<PAGE> 1
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> 2
LACROSSE FOOTWEAR, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 14, 1998
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, May 14, 1998, at 10:00 A.M., local
time, at the Radisson Hotel La Crosse, 200 Harborview Plaza, La Crosse,
Wisconsin 54601, for the following purposes:
1. To elect three directors to hold office until the 2001 annual
meeting of shareholders and until their successors are duly elected and
qualified.
2. 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 March 20, 1998 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
April 14, 1998
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> 3
LACROSSE FOOTWEAR, INC.
1319 ST. ANDREW STREET
LA CROSSE, WISCONSIN 54603
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 14, 1998
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 April 14, 1998 in connection with a solicitation of proxies by the
Board for use at the annual meeting of shareholders to be held on Thursday, May
14, 1998, at 10:00 A.M., local time, at the Radisson Hotel La Crosse, 200
Harborview Plaza, La Crosse, Wisconsin 54601 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 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, 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 March 20, 1998 are
entitled to vote at the Annual Meeting. On that date, the Company had
outstanding and entitled to vote 6,669,427 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 2001 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
<PAGE> 4
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 March 20, 1998, 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 2001 Annual Meeting
GEORGE W. SCHNEIDER, 75, 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., 55, 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"). In addition, Mr. Merk
has served as Chief Executive Officer of Danner since the March 1994
acquisition. 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., and serves on the Finance Committee of the Economic
Development Department of the State of Oregon.
CRAIG L. LEIPOLD, 45, has served as a director of the Company since
November 1997 and as President and Chief Executive Officer of the Company's
Rainfair, Inc. ("Rainfair") subsidiary since the May 1996 acquisition of
Rainfair. Prior to joining the Company, Mr. Leipold was the primary shareholder
and Chief Executive Officer of Rainfair since 1989. Mr. Leipold is also Chief
Executive Officer of the Nashville Predators, a National Hockey League team, and
a director of Levy Corp.
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 1999 Annual Meeting
FRANK J. UHLER, JR., 67, 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.
2
<PAGE> 5
RICHARD A. ROSENTHAL, 65, 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.
Terms expiring at the 2000 Annual Meeting
PATRICK K. GANTERT, 48, 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.
LUKE E. SIMS, 48, 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.
JOHN D. WHITCOMBE, 42, has served as a director of the Company since March
1998. Mr. Whitcombe has been a partner in the law firm of Burkley, Greenberg,
Fields & Whitcombe, Torrance, California, since November 1994 and from 1992
until November 1994 he was a partner in the law firm of Whitcombe, Makin &
Pentis. Mr. Whitcombe is a director of the Oarsmen Foundation, RHCDS Educational
Scholarship Fund and Pacific Bank Technology, Inc.
Joseph P. Schneider, an officer of the Company, is the son of George W.
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 1997.
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 1997 Employee Stock Incentive Plan (the
"1997 Plan"). Luke E. Sims (Chairman) and Richard A. Rosenthal are members of
the Compensation Committee. The Compensation Committee held one meeting in 1997.
3
<PAGE> 6
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 1997. 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).
4
<PAGE> 7
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of Common Stock as of March 20, 1998 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.
<TABLE>
<CAPTION>
SHARES OF PERCENT OF
COMMON STOCK COMMON STOCK
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED(1) BENEFICIALLY OWNED
------------------------ --------------------- ------------------
<S> <C> <C>
Schneider Family Voting Trust(2)........................... 3,321,299 49.8%
George W. Schneider(3)..................................... 1,343,903(2) 20.2%
Virginia F. Schneider(3)................................... 1,343,903(2) 20.2%
Firstar Corporation(4)..................................... 492,978 7.4%
Firstar Trust Company(5)................................... 492,578(4) 7.4%
Heartland Advisors, Inc.(6)................................ 377,500 5.7%
Joseph P. Schneider........................................ 221,304(2) 3.3%
Eric E. Merk, Sr. ......................................... 121,140(7) 1.8%
Frank J. Uhler, Jr. ....................................... 90,400(8) 1.4%
Patrick K. Gantert......................................... 77,850 1.2%
Luke E. Sims............................................... 34,000(9) *
Richard A. Rosenthal....................................... 21,750 *
David R. Llewellyn......................................... 7,100 *
John D. Whitcombe.......................................... 2,500 *
Craig L. Leipold........................................... 2,000 *
All directors, nominees and executive officers as a group
(20 persons)............................................. 1,982,106(2)(10) 29.3%
</TABLE>
- -------------------------
* Denotes less than 1%.
