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
LACROSSE FOOTWEAR, 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)(4) and
0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (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.:
3) Filing Party:
4) Date Filed:
<PAGE>
LACROSSE FOOTWEAR, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held June 12, 1997
To the Shareholders of
LaCrosse Footwear, Inc.:
NOTICE IS HEREBY GIVEN that the annual meeting of shareholders
of LaCrosse Footwear, Inc. will be held on Thursday, June 12, 1997, at
10:00 A.M., local time, at the LaCrosse Footwear Retail Store, 1320 St.
Andrew Street, La Crosse, Wisconsin 54603, for the following purposes:
1. To elect three directors to hold office until the 2000
annual meeting of shareholders and until their successors are duly elected
and qualified.
2. To consider and act upon a proposal to approve the LaCrosse
Footwear, Inc. 1997 Employee Stock Incentive Plan.
3. To consider and act upon such other business as may
properly come before the meeting or any adjournment or postponement
thereof.
The close of business on April 18, 1997 has been fixed as the
record date for the determination of shareholders entitled to notice of,
and to vote at, the meeting and any adjournment or postponement thereof.
A proxy for the meeting and a proxy statement are enclosed
herewith.
By Order of the Board of Directors
LACROSSE FOOTWEAR, INC.
Thomas S. Sleik
Secretary
La Crosse, Wisconsin
May 7, 1997
YOUR VOTE IS IMPORTANT NO MATTER HOW LARGE OR SMALL YOUR HOLDINGS MAY BE.
TO ASSURE YOUR REPRESENTATION AT THE MEETING, PLEASE DATE THE ENCLOSED
PROXY, WHICH IS SOLICITED BY THE BOARD OF DIRECTORS, SIGN EXACTLY AS YOUR
NAME APPEARS THEREON AND RETURN IMMEDIATELY.
<PAGE>
LACROSSE FOOTWEAR, INC.
1319 St. Andrew Street
La Crosse, Wisconsin 54603
PROXY STATEMENT
For
ANNUAL MEETING OF SHAREHOLDERS
To Be Held June 12, 1997
This proxy statement is being furnished to shareholders by the
Board of Directors (the "Board") of LaCrosse Footwear, Inc. (the
"Company") beginning on or about May 7, 1997 in connection with a
solicitation of proxies by the Board for use at the annual meeting of
shareholders to be held on Thursday, June 12, 1997, at 10:00 A.M., local
time, at the LaCrosse Footwear Retail Store, 1320 St. Andrew Street, La
Crosse, Wisconsin 54603 and all adjournments or postponements thereof (the
"Annual Meeting") for the purposes set forth in the attached Notice of
Annual Meeting of Shareholders.
Execution of a proxy given in response to this solicitation will
not affect a shareholder's right to attend the Annual Meeting and to vote
in person. Presence at the Annual Meeting of a shareholder who has signed
a proxy does not in itself revoke a proxy. Any shareholder giving a proxy
may revoke it at any time before it is exercised by giving notice thereof
to the Company in writing or in open meeting.
A proxy, in the enclosed form, which is properly executed, duly
returned to the Company and not revoked will be voted in accordance with
the instructions contained therein. The shares represented by executed
but unmarked proxies will be voted FOR the three persons nominated for
election as directors referred to herein, FOR the proposal to approve the
LaCrosse Footwear, Inc. 1997 Employee Stock Incentive Plan (the "1997
Plan") and on such other business or matters which may properly come
before the Annual Meeting in accordance with the best judgment of the
persons named as proxies in the enclosed form of proxy. Other than the
election of directors and the proposal to approve the 1997 Plan, the Board
has no knowledge of any matters to be presented for action by the
shareholders at the Annual Meeting.
Only holders of record of the Company's common stock, $.01 par
value per share (the "Common Stock"), at the close of business on April
18, 1997 are entitled to vote at the Annual Meeting. On that date, the
Company had outstanding and entitled to vote 6,667,727 shares of Common
Stock, each of which is entitled to one vote per share.
ELECTION OF DIRECTORS
The Company's By-Laws provide that the directors shall be
divided into three classes, with staggered terms of three years each. At
the Annual Meeting, the shareholders will elect three directors to hold
office until the 2000 annual meeting of shareholders and until their
successors are duly elected and qualified. Unless shareholders otherwise
specify, the shares represented by the proxies received will be voted in
favor of the election as directors of the three persons named as nominees
herein. The Board has no reason to believe that any of the listed
nominees will be unable or unwilling to serve as a director if elected.
However, in the event that any nominee should be unable to serve or for
good cause will not serve, the shares represented by proxies received will
be voted for another nominee selected by the Board. Directors will be
elected by a plurality of the votes cast at the Annual Meeting (assuming a
quorum is present). Consequently, any shares not voted at the Annual
Meeting, whether due to abstentions, broker non-votes or otherwise, will
have no impact on the election of directors. Votes will be tabulated by
inspectors of election appointed by the Board.
The following sets forth certain information, as of April 18,
1997, about the Board's nominees for election at the Annual Meeting and
each director of the Company whose term will continue after the Annual
Meeting.
Nominees for Election at the Annual Meeting
Terms expiring at the 2000 Annual Meeting
Patrick K. Gantert, 47, has served as President, Chief Executive
Officer and as a director of the Company since December 1994. Prior
thereto, Mr. Gantert served as Executive Vice President and Chief
Operating Officer since August 1993 and as Executive Vice President since
June 1992. From March 1985, when he joined the Company, until June 1992,
Mr. Gantert was Vice President-Finance. Mr. Gantert is a director of
First Bancorporation, Inc.
Virginia F. Schneider, 72, has served as a director of the
Company since June 1990.
Luke E. Sims, 47, has served as a director of the Company since
December 1985. Mr. Sims has been a partner in the law firm of Foley &
Lardner, Milwaukee, Wisconsin, since 1984 and has been an attorney with
such firm since 1976. Foley & Lardner has acted as general counsel for
the Company since 1982. Mr. Sims is a director of The Louis Allis
Company, Wilson-Hurd Mfg. Co. and Ronald McDonald House Charities of
Eastern Wisconsin, Inc.
THE BOARD RECOMMENDS THE FOREGOING NOMINEES FOR ELECTION AS DIRECTORS AND
URGES EACH SHAREHOLDER TO VOTE "FOR" ALL NOMINEES. SHARES OF COMMON STOCK
REPRESENTED BY EXECUTED BUT UNMARKED PROXIES WILL BE VOTED "FOR" ALL
NOMINEES.
Directors Continuing in Office
Terms expiring at the 1998 Annual Meeting
George W. Schneider, 74, was elected to the Board of Directors
of the Company's predecessor in 1968 and was the principal investor and
motivating force behind the management buyout of the Company's predecessor
in 1982. Since 1982, Mr. Schneider also has served as Chairman of the
Board of the Company. Mr. Schneider's background is in banking and real
estate. He was the principal organizer of Bay Cities National Bank,
Redondo Beach, California, and served as its Chairman of the Board from
1982 until the bank was acquired in December 1995. Mr. Schneider also
served as a director and Vice Chairman of the Board of Directors of Little
Company of Mary Health Systems, Little Company of Mary Hospital and San
Pedro Peninsula Hospital for many years, but relinquished those positions
in 1995.
Eric E. Merk, Sr., 54, has served as Vice President - Danner and
as a director of the Company since the March 1994 completion of the
Company's acquisition of Danner Shoe Manufacturing Co. ("Danner"). Prior
to joining the Company, Mr. Merk was a significant shareholder and
President of Danner since purchasing Danner in 1983. Mr. Merk is a
director of the Oregon Corporation for Affordable Housing, Inc. and
InSport International Inc.
Terms expiring at the 1999 Annual Meeting
Frank J. Uhler, Jr., 66, has served as Vice Chairman of the
Board of the Company since December 31, 1994 and as a director since he
joined the Company in June 1978. From June 1978 until 1982, Mr. Uhler
served as President and from 1982 until December 31, 1994 he served as
President and Chief Executive Officer of the Company. Along with Mr.
George W. Schneider, Mr. Uhler was the other principal member of the
management group that acquired the Company's predecessor in 1982. Mr.
Uhler is a director of the Rubber and Plastic Footwear Manufacturers
Association and Franciscan Skemp Health Care System.
Richard A. Rosenthal, 64, has served as a director of the
Company since June 1990. Mr. Rosenthal was the Director of Athletics at
the University of Notre Dame from 1987 until August 1, 1995. Mr.
Rosenthal is a director of Athey Products Corporation, Advanced Drainage
Systems, Inc., the Corporation for Innovative Development, Goshen Rubber
Company, RFE Investment Partners, Zimmer Paper Products, Inc., Beck
Corporation, Toetco Engineering, Inc. and St. Joseph Capital Corporation.
George W. Schneider and Virginia F. Schneider are husband and
wife. Joseph P. Schneider, an officer of the Company, is the son of
George W. and Virginia F. Schneider. None of the other directors or
executive officers are related to each other.
