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
Rawlings Sporting Goods Company, 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] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] 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
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4) Date Filed:
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<PAGE>
RAWLINGS SPORTING GOODS COMPANY, INC.
1859 Intertech Drive
Fenton, Missouri 63026
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The Annual Meeting of Stockholders of Rawlings Sporting
Goods Company, Inc. (the "Company") will be held at the Marriott
West Hotel, 660 Maryville Centre Drive, St. Louis, Missouri 63141
on Thursday, January 16, 1997 at 10:00 a.m., Central Time, to
consider and take action with respect to the following:
1. To elect two Directors for a class of Directors to
serve until the annual meeting following the
Company's fiscal year ending August 31, 1999.
2. To ratify the Board of Directors' selection of
Arthur Andersen LLP as independent public
accountants of the Company for the Company's
fiscal year ending August 31, 1997.
3. To conduct such other business as may properly
come before the Annual Meeting or any adjournments
thereof.
Stockholders of record at the close of business on
November 18, 1996 are entitled to notice of and to vote at the
Annual Meeting or any adjournments thereof.
All stockholders are cordially invited to attend the
meeting.
By Order of the Board of Directors
\s\ Howard B. Keene
Howard B. Keene
Secretary
Dated: November 27, 1996
YOUR VOTE IS IMPORTANT.
PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT
IN THE ENCLOSED ENVELOPE, WHETHER OR NOT YOU EXPECT TO
ATTEND THE MEETING.
<PAGE>
RAWLINGS SPORTING GOODS COMPANY, INC.
1859 Intertech Drive
Fenton, Missouri 63026
PROXY STATEMENT
Mailed on November 27, 1996
Annual Meeting of Stockholders to be held on January 16, 1997
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Rawlings Sporting Goods Company, Inc.
(the "Company") to be used at the Annual Meeting of Stockholders to be held on
January 16, 1997 and at any adjournments thereof. The time and place of the
Annual Meeting are stated in the Notice of Annual Meeting of Stockholders (the
"Notice") which accompanies this Proxy Statement.
The expense of soliciting proxies, including the costs of preparing,
assembling and mailing the Notice, Proxy Statement and Proxy, will be borne by
the Company. In addition to the use of the mails, proxies may be solicited
personally or by telephone or telegraph, and the Company may pay persons
holding shares for others their expenses in sending proxy materials to their
principals.
VOTING SECURITIES AND VOTES REQUIRED
Only stockholders of record at the close of business on November 18,
1996 are entitled to notice of and to vote at the Annual Meeting. At the
close of business on November 18, 1996, the Company had outstanding and
entitled to vote 7,703,435 shares of Common Stock, par value $.01 per share
(the "Common Stock"). Each share of Common Stock is entitled to one vote.
The holders of record of a majority of the number of shares of Common
Stock issued, outstanding and entitled to vote on any matter shall constitute
a quorum with respect to that matter at the Annual Meeting. Shares of Common
Stock present in person or represented by proxy (including shares which
abstain or withhold a vote with respect to one or more of the matters
presented for stockholder approval) will be counted for purposes of
determining whether a quorum is present.
Each candidate for election as a Director must receive a plurality of
the votes cast by the stockholders present in person or represented by proxy
and entitled to vote at the Annual Meeting. The affirmative vote of the
holders of a majority of the shares of Common Stock, present in person or
represented by proxy and entitled to vote at the Annual Meeting, provided a
quorum is present, is required to ratify the Board of Directors' selection of
Arthur Andersen LLP as independent public accountants of the Company for the
Company's fiscal year ending August 31, 1997.
Shares represented by proxies which are marked "WITHHELD" with regard to
the Election of Directors will be excluded entirely from the vote and will
have no effect. Shares represented by proxies which are marked "ABSTAIN" with
respect to the other matters presented for consideration at the Annual Meeting
will be considered present in person or represented by proxy at the meeting
and, accordingly, will have the effect of a negative vote because those
matters each require the affirmative vote of the holders of a majority of the
shares of Common Stock present in person or represented by proxy and entitled
to vote at the Annual Meeting. In addition, where brokers are prohibited from
exercising discretionary authority for beneficial owners who have not provided
voting instructions with respect to a particular matter ("broker non-votes"),
those shares will have no effect on the outcome of such matter.
Shares entitled to vote represented by proxies which are properly
executed and returned before the Annual Meeting will be voted at the Annual
Meeting as directed therein. If no vote is specified therein, the shares will
be voted <PAGE> "FOR" the election of the Directors named as a nominees in the
Proxy Statement and "FOR" the ratification of the selection of Arthur Andersen
LLP as independent public accountants of the Company for the Company's fiscal
year ending August 31, 1997.
The Board of Directors does not know of any other business to be
presented for consideration at the Annual Meeting. If any other business
properly comes before the Annual Meeting or any adjournment thereof, the
proxies will be voted on such matters in the discretion of the proxy holders
insofar as the proxies are not limited to the contrary. The Delaware General
Corporation Law provides that, unless otherwise provided in the proxy and
unless the proxy is coupled with an interest, a stockholder may revoke a proxy
previously given at any time prior to its exercise at the Annual Meeting. A
stockholder who has given a proxy may revoke it at any time before it is
exercised by delivering to any of the persons named as proxies, or to the
Company addressed to the Secretary, an instrument revoking the proxy, by
appearing at the Annual Meeting and voting in person or by executing a later
dated proxy which is exercised at the Annual Meeting.