(1) Includes the following shares subject to stock options which are
exercisable within 60 days of March 20, 1998: Joseph P. Schneider, 9,400
shares; Patrick K. Gantert, 20,600 shares; David R. Llewellyn, 6,100 shares
and all directors, nominees and executive officers as a group, 90,300
shares.
(2) Substantially all of the shares of Common Stock beneficially owned by
George W. Schneider, Virginia F. Schneider and 11 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) 1,297,005 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) 167,254 of the shares reported as
beneficially owned by Joseph P. Schneider, and (c) 1,464,259
5
<PAGE> 8
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) 4,000 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) 42,000 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 42,000 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 3 to a report on Schedule 13G,
dated February 13, 1998, filed by Firstar Corporation ("Firstar") with the
Securities and Exchange Commission. Firstar reported sole voting and
investment power over 492,578 of the shares and shared voting and
investment power over 400 of the shares. Shares held by Firstar include
492,578 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 2 to a report on Schedule 13G,
dated February 13, 1998, filed by Firstar Trust Company with the Securities
and Exchange Commission. Firstar Trust Company reports beneficial ownership
of these shares, in part, 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 Schedule 13G, dated January 23, 1998, filed by
Heartland Advisors, Inc. ("Heartland") with the Securities and Exchange
Commission. Heartland is considered the beneficial owner of the shares of
Common Stock indicated in the table, which shares are held in its
investment advisory accounts. The address of Heartland is 790 North
Milwaukee Street, Milwaukee, Wisconsin 53202.
(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 3,089 shares held by the Company's 401(k) Plan based on a plan
statement dated as of December 31, 1997.
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 11 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.
6
<PAGE> 9
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; provided, however, that on January 31 of each
year (commencing on January 31, 1998) each beneficiary will automatically
receive 10,000 shares.
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.
7
<PAGE> 10
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 $100,000
in the fiscal year ended December 31, 1997. The persons named in the table are
sometimes referred to herein as the "named executive officers."
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
----------------------------------------- ---------- ------------
SECURITIES LONG-TERM
UNDERLYING INCENTIVE
NAME AND OTHER ANNUAL STOCK COMPENSATION ALL OTHER
PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($)(1) OPTIONS(#) PAYOUTS($) COMPENSATION($)
------------------ ---- --------- -------- ------------------ ---------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
George W. Schneider 1997 $154,000 $113,970 - - - $12,970(2)
Chairman of the Board 1996 138,462 104,769 - - - 12,546
1995 125,000 - - - - 12,468
Patrick K. Gantert 1997 165,000 159,967 - 9,000 - 37,025(3)
President and Chief 1996 147,692 114,769 - 8,000 - 30,224
Executive Officer 1995 133,077 68,113 - 6,000 - 23,005
Joseph P. Schneider 1997 129,904 57,044 - 2,500 - 3,268(4)
Vice President 1996 106,542 42,755 $50,415 3,500 - 2,531
1995 92,371 30,837 - 2,500 - 1,128
David R. Llewellyn 1997 122,300 55,480 - 2,500 - 3,112(5)
Vice President - 1996 117,210 51,822 - 3,500 - 2,661
Marketing and Business 1995 113,385 37,538 - 9,500 - 2,174
Development
Eric E. Merk, Sr. 1997 116,481 50,020 - - - 4,691(6)
Vice President - Danner 1996 131,109 43,294 - - - 5,430
1995 160,636 56,223 - - - 3,331
</TABLE>
- -------------------------
(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 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).