BOARD OF DIRECTORS
General
The Board has standing Audit and Compensation Committees. The
Audit Committee is responsible for recommending to the Board the
appointment of independent auditors, reviewing and approving the scope of
the annual audit activities of the auditors, approving the audit fee
payable to the auditors and reviewing audit results. Richard A. Rosenthal
(Chairman), George W. Schneider and Luke E. Sims are members of the Audit
Committee. The Audit Committee held one meeting in 1996.
The Compensation Committee reviews and recommends to the Board
the compensation structure for the Company's directors, officers and other
managerial personnel, including salary rates, participation in incentive
compensation and benefit plans, fringe benefits, non-cash perquisites and
other forms of compensation, and administers the Company's 1993 Employee
Stock Incentive Plan (the "1993 Plan") and the 1997 Plan. Luke E. Sims
(Chairman), Virginia F. Schneider and Richard A. Rosenthal are members of
the Compensation Committee. The Compensation Committee held one meeting
in 1996.
The Board has no standing nominating committee. The Board
selects the director nominees to stand for election at the Company's
annual meetings of shareholders and to fill vacancies occurring on the
Board. The Board will consider nominees recommended by shareholders, but
has no established procedures which shareholders must follow to make a
recommendation.
The Board held five meetings in 1996. Each director attended
all of the meetings of the Board and all of the meetings held by all
committees of the Board on which such director served during the year.
Director Compensation
Directors who are executive officers of the Company receive no
compensation as such for service as members of either the Board or
committees thereof. Directors who are not executive officers of the
Company receive an annual retainer of $12,500 (assuming four quarterly
Board meetings), a pro rata fee in the event of a major special Board
meeting, and a fee of $1,000 for each committee meeting attended if such
meeting is held on a day other than a day on which a regular Board meeting
is held (except that the fee payable for such a committee meeting is
reduced to $500 if the meeting is one hour or less).
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information regarding the
beneficial ownership of Common Stock as of April 18, 1997 by: (i) each
director and nominee; (ii) each of the executive officers named in the
Summary Compensation Table set forth below; (iii) all of the directors,
nominees and executive officers (including the executive officers named in
the Summary Compensation Table) as a group; and (iv) each person or other
entity known by the Company to own beneficially more than 5% of the Common
Stock. Except as otherwise indicated in the footnotes, each of the
holders listed below has sole voting and investment power over the shares
beneficially owned.
Percent of
Shares of Common Stock
Common Stock Beneficially
Name of Beneficial Owner Beneficially Owned(1) Owned
Schneider Family Voting Trust(2) 3,480,501 52.2%
George W. Schneider(3) . . . . . 1,355,505(2) 20.3%
Virginia F. Schneider(3) . . . . 1,355,505(2) 20.3%
Firstar Corporation(4) . . . . . 494,616 7.4%
Firstar Trust Company(5) . . . . 489,800(4) 7.3%
The Putnam Advisory Company,
Inc.(6) . . . . . . . . . . . . 357,700 5.4%
Joseph P. Schneider . . . . . . . 233,104(2) 3.5%
Eric E. Merk, Sr. . . . . . . . . 121,140(7) 1.8%
Frank J. Uhler, Jr. . . . . . . . 110,775(8) 1.7%
Patrick K. Gantert . . . . . . . 70,250 1.1%
Luke E. Sims . . . . . . . . . . 34,000(9) *
Richard A. Rosenthal . . . . . . 21,750 *
David R. Llewellyn . . . . . . . 5,500 *
All directors, nominees and
executive officers as a group
(19 persons) . . . . . . . . . . 1,992,816(2)(10) 29.6%
_______________________
* Denotes less than 1%.
(1) Includes the following shares subject to stock options which are
exercisable within 60 days of April 18, 1997: Joseph P. Schneider,
6,200 shares; Patrick K. Gantert, 13,000 shares; David R. Llewellyn,
4,500 shares and all directors, nominees and executive officers as a
group, 57,950 shares.
(2) Substantially all of the shares of Common Stock beneficially owned by
George W. Schneider, Virginia F. Schneider and 18 other members of
the Schneider family have been deposited into a voting trust ("Voting
Trust"), pursuant to which the five trustees thereof (currently,
George W. Schneider, Virginia F. Schneider, Joseph P. Schneider,
Steven M. Schneider and Patrick Greene), acting by majority action,
have shared voting power (shared with the beneficiaries of the Voting
Trust) and sole investment power over all such shares. The terms of
the Voting Trust are more particularly described below under
"--Voting Trust." Shares held in the Voting Trust include shares
reported above as beneficially owned by other named persons as
follows: (a) 1,320,505 of the shares reported as beneficially owned
by each of George W. Schneider and Virginia F. Schneider, as co-
trustees of the George W. and Virginia F. Schneider Trust U/A dated
September 1, 1987, (b) 177,254 of the shares reported as beneficially
owned by Joseph P. Schneider, and (c) 1,497,759 of the shares
reported as beneficially owned by the directors, nominees and
executive officers of the Company as a group. The address of the
Voting Trust is 1319 St. Andrew Street, La Crosse, Wisconsin 54603.
(3) Shares of Common Stock reported as beneficially owned by George W.
Schneider and Virginia F. Schneider include (a) 3,000 shares which
are deposited in the George W. and Virginia F. Schneider Trust U/A
dated September 1, 1987 over which Mr. and Mrs. Schneider, as co-
trustees, have shared voting and investment power and (b) 32,000
shares which are held by a charitable foundation in which Mr. and
Mrs. Schneider are trustees (Mr. and Mrs. Schneider disclaim
beneficial ownership of these 32,000 shares). See also footnote 2.
The address of George W. and Virginia F. Schneider is 1319 St. Andrew
Street, La Crosse, Wisconsin 54603. The address of the George W. and
Virginia F. Schneider Trust U/A dated September 1, 1987 is P.O. Box
71, Redondo Beach, California 90277.
(4) The information is based on Amendment Number 2 to a report on
Schedule 13G, dated February 13, 1997, filed by Firstar Corporation
("Firstar") with the Securities and Exchange Commission. Firstar
reported sole voting and investment power over 494,216 of the shares
and shared voting and investment power over 400 of the shares.
Shares held by Firstar include 489,800 shares reported above as
beneficially owned by Firstar Trust Company, a subsidiary of Firstar.
The address of Firstar is 777 East Wisconsin Avenue, Milwaukee,
Wisconsin 53202.
(5) The information is based on Amendment Number 1 to a report on
Schedule 13G, dated February 12, 1996, filed by Firstar Trust Company
with the Securities and Exchange Commission. Firstar Trust Company
reports beneficial ownership of these shares as the sole trustee of
the George and Virginia Schneider Grandchildren's Trust. The address
of Firstar Trust Company is 777 East Wisconsin Avenue, Milwaukee,
Wisconsin 53202.
(6) The information is based on Amendment Number 1 to a report on
Schedule 13G, dated January 27, 1997, filed by Marsh & McLennan
Companies, Inc. ("MMC"), Putnam Investments, Inc. ("PI"), Putnam
Investment Management, Inc. and The Putnam Advisory Company, Inc.
(collectively, "Putnam") with the Securities and Exchange Commission.
Certain Putnam investment managers (together with their parent
corporations, PI and MMC) are considered beneficial owners of the
shares of Common Stock indicated in the table, which shares were
acquired for investment purposes only by such investment managers for
certain of their advisory clients. Putnam reported sole voting power
with respect to none of the shares, shared voting power with respect
to 187,100 of the shares, sole investment power with respect to none
of the shares and shared investment power with respect to all of the
shares. The address of MMC is 1166 Avenue of the Americas, New York,
New York 10036 and the address of the other Putnam entities is One
Post Office Square, Boston, Massachusetts 02109.
(7) Includes 60,570 shares held by Mr. Merk's wife, over which she has
sole voting and investment power. Mr. Merk disclaims beneficial
ownership of the shares held by his wife.
(8) Includes 58,885 shares held by a trust in which Mr. Uhler is one of
the trustees. Mr. Uhler disclaims beneficial ownership of these
58,885 shares.
(9) Includes 18,000 shares held of record by Mr. Sims' wife for the
benefit of their three minor children.
(10) Includes 3,172 shares held by the Company's 401(k) Plan based on a
plan statement dated as of December 31, 1996.
Voting Trust
To help ensure the continuity and stability of the management of
the Company, George W. and Virginia F. Schneider and 12 other members of
their family, including certain affiliated entities, entered into a voting
trust agreement in June 1982. Pursuant to the trust agreement, as
amended, all shares of Common Stock held by such individuals and entities
were initially deposited into the voting trust created thereunder (the
"Voting Trust"). Each depositor and beneficiary holding Voting Trust
certificates issued thereunder (which now includes 18 other members of the
Schneider family) also agreed (with certain limited exceptions) to
transfer to the Voting Trust all shares of Common Stock thereafter
acquired.