PRINCIPAL STOCKHOLDER
The stockholder named in the following table is the only stockholder
which is known to the Company to be the beneficial owner of five percent (5%)
or more of the Company's Common Stock as of August 31, 1996. For purposes of
this table, and as used elsewhere in this Proxy Statement, the term
"beneficial owner" means any person who, directly or indirectly, has or shares
the power to vote, or to direct the voting of, a security or the power to
dispose, or to direct the disposition, of a security.
Name and Address of Amount and Nature of Percent
Beneficial Owner Beneficial Ownership of Class
First Pacific Advisors, Inc. 893,500/1/ 11.6%
1140 West Olympic Boulevard,
Suite 1200
Los Angeles, California 90064
/1/ This amount, as reflected in an amended report on Schedule 13G dated
February 13, 1996, consists of no sole voting power, shared voting power
with respect to 368,500 shares, no sole dispositive power and shared
dispositive power with respect to 893,500 shares.
<PAGE>
STOCK OWNERSHIP OF DIRECTORS,
THE NOMINEES FOR DIRECTOR AND EXECUTIVE OFFICERS
The following table and notes thereto set forth information, as of
October 31, 1996, with respect to the beneficial ownership of shares of Common
Stock by each Director and each Executive Officer named in the Summary
Compensation Table and by the Directors and Executive Officers of the Company,
as a group, based upon information furnished to the Company by such persons:
Amount of Beneficial Ownership
as of October 31, 1996(1)
Amount and Nature of Percent
Name of Beneficial Owner Beneficial Ownership of Class
Carl J. Shields 93,220 /2/ 1.2%
Andrew N. Baur 13,157 /3/ *
Michael McDonnell 79,759 /4/ 1.0%
William C. Robinson 20,000 /5/ *
Michael J. Roarty 11,500 /5/ *
Linda L. Griggs 0 *
Howard B. Keene 42,307 /6/ *
Randy D. Black 14,071 /7/ *
Paul E. Martin 18,016 /8/ *
J. Michael Thompson 12,287 /9/ *
All Directors and
Executive Officers
as a Group (11
persons) 349,119 4.5%
________________________
* Less than 1%
/1/ Each Director and Executive Officer owning shares listed or included in
this table exercises sole voting and dispositive power over such shares,
except as otherwise indicated in footnotes (2) through (9). Included in
the table are shares underlying options that are exercisable within
sixty days after October 31, 1996.
/2/ This amount includes 87,128 shares of Common Stock underlying options
granted under the Rawlings Sporting Goods Company, Inc. Long-Term
Incentive Plan (the "Stock Option Plan"), 1,000 shares of Common Stock
beneficially owned by Mr. Shields' spouse with respect to which
Mr. Shields has shared voting and dispositive power, and 711 shares
beneficially owned under the Rawlings Sporting Goods Company, Inc.
Savings Plan (the "401(k) Plan") as to which Mr. Shields has sole voting
and dispositive power.
/3/ This amount includes 1,500 shares of Common Stock underlying options
granted under the Rawlings Sporting Goods Company, Inc. Non-Employee
Directors' Stock Plan ("Directors' Plan") and 1,657 shares of Common
Stock Mr. Baur is entitled to receive in lieu of directors' fees
pursuant to the Directors' Plan.
/4/ This amount includes 1,500 shares of Common Stock underlying options
granted under the Directors' Plan and 1,759 shares of Common Stock Mr.
McDonnell is entitled to receive in lieu of directors' fees pursuant to
the Directors' Plan.
/5/ This amount includes 1,500 shares of Common Stock underlying options
granted under the Directors' Plan.
/6/ This amount includes 33,204 shares of Common Stock underlying options
granted under the Stock Option Plan and 9,103 shares beneficially owned
under the 401(k) Plan as to which Mr. Keene has sole voting and
dispositive power.
<PAGE>
/7/ This amount consists of 12,270 shares of Common Stock underlying options
granted under the Stock Option Plan, and 1,801 shares of Common Stock
beneficially owned under the 401(k) Plan as to which Mr. Black has sole
voting and dispositive power.
/8/ This amount includes 16,207 shares of Common Stock underlying options
granted under the Stock Option Plan, and 309 shares of Common Stock
beneficially owned under the 401(k) Plan as to which Mr. Martin has sole
voting and dispositive power.
/9/ This amount includes 11,281 shares of Common Stock underlying options
granted under the Stock Option Plan, and 711 shares of Common Stock
beneficially owned under the 401(k) Plan as to which Mr. Thompson has
sole voting and dispositive power.
ELECTION OF DIRECTORS
At this Annual Meeting, two Directors will be elected for a term
expiring at the annual meeting following the Company's fiscal year ending
August 31, 1999. Michael McDonnell and Michael J. Roarty have informed the
Company that they are willing to serve for the term to which they are
nominated if they are elected. If either of these nominees should become
unavailable for election or is unable to serve as a Director, the shares
represented by proxies voted in favor of him will be voted for any substitute
nominee as may be named by the Board of Directors. The candidate for election
as a Director must receive a plurality of the votes cast by the stockholders
present in person or represented by proxy and entitled to vote at the Annual
Meeting.