(2) Includes $10,410 for term life insurance premiums and a $2,560 matching
contribution under the Company's 401(k) Plan.
(3) Includes $33,196 accrued under the Company's Deferred Compensation Plan for
Key Employees, $1,269 for term life insurance premiums and a $2,560 matching
contribution under the Company's 401(k) Plan.
8
<PAGE> 11
(4) Includes $68 for term life insurance premiums and a $3,200 matching
contribution under the Company's 401(k) Plan.
(5) Includes $702 for term life insurance premiums and a $2,410 matching
contribution under the Company's 401(k) Plan.
(6) Includes $1,491 accrued under the Company's Deferred Compensation Plan for
Key Employees and a $3,200 matching contribution under the Company's 401(k)
Plan.
STOCK OPTIONS
The Company has in effect the 1993 Plan and the 1997 Plan pursuant to which
options to purchase Common Stock may be granted to officers and other key
employees of the Company and its subsidiaries. The following table presents
certain information as to grants of stock options made during fiscal 1997 to
Patrick K. Gantert, Joseph P. Schneider and David R. Llewellyn. No other named
executive officer was granted options in fiscal 1997.
OPTION GRANTS IN 1997 FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM(2)
---------------------------------------------------------- ------------------------------
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS AT 0% AT 5% AT 10%
UNDERLYING GRANTED TO EXERCISE OR ANNUAL ANNUAL ANNUAL
OPTIONS GRANTED EMPLOYEES IN BASE PRICE EXPIRATION GROWTH GROWTH GROWTH
NAME (#)(1) FISCAL YEAR ($/SHARE) DATE RATE RATE RATE
---- --------------- ------------- ----------- ---------- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Patrick K. Gantert..... 9,000 14.2% $10.875 1/2/07 0 $61,553 $155,988
Joseph P. Schneider.... 2,500 3.9% 10.875 1/2/07 0 17,098 43,330
David R. Llewellyn..... 2,500 3.9% 10.875 1/2/07 0 17,098 43,330
</TABLE>
- -------------------------
(1) The options reflected in the table (which are nonstatutory options for
purposes of the Internal Revenue Code) were granted on January 2, 1997, and
became or will become exercisable in 20% increments on January 2, 1998,
1999, 2000, 2001 and 2002.
(2) This presentation is intended to disclose the potential value which would
accrue to the optionee if the option were exercised the day before it would
expire and if the per share value had appreciated at the compounded annual
rate indicated in each column. The assumed rates of appreciation of 5% and
10% are prescribed by the rules of the Securities and Exchange Commission
regarding disclosure of executive compensation. The assumed annual rates of
appreciation are not intended to forecast possible future appreciation, if
any, with respect to the price of the Common Stock.
9
<PAGE> 12
The following table sets forth information regarding the exercise of stock
options by the named executive officers during the 1997 fiscal year and the
fiscal year-end value of unexercised options held by such persons. Messrs. G.
Schneider and Merk did not hold any options to acquire Common Stock as of
December 31, 1997 and are accordingly not reflected in the table.
AGGREGATED OPTION EXERCISES IN 1997
FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL IN-THE-MONEY OPTIONS
SHARES YEAR-END(#) AT FISCAL YEAR-END($)(1)
ACQUIRED ON VALUE ---------------------------- -------------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Patrick K. Gantert...... -- -- 13,000 25,000 $30,004 $84,516
Joseph P. Schneider..... -- -- 6,200 9,800 13,808 33,670
David R. Llewellyn...... -- -- 4,500 11,000 16,908 43,945
</TABLE>
- -------------------------
(1) 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.
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
1998.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
AVERAGE YEARS OF SERVICE
ANNUAL -----------------------------------------------------------------------
COMPENSATION 15 20 25 30 35
- ------------ ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
$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
</TABLE>
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.
10
<PAGE> 13
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 1997 compensation limit applicable to the Salaried Plan
was $160,000. 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, 1997 are as follows: Mr. G.
