<PAGE>
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 No. 240.14a-11(c) or Section
240.14a-12
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
[LOGO]
August 20, 1998
Dear Shareholder:
The Board of Directors and management of Cutter & Buck Inc. cordially
invite you to attend the Annual Meeting of Shareholders. The meeting will be
held on Wednesday, September 23, 1998 at 2:00 p.m., in the Ballroom of the
Broadmoor Golf Club, 2340 Broadmoor East, Seattle, Washington. In addition
to the business items listed in the proxy statement, there will be a report
on the progress of the Company and an opportunity to ask questions of general
interest to you as a Shareholder.
YOUR VOTE IS VERY IMPORTANT. Therefore, whether or not you plan to
attend the meeting in person, please sign and return the enclosed proxy in
the envelope provided. If you attend the meeting and desire to vote in
person, you may do so even though you have previously sent a Proxy.
Sincerely,
/s/ HARVEY N. JONES
------------------------------------
Harvey N. Jones
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
<PAGE>
[LOGO]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON WEDNESDAY, SEPTEMBER 23, 1998
To the Shareholders of Cutter & Buck Inc.:
Notice is hereby given that the Annual Meeting of Shareholders of Cutter
& Buck Inc. (the "Company") will be held on Wednesday, September 23, 1998 at
2:00 p.m. in the Ballroom of the Broadmoor Golf Club, 2340 Broadmoor East,
Seattle, Washington for the following purposes:
1. To elect two Class I directors for a term of three years, to serve
until the 2001 Annual Meeting of Shareholders and until their respective
successors are elected and have qualified;
2. To ratify the appointment of independent auditors for the Company;
and
3. To transact any other business which may properly come before the
meeting or any adjournment thereof.
Holders of Common Stock at the close of business on August 3, 1998 are
entitled to notice of, and to vote at, the meeting. Shareholders are
cordially invited to attend the meeting in person.
By Order of the Board of Directors,
/s/ MARTIN J. MARKS
-----------------------------------
Martin J. Marks
PRESIDENT AND SECRETARY
Cutter & Buck Inc.
2701 First Avenue, Suite 500
Seattle, Washington 98121
August 20, 1998
- ------------------------------------------------------------------------------
IMPORTANT: Please fill in, date, sign and return the enclosed Proxy in the
postage-paid envelope to ensure that your shares are represented at the
meeting. If you attend the meeting, you may vote in person, if you wish to do
so, even though you have previously sent in your Proxy.
- ------------------------------------------------------------------------------
<PAGE>
CUTTER & BUCK INC.
PROXY STATEMENT
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed Proxy is solicited by the Board of Directors of the
Company for use at the Annual Meeting of Shareholders to be held on
Wednesday, September 23, 1998, and at any adjournment or adjournments thereof
(the "Annual Meeting"). The Company first mailed this Proxy Statement to
Shareholders on or about August 20, 1998.
RECORD DATE AND OUTSTANDING SHARES
Only Shareholders of record on the books of the Company at the close of
business on August 3, 1998, will be entitled to notice of, and to vote at,
the Annual Meeting. On that date there were issued and outstanding 5,427,756
shares of Common Stock of the Company.
SOLICITATION AND REVOCABILITY OF PROXIES
Proxies may be solicited by officers, directors and regular supervisory
employees of the Company, none of whom will receive any additional
compensation for their services. Solicitation of proxies may be made
personally or by mail, telephone, telecopy or messenger. All costs of
solicitation of proxies will be paid by the Company.
Any Shareholder granting a proxy has the power to revoke it at any time
before it is exercised. A proxy may be revoked either by (i) filing with the
Secretary of the Company prior to the Annual Meeting, at the Company's
executive offices, either a written revocation or duly executed proxy bearing
a later date, or (ii) attending the Annual Meeting and voting in person,
regardless of whether a proxy has previously been given. Attendance at the
Annual Meeting will not revoke a Shareholder's proxy unless the Shareholder
votes in person.
QUORUM AND VOTING
Under Washington law and the Company's Restated Articles of
Incorporation, a quorum consisting of a majority of the outstanding shares
entitled to vote must be represented in person or by proxy to elect directors
and to transact any other business that may properly come before the meeting.
In the election of directors, the nominees elected are the two individuals
receiving the greatest number of votes cast by the shares present in person
or represented by proxy and entitled to vote. Any action other than a vote
for a nominee will have the effect of voting against the nominee.
If the accompanying Proxy is properly executed and returned, the shares
represented thereby will be voted in accordance with the instructions given.