The ages, terms of office and certain other information as of August 31,
1996 with respect to Michael McDonnell and Michael J. Roarty and each of the
other persons serving as directors are as follows:
INFORMATION CONCERNING NOMINEES FOR TERM EXPIRING AT THE
ANNUAL MEETING OF STOCKHOLDERS FOLLOWING THE FISCAL YEAR
ENDING AUGUST 31, 1999
If Elected,
Term Expires at
Annual Meeting
of Stockholders
following
Served as the Fiscal Year
Name and Principal Occupation Director Since Ending August 31,
MICHAEL MCDONNELL, age 57 1994 1999
President of West Union
Corporation, a holding company
for the distribution of hardware
and the manufacturing of building
products, since 1980; director of
National Commerce Bancorp.; part
owner of the St. Louis Cardinals
Major League Baseball team since 1996.
<PAGE>
MICHAEL J. ROARTY, age 68
Consultant to Anheuser-Busch 1994 1999
Companies, Inc., a brewery, since
October 1994; previously Executive
Vice President - Marketing of
Anheuser-Busch Companies, Inc.
The Board of Directors recommends that you vote FOR the election of
Michael McDonnell and Michael J. Roarty as directors of the Company.
INFORMATION CONCERNING REMAINING DIRECTORS
If Elected,
Term Expires at
Annual Meeting
of Stockholders
following
Served as the Fiscal Year
Name and Principal Occupation Director Since Ending August 31,
CARL J. SHIELDS, age 55 1994 1997
Chairman of the Board, President
and Chief Executive Officer of
the Company since July 1994;
President of Rawlings Sporting
Goods Company, a division of
Figgie International Inc. (the
"Rawlings Division"), from
February 1994 to July 1994; Vice
President, Sales/Marketing of the
Rawlings Division from September
1993 to February 1994; Vice
President, Sales of the Rawlings
Division from 1988 to September 1993.
ANDREW N. BAUR, age 52 1994 1997
Chairman of Mississippi Valley
Bancshares, a bank holding company,
and Chairman of Southwest Bank of
St. Louis, the bank subsidiary of
Mississippi Valley Bancshares, since
1984; part owner of the St. Louis
Cardinals Major League Baseball
team since 1996.
LINDA L. GRIGGS, age 47 1996 1998
Partner in the Business and Finance
Section of the law firm of Morgan,
Lewis & Bockius LLP.
<PAGE>
WILLIAM C. ROBINSON, age 46 1994 1998
President of The Treehouse Florida
Fancy, Inc. since 1990; a consultant
to F.W. Woolworth Co. from 1988 to
1990; President and Chief Executive
Officer of Robby's Sports, a 49-store
sporting goods retail chain, from
1973 to 1988.
BOARD OF DIRECTORS AND BOARD COMMITTEES
The Company's Certificate of Incorporation provides that the Board of
Directors shall consist of not less than one and nor more than seven members
as shall be determined from time to time by vote of a majority of the
Directors then in office. The Board of Directors currently consists of six
members. Article Six of the Company's Certificate of Incorporation provides
that from and after the first annual meeting of the stockholders the Company's
Board of Directors shall be divided into three classes, as nearly equal in
numbers as the then total number of Directors constituting the Board permits.
The members of each class are elected to serve for a term of three years and
until their successors are duly elected and qualified, or until a member's
death, resignation or removal.
Under the present schedule, regular meetings of the Board of Directors
are held four times each year and additional special meetings are called
whenever necessary. The Board met five times during the fiscal year ended
August 31, 1996. All of the Directors attended at least 75% of the meetings
of the Board of Directors and of the committees of the Board of Directors on
which they served which were held during the fiscal year ended August 31,
1996.
The Board of Directors has established an Audit Committee consisting of
Andrew N. Baur, William C. Robinson and Linda L. Griggs. Mr. Baur serves as
Chairman of the Audit Committee. The Audit Committee is authorized to
recommend to the Company's Board of Directors the independent public
accountants to be selected to audit the Company's annual financial statements
and to review the planned scope of the annual external and internal audits,
the independent accountants' and internal auditors' report to management and
management's responses thereto and the effectiveness of the Company's internal
audit staff. The Audit Committee met three times during the fiscal year ended
August 31, 1996.
The Board of Directors has also established a Compensation Committee
consisting of Michael McDonnell, Michael J. Roarty and William C. Robinson.
Mr. Robinson serves as Chairman of the Compensation Committee. The
Compensation Committee is authorized to establish remuneration levels for
Executive Officers, review the performance of the Chief Executive Officer,
review management organization and development, review significant non-equity
based employee benefit and executive compensation programs and establish and
administer equity-based executive compensation programs, including the 1994
Long-Term Incentive Plan. The Compensation Committee met one time during the
fiscal year ended August 31, 1996.
The Board of Directors has not established a nominating committee.
The Bylaws in effect on the date hereof provide that, unless nominated
by the Board of Directors, no person may be elected a director unless notice
in writing of such person's nomination by a stockholder of the Company shall
be <PAGE> received by the Secretary of the Company not more than sixty and not
less than fourteen calendar days before the date of the meeting at which it is
to take place. With respect to the Annual Meeting of Stockholders to be held
on January 16, 1997, such notice of nomination must be received by the
Secretary of the Company not earlier than November 17, 1996 and not later than
January 2, 1997. Such notice must set forth (a) the name, age, business
address and, if known, residence address of each nomince proposed in such
notice, (b) the principal occupation or employment of the nominee, (c) a
description of the business experience during the last five years of such
nominee, and (d) the number of shares of capital stock of the Company
beneficially owned by such nominee. In addition, such notice must be signed
by the stockholder, who must be duly qualified to attend and vote at the
meeting (other than the person or persons nominated) and must contain a notice
in writing signed by each nominee of the nominee's willingness to be elected
and to serve as a director.