Schneider, 16 years; Mr. Gantert, 13 years; Mr. J. Schneider, 11 years; and Mr.
Llewellyn, 4 years. Pursuant to the terms of the Salaried Plan, Mr. G. Schneider
began receiving benefits in 1994.
In connection with Joseph P. Schneider's election as Chief Operating
Officer of Danner in June 1996 (and, as a result thereof, the recognition that
under the terms of the Salaried Plan Mr. J. Schneider will not continue to
accrue benefits thereunder), the Company and Mr. J. Schneider reached an
understanding regarding an unfunded supplemental retirement plan for him.
Pursuant to such understanding, upon termination of employment with the Company,
or in the event of termination by reason of Mr. J. Schneider's death or
disability, Mr. J. Schneider (or his beneficiary) will be entitled to receive as
an unfunded monthly supplemental benefit from the Company an amount equal to the
difference between his current deferred vested benefit calculation and what his
benefit would have been had he continued to accrue benefits under the Salaried
Plan (or any successor plan that is in place as of his termination).
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 1997
and all such accounts were credited during such year; however, only Mr. Gantert
received an award from the Company in 1997. 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).
11
<PAGE> 14
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 noncompete 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 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 an annual adjustment to reflect
12
<PAGE> 15
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 1997, 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 October 1997. The results of this study have provided the framework
for determining compensation for executives of the Company.
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).
13
<PAGE> 16
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 1997, 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 1997, the
Compensation Committee increased his base salary by 10% from $150,000 (effective
February 1, 1996) to $165,000 (effective January 1, 1997) 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 1997, Mr. Gantert was awarded a bonus of
$159,967 in 1997 calculated by reference generally to the formula included in
his employment agreement. Because the incentive compensation formula contained
in Mr. Gantert's employment agreement was put into effect in 1993 when Mr.
Gantert was the chief operating officer of the Company directly responsible for
its then more limited operations, the formula provides only general guidance in
evaluating Mr. Gantert's performance. In recognition of this fact, the
Compensation Committee recommended, and the Board approved, a review to be
conducted during 1998 by the Compensation Committee (with the assistance of the
14
<PAGE> 17
Company's compensation consultants) of Mr. Gantert's overall compensation
package, including his incentive compensation formula. In evaluating Mr.
Gantert's performance during 1997, the Compensation Committee and the Board
noted, among other things, the Company's continued profitable growth and the
strategic steps taken by the Company in acquiring the Lake of the Woods business
and the purchase of the remaining 50% equity interest in Rainfair, Inc.
The Compensation Committee recommended (and the Board approved) a bonus of
$113,970 for 1997 for Mr. George Schneider, the Company's Chairman of the Board.
Stock Options. The Company's 1993 Plan and the 1997 Plan 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 1997 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.
The Board, acting on the recommendation of the Compensation Committee,
granted stock options during 1997 to key employees under an informal five-year
plan adopted in 1993 and designed to provide annual grants of stock options to
key employees. In addition, the Board granted, based upon the recommendation of
the Compensation Committee, stock options on a one-time basis to all members of
the Company's employee salesforce who had been with the Company at least two
years.
Section 162(m) Limitation. The Company anticipates that all 1998
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
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.
15
<PAGE> 18
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.
<TABLE>
<CAPTION>
MG
LACROSSE INDUSTRY NASDAQ
Measurement Period FOOTWEAR, GROUP MARKET
(Fiscal Year Covered) INC. INDEX INDEX
<S> <C> <C> <C>
Apr. 8, 1994 100 100 100
Dec. 31, 1994 80.65 114.58 102.34
Dec. 31, 1995 64.76 140.02 132.74
Dec. 31, 1996 80.33 220.70 164.95
Dec. 31, 1997 109.36 161.79 201.77
</TABLE>
16
<PAGE> 19
CERTAIN TRANSACTIONS
In March 1994, the Company consummated the acquisition of Danner in part by
issuing 277,778 shares of Common Stock as a portion of the purchase price. 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 the
acquisition, the Company guaranteed the holders of these shares of Common Stock
a market price of at least $16.20 per share by March 1, 1999. If the market
price is less than $16.20 per share, the Company will be required to make a cash
payment equal to the difference on March 1, 1999. If the former Danner
shareholders have the opportunity to sell their shares of Common Stock under a
Company-filed registration statement or under Rule 144 promulgated under the
Securities Act of 1933, as amended, and choose not to sell after receiving a
Company request to sell, then the Company's obligation can be reduced or
eliminated to the extent of the number of shares permitted to be sold based upon
the then prevailing market price for the Common Stock. As of December 31, 1997,
approximately half of the shares of Common Stock have been sold with no further
obligation on the part of the Company.