Under the Voting Trust, the five trustees (currently, George W.
Schneider, Virginia F. Schneider, Joseph P. Schneider, Steven M. Schneider
and Patrick Greene), acting by majority action, are vested with the
exclusive right to sell, transfer or dispose of the deposited shares and
to vote such deposited shares in their discretion on all matters on which
such shares are entitled to vote; provided, however, that in the event of
a proposed recapitalization, reorganization, merger, consolidation,
liquidation, sale of all or substantially all of the assets of the Company
or a comparable transaction, in addition to the necessary vote of the
trustees, any such action shall also require the affirmative vote or
consent of the beneficiaries holding Voting Trust certificates
representing at least 75% of the aggregate number of votes of the then
deposited shares. The beneficiaries also are entitled to receive all cash
dividends or other distributions (other than in capital stock of the
Company) declared and paid on the deposited shares.
The deposited shares may only be withdrawn from the Voting Trust
by a beneficiary prior to the expiration or termination of the Voting
Trust if the trustees allow such withdrawal.
The Voting Trust continues in effect until April 1, 2000, and
thereafter for up to two additional successive five-year periods if the
trustees so elect. Notwithstanding the foregoing, in the event of a
reorganization, merger or consolidation in which the Company does not
survive, a liquidation of the Company, a sale of all or substantially all
of the assets of the Company or sale of all the Common Stock held by the
trustees under the Voting Trust, the Voting Trust shall automatically
terminate. Additionally, the Voting Trust may be terminated at any time
prior to the expiration thereof by the trustees with the affirmative vote
or consent of the beneficiaries holding Voting Trust certificates
representing at least 75% of the aggregate number of votes of the then
deposited shares.
The Voting Trust also provides that the trustees shall cause the
then Chief Executive Officer of the Company to be elected as a director of
the Company and shall not allow the number of directors of the Company who
are members of the Schneider family to exceed a majority of the directors,
less one. Additionally, the trustees, subject to certain exceptions, may
correct defects and omissions in the underlying trust agreement and make
other amendments or modifications thereto as in their judgment may be
necessary or appropriate to effectively carry out the trust agreement.
The trustees are not entitled to receive any remuneration for serving as
such under the Voting Trust.
EXECUTIVE COMPENSATION
Summary Compensation Information
The following table sets forth certain information concerning
the compensation earned in each of the last three fiscal years by the
Company's Chief Executive Officer and each of the Company's four other
most highly compensated executive officers whose total cash compensation
exceeded $100,000 in the fiscal year ended December 31, 1996. The persons
named in the table are sometimes referred to herein as the "named
executive officers."
<TABLE>
Summary Compensation Table
<CAPTION>
Long-Term Compensation
Annual Compensation Awards Payouts
Securities Long-Term
Other Annual Underlying Incentive
Name and Compensa- Stock Compensation All Other
Principal Position Year Salary($) Bonus($) tion($)(1) Options(#) Payouts($) Compensation($)
<S> <C> <C> <C> <C> <C> <C> <C>
George W. Schneider 1996 $138,462 $104,769 -- -- -- $12,546(2)
Chairman of the Board 1995 125,000 -- -- -- -- 12,468
1994 114,369 135,000 -- -- -- 12,788
Patrick K. Gantert 1996 147,692 114,769 -- 8,000 -- 30,224(3)
President and Chief 1995 133,077 68,113 -- 6,000 -- 23,005
Executive Officer 1994 109,231 132,500 -- 15,000 -- 32,691
Eric E. Merk, Sr. 1996 131,109 43,294 -- -- -- 5,430(5)
Vice President-Danner(4) 1995 160,636 56,223 -- -- -- 3,331
1994 125,000 125,000 -- -- -- 2,700
Joseph P. Schneider 1996 106,542 42,755 $50,415 3,500 -- 2,531(6)
Vice President 1995 92,371 30,837 -- 2,500 -- 1,128
1994 86,246 47,967 -- 7,500 -- 1,121
David R. Llewellyn 1996 117,210 51,822 -- 3,500 -- 2,661(8)
Vice President-Marketing 1995 113,385 37,538 -- 9,500 -- 2,174
and Business 1994 78,269 39,827 29,560 -- -- 907
Development(7)
___________
(1) Certain personal benefits provided by the Company and its
subsidiaries to the named executive officers are not included in the
table. The aggregate amount of such personal benefits for each named
executive officer in each year reflected in the table did not exceed
the lesser of $50,000 or 10% of the sum of such officer's salary and
bonus in each respective year, except for (a) Mr. J. Schneider who in
1996 received benefits aggregating $50,415 (which amount includes
$34,356 in relocation and moving expenses paid by the Company and a
$16,059 tax reimbursement payment by the Company in connection with
such expenses) and (b) Mr. Llewellyn who in 1994 received benefits
aggregating $29,560 (which amount includes $18,745 in relocation and
moving expenses paid by the Company and a $10,815 tax reimbursement
payment by the Company in connection with such expenses).
(2) Includes $10,388 for term life insurance premiums and a $2,158
matching contribution under the Company's 401(k) Plan.
(3) Includes $26,635 accrued under the Company's Deferred Compensation
Plan for Key Employees, $1,189 for term life insurance premiums and a
$2,400 matching contribution under the Company's 401(k) Plan.
(4) Mr. Merk was elected Vice President-Danner in connection with the
Company's March 1994 acquisition of Danner.
(5) Includes $2,430 accrued under the Company's Deferred Compensation
Plan for Key Employees and a $3,000 matching contribution under the
Company's 401(k) Plan.
(6) Includes $66 for term life insurance premiums and a $2,465 matching
contribution under the Company's 401(k) Plan.
(7) Mr. Llewellyn was elected Vice President-Marketing and Business
Development in April 1994.
(8) Includes $450 for term life insurance premiums and a $2,211 matching
contribution under the Company's 401(k) Plan.
</TABLE>
Stock Options
The Company has in effect the 1993 Plan and the 1997 Plan (which
is contingent on approval by the shareholders at the Annual Meeting)
pursuant to which options to purchase Common Stock may be granted to
officers and other key employees of the Company and its subsidiaries. The
following table presents certain information as to grants of stock options
made during fiscal 1996 to Patrick K. Gantert, Joseph P. Schneider and
David R. Llewellyn. No other named executive officer was granted options
in fiscal 1996.
<TABLE>
Option Grants in 1996 Fiscal Year
<CAPTION>
Potential Realizable Value at Assumed
Individual Grants Annual Rates of Stock Price Appreciation
for Option Term (2)
Number of Percent of
Securities Total Options At 0% At 5% At 10%
Underlying Granted to Exercise or Annual Annual Annual
Options Granted Employees in Base Price Expiration Growth Growth Growth
Name (#)(1) Fiscal Year ($/Share) Date Rate Rate Rate
<S> <C> <C> <C> <C> <C> <C> <C>
Patrick K. Gantert . . . 8,000 9.0% $9.06 1/2/06 0 $45,582 $115,514
Joseph P. Schneider. . . 3,500 3.9% 9.06 1/2/06 0 19,942 50,538
David R. Llewellyn . . . 3,500 3.9% 9.06 1/2/06 0 19,942 50,538
____________
(1) The options reflected in the table (which are nonstatutory options
for purposes of the Internal Revenue Code) were granted on January 2,
1996, and became or will become exercisable in 20% increments on
January 2, 1997, 1998, 1999, 2000 and 2001.
(2) This presentation is intended to disclose the potential value which
would accrue to the optionee if the option were exercised the day
before it would expire and if the per share value had appreciated at
the compounded annual rate indicated in each column. The assumed
rates of appreciation of 5% and 10% are prescribed by the rules of
the Securities and Exchange Commission regarding disclosure of
executive compensation. The assumed annual rates of appreciation are
not intended to forecast possible future appreciation, if any, with
respect to the price of the Common Stock.
</TABLE>
The following table sets forth information regarding the
exercise of stock options by the named executive officers during the 1996
fiscal year and the fiscal year-end value of unexercised options held by
such persons. Messrs. G. Schneider and Merk did not hold any options to
acquire Common Stock as of December 31, 1996 and are accordingly not
reflected in the table.
<TABLE>
Aggregated Option Exercises in 1996
Fiscal Year and Fiscal Year-End Option Values
<CAPTION>
Number of Securities Value of Unexercised In-the-
Underlying Unexercised Money Options at Fiscal
Options at Fiscal Year-End(#) Year-End ($)
Shares Acquired Value Realized
Name on Exercise (#) ($) Exercisable Unexercisable Exercisable Unexercisable(2)
<S> <C> <C> <C> <C> <C> <C>
Patrick K. Gantert -- -- 7,200 21,800 (1) $14,520
Joseph P. Schneider -- -- 3,500 10,000 (1) 6,352
David R. Llewellyn -- -- 1,900 11,100 (1) 6,352
____________
(1) Not applicable. The fair market value of the underlying Common Stock
at fiscal year-end was less than the exercise price of the options.