In the absence of instructions to the contrary, the shares will be voted in
accordance with the Board of Directors' recommendations. The Company is not
aware, as of the date hereof, of any matters to be voted upon at the Annual
Meeting other than those described in this Proxy Statement and the
accompanying Notice of Annual Meeting of Shareholders. Proposal 2 will be
approved if the votes cast in favor of the Proposal exceed the votes cast
against it. Abstention from voting or broker nonvotes will have no effect
since such actions do not represent votes cast.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of August 3, 1998, certain
information with respect to the beneficial ownership of the Company's Common
Stock by: (i) each person known by the Company to own beneficially more than
5% of the Common Stock, (ii) each of the Company's directors, (iii) certain
of the Company's executive officers, and (iv) all directors and executive
officers as a group. Except as otherwise noted, the named beneficial owner
has sole voting and investment power.
<TABLE>
<CAPTION>
Shares Percentage of
NAME AND ADDRESS(1) BENEFICIALLY OWNED CLASS
------------------------------------------- ------------------ -------------
<S> <C> <C>
J. & W. Seligman & Co., Inc. (1). . . . 385,630 7.1%
Scudder Kemper Investments Inc. (1) . . 293,900 5.4%
Harvey N. Jones (2) . . . . . . . . . . 267,883 4.9%
Martin J. Marks (3) . . . . . . . . . . 98,506 1.8%
Michael S. Brownfield (4) . . . . . . . 68,328 1.3%
Frances M. Conley (5) . . . . . . . . . 56,631 1.0%
Larry C. Mounger (6). . . . . . . . . . 24,625 *
Patricia A. Nugent (3). . . . . . . . . 23,033 *
Jon P. Runkel (3) . . . . . . . . . . . 12,118 *
Jim C. McGehee (3). . . . . . . . . . . 7,500 *
James C. Towne (7). . . . . . . . . . . 5,312 *
All directors and executive officers
as a group (14 persons) (8) . . . . . 600,516 11.1%
</TABLE>
- -----------------
* Less than one percent
(1) The address of J. & W. Seligman & Co., Inc. is 100 Park Avenue, Eighth
Floor, New York, New York 10017. The address of Scudder Kemper
Investments Inc. is 345 Park Avenue, New York, New York 10154-0010.
The address of the directors and executive officers listed is c/o Cutter
& Buck Inc., 2701 First Avenue, Suite 500, Seattle, Washington 98121.
(2) Includes 34,013 shares issuable upon exercise of options exercisable
within 60 days of August 3, 1998. Excludes 5,300 shares held by the
Jones-Iannucci Educational Trust, of which Mr. Jones' children are the
sole beneficiaries.
(3) Represents shares issuable upon exercise of options exercisable within
60 days of August 3, 1998.
(4) Includes 6,936 shares issuable upon exercise of options exercisable
within 60 days of August 3, 1998.
(5) 49,696 of these shares are held by Roanoke Capital, Ltd. ("Roanoke
Capital"). Ms. Conley, a director of the Company, is a shareholder,
director and principal of Roanoke Capital. The only other shareholder,
director and principal of Roanoke Capital is Gerald R. Conley, Ms.
Conley's husband. Ms. Conley disclaims beneficial ownership of the
shares held by Roanoke Capital that exceed her pecuniary interest
therein.
(6) Includes 16,184 shares issuable upon exercise of options exercisable
within 60 days of August 3, 1998.
(7) Includes 2,312 shares issuable upon exercise of options exercisable
within 60 days of August 3, 1998.
(8) Includes 221,102 shares issuable upon exercise of options exercisable
within 60 days of August 3, 1998.
2
<PAGE>
EXECUTIVE OFFICERS OF THE COMPANY
The executive officers of the Company are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
------------------ --- -----------------------------------------------------------
<S> <C> <C>
Harvey N. Jones* 47 Chairman and Chief Executive Officer
Martin J. Marks 49 President, Chief Operating Officer, Treasurer and Secretary
Jim C. McGehee 48 Vice President of Sales
Patricia A. Nugent 43 Vice President of Merchandise and Design
Jon P. Runkel 41 Vice President of Production
Philip C. Davis 40 Vice President of Operations
Stephen S. Lowber 47 Vice President and Chief Financial Officer
Philip B. Jones* 45 Vice President of International / Managing Director
of Cutter & Buck (Europe) B.V.
Jeffrey S. Buchman 51 Vice President of Marketing and Communications
Ernest J. Pyle 43 Vice President and Chief Information Officer
</TABLE>
- -----------------
* Harvey N. Jones and Philip B. Jones are brothers.