The Bylaws have been amended, effective for all meetings of stockholders
after the Meeting of Stockholders to be held on January 16, 1997, to provide
that beneficial or record owners of Common Stock if such stockholder delivers
notice of the nomination to the Secretary of the Company not less than sixty
days prior to the first anniversary of the preceding year's annual meeting;
provided that in the event that the date of the annual meeting is advanced by
more than thirty days or delayed by more than sixty days from such anniversary
date, notice by the stockholder must be delivered not later than the close of
business on the later of (i) the sixtieth day prior to such annual meeting, or
(ii) the tenth day following the date on which public announcement of the date
of such meeting is first made. Such notice must set forth (a) the name and
address of the nominating stockholder and of the nominee, (b) a representation
that such stockholder is a beneficial or record owner of stock of the Company
entitled to vote in the election of directors at such meeting and intends to
appeal in person or by proxy at the meeting to nominate the person or persons
specified in the notice, (c) the name and address of the record holder of the
stock as it appears in the Company's books and of the beneficial owners
thereof, if any, on whose behalf the nomination is made, (d) the class and
number of shares which are owned beneficially and of record by the nominating
stockholders and each proposed nominee, (e) a description of all arrangements
or understandings between the stockholder and each nominee and any other
person (naming such persons) pursuant to which the nomination or nominations
are to be made by the stockholder, (f) such other information regarding each
nominee proposed by such stockholder as would be required to be included in a
proxy statement filed with the SEC pursuant to Regulation 14A promulgated
under the Exchange Act had the nominee been nominated or intended to be
nominated by the Board of Directors, and (g) the consent of each nominee to
serve as a director of the Company if elected.
COMPENSATION OF DIRECTORS
The Company's Directors, except for those who are also employees of the
Company, receive an annual retainer fee of $15,000 for service as a Director.
In addition, each non-employee Director receives meeting attendance fees of
$1,000 per meeting for special Board meetings or Committee meetings not held
in conjunction with a regular Board meeting. The Company also reimburses all
of its Directors for their out-of-pocket expenses incurred in the performance
of their duties as Directors of the Company.
Pursuant to the Rawlings Sporting Goods Company, Inc. 1994 Non-Employee
Directors' Stock Plan (the "Directors' Plan"), the non-employee Directors
receive (i) a non-qualified stock option having an exercise price equal to the
fair market value on the date of grant for 2,500 shares of the Common Stock
upon their initial election or appointment and, thereafter, a non-qualified
stock option for 1,000 shares of the Common Stock annually at the date of the
annual meeting, except that no more than one stock option award may be granted
to each non-employee Director in a given calendar year, and (ii) the right to
defer receipt of fees in cash, and receive instead the right to delivery at a
specified future date of that number of shares of Common Stock having a value
at the time of deferral equal to the amount of cash deferred.
<PAGE>
EXECUTIVE COMPENSATION
Background
The Company acquired the assets and liabilities of the Rawlings Sporting
Goods Company division (the "Rawlings Business") of Figgie International Inc.
("Figgie") on July 8, 1994. Accordingly, the Company's Board of Directors or
the Compensation Committee has determined the amounts of the compensation paid
to Executive Officers since July 8, 1994.
The members of the Company's Compensation Committee during the Company's
fiscal year ended August 31, 1996, who are also currently members of the
Compensation Committee, were Michael McDonnell, Michael J. Roarty and William
C. Robinson. Carl J. Shields was also a member of the Compensation Committee
until his resignation on October 13, 1994.
Set forth below is the Compensation Committee's report on executive
compensation.
Notwithstanding anything to the contrary, the following report of
the Compensation Committee and the Performance Graph shall not be
deemed incorporated by reference by any general statement
incorporating by reference this Proxy Statement into any filing
under the Securities Act of 1933, as amended, or under the
Securities Exchange Act of 1934, as amended, except to the extent
that the Company specifically incorporates this information by
reference, and shall not otherwise be deemed filed under such
Acts.
Compensation Committee Report on Executive Compensation
The Compensation Committee (the "Committee") of the Board of Directors
is charged with the responsibility to administer compensation programs for the
Company's executives. To this end, the Committee has established the
following fundamental philosophy for executive compensation:
An appropriate and significant portion of each executive's
total compensation should be performance-based and linked to the
creation of value for stockholders, and
Market practices and compensation levels must be considered
when establishing an appropriate program for executives in order
to assist the Company in attracting and retaining high quality
talent.
Pursuant to this philosophy, the Company's executive compensation plans
have been designed to remunerate executives through three primary sources -
base salary, annual cash incentives and long-term equity-oriented incentives.
The entire program has been formulated so that the portion of an executive's
total compensation being derived from variable, performance-based pay is
greater at increasing levels of responsibilities.
Details regarding each of the primary facets of executive compensation,
along with a discussion of the awards made in fiscal 1996, follows.
Base Salary
The Company targets salaries for executives at the median (size-adjusted
50th percentile) of the competitive marketplace. For purposes of each of the
primary facets of compensation, the competitive marketplace includes
organizations of similar size in the sporting goods industry.
