Code section 162(m) generally disallows a tax deduction to a public corporation for non-performance-based compensation over $1,000,000 paid for any fiscal year to each of the individuals who were, at the end of the fiscal year, the corporation’s chief executive officer and the four other most highly compensated executive officers, excluding the principal financial officer. Most grants under the Stock Incentive Plan and Cash Bonus Plan are intended to satisfy the requirements for “performance-based compensation” under Code section 162(m), including the requirement that such plans be approved by shareholders. As a result, the Compensation Committee believes that such awards under these plans intended to satisfy the requirements for “performance-based compensation” under Code section 162(m) will not count against the $1,000,000 limit and will be deductible by Johnson Outdoors. Other grants or compensation paid or imputed to individual executive officers covered by Code section 162(m) may not satisfy the requirements for “performance-based compensation” and may cause “non-performance-based compensation” to exceed the $1,000,000 limit, and would then not be deductible by Johnson Outdoors to the extent it exceeds the $1,000,000 limit. Although the Compensation Committee designs certain components of executive compensation to preserve income tax deductibility, it believes that it is not in the shareholders’ interest to restrict the Compensation Committee’s discretion and flexibility in developing appropriate compensation programs and establishing compensation levels and, in some instances, the Compensation Committee may approve compensation that is not fully deductible.
Generally, grants of shares of restricted stock and performance-based restricted stock units to employees (other than inducement grants to new employees) are made annually on the date of the first quarterly meeting of the Compensation Committee held in December of each year, after prior fiscal year earnings have been determined, and the amount of the actual grant can be calculated. The grant date is always the date of approval of the grant by the Compensation Committee. Accordingly, to maintain flexibility and promote retention or individual goals, other compensation arrangements such as restricted stock grants and certain annual incentive cash payments are not designed to satisfy the conditions of Code section 162(m) and therefore may not be deductible.
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis section of this Proxy Statement with our management and, based on such review and discussions with management, the Compensation Committee recommended to our Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement.
Page 31 of 64Thomas F. Pyle, Jr. (Chairman)
John M. Fahey, Jr.Terry E. London
Katherine Button Bell
Summary Compensation Table
The following table provides information for fiscal 2017, 2016, 2015 and 20142015 concerning the compensation paid by Johnson Outdoors to the individual who served as our principal executive officer during fiscal 20162017 and the person who served as our principal financial officer in fiscal 2016.2017. We refer to these two executive officers as our “named executive officers” in this Proxy Statement.
Name and Principal Position | Fiscal Year | | Salary | | | Bonus (1) | | | Stock Awards (2) | | | Non-Equity Incentive Plan Comp. (3) | | | All Other Comp. (4) | | | Total | | Fiscal Year | | Salary | | | Bonus (1) | | | Stock Awards (2) | | | Non-Equity Incentive Plan Comp. (3) | | | All Other Comp. (4) | | | Total | |
Helen P. Johnson-Leipold, | 2016 | | | $682,288 | | | | $78,292 | | | | $400,000 | | | | $595,023 | | | | $38,751 | | | | $1,794,354 | | 2017 | | $ | 704,323 | | | $ | 80,821 | | | $ | 400,021 | | | $ | 1,077,614 | | | $ | 73,193 | | | $ | 2,335,972 | |
Chairman and Chief | 2015 | | | $662,415 | | | | $80,483 | | | | $472,000 | | | | $592,894 | | | | $42,785 | | | | $1,850,577 | | 2016 | | $ | 682,288 | | | $ | 78,292 | | | $ | 400,000 | | | $ | 595,023 | | | $ | 38,751 | | | $ | 1,794,354 | |