The biographies of the executive officers who are not directors are as
follows:
MR. MCGEHEE, Vice President of Sales of the Company, joined the Company
in February 1990. From 1986 to 1989, he was Men's National Sales Manager for
JGH. Mr. McGehee has a bachelor's degree in business (marketing) from Auburn
University.
MS. NUGENT, Vice President of Merchandise and Design of the Company,
joined the Company in December 1993 and served as Vice President of
Production from April 1994 to May 1995. From 1983 to 1993, she was a private
consultant to various clothing and textile firms, including Demetre Inc., a
sweater company, and Roffe Inc., a skiwear company. Ms. Nugent has a
bachelor's degree in clothing and textile design from the University of
Washington and a design certificate from the Modeschule der Stadt Wien in
Vienna, Austria.
MR. RUNKEL, Vice President of Production of the Company, joined the
Company in April 1995 and served as Operations Manager from April 1995 to
June 1995. From October 1994 to April 1995, he was a production manager of
Organik Technologies, Inc., an apparel manufacturer, producing contract work
for such names as Patagonia, Eddie Bauer, Timberland and Jantzen, and from
March 1993 to September 1994, he was a consultant on operations/production
for Susan Barry Designs, a women's "bridge" line.
MR. DAVIS, Vice President of Operations, joined the Company in January
1997. From 1987 to 1996, he held various positions at Stusser Electric, an
electrical parts distribution company, including President from 1994 to 1996.
Mr. Davis has a bachelor's degree in economics from Stanford University.
MR. PHILIP JONES, Vice President of International / Managing Director of
Cutter & Buck (Europe) B.V., joined the Company in July 1997. From 1989 to
June 1997, Mr. Jones was an independent international trade consultant serving
certain major U.S. companies, and from 1983 to 1988, he was a senior
legislative assistant to United States Senator Daniel J. Evans. Mr. Jones
holds a bachelor's degree in East Asian studies from Harvard University.
MR. LOWBER, Vice President and Chief Financial Officer, joined the
Company in September 1997. From April 1992 to June 1997, Mr. Lowber was
Chief Financial Officer of LUXAR Corporation, a medical devices manufacturing
company. Mr. Lowber has a bachelor's degree in finance from Western
Washington University and a master's degree in business administration from
Seattle University, and is a certified public accountant.
MR. BUCHMAN, Vice President of Marketing & Communications, joined the
Company in July 1998. From 1974 to June 1998, Mr. Buchman held various
positions at The Fashion Institute of Technology, most recently serving as
the Chairman of the Advertising and Marketing Communications Department.
From 1986 to the present, he also served as the President of The Telefashion
Group, a provider of marketing and communications consulting services. Mr.
Buchman has a bachelor's degree in English from the University of Buffalo,
and a master's degree in Communications Management from Brooklyn College.
3
<PAGE>
MR. PYLE, Vice President and Chief Information Officer, joined the
Company in July 1998. From November 1995 to June 1998, Mr. Pyle held various
positions with System Software Associates, Inc., an enterprise resource
planning solutions provider, most recently serving as Vice President, North
America. From April 1992 to November 1995, he was owner of SSA Northwest, an
independent affiliate of Systems Software Associates, Inc. Mr. Pyle attended
the University of Washington and has an associate's degree in computer
science from Peterson Technical College.
Officers serve at the discretion of the Board of Directors.
COMPENSATION OF EXECUTIVE OFFICERS
IN THE YEAR ENDED APRIL 30, 1998
SUMMARY COMPENSATION TABLE
The following table sets forth certain information concerning
compensation paid or accrued to the Company's Chairman and Chief Executive
Officer and its four most highly-compensated officers who earned salary and
bonus of at least $100,000 (the "Named Executive Officers") for services
rendered to the Company in all capacities during the fiscal year ended April
30, 1998:
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------------ ------------
SECURITIES ALL OTHER
FISCAL UNDERLYING COMPENSATION
NAMES AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) OPTIONS (#) ($)(1)
- --------------------------------------- ------ ---------- --------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Harvey N. Jones 1998 $203,750 $ 55,000 30,000 $384
Chairman and Chief Executive Officer 1997 $157,500 $ 7,500 -0- $492
1996 $120,000 -0- 30,000 $552
Martin J. Marks 1998 $180,000 $ 45,000 25,000 $384
President, Chief Operating 1997 $150,000 $ 7,500 -0- $492
Officer, Treasurer and Secretary 1996 $110,000 -0- 25,000 $552
Jim C. McGehee 1998 $177,500 $ 51,350 15,000 $384
Vice President of Sales 1997 $110,000 $101,922(2) -0- $492
1996 $110,000 $ 20,774(2) 15,000 $552
Patricia A. Nugent 1998 $115,750 $ 17,500 15,000 $384
Vice President of Merchandise 1997 $101,000 $ 7,500 -0- $492
and Design 1996 $ 95,000 -0- 14,625 $552
Jon P. Runkel 1998 $112,500 $ 17,500 15,000 $384
Vice President of Production 1997 $ 82,500 $ 7,500 -0- $384
1996 $ 60,000 -0- 19,625 $552
</TABLE>
- ----------------
(1) Represents term life insurance premiums.