(2) The dollar values are calculated by determining the difference
between the fair market value of the underlying Common Stock and the
exercise price of the options at exercise or fiscal year-end,
respectively.
</TABLE>
Retirement Plan
The Company's Retirement Plan (the "Salaried Plan") covers
substantially all salaried employees of the Company. The table set forth
below illustrates the estimated annual benefits payable as a single life
annuity upon retirement pursuant to the current Salaried Plan formula for
various levels of compensation and years of service, assuming retirement
after attainment of age 65 during 1997.
Pension Plan Table
Average Years of Service
Annual
Compensation 15 20 25 30 35
$100,000 $10,500 $14,000 $17,500 $21,000 $24,500
125,000 13,125 17,500 21,875 26,250 30,625
150,000 15,750 21,000 26,250 31,500 36,750
175,000 18,375 24,500 30,625 36,750 42,875
200,000 21,000 28,000 35,000 42,000 49,000
225,000 23,625 31,500 39,375 47,250 55,125
The Salaried Plan is a qualified noncontributory plan that
provides for fixed benefits to participants and their survivors in the
event of normal (age 65) or early (age 55) retirement. Participants who
have worked for the Company for five years and who leave the Company for
any reason other than death, disability or early retirement are entitled
to a portion of the benefits that they would have earned under the
Salaried Plan had they worked for the Company until normal retirement age.
Early retirement benefits are reduced to reflect early commencement.
Compensation covered by the Salaried Plan is a participant's
total remuneration, including salary and bonus, as shown in the Summary
Compensation Table, but excluding deferred compensation and fringe and
welfare benefits. Benefits are based on a participant's average monthly
compensation for the 60 consecutive calendar months of the 120 calendar
months preceding termination of employment for which his or her
compensation was the highest. Under the Salaried Plan, only compensation
up to the limits imposed by the Internal Revenue Code is taken into
account. The 1996 compensation limit applicable to the Salaried Plan was
$155,000. Benefits are not subject to any deduction for Social Security
or other offset amounts. The number of credited years of service under
the Salaried Plan for each of the named executive officers (other than Mr.
Merk, who does not participate in the plan) as of December 31, 1996 are as
follows: Mr. G. Schneider, 15 years; Mr. Gantert, 12 years; Mr. J.
Schneider, 11 years; and Mr. Llewellyn, 3 years. Pursuant to the terms of
the Salaried Plan, Mr. G. Schneider began receiving benefits in 1994.
Deferred Compensation Plan for Key Employees
The Company has a non-qualified, unfunded Deferred Compensation
Plan for Key Employees under which it makes annual awards to the
bookkeeping accounts of certain participating employees. Mr. Gantert is
entitled to an award under the plan each year pursuant to his employment
agreement with the Company (see below under "--Agreements with Named
Executive Officers"). The Board may, but is not required to, make awards
to the other plan participants. Regardless of whether an award is made in
any given year, each participant's bookkeeping account in the plan is
credited or debited annually based on the Company's net income or loss for
that year. Four key employees had account balances in the plan in 1996
and all such accounts were credited during such year; however, only Mr.
Gantert received an award from the Company in 1996. Participants in the
Company's Deferred Compensation Plan for Key Employees generally receive
their account balances upon the first of the following events to occur:
(i) at any time at the sole discretion of the Board; (ii) a merger or
consolidation in which the Company does not survive, a liquidation or
dissolution of the Company or the sale of all or substantially all of the
assets of the Company; (iii) termination of employment, whether with or
without cause; (iv) death or disability; or (v) retirement at age 62 or
thereafter. Notwithstanding the foregoing, a participant who retires on
or after age 62 may elect to defer receipt of his or her account balance
and receive interest on such balance at the rate, determined annually,
equal to the then current two-year United States Treasury rate (provided
that retirees on or before January 1, 1997 will continue to receive
interest on his or her account balance at 8% per annum).
Agreements with Named Executive Officers
In July 1992, the Company entered into an Employment Agreement
with Patrick K. Gantert providing for a minimum base salary of $100,000 in
1993, $109,000 in 1994, $119,000 in 1995 and $150,000 in 1996, an annual
incentive bonus up to the amount of his base salary in any given year (or
a greater amount under certain circumstances) that is based upon the
Company achieving certain operating results, annual contributions of
$10,000 on Mr. Gantert's behalf to the Company's Deferred Compensation
Plan for Key Employees, $500,000 of life insurance and a non-compete
agreement. Under this agreement, as amended, the Company agreed to employ
Mr. Gantert as its Executive Vice President and, effective January 1, 1996
(subsequently advanced to December 31, 1994 upon the retirement of Mr.
Uhler from his positions as President and Chief Executive Officer), its
President, Chief Executive Officer and Chief Operating Officer, until
December 31, 1996, with the term of employment automatically renewed for
successive one-year periods thereafter unless notice is given of non-
renewal at least two years prior to December 31, 1996 or the end of the
then current term. Notwithstanding the above, Mr. Gantert's employment
may terminate prior to the end of the term in the event of Mr. Gantert's
death, disability, termination (whether for good cause or voluntarily by
the Company or Mr. Gantert), retirement or upon the consummation of
certain extraordinary corporate events. If Mr. Gantert's employment is
terminated because of his disability, by the Company for good cause or
upon the consummation of certain extraordinary corporate events, then Mr.
Gantert is entitled to continue to receive his base salary and, in the
last situation, his incentive compensation for periods ranging from three
to twelve months. If Mr. Gantert's employment is voluntarily terminated
by the Company for any reason other than good cause, Mr. Gantert is
entitled to receive his base salary and incentive compensation for 24
months. The covenant not to compete contained in Mr. Gantert's Employment
Agreement is for the term of the agreement and for a period of two years
following termination of his employment; provided that, if Mr. Gantert's
employment is terminated by the Company without cause, the covenant not to
compete will extend only through the period for which Mr. Gantert is
entitled to termination payments.
In connection with the consummation of the Company's acquisition
of Danner in March 1994, the Company entered into an Employment Agreement
with Eric E. Merk, Sr., which was amended in June 1995, pursuant to which
the Company agreed to employ Mr. Merk as the President of the Company's
subsidiary which acquired Danner and Vice President-Danner of the Company
until the earlier of December 2000 or his death, disability or termination
for good cause, and Mr. Merk agreed to such employment on substantially a
full-time basis until December 1995 and on a half-time basis from January
1996 to December 2000. Under this agreement, as amended, Mr. Merk (i) was
entitled to receive a minimum annual base salary of $150,000 in 1994 and
$160,636 in 1995, an incentive bonus in 1994 of up to $125,000 that was
based upon the performance of the Danner business and an incentive bonus
in 1995 calculated under the incentive compensation program for the
Company's officers and other key employees (which awards bonuses based 50%
on Company operating profit, 35% on functional operating plan achievement
and 15% on individual performance; see "--Report on Executive
Compensation" below) and (ii) is entitled to receive a minimum annual base
salary of $126,700 in 1996, $108,600 in 1997, $90,500 in 1998, $72,400 in
1999 and $54,300 in 2000, subject to cost of living adjustments, as well
as an annual incentive bonus calculated under the Company's incentive
compensation program for officers and other key employees. Mr. Merk's
Employment Agreement also contains a covenant not to compete that is in
effect during the term of his employment and for a period of two years
thereafter.
In June 1994, the Company entered into an Employment Agreement
with David R. Llewellyn providing for an annual base salary of $110,000
per year (subject to annual adjustment to reflect increases in the base
salaries of certain groups of executives of the Company), the right to
participate in the annual incentive compensation program for the Company's
officers and other key employees, a post-employment consulting
arrangement, the grant of options to purchase 7,500 shares of Common Stock
under the 1993 Plan on the first anniversary of the agreement, the payment
of certain moving and relocation expenses and a non-compete agreement.
Under this agreement, the Company agreed to employ Mr. Llewellyn as its
Vice President-Marketing and Business Development from April 18, 1994,
until the earlier of November 1, 1999, or his death, disability,
termination for good cause, voluntary termination or material breach. The
agreement also provides that upon the natural expiration of the term of
employment on November 1, 1999, the Company and Mr. Llewellyn will enter
into a consulting agreement pursuant to which Mr. Llewellyn will provide a
minimum of 500 hours per year of consulting services to the Company at a
rate of $100 per hour for three years (subject to earlier termination in
the event of Mr. Llewellyn's prior death or disability). The covenant not
to compete contained in Mr. Llewellyn's Employment Agreement is for the
term of the agreement and for a period of three years following
termination of his employment with the Company.
Report on Executive Compensation
The Compensation Committee of the Board is responsible for all
aspects of the Company's compensation package offered to its corporate
officers, including the named executive officers. The following report
was prepared by the members of the Compensation Committee.