In 1994, the Committee determined, with the assistance of an
independent, executive compensation consultant, that salaries for the
Company's top executives needed to be increased to reflect the additional
duties and responsibilities <PAGE> resulting from the Company's spin-off
from Figgie. A multi-year process was implemented to move salaries for these
executives to market median levels within 2-3 years. The salary increases
depicted in the Summary Compensation Table reflect this ongoing process to
achieve targeted salary levels.
As of August 31, 1996, salary levels approximate market medians for the
Company's executive group as a whole. In particular, Mr. Shields' current
salary ($250,000) is below the market median. Future increases to executive
salaries will be based on the Committee's discretionary evaluation of Company
and individual performance and increases occurring within the marketplace.
Annual Cash Incentives
The Company maintains a management incentive plan whose participants
include certain management employees and all of the Company's executives. The
plan provides for the payment of annual cash awards based upon the achievement
of specified Company goals and an evaluation of each executive's individual
performance.
Incentive opportunities are established for each executive level, stated
as a percentage of base salary. These opportunities are set at levels
designed to approximate median incentive opportunities for similar positions
within the competitive marketplace. Actual awards earned are a function of
Company and individual performance; thus, actual awards to the Company's
executives may be below or above actual median awards in the marketplace
depending on how the Company and each executive performs.
Annual incentives earned for fiscal 1996, as shown in the Summary
Compensation Table, reflect the Committee's evaluation of the Company's
performance against stated financial goals and an evaluation of each
executive's individual contribution for 1996. As the Company did not achieve
100% of its planned goals (primarily based on achievement of specified net
income levels), the amounts earned reflect awards below targeted incentive
levels, including the award for Mr. Shields.
Long-Term Equity-Based Compensation
The Company maintains a long-term incentive plan which provides for the
grant of stock-based incentive awards to certain management employees and all
of the Company's executives.
The Company utilizes nonqualified stock options granted at fair market
value as its primary long-term incentive. From time to time, executives are
granted stock options at levels determined by the Committee based on a number
of subjective facros, including among other things, a general desire to
approximate median award levels within the competitive marketplace. Since the
executives derive no value from the options unless the value of the Company's
stock increase, these awards support the Company's objective of linking
executive compensation to the creation of shareholder value.
Awards made to the Company's executives in fiscal 1996, including the
44,722 options granted to Mr. Shields, approximate the median level of awards
made to executives in similar positions within the competitive marketplace.
Section 162(m)
In December 1995, the IRS finalized rules regarding the deductibility of
compensation under Internal Revenue Code Section 162(m). The rules state
that compensation in excess of $1 million annually to any one executive will
be non-deductible for income tax purposes unless the compensation is
"performance based." At this point, none of the compensation paid by the
Company to its executives is non-deductible. The Committee will monitor
IRS rules and the Company's executive compensation program to ensure, to the
extent appropriate, that full deductibility for such payments continues.
Michael J. Roarty William C. Robinson
Michael McDonnell
<PAGE>
Compensation Committee Interlocks and Insider Participation
As discussed above under "Compensation Committee Report," the Compensation
Committee has general responsibility for the establishment, direction and
administration of all aspects of the compensation policies and programs for
the Company's executive officers. During the fiscal year ended August 31,
1996, the members of the Compensation Committee were Michael McDonnell,
Michael J. Roarty and William C. Robinson. None of the members of the
Compensation Committee were, during the fiscal year ended August 31, 1996,
an officer or employee of the Company or any of its subsidiaries, or
otherwise were formerly an officer of the Company or any of its subsidiaries.
Summary of Compensation
The following table shows information concerning compensation earned by
or paid to the Company's Chief Executive Officer and each of the four other
most highly compensated Executive Officers of the Company whose salary and
bonus for the twelve months ended August 31, 1996 exceeded $100,000. This
information is provided for the fiscal years ended August 31, 1995 and 1996,
and the eight months ended August 31, 1994. The compensation reported below
for the eight months ended August 31, 1994 includes compensation awarded by
the Company's predecessor business prior to the Company's acquisition of the
Rawlings Business from Figgie on July 8, 1994.
<TABLE>
SUMMARY COMPENSATION TABLE
Long-Term
Compensation
Annual Compensation Awards
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Securities All Other
Name and Principal All Other Underlying Compensation
Position Year /1/ Salary Bonus Compensation/2/ Options /3/
Carl J. Shields 1996 $245,000 $ 109,964 $ - 44,722 $2,875
Chairman, President 1995 190,000 - - - 3,650
and Chief Executive 1994 83,332 - - 108,332 -
Officer -
Howard B. Keene 1996 147,500 49,875 - 17,111 4,069
Chief Operating 1995 119,542 - - - 2,716
Officer 1994 66,000 - - 41,250 -
Randy D. Black /4/ 1996 132,500 48,744 - 13,889 3,841
Vice President, 1995 113,705 - 19,253 22,919 2,701
Marketing 1994 12,500 - -- - -
Paul E. Martin /5/ 1996 126,250 43,986 - 12,778 2,600
Chief Financial 1995 25,728 - - 35,844 -
Officer
J. Michael Thompson /6/ 1996 121,500 47,717 - 12,222 3,674
Vice President, Sales 1995 102,500 - 21,039 21,622 2,325
1994 58,996 - - - -
</TABLE>
/1/ On August 23, 1994, the Board of Directors approved a change in the
Company's fiscal year end to August 31 from December 31, effective immediately.