(2) Bonus amounts received by Mr. McGehee in fiscal 1996 and 1997 represent
sales commissions.
OPTION EXERCISES IN FISCAL 1998 AND AGGREGATE FISCAL YEAR-END OPTION VALUES
The following table sets forth certain information as of April 30, 1998
regarding options held by each of the Named Executive Officers:
<TABLE>
<CAPTION>
SECURITIES UNDERLYING VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES FISCAL YEAR END(#)(1) FISCAL YEAR END($)(2)
ACQUIRED ON DOLLAR VALUE --------------------------- ---------------------------
NAMES EXERCISE(#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------ ----------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Harvey N. Jones -0- N/A 61,253 45,000 $ 1,362,048 $503,106
Martin J. Marks -0- N/A 92,256 37,500 $ 2,138,136 $419,255
Jim C. McGehee -0- N/A 44,502 22,500 $ 1,018,754 $251,553
Patricia A. Nugent 10,000 $192,020 19,382 21,156 $ 417,443 $237,338
Jon P. Runkel 3,468 $ 87,567 8,368 22,789 $ 137,007 $257,847
</TABLE>
4
<PAGE>
- ----------------
(1) The options listed are incentive or nonqualified stock options granted
under the Company's 1991 and 1995 Stock Option Plans and the 1997 Stock
Incentive Plan. The exercise price of each option is equal to the fair
market value of the underlying Common Stock on the date of grant. To the
extent not already vested, the options generally become fully vested and
exercisable upon a change in control of the Company.
(2) Based on the closing price of the Company's Common Stock as quoted on the
Nasdaq National Market on April 30, 1998 ($26.50), less the exercise price.
The actual value realized may be greater or less than the potential
realizable values set forth in the table.
COMPENSATION COMMITTEE REPORT ON FISCAL YEAR 1998 EXECUTIVE COMPENSATION
The Compensation Committee is comprised of three nonemployee directors.
The Committee is responsible for establishing and administering the Company's
policies that govern compensation and benefit practices for employees of the
Company and its subsidiaries. The Committee also evaluates the performance
of the executive officers of the Company and its subsidiaries for purposes of
determining their base salaries, cash-based and equity-based incentives and
related benefits.
Compensation Goals
The goals of the compensation program are to align the interests of
executive management with the long-term interests of Shareholders and to
motivate Company executives to achieve the strategic business goals of the
Company. The compensation program is designed to recognize the contributions
of the executive officers, and to provide compensation opportunities which
are comparable to those offered by competitors in the sportswear industry.
In furtherance of these goals, the Company's compensation package for its
officers includes both short-term and long-term features in the form of base
salary, cash-based incentives keyed to Company performance and equity-based
incentives in the form of stock options which are granted at the discretion
of the Committee.
The Committee has recently engaged a compensation consultant to assist
the Committee in reviewing the adequacy, focus and effectiveness of its
current compensation program.
Base Salaries
Base salaries for all officers are reviewed annually. In evaluating
salaries, the Committee uses compensation surveys pertaining to companies
within the fashion industry of similar size, and considers the officer's
individual performance during the prior year. In determining how the
respective officer contributes to the Company, the Committee considers
current corporate performance, including sales growth, market position and
increased brand identity, as well as the potential for future performance
gains. The Committee has neither set targets related to these factors nor
attributed any specific weight to them for purposes of determining base
salaries.
Cash-Based Incentives
Although there is no formal bonus plan for the Company's executive
officers, the Committee, in its discretion, may grant bonuses to those
executive officers from time to time. During fiscal 1998, 75% of the
Company's executive officers received bonuses which ranged from $10,000 to
$55,000. The Committee is currently considering the adoption of a plan to
allow officers to elect to receive a portion of their cash-based incentive in
Company stock.
Equity-Based Incentives
The Company provides its executive officers with long-term incentives
through its Stock Incentive Plan. The primary objective of the Plan is to
provide the Company's executive officer participants with an incentive for
them to make decisions and take actions which maximize long-term shareholder
value. The Plan is designed to promote this long-term focus by using
discretionary grants of stock options and long-term vesting periods. The
Committee favors intermittent option grants to ensure that participants
always have at least a portion of their options unvested. The Committee
believes this practice promotes motivation and retention of key personnel.