The Company's executive compensation program is designed to be
closely linked to corporate performance. To this end, the Company has
developed an overall compensation strategy and specific compensation plans
that tie a significant portion of executive compensation to the Company's
success in meeting specified performance goals. The overall objectives of
this strategy are to attract and retain qualified executive talent, to
motivate these executives to achieve the goals inherent in the Company's
business strategy, to link executive and shareholder interests through the
use of equity-based compensation plans and to provide a compensation
package that recognizes individual contributions as well as overall
business results.
During 1993, the Company retained nationally-recognized
compensation consultants to advise it with respect to compensation issues.
The first step in the overall review of executive compensation was an
analysis of the duties and responsibilities of each Company executive.
This resulted in an objective ranking of the relative duties and
responsibilities of each Company executive vis-a-vis other Company
executives. Subsequently, the Company's consultants compared the
compensation for each Company executive with general market data for
individuals with comparable job responsibilities. The Company's
consultants summarized their conclusions on Company executive compensation
in a report finalized in December 1993. The results of this study have
provided the framework for determining compensation for executives of the
Company. Given the time that has elapsed since the 1993 compensation
survey was concluded, the Compensation Committee intends to retain the
same compensation consultants to update their report, if appropriate, and
make further recommendations. This effort is expected to be concluded by
mid-1997, and any desired changes will be promptly implemented.
The Compensation Committee determines the compensation of the
Chairman of the Board and the Chief Executive Officer, and sets the policy
for, reviews and approves the recommendations of management (subject to
such adjustments as may be deemed appropriate by the Compensation
Committee and subject to the Board's and/or the Compensation Committee's
sole discretion regarding awards of stock options) with respect to the
compensation awarded to other corporate officers (including the other
named executive officers).
The key elements of the Company's executive compensation program
consist of base salary, annual bonus opportunity and grants of stock
options. Although the Compensation Committee believes strongly in
offering compensation opportunities competitive with those of comparable
companies within the Company's industry, the most important considerations
in setting annual compensation are Company performance and individual
contributions. A general description of the elements of the Company's
compensation program, including the basis for the compensation awarded to
the Company's Chief Executive Officer for 1996, are discussed below.
Base Salaries. Base salaries are initially determined by
evaluating the responsibilities of the position, the experience of the
individual and the salaries for comparable positions in the competitive
marketplace. Base salary levels for the Company's executive officers are
generally positioned at market competitive levels for comparable positions
in manufacturing companies of similar size. In determining annual salary
adjustments for executive officers, the Compensation Committee considers
various factors including the individual's performance and contribution,
competitive salary increase levels provided by the marketplace, the
relationship of an executive officer's salary to the market competitive
levels for comparable positions, and the Company's performance. In the
case of executive officers with operating responsibility for a particular
business unit, such unit's financial results are also considered. The
Compensation Committee, where appropriate, also considers nonfinancial
performance measures such as manufacturing efficiency gains, improvements
in product quality and relations with customers, suppliers and employees.
Nonfinancial measures used for executive officers are determined on a
case-by-case basis and the Compensation Committee does not assign any
specific weight to any one of these factors. The base salaries paid to
three named executive officers, including Mr. Gantert, are also based on
their employment agreements with the Company. See above under "--
Agreements with Named Executive Officers."
With respect to the base salary paid to Mr. Gantert in 1996, the
Compensation Committee increased his base salary by 11% from $135,000
(effective February 1, 1995) to $150,000 (effective February 1, 1996) in
accordance with his employment agreement as well as to reflect the
Compensation Committee's assessment of the factors listed above.
Annual Bonus. Except for Mr. Gantert, who is entitled to
receive an annual incentive bonus calculated under his employment
agreement with the Company (see below and under "--Agreements with Named
Executive Officers" above), the Company's executive officers are eligible
for annual cash bonus awards under the Company's incentive compensation
program. Under this program, corporate and operational performance
objectives are established at the beginning of each year and eligible
executives are assigned minimum, target and maximum bonus levels. For
these executives, the bonus award is based 50% on Company operating
profit, 35% on functional operating plan achievement and 15% on individual
performance.
Under his employment agreement with the Company, Mr. Gantert is
entitled to an annual incentive bonus up to the amount of his base salary
in any given year (or a greater amount at the sole discretion of the Board
if the Company's return on net assets exceeds a specified percentage) that
is based upon the Company's operating profit before certain bonuses are
paid and return on net assets. Based on the Company's performance in
1996, Mr. Gantert was awarded a bonus of $114,769 in 1996, which was
slightly higher than the level dictated by his employment agreement. In
evaluating Mr. Gantert's performance during 1996, the Compensation
Committee and the Board noted, among other things, the strategic steps
taken by the Company in acquiring certain assets of Red Ball, Inc. and
concluding the Rainfair, Inc. acquisition.
The Compensation Committee recommended (and the Board approved)
a bonus of $104,769 for 1996 for Mr. George Schneider, the Company's
Chairman of the Board.
Stock Options. The Company's 1993 Plan and the 1997 Plan being
submitted to the shareholders for their approval at the Annual Meeting are
designed to encourage and create ownership of Company common stock by key
executives, thereby promoting a close identity of interests between the
Company's management and its shareholders. The 1993 Plan and the 1997
Plan are designed to motivate and reward executives for long-term
strategic management and the enhancement of shareholder value. The
Compensation Committee has determined that annual stock option grants to
the Company's key employees, including key executive officers, is
consistent with the Company's best interest and the Company's overall
compensation program.
In determining the number of stock options to be granted, the
Compensation Committee considers a variety of factors, including the
executive's level of responsibility, relative contributions to the Company
and existing level of ownership of Company Common Stock. Consideration is
also given to an executive's potential for future responsibility and
contributions to the Company as well as the aggregate number of stock
options proposed to be granted with a view towards ensuring that aggregate
compensation for Company executives is appropriate. Stock options are
granted with an exercise price equal to the market value of the Common
Stock on the date of grant. Stock options granted in 1996 vest and become
exercisable in 20% increments over a five-year period from the date of
grant. Vesting schedules are designed to encourage the creation of
shareholder value over the long-term since the full benefit of the
compensation package cannot be realized unless stock price appreciation
occurs over a number of years and the executive remains in the Company's
employ.
The Board, acting on the recommendation of the Compensation
Committee, granted stock options during 1996 to key employees under an
informal five-year plan adopted in 1993 and designed to provide annual
grants of stock options to key employees.
Section 162(m) Limitation. The Company anticipates that all
1997 compensation to executives will be fully deductible under Section
162(m) of the Internal Revenue Code. Therefore, the Compensation
Committee determined that a policy with respect to qualifying compensation
paid to executive officers for deductibility is not necessary.
LACROSSE FOOTWEAR, INC.
COMPENSATION COMMITTEE
Luke E. Sims, Chairman
Richard A. Rosenthal
Virginia F. Schneider
Compensation Committee Interlocks and Insider Participation
The current members of the Compensation Committee are identified
above. Luke E. Sims, the Chairman of the Compensation Committee, is a
partner in the law firm of Foley & Lardner, Milwaukee, Wisconsin, which
has served as general counsel for the Company since 1982.
PERFORMANCE INFORMATION
The following graph compares on a cumulative basis changes since
April 8, 1994 (the date on which the Common Stock was first publicly
traded) in (a) the total shareholder return on the Common Stock with (b)
the total return on the Nasdaq Market Index and (c) the total return on
the Media General Financial Services Footwear Industry Group Index (the
"MG Industry Group Index"). Such changes have been measured by dividing
(a) the sum of (i) the amount of dividends for the measurement period,
assuming dividend reinvestment, and (ii) the difference between the price
per share at the end of and the beginning of the measurement period, by
(b) the price per share at the beginning of the measurement period. The
graph assumes $100 was invested on April 8, 1994 in Common Stock, the
Nasdaq Market Index and the MG Industry Group Index.
[STOCK PERFORMANCE GRAPH]
December December December
April 8, 31, 31, 31,
1994 1994 1995 1996
LACROSSE FOOTWEAR, INC. $100 $80.65 $64.76 $ 80.33
MG INDUSTRY GROUP INDEX 100 114.58 140.02 220.70
NASDAQ MARKET INDEX 100 102.34 132.74 164.95
1997 PLAN
General
The purpose of the 1997 Plan is to induce certain officers and
other key employees to remain in the employ of the Company or its
subsidiaries and to encourage such employees to secure or increase on
reasonable terms their stock ownership in the Company. The 1997 Plan is
intended to promote continuity of management and increased incentive and
personal interest in the welfare of the Company by those who are primarily
responsible for shaping and carrying out the long-range plans of the
Company and securing its continued growth and financial success.
The Company currently has in effect the 1993 Plan. As of
April 18, 1997, a total of 1,900 shares of Common Stock remained available
for the granting of additional options under the 1993 Plan. To allow for
additional equity-based compensation awards to be made by the Company, the
1997 Plan was adopted by the Board on November 22, 1996 and is effective
as of such date, subject to approval by the shareholders at the Annual
Meeting.