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 1997, rent for the facility was $195,794. 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.
In May 1996, the Company and Craig L. Leipold, a director of the Company
since November 1997 and President and Chief Executive Officer of the Company's
Rainfair subsidiary, established a new corporation and each purchased one-half
of the new corporation's common stock for $1,250,000. The Company also purchased
all of the new corporation's outstanding preferred stock for $500,000. On May
31, 1996, this 50%-owned subsidiary of the Company purchased substantially all
of the assets of Rainfair. The name of the subsidiary was changed to Rainfair in
June 1996 after completing the asset purchase. In January 1998, the Company
purchased all of Mr. Leipold's shares of Rainfair for approximately $2.4
million, thereby making Rainfair a wholly-owned subsidiary of the Company.
In connection with the May 1996 acquisition of Rainfair, Rainfair entered
into a sublease indirectly with a Wisconsin corporation which Mr. Leipold owns
for the Racine, Wisconsin facility used by the Rainfair business. Under the
sublease, Rainfair pays an annual rent of $350,000, subject to increases based
on changes in the "prime rate", and all other costs associated with owning and
operating such facility, including utilities, taxes and insurance. In 1997, rent
for the facility was $350,000. The sublease also gives Rainfair an option to
purchase the facility on the last day of the sublease term. The terms of the
foregoing arrangement were negotiated between the Company and the Wisconsin
corporation on an arms-length basis at the time of the acquisition of Rainfair
and, on that basis, the Company believes the terms of the sublease are no less
favorable to the Company and Rainfair than could have been obtained from an
unaffiliated third party.
17
<PAGE> 20
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, 1997 all its directors and executive officers complied
with the Section 16(a) filing requirements, except that a Form 4 filing required
on the purchase of Common Stock by Craig L. Leipold, a director of the Company,
was late.
MISCELLANEOUS
INDEPENDENT AUDITORS
McGladrey & Pullen, LLP acted as the independent auditors for the Company
in 1997 and it is anticipated that such firm will be similarly appointed to act
in 1998. 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 1999 annual meeting must be
received by the Company by the close of business on December 15, 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
April 14, 1998
18
<PAGE> 21
LACROSSE FOOTWEAR, INC.
1998 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 March
20, 1998, at the annual meeting of shareholders to be held on May 14, 1998, 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.
- PLEASE DETACH BELOW, SIGN, DATE AND RETURN PROMPTLY USING THE ENVELOPE
PROVIDED -
................................................................................
<PAGE> 22
LACROSSE FOOTWEAR, INC. 1998 ANNUAL MEETING
<TABLE>
<CAPTION>
<S><C>
1. ELECTION OF 1 - George W. Schneider 2 - Eric E. Merk, Sr. / / FOR all / / WITHHOLD
DIRECTORS: nominees AUTHORITY
Terms expiring at 3 - Craig L. Leipold listed to the to vote for all
the 2001 Annual left (except as nominees listed
Meeting specified to the left.
below).
______________________________________________
(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. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY
COME BEFORE THE MEETING.
Date_________________________, 1998 NO. OF SHARES
Check appropriate box / / Please check this box ______________________________________________
Indicate changes below: if you plan to attend | |
the Annual Meeting. | |
Number of persons |_____________________________________________|
Address Change? / / Name Change? / / 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.
</TABLE>