5
<PAGE>
Subject to the terms of the Plan, the Committee determines the terms and
conditions of options, including the exercise price. It has been the
practice of the Committee to grant options with an exercise price equal to
the closing bid price of the Company's Common Stock as reported on the Nasdaq
National Market as of the date of grant. Prior to and in connection with the
Company's initial public offering in August 1995, the Committee accelerated
the then-outstanding unvested stock option awards by revising the existing
vesting schedules such that 50% of the options would vest on the first
anniversary of the original date of the grant and 25% would vest on each of
the second and third anniversaries thereafter, as long as the optionee
remained in the employ of the Company. Option awards granted subsequent to
the Company's initial public offering generally vest in four equal annual
installments beginning one year from date of grant. The Committee believes
that stock options provide an incentive for executive officers, allowing the
Company to attract and retain high quality management.
The Plan also allows the Company to grant Company stock to officers and
employees of the Company and its subsidiaries but none has been issued to
date.
Compensation of the Chairman and Chief Executive Officer
In assembling the Chairman and Chief Executive Officer's compensation
package, the Committee pursues the same objectives which apply for the
Company's other executive officers. Although the Committee's overall goal is
to set the Chairman and Chief Executive Officer's salary at the median base
for competitors which are similar in industry size and performance, the
actual level approved by the Committee may be higher or lower based upon the
Committee's subjective evaluation of the annual and long-term performance of
the Company, the individual performance of the Chairman and Chief Executive
Officer, and the cash resources and needs of the Company. Reflecting that,
the increase in Mr. Jones' salary for fiscal 1998 was due to his significant
contributions in strengthening the company's market expansion, brand
identity, sales growth and overall performance.
COMPENSATION COMMITTEE
Larry C. Mounger (Chair)
Michael S. Brownfield
Frances M. Conley
STOCK PRICE PERFORMANCE
The following graph compares the cumulative total return of Company
Common Stock, the Nasdaq Stock Market - U.S. Index and the Nasdaq
Non-Financial Index. The cumulative total return of Company Common Stock
assumes $100 invested on August 15, 1995 in Cutter & Buck Inc. Common Stock.
<TABLE>
<CAPTION>
8/15/95 4/30/96 4/30/97 4/30/98
------- ------- ------- -------
<S> <C> <C> <C> <C>
Cutter & Buck Inc. 100.00 152.38 152.38 336.51
Nasdaq Stock Market (U.S.) Index 100.00 119.78 126.74 189.67
Nasdaq Non-Financial Index 100.00 118.93 120.89 18.99
</TABLE>
[GRAPH]
6
<PAGE>
PROPOSAL NO. 1 - ELECTION OF DIRECTORS
The Amended and Restated Articles of Incorporation of the Company
provide that the Board of Directors shall be divided into three classes, with
such classes to be as nearly equal in number as the total number of directors
constituting the entire Board permits. The Company's Board of Directors
consists of six members, with two members in each of the classes. Upon the
expiration of the term of a class of directors, nominees for such class are
elected to serve for a term of three years and until their respective
successors have been elected and qualified. The current terms of the Class 1
directors, Ms. Frances M. Conley and Mr. Larry C. Mounger, expire upon the
election and qualification of the directors to be elected at the Annual
Meeting. The Board of Directors has nominated Ms. Conley and Mr. Mounger for
reelection to the Board of Directors at the Annual Meeting, to serve until
the Annual Meeting of Shareholders for fiscal 2001 and until their respective
successors have been elected and qualified. The terms of the Class 2 and
Class 3 directors expire at the Annual Meetings of Shareholders for fiscal
1999 and fiscal 2000, respectively.
Unless otherwise directed, the persons named in the proxy intend to vote
all proxies FOR the election of Ms. Conley and Mr. Mounger to the Board of
Directors. The nomineees have consented to serve as directors of the Company
if elected. If at the time of the Annual Meeting, either Ms. Conley or Mr.
Mounger is unable or declines to serve as a director, the discretionary
authority provided in the enclosed Proxy will be exercised to vote for a
substitute candidate designated by the Board of Directors. The Board of
Directors has no reason to believe that either of the nominees will be unable
or will decline to serve as a director.
THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE REELECTION OF FRANCES
M. CONLEY AND LARRY C. MOUNGER AS CLASS I DIRECTORS OF THE COMPANY.
Information on the Directors and Director nominees follows:
<TABLE>
<CAPTION>
DIRECTOR PRINCIPAL OCCUPATION AND BUSINESS
NAME (Age) SINCE EXPERIENCE FOR THE PAST FIVE YEARS
----------------------------- -------- -------------------------------------------------------
<S> <C> <C>
Harvey N. Jones (47)......... 1990 Mr. Jones, a co-founder of the Company, has been Chief
Executive Officer and a director of the Company since
its inception in January 1990. He was President of
the Company from then until May 1997, and has been its
Chairman since that time.
Michael S. Brownfield (58)... 1995 Mr. Brownfield has been the Chairman of Accurate
Molded Plastics, a private manufacturer of tooling and
injection molded plastics since 1998. Mr. Brownfield
also serves on the boards of directors of
Heartsmart, Inc., a private biomedical company,
Northwest Cascade, Inc., a private construction
company, Kitsap Entertainment Corporation, a private
restaurant franchisee, and Global Tel Resources, Inc.,
a private telecommunications company. He has a
bachelor's degree in chemistry from the University of
Oregon.
Frances M. Conley (55)....... 1990 Ms. Conley has been a shareholder, director and principal
of Roanoke Capital, the general partner of
Roanoke Investors Limited Partnership, a venture capital
limited partnership since 1982. Ms. Conley also
serves on the board of directors of Data I/0, a
publicly-held provider of equipment for programming
integrated circuits and of Recreational Equipment Inc,
a private cooperative national retailer of outdoor
gear and clothing. She has a bachelor's degree in
music from Emmanuel College and a master's degree in
business administration from the Harvard Graduate
School of Business Administration.
Martin J. Marks (49)......... 1997 Mr. Marks, President, Chief Operating Officer,
Treasurer and Secretary of the Company, joined the
Company as Chief Financial Officer in January 1991.
Prior to being named President in May 1997, he held
the position of Sr. Vice President. Mr. Marks has a
bachelor's degree in business administration from
Portland State University and is a certified public
accountant.
7
<PAGE>
<CAPTION>
DIRECTOR PRINCIPAL OCCUPATION AND BUSINESS
NAME (Age) SINCE EXPERIENCE FOR THE PAST FIVE YEARS
----------------------------- -------- -------------------------------------------------------
<S> <C> <C>
Larry C. Mounger (61)........ 1990 Mr. Mounger has been the Chairman of Sunrise Clothing
Group, a screen-printing and embroidery company since
June 1997. From January 1993 until October 1995,
Mr. Mounger was President and Chief Executive Officer
and a director of Sun Sportswear, a publicly-held
garment screenprinter. From June 1963 to January
1993, he held numerous positions at Pacific Trail,
Inc., an outerwear manufacturer, most recently
President, Chairman and Chief Executive Officer.
Mr. Mounger is currently the Chairman of Sunrise
Design, a screen-printing and embroidery company. He
has a bachelor's degree in business administration and
a juris doctor degree from the University of
Washington.
James C. Towne (55).......... 1997 Mr. Towne has been Chairman of Greenfield Development
Corporation, a remediation and development company
since 1995. From 1982 to 1995, he was President, CEO
or Chairman of various companies, including Osteo
Sciences Corporation, Photon Kinetics, Inc., MCV
Corporation, Metheus Corporation and Microsoft
Corporation. Mr. Towne also serves on the board of
directors of Tully's Coffee Co., a private specialty
coffee retailer. He has a bachelor's degree in
economics and a master's degree in business
administration from Stanford University.
</TABLE>
Directors hold office until the next Annual Meeting of Shareholders of
the Company or until their successors have been elected and qualified.
INFORMATION ON COMMITTEES OF THE BOARD OF DIRECTORS AND MEETINGS
The Board of Directors maintains an Audit Committee, a Compensation
Committee and a Nominating Committee. These committees do not have formal
meeting schedules, but are required to meet at least once each year. During
the past year, there were six meetings of the Board of Directors, and one
meeting of each of the Audit Committee, the Compensation Committee and the
Nominating Committee. Each director attended at least seventy-five percent
(75%) of the meetings of the Board of Directors and of the committees of
which he or she is a member.
Current members of the Audit Committee are Ms. Conley, Chair, and Mr.
Mounger and Mr. Towne. The Audit Committee is responsible for recommending
the Company's independent auditors and reviewing the scope, costs and results
of the audit engagement.
Current members of the Compensation Committee are Mr. Mounger, Chair,
Ms. Conley and Mr. Brownfield. The Compensation Committee is responsible for
determining the overall compensation levels of the Company's executive
officers and administering the Company's stock incentive and employee stock
purchase plans.