The following summary description of the 1997 Plan is qualified
in its entirety by reference to the full text of the 1997 Plan which is
attached to this Proxy Statement as Appendix A.
Administration
The 1997 Plan will be administered by the Board and/or the
Compensation Committee of the Board consisting of not less than two
directors who are "non-employee directors" within the meaning of
Rule 16b-3 under the Securities Exchange Act of 1934, as amended, and who
are "outside directors" within the meaning of Section 162(m) of the
Internal Revenue Code. If at any time the Compensation Committee shall
not be in existence or not consist of directors who are qualified as "non-
employee directors" and "outside directors", the Board shall administer
the Plan. Among other functions, the Compensation Committee and the Board
each has full authority and discretion, subject to the express provisions
of the 1997 Plan, to establish rules and regulations deemed necessary or
advisable for the proper administration of the 1997 Plan and to determine
the individuals to whom, and the time or times at which, options will be
granted, the type of options, the exercise periods, limitations on
exercise, the number of shares subject to each option and any other terms,
limitations, conditions and restrictions on any option granted under the
1997 Plan. Subject to the express terms of the 1997 Plan, determinations
and interpretations with respect thereto will be conclusive and binding on
all parties.
Eligibility
Options may be granted under the 1997 Plan to officers and other
key employees of the Company and of any of its present and future
subsidiaries. A director or an officer of the Company or of a subsidiary
who is not also an employee of the Company or of a subsidiary is not
eligible to receive options under the 1997 Plan. Approximately 20 persons
are currently eligible to receive options under the 1997 Plan, however,
the Board, based upon the recommendation of the Compensation Committee,
has granted special one-time stock options to approximately 40 other key
employees of the Company or its subsidiaries under the 1993 Plan.
Awards Under the 1997 Plan; Available Shares
The 1997 Plan permits the grant to officers and other key
employees of either "incentive stock options," which qualify for special
income tax treatment under the Internal Revenue Code, or "nonstatutory
stock options," which do not so qualify. The aggregate fair market value
(determined as of the date the option is granted) of the Common Stock for
which an incentive stock option is exercisable for the first time by a
participant during any calendar year under the 1997 Plan or any other plan
of the Company may not exceed $100,000.
The maximum number of shares of Common Stock which may be
acquired upon the exercise of options granted under the 1997 Plan is
300,000, subject to adjustment in order to prevent dilution in certain
cases as described below. In the event that all or any portion of an
option granted under the 1997 Plan expires unexercised, is cancelled or
terminates, the shares then subject to such option will again be available
for the granting of additional options under the 1997 Plan. The 1997 Plan
provides that no officer or key employee may be granted options that could
result in such participant receiving more than 125,000 shares of Common
Stock under the 1997 Plan, which number of shares is subject to adjustment
to prevent dilution in certain cases as described below. Any shares
delivered pursuant to the exercise of options granted under the 1997 Plan
may be either authorized and unissued shares of Common Stock or treasury
shares held by the Company.
Terms of Options
The option exercise price per share of Common Stock subject to
any option granted to an officer or other key employee under the 1997 Plan
will be determined by the Compensation Committee or the Board, but may not
be less than 100% of the fair market value of a share of Common Stock on
the date the option is granted; provided, however, that no incentive stock
option may be granted to any officer or other key employee who, at the
time such incentive stock option is granted, owns stock possessing more
than 10% of the total combined voting power of all classes of stock of the
Company or its subsidiaries unless the option exercise price of such
incentive stock option is at least 110% of the fair market value of a
share of Common Stock on the date of grant.
Options granted under the 1997 Plan will expire at such time as
the Compensation Committee or Board determines, except that no incentive
stock option may be exercised more than ten years from the date of grant.
Options cannot be exercised until the period, if any, specified by the
Compensation Committee or Board has expired. If the employment of an
officer or key employee terminates for any reason whatsoever, all rights
to exercise an option granted pursuant to the 1997 Plan also terminate
unless otherwise determined by the Compensation Committee or the Board or
provided in the option agreement with such officer or key employee.
Except as otherwise provided by the Compensation Committee or the Board,
options are not transferrable otherwise than by will or the laws of
descent and distribution, and may be exercised during the life of the
officer or key employee only by him or her. No options may be granted
under the 1997 Plan after November 22, 2006.
The purchase price for shares of Common Stock acquired upon
exercise of options under the 1997 Plan may be paid in cash, by delivery
of securities of the Company having a fair market value on the date of
exercise equal to the option exercise price or by delivery to the Company
of an executed irrevocable option exercise form together with irrevocable
instructions to a broker-dealer to sell or margin a sufficient portion of
the shares and deliver the sale or margin loan proceeds directly to the
Company to pay for the option exercise price. No shares of Common Stock
will be issued under the 1997 Plan until full payment therefor has been
made.
Capital Adjustments
In the event of a capital adjustment resulting from a stock
dividend (other than a stock dividend in lieu of an ordinary cash
dividend), stock split, reorganization, merger, consolidation, spin-off,
recapitalization, split-up, combination or exchange of shares, or
otherwise, the aggregate number and class of shares available under the
1997 Plan, the limit imposed on the number of options that may be granted
to any one participant, the number and class of shares subject to each
outstanding option and the exercise price for shares subject to each
outstanding option, shall be appropriately adjusted by the Compensation
Committee or the Board, whose determination shall be conclusive.
Amendment and Termination
The 1997 Plan shall terminate on November 22, 2006, unless
sooner terminated as provided thereunder. The Board may at any time and
from time to time terminate or amend the 1997 Plan; provided, however,
that approval of the Company's shareholders for any such amendment shall
also be obtained if otherwise required by (i) the Internal Revenue Code or
any rules promulgated thereunder (in order to allow for incentive stock
options to be granted under the 1997 Plan or to enable the Company to
comply with the provisions of Section 162(m) of the Internal Revenue Code)
or (ii) the listing requirements of any principal securities exchange or
market on which the shares of Common Stock are then traded (in order to
maintain the listing or quotation of the Common Stock thereon). No
termination or amendment of the 1997 Plan may, without the participant's
consent, adversely affect the rights of such participant under any option
previously granted to such participant.
Withholding
Under the 1997 Plan, the Company may deduct and withhold from
any cash otherwise payable to a participant such amount as may be required
to satisfy the Company's obligation to withhold Federal, state or local
taxes. In the event such amount withheld is insufficient for such
purpose, the Company may require that the participant pay to the Company
upon demand or otherwise make arrangements satisfactory to the Company for
payment of an amount necessary to satisfy the obligation to withhold any
such taxes. A participant may satisfy the Company's withholding tax
requirements by electing to have the Company withhold shares of Common
Stock otherwise issuable to such participant.
Certain Federal Income Tax Consequences
The grant of a stock option under the 1997 Plan will create no
income tax consequences to the participant or the Company. A participant
who is granted a nonstatutory stock option will generally recognize
ordinary income at the time of exercise in an amount equal to the excess
of the fair market value of the Common Stock acquired at such time over
the exercise price. Although the Company will generally be entitled to a
deduction in the same amount and at the same time as ordinary income is
recognized by the participant, the Company may lose all or a portion of
such deduction if any of the options granted do not qualify as
"performance-based compensation" under Section 162(m) of the Internal
Revenue Code. A subsequent disposition of the Common Stock will give rise
to capital gain or loss to the extent the amount realized from the sale
differs from the tax basis, i.e., the fair market value of the Common
Stock on the date of exercise. This capital gain or loss will be long-
term capital gain or loss if the Common Stock has been held for more than
one year from the date of exercise.
In general, if a participant in the 1997 Plan holds the Common
Stock acquired pursuant to the exercise of an incentive stock option for
at least two years from the date of grant and one year from the date of
exercise, the participant will recognize no income or gain as a result of
exercise for regular income tax purposes. However, the excess of the fair
market value of the Common Stock acquired on the date of exercise over the
exercise price (the "Spread") is an adjustment for alternative minimum tax
purposes and, as a result, the participant may be taxed on all or a
portion of the Spread under the alternative minimum tax. Except as
described below, any gain or loss realized by the participant on the
disposition of the Common Stock acquired pursuant to the exercise of an
incentive stock option will be treated as a long-term capital gain or loss
and no deduction will be allowed to the Company. If these holding period
requirements are not satisfied, the participant will recognize ordinary
income at the time of the disposition equal to the lesser of (a) the gain
realized on the disposition, or (b) the Spread. The Company will be
entitled to a deduction in the same amount and at the same time as
ordinary income is recognized by the participant. Any additional gain
realized by the participant over the fair market value at the time of
exercise will be treated as a capital gain. This capital gain will be a
long-term capital gain if the Common Stock had been held for more than one
year from the date of exercise.