As a result, the information presented for 1994 is for the eight-month
transition period from January 1 to August 31, 1994.
/2/ The amounts indicated for 1995 represent the incremental cost to the
Company of expenses associated with the use of a company car (Mr. Black -
$6,000; Mr. Thompson - $4,545) and of moving expenses (Mr. Black - $13,253;
and Mr. Thompson - $16,494).
/3/ The amounts indicated for 1995 and 1996 reflect matching contributions
made by the Company pursuant to the Rawlings Sporting Goods Company, Inc.
Savings Plan (the "401(k) Plan").
<PAGE>
/4/ Mr. Black became Vice President, Marketing in July 1994.
/5/ Mr. Martin became Chief Financial Officer in June 1995.
/6/ Mr. Thompson became Vice President, Sales in July 1994.
<PAGE>
Stock Options
The following tables set forth certain information concerning options
granted during the fiscal year ended August 31, 1996 to the Executive Officers
named in the Summary Compensation Table and the number and value of the
unexercised options held by such persons on August 31, 1996:
<TABLE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR /1/
<CAPTION>
Potential Realizable Value at Assumed Annual
Rates of Stock Price Appreciation for Option
Individual Grants Term /2/
<C> <C> <C> <C> <C> <C> <C> <C> <C>
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Name
Number of % of Total
Securities Options/SARs Alternative
Underlying Granted to Exercise or to (f) and (g):
Option/SARs Employees in Base Price Expiration Grant Date
Granted (#) Fiscal Year ($/Sh) Date 0% ($) 5% ($) 10% ($) Value /3/
Carl J. Shields 44,722 24% $9.00/Sh 9/21/2005 $0 $253,129 $641,478 $234,791
Howard B. Keene 17,111 9% $9.00/Sh 9/21/2005 $0 $96,849 $245,435 $89,833
Randy D. Black 13,889 7% $9.00/Sh 9/21/2005 $0 $78,612 $199,219 $72,917
Paul E. Martin 12,778 7% $9.00/Sh 9/21/2005 $0 $72,324 $183,284 $67,085
J. Michael
Thompson 12,222 7% $9.00/Sh 9/21/2005 $0 $69,177 $175,308 $64,166
/1/ The options have an exercise price equal to the market price on the date of grant and become exercisable as
to one-third of the initial number of underlying shares of Common Stock on each of the first, second and third
anniversaries of the date of grant, subject to acceleration in the event of death or disability of the optionee,
a change in control (as defined in the Stock Option Plan) or as otherwise determined by the Compensation Committee.
/2/ The potential realizable value represents the amount each Executive Officer might realize if the stock
appreciates annually at the assumed rates of 0%, 5% and 10% for the full period of the options (10 years).
The amounts represent only hypothetical values and there can be no assurance that such growth rates in stock price
will be achieved. The actual amount realized by each Executive Officer will be determined at the time the options
are exercised and will be based on the excess of the fair market value of the stock at the time of exercise over
the exercise price. For comparison, the total realizable value for all stockholders, assuming 0%, 5% and 10% annual
growth rates for 10 years, would be approximately $0, $43 million and $109 million, respectively, based upon an
acquisition price of $9.00 per share.
/3/ Represents the grant date present value of the options utilizing the Black-Scholes option pricing model. The
model attempts to calculate a hypothetical present value of the options and may not reflect the actual value which
may be realized by each Executive Officer. The substantive inputs in the model for the Company include the following:
an interest rate of 6.8%, an exercise price of $9.00, a ten-year exercise term, no dividends paid and a stock volatility
equal to 30.4%.
</TABLE>
<PAGE>
<TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
<CAPTION>
(a) (b) (c) (d) (e)
<C> <C> <C> <C> <C>
Number of Securities Underlying Value of Unexercised
Unexercised Options/SARs at In-the-Money
Shares FY-End (#) Options/SARs at
Acquired on Value FY-End ($)
Exercise (#) Realized($) Exercisable/
Name /1/ /1/ Exercisable/Unexercisable Unexercisable /2/
Carl J. Shields 0 0 72,221/80,833 $0/$25,134
Howard B. Keene 0 0 27,500/30,861 $0/$9,616
Randy D. Black 0 0 7,640/29,168 $0/$7,806
Paul E. Martin 0 0 11,948/36,674 $0/$7,181
J. Michael
Thompson 0 0 7,207/26,637 $0/$6,869
/1/ No options were exercised.
/2/ The closing price of the Common Stock on the Nasdaq National Market on August 31, 1996 was $9.562 per
share. Value is calculated by determining the difference between the option exercise price and
$9.562, multiplied by the number of shares of Common Stock underlying the options.
</TABLE>
Retirement Plans
All of the Executive Officers of Rawlings who were previously employees
of Figgie accrued retirement income credits under Figgie's Retirement Income
Plan II (the "Figgie Plan") until the date of the initial public offering of
the Company's shares (the "IPO"). Such employees will receive upon retirement
benefits accrued under the Figgie Plan up until the date of the IPO. In
connection with the acquisition of the Rawlings Business from Figgie, each of
the Company's employees has been given credit for vesting and eligibility to
receive benefits under the Company's retirement plan for service as an
employee of Figgie. In return, Figgie has provided full vesting under the
Figgie Plan for all employees of Rawlings who were previously employees of
Figgie.