Current members of the Nominating Committee are Mr. Brownfield, Chair,
Ms. Conley and Mr. Jones. The Nominating Committee is primarily responsible
for recommending director nominees to the Company's Board of Directors. The
Nominating Committee will consider recommendations by Shareholders for
vacancies on the Board, which recommendations may be submitted to the
Company's Secretary.
DIRECTOR COMPENSATION
The Company currently pays $1,000 per Board meeting attended to each
director who is not an officer or employee of the Company. Directors are not
currently paid any additional amounts for attending Committee meetings. All
directors are entitled to reimbursement for expenses incurred in traveling to
and from Board meetings. From 1991 to 1995, Mr. Mounger was granted an
option under the 1991 Plan to purchase 2,312 shares of the Company's Common
Stock at an exercise price equal to the fair market value of the Common Stock
on the date of grant. Since 1995, pursuant to the 1995 Non-Employee Director
Plan, directors who are not officers or employees of the Company have been
eligible to receive annual option grants to purchase 2,312 shares of Common
Stock at the fair market value of the Common Stock on the date of grant.
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PROPOSAL NO. 2: RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors, acting upon the recommendation of the Audit
Committee, has appointed Ernst & Young LLP ("Ernst & Young") as auditors of
the Company for the fiscal year ending April 30, 1999. Ernst & Young has
audited the accounts of the Company since fiscal year 1993. Representatives
of Ernst & Young are expected to attend the meeting and will have the
opportunity to make a statement and to respond to appropriate questions from
Shareholders. In the event Shareholders do not ratify the appointment by a
majority of the votes cast, represented in person or by proxy, the selection
of auditors will be reconsidered by the Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF ERNST & YOUNG AS
AUDITORS FOR THE COMPANY.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Based solely on a review of copies of reports made pursuant to Section
16(a) of the Securities Exchange Act of 1934 and the related regulations (the
"Exchange Act"), the Company believes that during fiscal year 1998 all filing
requirements applicable to its directors, executive directors and 10 percent
shareholders were satisfied.
FUTURE SHAREHOLDER NOMINATIONS AND PROPOSALS
Nominations of persons for election to the Board of Directors may be
made at any Annual Meeting of Shareholders by any Shareholder of the Company
(a) who is a Shareholder of record on the date of the giving of the notice
and on the record date for the determination of Shareholders entitled to vote
at the Annual Meeting, and (b) who timely complies with the notice procedures
and form of notice set forth below. To be timely, a Shareholder's notice
must be given to the Secretary of the Company and must be delivered to or
mailed and received at the principal executive offices of the Company not
less than sixty (60) days nor more than ninety (90) days prior to the
anniversary date of the immediately preceding Annual Meeting of Shareholders;
PROVIDED, HOWEVER, that in the event that the Annual Meeting is called for a
date that is not within thirty (30) days before or after the anniversary
date, or no Annual Meeting was held in the immediately preceding year, notice
by the Shareholder in order to be timely must be so received no later than
the close of business on the tenth (10th) day following the day on which the
notice of the Annual Meeting date was mailed to Shareholders or other public
disclosure of the Annual Meeting date was made, whichever first occurs. To
be in proper form, a Shareholder's notice must be in written form and must
set forth (a) as to each person whom the Shareholder proposes to nominate for
election as a director (i) the name, age, business address and residence
address of the person, (ii) the principal occupation or employment of the
person, (iii) the class or series and number of shares of capital stock of
the Company which are owned beneficially or of record by the person, and (iv)
any other information relating to the person that would be required to be
disclosed in a proxy statement or other filings required to be made in
connection with solicitations of proxies for election of directors pursuant
to Section 14 of the Securities Exchange Act, and (b) as to the Shareholder
giving the notice (i) the name and record address of the Shareholder, (ii)
the class or series and number of shares of capital stock of the Company
which are owned beneficially or by record by the Shareholder, (iii) a
description of all arrangements or understandings between the Shareholder and
each proposed nominee and any other person or persons (including their names)
pursuant to which the nomination(s) are to be made by the Shareholder, (iv) a
representation that the Shareholder intends to appear in person or by proxy
at the meeting to nominate the person named in its notice, and (v) any other
information relating to the Shareholder that would be required to be
disclosed in a proxy statement or other filings required to be made in
connection with solicitations of proxies for election of directors pursuant
to Section 14 of the Exchange Act. The notice must be accompanied by a
written consent of each proposed nominee to be named as a nominee and to
serve as a director if elected.