Awards under the 1997 Plan
The following table sets forth information with respect to
option grants that have been made under the 1997 Plan to date to the
various individuals and groups identified below. All of such options were
granted contingent upon shareholder approval of the 1997 Plan at the
Annual Meeting. The options are nonstatutory stock options which vest and
become exercisable in 20% increments over a five-year period from the date
of grant. The options had a per share exercise price of $10.875. Other
than Messrs. Gantert, J. Schneider and Llewellyn, no other named executive
officer has been granted options under the 1997 Plan.
New Plan Benefits
LaCrosse Footwear, Inc.
1997 Employee Stock Incentive Plan
Number of Shares
Name and Position of Common Stock
Subject to Options
Patrick K. Gantert . . . . . . . . . . . . 9,000
President and Chief Executive
Officer
Joseph P. Schneider . . . . . . . . . . . . 2,500
Vice President
David R. Llewellyn . . . . . . . . . . . . 2,500
Vice President - Marketing
and Business Development
All executive officers as . . . . . . . . . . . . 21,750
a group (16 persons)
All employees (other than . . . . . . . . . . . . 1,250
executive officers) as a
group
The Company cannot currently determine the options that may be
granted to eligible participants under the 1997 Plan in the future. Such
determinations will be made from time to time by the Compensation
Committee and/or the Board.
On April 18, 1997, the last reported price per share of the
Common Stock on The Nasdaq National Market was $11.375.
Vote Required
The affirmative vote of the holders of a majority of the shares
of Common Stock represented and voted at the Annual Meeting with respect
to the 1997 Plan (assuming a quorum is present) is required to approve the
1997 Plan. Any shares of Common Stock not voted at the Annual Meeting
with respect to the 1997 Plan (whether as a result of broker non-votes or
otherwise, except abstentions) will have no impact on the vote. Shares of
Common Stock as to which holders abstain from voting will be treated as
votes against the 1997 Plan.
THE BOARD RECOMMENDS A VOTE "FOR" THE 1997 PLAN AND URGES EACH SHAREHOLDER
TO VOTE "FOR" THE 1997 PLAN. SHARES OF COMMON STOCK REPRESENTED BY
EXECUTED BUT UNMARKED PROXIES WILL BE VOTED "FOR" THE 1997 PLAN.
CERTAIN TRANSACTIONS
In March 1994, the Company consummated the acquisition of
Danner. Eric E. Merk, Sr., Vice President-Danner and a director of the
Company, owned 46.75% of the equity interest in Danner and his wife owned
another 46.75%.
In connection with the consummation of the acquisition of
Danner, the Company entered into a lease for the Portland, Oregon facility
used by the Danner business with an Oregon general partnership in which
Mr. Merk and his wife have a 50% partnership interest. Under the lease,
the Company pays an annual rent of $180,000, subject to an annual cost of
living adjustment, and all other costs associated with owning and
operating such facility, including utilities, taxes and insurance. In
1996, rent for the facility was $189,570. The lease also gives the
Company a right of first refusal in the event of a proposed sale of the
facility during the term of the lease. The terms of the foregoing
arrangement were negotiated between the Company and the Oregon general
partnership on an arms-length basis at the time of the acquisition of
Danner and, on that basis, the Company believes the terms of the lease are
no less favorable to the Company than could have been obtained from an
unaffiliated third party.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires
the Company's directors and executive officers to file reports concerning
their ownership of Company equity securities with the Securities and
Exchange Commission and the Company. Based solely upon information
provided to the Company by individual directors and executive officers,
the Company believes that during the fiscal year ended December 31, 1996
all its directors and executive officers complied with the Section 16(a)
filing requirements, except that a Form 4 filing required upon the
purchase of Common Stock through a 401(k) plan by the spouse of Mr.
Rinehart, an officer of the Company, was late.
MISCELLANEOUS
Independent Auditors
McGladrey & Pullen, LLP acted as the independent auditors for
the Company in 1996 and it is anticipated that such firm will be similarly
appointed to act in 1997. Representatives of McGladrey & Pullen, LLP are
expected to be present at the Annual Meeting with the opportunity to make
a statement if they so desire. Such representatives are also expected to
be available to respond to appropriate questions.
Shareholder Proposals
Proposals which shareholders of the Company intend to present at
and have included in the Company's proxy statement for the 1998 annual
meeting must be received by the Company by the close of business on
January 7, 1998.
Other Matters
The cost of soliciting proxies will be borne by the Company. In
addition to soliciting proxies by mail, proxies may be solicited
personally and by telephone by certain officers and regular employees of
the Company. The Company will reimburse brokers and other nominees for
their reasonable expenses in communicating with the persons for whom they
hold Common Stock.
By Order of the Board of Directors
LACROSSE FOOTWEAR, INC.
Thomas S. Sleik
Secretary
May 7, 1997
<PAGE>
Appendix A
LACROSSE FOOTWEAR, INC.
1997 EMPLOYEE STOCK INCENTIVE PLAN
(1) Establishment. LACROSSE FOOTWEAR, INC. (the "Company")
hereby establishes a stock incentive plan for certain officers and other
key employees, as described herein, which shall be known as the "LACROSSE
FOOTWEAR, INC. 1997 EMPLOYEE STOCK INCENTIVE PLAN" (the "Plan"). It is
intended that stock options (including both incentive stock options and
nonstatutory stock options) may be granted under the Plan.
(2) Purpose. The purpose of the Plan is to induce certain
officers and other key employees to remain in the employ of the Company or
its subsidiaries and to encourage such employees to secure or increase on
reasonable terms their stock ownership in the Company. The Board of
Directors of the Company (the "Board") believes that the Plan will promote
continuity of management and increased incentive and personal interest in
the welfare of the Company by those who are primarily responsible for
shaping and carrying out the long-range plans of the Company and securing
its continued growth and financial success.
(3) Effective Date of the Plan. The effective date of the Plan
is the date of its adoption by the Board, November 22, 1996, subject to
the approval and ratification of the Plan by the shareholders of the
Company within twelve months of the effective date, and any and all awards
made under the Plan prior to such approval shall be subject to such
approval.
(4) Stock Subject to Plan. Subject to adjustment in accordance
with the provisions of Section 8, common stock, $.01 par value per share,
not to exceed 300,000 shares, may be issued pursuant to the Plan. Such
shares may be authorized and unissued or treasury shares. If any options
expire, are canceled, or terminate for any reason without having been
exercised in full, the shares subject to the unexercised portion thereof
shall again be available for the purposes of the Plan.
(5) Administration. The Plan shall be administered by the
Board and/or the Compensation Committee (the "Committee") of the Board
consisting of not less than two directors, each of whom shall qualify as a
"non-employee director" within the meaning of Rule 16b-3 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or any
successor rule or regulation, and an "outside director" within the meaning
of Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), and Treasury Regulation Section 1.162-27 promulgated thereunder.
If at any time the Committee shall not be in existence or not consist of
directors who are qualified as"non-employee directors" and "outside
directors" as defined above, the Board shall administer the Plan. To the
extent permitted by applicable law, the Board may, in its discretion,
delegate to another committee of the Board or to one or more senior
officers of the Company any or all of the authority and responsibility of
the Committee with respect to options to participants other than
participants who are subject to the provisions of Section 16 of the
Exchange Act ("Section 16 Participants"). To the extent that the Board
has delegated to such other committee or one or more officers the
authority and responsibility of the Committee, all references to the
Committee herein shall include such other committee or one or more
officers.
The Committee and the Board each shall have authority to grant
stock options ("Awards") to eligible employees of the Company and its
present and future subsidiaries under the Plan. Subject to the express
provisions of the Plan, the Committee and the Board each shall have
authority to establish such rules and regulations as they deem necessary
or advisable for the proper administration of the Plan, and, in their
discretion, to determine the individuals to whom, and the time or times at
which Awards shall be granted, the type of Awards, the exercise periods,
limitations on exercise, the number of shares to be subject to each Award
and any other terms, limitations, conditions and restrictions on Awards as
the Committee or the Board, in its discretion, deems appropriate;
provided, however, that the maximum number of shares, subject to
adjustment in accordance with the provisions of Section 8, subject to
Award that any one Participant (as hereinafter defined in Section 6
hereof) can be granted under the Plan during its term is 125,000. In
making such determinations, the Committee and the Board may take into
account the nature of the services rendered by the respective employees,
their present and potential contributions to the success of the Company or
its subsidiaries, and such other factors as the Committee or the Board in
its discretion shall deem relevant. Subject to the express provisions of
the Plan, the Committee and the Board each shall also have authority to
interpret the Plan, to prescribe, amend and rescind rules and regulations
relating to it, to determine the terms and provisions of the respective
Award agreements (which need not be identical), to waive any conditions or
restrictions with respect to any Award and to make all other
determinations necessary or advisable for the administration of the Plan.
The Committee and Board determinations on the matters referred to in this
Section 5 shall be conclusive.