Executive Office | 2014 | | | $645,540 | | | | $531,151 | | | | $469,053 | | | | $0 | | | | $55,865 | | | | $1,701,610 | | |
Executive Officer | | 2015 | | $ | 662,415 | | | $ | 80,483 | | | $ | 472,000 | | | $ | 592,894 | | | $ | 42,785 | | | $ | 1,850,577 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
David W. Johnson, Vice | 2016 | | | $335,546 | | | | $24,914 | | | | $130,000 | | | | $178,829 | | | | $34,470 | | | | $703,759 | | 2017 | | $ | 365,812 | | | $ | 25,351 | | | $ | 140,038 | | | $ | 342,034 | | | $ | 36,023 | | | $ | 909,258 | |
President and Chief | 2015 | | | $324,827 | | | | $25,458 | | | | $141,700 | | | | $177,672 | | | | $28,637 | | | | $698,294 | | 2016 | | $ | 335,546 | | | $ | 24,914 | | | $ | 130,000 | | | $ | 178,829 | | | $ | 34,470 | | | $ | 703,759 | |
Financial Officer | 2014 | | | $315,630 | | | | $168,042 | | | | $137,150 | | | | $0 | | | | $34,721 | | | | $655,543 | | 2015 | | $ | 324,827 | | | $ | 25,458 | | | $ | 141,700 | | | $ | 177,672 | | | $ | 28,637 | | | $ | 698,294 | |
| (1) | The named executive officers are eligible to receive annual incentive cash bonuses under the Cash Bonus Plan. The award of annual incentive cash bonuses under the Cash Bonus Plan is generally comprised of two components. The first component is based on the executive achieving pre-established individual objectives. The second component is based on the Company achieving specified financial performance component.measures. The amounts in this column reflect the individual objectives component of the named executive officer’s annual bonus under the Cash Bonus Plan. The second component based on the Company achieving specified financial performance measures is included in the column under the heading “Non-equity Incentive Plan Comp.” when the specified financial performance measures are met. |
In determining each named executive officer’s annual incentive cash bonus amount for fiscal 2017, 2016 2015 and 20142015 performance, our Compensation Committee allocated 15% of the target bonus to achieving the pre-established individual objectives component, and 85% to the Company achieving the Company financial component. For each of the individual objectives component and the Company financial component under the Cash Bonus Plan, the eligible bonus can be paid out from 0-200% of the target bonus amount for that component. The target bonus amounts for 2017, 2016 2015, and 20142015 for Ms. Johnson-Leipold were $633,891, $614,059 $596,174 and $548,709$596,174, and for Mr. Johnson were $201,197, $184,550 $178,655 and $173,596,$178,655, respectively. If either or both components (individual objectives component and Company financial component) are achieved at targeted performance levels, the payout equals 100% of the eligible bonus for such component.
For fiscal 2017, 2016 2015 and 2014,2015, the annual cash bonus under the Cash Bonus Plan with respect to achieving the individual objectives component was $80,821, $78,292 $80,483 and $74,076$80,483 for Ms. Johnson-Leipold and $25,351, $24,914 $25,458 and $23,436$25,458 for Mr. Johnson, respectively.
For fiscal 2016, 2015 and 2014, the annual cash bonus under the Cash Bonus Plan with respect to achieving the Company financial component related to achieving a minimum level of net income and achieving a specified level of working capital as a percentage of sales. Because the payment of the portion of the cash bonus for fiscal 2014 with respect to achieving the Company financial performance component was made in the discretion of the Compensation Committee, the full amount of the bonus for fiscal 2014 is included in this column and not in the column “Non-Equity Incentive Plan Comp.” For fiscal 2014, the Company paid discretionary bonuses of $457,075 to Ms. Johnson-Leipold and $144,606 to Mr. Johnson. See footnote (3) below for a discussion of the payouts during fiscal 2016 and 2015 to the named executive officers in connection with this Company financial component when the specified financial performance measures are met.respectively.