To be included in the Company's proxy materials mailed to the Company's
Shareholders pursuant to Rule 14a-8 of the Exchange Act, Shareholder
proposals to be presented at the 1999 Annual Meeting of Shareholders must be
received by the Company at its executive offices at 2701 First Avenue, Suite
500, Seattle, Washington 98121, to the attention of the Secretary, on or
before April 20, 1999. No business may be transacted at an Annual Meeting of
Shareholders, other than business that is either (a) specified in the notice
of meeting (or any supplement thereto) given by or at the direction of the
Board of Directors (or any duly authorized committee thereof), (b) otherwise
properly brought before the Annual Meeting by or at the direction of the
Board of Directors (or any duly authorized committee thereof), or (c)
otherwise properly brought before the Annual Meeting by any Shareholder of
the Company (i) who is a Shareholder of record on the date of the giving of
the notice and on the record date for the determination of Shareholders of
record on the date for the determination of Shareholders entitled to vote at
the Annual Meeting, and (ii) who timely complies with the notice procedures
and form of notice set forth below. To be timely, a Shareholder's notice
must be given to the Secretary of the Company and must be delivered to or
mailed and received at the principal executive offices of the Company not
less than
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<PAGE>
sixty (60) days nor more than ninety (90) days prior to the anniversary date
of the immediately preceding Annual Meeting of Shareholders; PROVIDED,
HOWEVER, that in the event that the Annual Meeting is called for a date that
is not within thirty (30) days before or after the anniversary date, or no
Annual Meeting was held in the immediately preceding year, notice by the
Shareholder in order to be timely must be so received no later than the close
of business on the tenth (10th) day following the day on which the notice of
the Annual Meeting date was mailed to Shareholders or other public disclosure
of the Annual Meeting date was made, whichever first occurs. To be in proper
form, a Shareholder's notice must be in written form and must set forth as to
each matter the Shareholder proposes to bring before the Annual Meeting (a) a
brief description of the business desired to be brought before the Annual
Meeting and the reasons for conducting the business at the Annual Meeting,
(b) the name and record address of the Shareholder, (c) the class or series
and number of shares of capital stock of the Company which are owned
beneficially or of record by each Shareholder, (d) a description of all
arrangements or understandings between the Shareholder and any other person
or persons (including their names) in connection with the proposal of the
business, and (e) a representation that the Shareholder intends to appear in
person or by proxy at the Annual Meeting to bring such business before the
meeting.
OTHER MATTERS
As of the date of this Proxy Statement, management knows of no other
business which will be presented for action at the Annual Meeting. If any
other business requiring a vote of the Shareholders should come before the
Annual Meeting, the persons designated as your proxies will vote or refrain
from voting in accordance with their best judgment.
By Order of the Board of Directors,
/s/ MARTIN J. MARKS
--------------------------------------
Martin J. Marks
PRESIDENT AND SECRETARY
Seattle, Washington
August 20, 1998
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PROXY
CUTTER & BUCK INC.
2701 FIRST AVENUE, SUITE 500
SEATTLE, WA 98121
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Harvey N. Jones and Martin J. Marks or
either of them, as Proxies, each with the power to appoint his substitute,
and hereby authorizes them to represent and to vote, as designated below, all
the shares of Common Stock of Cutter & Buck Inc. held of record by the
undersigned on August 3, 1998, at the Annual Meeting of Shareholders to be
held on September 23, 1998, or any adjournment thereof.
1. ELECTION OF DIRECTORS. Elect two Class I directors to serve until the
2001 Annual Meeting of Shareholders 2001 and until their respective
successors are elected and qualified.
/ / FOR all nominees listed below / / WITHHOLD AUTHORITY to
(EXCEPT AS MARKED TO THE CONTRARY vote for all nominees
BELOW) listed below
(INSTRUCTION: To withhold authority to vote for any individual nominee,
strike a line through the nominee's name listed below.)
Frances M. Conley, Larry C. Mounger
2. INDEPENDENT AUDITORS. Ratify the appointment of Ernst & Young LLP as the
Company's auditors.
/ / FOR / / AGAINST / / ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
<PAGE>
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 PROPOSALS 1 AND 2 AND WILL BE VOTED IN ACCORDANCE WITH THE
DISCRETION OF THE PROXIES UPON ALL OTHER MATTERS WHICH MAY COME BEFORE THE
MEETING OR ANY ADJOURNMENT THEREOF.
DATED: , 1998
---------------------
---------------------------------
Signature
---------------------------------
Signature (if held jointly)
Please sign name as appears below.
When shares are held by joint
tenants, both should sign. When
signing as attorney, executor,
administrator, trustee or guardian,
please give full title. If a
corporation, please sign full
corporate name by President or other
authorized officer. If a
partnership, please sign in
partnership name by authorized
person.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY, USING THE
ENCLOSED ENVELOPE.