As of July 8, 1994, the date of the IPO, the annual benefits payable
upon retirement under the Figgie Plan, including accrued benefits from a prior
plan which was terminated on November 21, 1988, to the individuals named in
the Summary Compensation Table who were employees of Figgie are as follows:
Mr. Shields, $6,005; Mr. Keene, $9,372; and Mr. Thompson, $6,621.
The Company has not adopted a retirement plan.
Severance Agreements
In October 1995, the Company entered into severance agreements with each
of the Executive Officers named in the Summary Compensation Table and Ted C.
Sizemore, the Vice President, Baseball Development and International Sales, of
the Company, which provide various severance benefits to the Executive
Officers if their employment with the Company is terminated under certain
circumstances following a change in control of the Company. The agreements
provide that a change in control of the Company is deemed to have occurred if
(i) a person acquires beneficial ownership of 20% or more of the Company's
voting stock, (ii) individuals who, at the date of the agreement or the
beginning of a two-year period thereafter, constitute the Board of Directors,
cease for any reason to constitute a majority of the Board, (iii) the
stockholders approve a liquidation of the Company, a sale or disposition of
all or substantially all of the <PAGE> Company's assets, or a merger,
consolidation or reorganization of the Company other than one that would result
in (a) the holders of the Company's voting stock continuing to own beneficially
more than 50% of the outstanding stock of the resulting corporation, (b) no
person who did not own voting stock prior to the transaction owning 20% or
more of the outstanding stock of the resulting corporation, and (c) at least
a majority of the board of directors of the resulting corporation being members
of the Board of Directors of the Company at the date the severance agreement
was signed or at the beginning of a two-year period thereafter that precedes
the corporate transaction, or (iv) the Board concludes that the Executive
Officer is entitled to the benefits because of the occurrence, threat or
imminence of an event with consequences similar to the foregoing.
Each of the agreements provide for severance payments in the event of
termination of the Executive Officer's employment within a specified period
after a change in control of the Company (three years for the Chief Executive
Officer, two and one-half years for the Chief Operating Officer and two years
for other Executive Officers), unless the Executive Officer's employment is
terminated by the Company or its successors for "cause" or "disability",
because of the Executive Officer's death or "retirement" or by the Executive
Officer's voluntary termination for other than "good reason", in each case as
such terms are defined in the agreements. The benefits consist of the
following: (a) an amount equal to three times the highest base salary paid to
the Chief Executive Officer at any time up to the termination of employment,
and two and one-half times (with respect to the Chief Operating Officer) and
two times the highest base salary paid to each of the other Executive Officers
at any time up to the termination of such Executive Officer's employment;
(b) salary and bonus (prorated assuming annual bonuses were paid at the target
level) to the date of termination; (c) medical, dental, long-term disability
and group term life insurance benefits for three years for the Chief Executive
Officer, two and one-half years for the Chief Operating Officer and two years
for other Executive Officers if the Executive Officer makes his or her
required contribution; and (d) acceleration of the vesting of all stock
options. Under the Deficit Reduction Act of 1984, severance payments that
exceed a certain amount subject both the Company and the Executive Officer to
adverse U.S. federal tax consequences. Each of the agreements provides that
the Company shall pay the Executive Officer (i) the severance benefits reduced
to the extent necessary to avoid an excise tax or (ii) unreduced severance
benefits if, after application of the excise tax, the severance benefits would
be greater than the severance benefits provided for in clause (i) above.
STOCK PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return on
an investment of $100 in the Common Stock on June 30, 1994 (the date on which
the Common Stock began trading on the Nasdaq National Market) to August 31,
1996 with the cumulative total return over the same period of (i) the Nasdaq
Composite Market Index and (ii) the Standard & Poor's Leisure Time Index and
assumes dividend reinvestment through the fiscal year ending August 31, 1996:
<PAGE>
Total Stockholder Return (6/30/94 - 8/31/96)
Stock Price Appreciation and Dividends
TOTAL STOCKHOLDER RETURN (6/30/94 TO 8/31/96) STOCK PRICE
APPRECIATION AND DIVIDENDS
Graphical material has been omitted for purposes of this
electronic filing. The data included in such material compares
the performance of the Company's Common Stock (based upon stock
appreciation and dividends) with the NASDAQ Index Composite and
the Leisure Time Products Index, assuming each such item was set
at 100 points on June 30, 1994 (the date of the Company's initial
public offering). The following is the data set forth on such
chart:
June 30, August 31, August 31, August 31,
1994 1994 1995 1996
Rawlings Sporting
Goods Company, Inc. 100 104 79 80
Leisure Time Products
Index 100 110 114 134
NASDAQ Index
Composite 100 108 145 162
<PAGE>
CERTAIN TRANSACTIONS
Andrew N. Baur, a Director of the Company, has a 40% ownership interest
in Tree Court Partnership I, a partnership which prior to April 1, 1996, was
the owner of the Company's 25,000 square foot headquarters office space in
Fenton, Missouri. The Company has leased this property since 1985. Pursuant
to the terms of the lease, the Company made lease payments of approximately
$415,000 during the fiscal year ended August 31, 1996, of which $233,000 was
paid to Tree Court Partnership I. The lease in effect during the 1996 fiscal
year commenced on December 1, 1995 and expires on November 30, 2000 at an
annual lease rate of approximately $420,000 per year. The Board of Directors
has not considered the approval of this lease, but the Company believes that
the terms of the lease are no less favorable to the Company than those that
could be obtained from unaffiliated parties.