(6) Eligibility. Awards may be granted to officers and other
key employees of the Company and of any of its present and future
subsidiaries ("Participants") under the Plan. A director or an officer of
the Company or of a subsidiary who is not also an employee of the Company
or of a subsidiary shall not be eligible to receive an Award.
(7) Grants of Options.
(a) Grant. Subject to the provisions of the Plan, the
Committee and the Board each may grant stock options to Participants in
such amounts as they shall determine. The Committee and the Board each
shall have full discretion to determine the terms and conditions
(including vesting) of all options. The Committee or Board shall
determine whether an option is to be an incentive stock option within the
meaning of Section 422 of the Code or a nonstatutory stock option and
shall enter into option agreements with Participants accordingly.
(b) Option Price. The per share option price, as determined by
the Committee or Board, shall be an amount not less than 100% of the fair
market value of the stock on the date such option is granted (110% in the
case of incentive stock options granted pursuant to Section 422(c)(5) of
the Code), as such fair market value is determined by such methods or
procedures as shall be established from time to time by the Committee or
Board ("Fair Market Value").
(c) Option Period. The term of each option shall be as
determined by the Committee or Board, but in no event shall the term of an
incentive stock option exceed a period of ten (10) years from the date of
its grant.
(d) Maximum Per Participant. The aggregate Fair Market Value
of the stock for which an incentive stock option is exercisable by a
Participant for the first time during any calendar year under the Plan and
any other plans of the Company or its subsidiaries shall not exceed
$100,000.
(e) Exercise of Option. The Committee or Board shall prescribe
the manner in which a Participant may exercise an option which is not
inconsistent with the provisions of this Plan. An option may be
exercised, subject to limitations on its exercise and the provisions of
subparagraph (g), from time to time, only by (i) providing written notice
of intent to exercise the option with respect to a specified number of
shares, and (ii) payment in full to the Company of the option price at the
time of exercise. Payment of the option price may be made (i) by delivery
of cash and/or securities of the Company having a then Fair Market Value
equal to the option price, or (ii) by delivery (including by fax) to the
Company or its designated agent of an executed irrevocable option exercise
form together with irrevocable instructions to a broker-dealer to sell or
margin a sufficient portion of the shares and deliver the sale or margin
loan proceeds directly to the Company to pay for the option price.
(f) Transferability of Option. The options are not
transferable otherwise than by will or the laws of descent and
distribution, and may be exercised during the life of the Participant only
by the Participant, except that a Participant may, to the extent allowed
by the Committee or Board and in a manner specified by the Committee or
Board, (a) designate in writing a beneficiary to exercise the option after
the Participant's death, and (b) transfer any option.
(g) Termination of Employment. In the event a Participant
leaves the employ of the Company and/or its subsidiaries whether
voluntarily or by reason of dismissal, disability or retirement, all
rights to exercise an option shall terminate immediately unless otherwise
determined by the Committee or Board or provided in the option agreement
granted to such Participant.
(8) Capital Adjustment Provisions. In the event of any change
in the shares of common stock of the Company by reason of a declaration of
a stock dividend (other than a stock dividend declared in lieu of an
ordinary cash dividend), stock split, reorganization, merger,
consolidation, spin-off, recapitalization, split-up, combination or
exchange of shares, or otherwise, the aggregate number and class of shares
available under this Plan, the number and class of shares subject to each
outstanding Award, and the exercise price for shares subject to each
outstanding option, shall be appropriately adjusted by the Committee or
Board, whose determination shall be conclusive.
(9) Termination and Amendment of Plan. The Plan shall
terminate on November 22, 2006, unless sooner terminated as hereinafter
provided. The Board may at any time terminate the Plan, or amend the Plan
as it shall deem advisable including (without limiting the generality of
the foregoing) any amendments deemed by the Board to be necessary or
advisable to assure the Company's deduction under Section 162(m) of the
Code for all Awards granted under the Plan, to assure conformity of the
Plan and any incentive stock options granted thereunder to the
requirements of Section 422 of the Code and to assure conformity with any
requirements of other state or federal laws or regulations; provided,
however, that shareholder approval of any amendment of the Plan shall also
be obtained if otherwise required by (i) the Code or any rules promulgated
thereunder (in order to allow for incentive stock options to be granted
under the Plan or to enable the Company to comply with the provisions of
Section 162(m) of the Code) or (ii) the listing requirements of any
principal securities exchange or market on which the shares are then
traded (in order to maintain the listing or quotation of the shares
thereon). No termination or amendment of the Plan may, without the
consent of the Participant, adversely affect the rights of such
Participant under any Award previously granted.
(10) Rights of Employees. Nothing in this Plan or in any Awards
shall interfere with or limit in any way the right of the Company and any
of its subsidiaries to terminate any Participant's or employee's
employment at any time, nor confer upon any Participant or employee any
right to continue in the employ of the Company or any of its subsidiaries.
(11) Rights as a Shareholder. A Participant shall have no
rights as a shareholder with respect to shares covered by any option until
the date of issuance of the stock certificate to such Participant and only
after such shares are fully paid. No adjustment will be made for
dividends or other rights for which the record date is prior to the date
such stock is issued.
(12) Tax Withholding. The Company may deduct and withhold from
any cash otherwise payable to a Participant such amount as may be required
for the purpose of satisfying the Company's obligation to withhold
Federal, state or local taxes in connection with any Award. Further, in
the event the amount so withheld is insufficient for such purpose, the
Company may require that the Participant pay to the Company upon its
demand or otherwise make arrangements satisfactory to the Company for
payment of such amount as may be requested by the Company in order to
satisfy its obligation to withhold any such taxes.
A Participant may be permitted to satisfy the Company's
withholding tax requirements by electing to have the Company withhold
shares of stock otherwise issuable to the Participant. The election shall
be made in writing and shall be made according to such rules and in such
form as the Committee or Board may determine.
(13) Miscellaneous. The grant of any Award under the Plan may
also be subject to other provisions as the Committee or Board determines
appropriate, including, without limitation, provisions for (a) one or more
means to enable Participants to defer recognition of taxable income
relating to Awards, which means may provide for a return to a Participant
on amounts deferred as determined by the Committee or Board; (b) the
purchase of stock under options in installments; and (c) compliance with
federal or state securities laws and stock exchange or Nasdaq National
Market requirements.
(14) Agreements. Awards granted pursuant to the Plan shall be
evidenced by written agreements in such form as the Committee or Board
shall from time to time adopt.
(15) Governing Law. The Plan and all determinations made and
actions taken pursuant thereto shall be governed by and construed in
accordance with the internal laws of the State of Wisconsin.
<PAGE>
LACROSSE FOOTWEAR, INC.
1997 ANNUAL MEETING OF SHAREHOLDERS
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints George W. Schneider, Frank J. Uhler, Jr.
and Patrick K. Gantert, and each of them, as Proxies with the power of
substitution (to act jointly or if only one acts then by that one) and
hereby authorizes them to represent and to vote as designated below all of
the shares of Common Stock of LaCrosse Footwear, Inc. held of record by
the undersigned on April 18, 1997, at the annual meeting of shareholders
to be held on June 12, 1997, or any adjournment or postponement thereof.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made, this
proxy will be voted "FOR" the election of the Board's nominees and "FOR"
the approval of the LaCrosse Footwear, Inc. 1997 Employee Stock Incentive
Plan.
PLEASE DETACH BELOW, SIGN, DATE AND RETURN USING THE ENVELOPE PROVIDED
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
<PAGE>
LACROSSE FOOTWEAR, INC. 1997 ANNUAL MEETING
1. ELECTION OF 1 - Patrick K. [_] FOR all [_] WITHHOLD
DIRECTORS: Gantert nominees AUTHORITY
Terms expiring listed to to vote
at the 2 - Virginia F. the left for all
2000 Annual Schneider (except nominees
Meeting as speci- listed
3 - Luke E. Sims fied to the
below). left.
(Instructions: To withhold authority to
vote for any indicated nominee, [--------------------------]
write the number(s) of the nominee(s) [ ]
in the box provided to the right.) [--------------------------]
2. TO APPROVE THE LACROSSE
FOOTWEAR, INC. 1997 [_] FOR [_] AGAINST [_] ABSTAIN
EMPLOYEE STOCK INCENTIVE PLAN:
3. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH
OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
Address Change? Date______________, 1997 NO. OF SHARES
Mark Box [_]
Indicate changes below:
[_] Please check this box [-------------------------]
if you plan to attend [ ]
the Annual Meeting [ ]
[ ]
Number of persons attending:___[ ]
[-------------------------]
Signature(s) in Box
Please sign exactly as name appears
hereon. When shares are held by joint
tenants, both should sign. When signing
as attorney, executor, administrator,
trustee or guardian, please give full
title as such. If a corporation, please
sign in full corporate name by President
or other authorized officer. If a
partnership, please sign in partnership
name by authorized person.