Mr. Baur is an executive officer of St. Louis Cardinals L.P. During
the fiscal year ended August 31, 1996, the Company sold approximately $315,000
of product to St. Louis Cardinals L.P. The Company believes that the terms
and prices for the sale of these products are no less favorable than those
obtained from unaffiliated parties.
COMPLIANCE WITH SECTION 16(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") requires the Company's directors and executive officers, and
persons who own more than 10% of the Company's outstanding Common Stock, to
file with the Securities and Exchange Commission initial reports of ownership
and reports of changes in ownership in the Company's Common Stock and other
equity securities. In addition, under Section 16(a), a director, executive
officer or 10% stockholder who is a trustee and has a pecuniary interest (such
interest includes situations where a member of the trustee's immediate family
is a beneficiary of the trust) in any holding or transaction in the Company's
securities held by the trust, must report the holding or transaction on the
trustee's individual form. Securities and Exchange Commission regulations
require directors, executive officers, greater than 10% stockholders and
reporting trusts to furnish the Company with copies of all Section 16(a)
reports they file.
To the Company's knowledge, based solely on review of copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended August 31, 1996, all
Section 16(a) filing requirements applicable to the directors, executive
officers and greater than 10% stockholders were met, except that: (i) two
statements of changes in beneficial ownership on Form 4, covering two
transactions, and an annual statement of beneficial ownership on Form 5 were
filed late by each of Andrew N. Baur and Michael McDonnell, and (ii) an annual
statement of beneficial ownership on Form 5 was filed late by each of Randy
D. Black, Howard B. Keene Michael J. Roarty, William C. Robinson, Carl J.
Shields, Ted C. Sizemore and J. Michael Thompson.
RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors, at the recommendation of the Audit Committee,
has selected the firm of Arthur Andersen LLP as the Company's independent
public accountants for its fiscal year ending August 31, 1997. Although the
Bylaws of the Company do not require the submission of the selection of
independent public accountants to the stockholders for approval, the Board of
Directors believes it is appropriate to give stockholders the opportunity to
ratify the decision of the Board of Directors. The Board of Directors will
not be bound by the stockholders' vote at the Annual Meeting but will take
into account the stockholders' decision.
Representatives of Arthur Andersen LLP are expected to be present at the
Annual Meeting. They will have the opportunity to make a statement should
they desire to do so and will also be available to respond to appropriate
questions from stockholders.
<PAGE>
Ratification of the selection of the independent public accountants will
require the affirmative vote of the holders of a majority of the shares of
Common Stock present in person or represented by proxy at the Annual Meeting
and entitled to vote, provided a quorum is present.
The Board of Directors recommends a vote FOR ratification of the
selection of Arthur Andersen LLP as the independent public accountants of the
Company for the Company's fiscal year ending August 31, 1997.
STOCKHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
It is presently anticipated that the 1998 Annual Meeting of Stockholders
will be held on January 15, 1998. In accordance with the Bylaws of the
Company, as amended effective immediately following the Annual Meeting of
Stockholders to be held January 16, 1997, stockholder proposals can only be
properly brought before the 1998 Annual Meeting of Stockholders if notice
thereof, prepared in accordance with the Bylaws, are received at the Company's
offices, located at 1859 Intertech Drive, Fenton, Missouri 63026, within a
reasonable time before the solicitation with respect to the meeting is made,
but in no event later than November 17, 1997. Stockholder proposals intended
for inclusion in the proxy statement for such Annual Meeting of Stockholders
must be received at the Company's offices within a reasonable time before the
solicitation with respect to the meeting is made, but in no event later than
July 30, 1997. Such proposals must also comply with the other requirements of
the proxy solicitation rules of the Securities and Exchange Commission.
Stockholder proposals should be addressed to the attention of the Secretary of
the Company.
OTHER MATTERS
The Board of Directors does not know of any matters to be presented at
the Annual Meeting other than those listed in the Notice of Annual Meeting of
Stockholders. However, if other matters properly come before the Annual
Meeting, it is the intention of the persons named in the accompanying proxy to
vote in accordance with their best judgment on such matters.
To the extent that information contained in this Proxy Statement is
peculiarly within the knowledge of persons other than the management of the
Company, it has relied on such persons for the accuracy and completeness
thereof.
Upon the receipt of a written request from any stockholder entitled to
vote at the forthcoming Annual Meeting, the Company will mail, at no charge to
the stockholder, a copy of the Company's Annual Report on Form 10-K, including
the financial statements and schedules required to be filed with the
Securities and Exchange Commissi9on pursuant to Rule 13a-1 under the Exchange
Act, for the Company's fiscal year ended August 31, 1996. Requests from
benerficial owners of the Company's voting securities must set forth a good
faith representation that, as of the record date for the Annual Meeting, the
person making the request was the beneficial owner of securities entitled to
vote at such meeting. Written requests for such report should be directed to:
Howard B. Keene
Secretary
Rawlings Sporting Goods Company, Inc.
1859 Intertech Drive
Fenton, Missouri 63026
<PAGE>
You are urged to complete, date, sign and return your proxy promptly to
make certain your shares will be voted at the Annual Meeting. For your
convenience, a return envelope is enclosed requiring no additional postage if
mailed in the United States.
By Order of the Board of Directors
\s\ Howard B. Keene
Howard B. Keene
Secretary
Dated: November 27, 1996