Page 32 of 64 | | For fiscal 2017, 2016 and 2015, the annual cash bonus under the Cash Bonus Plan with respect to achieving the Company financial component related to achieving a minimum level of net income and achieving a specified level of working capital as a percentage of sales. See footnote (3) below for a discussion of the payouts during fiscal 2017, 2016 and 2015 to the named executive officers in connection with this Company financial component. |
| (2) | The amounts in this column reflect the dollar value of long-term equity based compensation awards pursuant to the Stock Incentive Plan granted during the fiscal years indicated in the table. These amounts for each of fiscal 2017, 2016 2015 and 20142015 equal the grant date fair value of shares of restricted stock and, with respect to fiscal 2016 and 2017, restricted stock units, computed in accordance with FASB Accounting Standards Codification Topic 718-10, on the date the shares of restricted stock or restricted stock units were granted. Assumptions used in the calculation of the grant date fair value are included under the caption “Stock Ownership Plans” in the Notes to the Company’s Consolidated Financial Statements in the fiscal 20162017 Annual Report on Form 10-K filed with the SEC on December 13, 20168, 2017 and such information is incorporated herein by reference. With respect to fiscal 2016,2017, the Company awarded Ms. Johnson-Leipold and Mr. Johnson 16,5569,278 and 2,690,1,740, respectively, performance-based restricted stock units on December 1, 2015.6, 2016. Additionally, Mr. Johnson has beenwas awarded 2,6901,508 shares of restricted stock on December 1, 2015.6, 2016. The table above includes the value of these restricted stock units on the grant date based upon the probable outcome of the performance conditions as reasonably determined by the Company. The grant date fair value of each performance-based restricted stock unit award assuming the highest level of performance was achieved over the performance period (i.e., the maximum amount) would have equaled $600,000 and $97,500$112,500 for Ms. Johnson-Leipold and Mr. Johnson, respectively. |
| (3) | This column includes the dollar value of all amounts earned by the named executive officers under our Cash Bonus Plan which are based upon the specified Company financial component for the applicable fiscal year. For fiscal 2017, 2016 and 2015, both of the Company’s financial performance measures were exceeded and, therefore, payout amounts are included in this column. For fiscal 2017, 2016 and 2015, the annual cash bonus under the Cash Bonus Plan with respect to achieving the Company financial component was $1,077,614, $595,023 and $592,894 for Ms. Johnson-Leipold and $342,034, $178,829 and $177,672 for Mr. Johnson, respectively. For fiscal 2014, no amounts were earned by or paid to the named executive officers under our Cash Bonus Plan with respect to the Company financial performance component. See Discretionary Bonuses under footnote (1) above for additional information on fiscal 2014 bonus payments. |
| (4) | The table below shows the components of this column, which include an approved match for each named executive officer’s 401(k) plan contributions, approved contributions credited to the individual’s qualified retirement plan, approved contributions to the individual’s non-qualified retirement plan account and perquisites provided to each individual for fiscal 2017, 2016 2015 and 2014,2015, respectively. |
Name | Year | | 401(k) Match | | | Qualified Plan Contributions | | | Non-Qualified Plan Contributions | | | Perquisites(a) | | | Total “All Other Compensation” | |
Helen P. Johnson-Leipold | 2016 | | $ | 7,950 | | | $ | 10,600 | | | $ | 20,201 | | | $ | 0 | | | $ | 38,751 | |
| 2015 | | $ | 7,950 | | | $ | 10,400 | | | $ | 15,935 | | | $ | 8,500 | | | $ | 42,785 | |
| 2014 | | $ | 7,800 | | | $ | 10,200 | | | $ | 28,865 | | | $ | 9,000 | | | $ | 55,865 | |
| | | | | | | | | | | | | | | | | | | | | |
David W. Johnson | 2016 | | $ | 8,193 | | | $ | 10,600 | | | $ | 6,093 | | | $ | 9,584 | | | $ | 34,470 | |
| 2015 | | $ | 8,035 | | | $ | 10,400 | | | $ | 5,041 | | | $ | 5,161 | | | $ | 28,637 | |
| 2014 | | $ | 8,261 | | | $ | 10,200 | | | $ | 9,260 | | | $ | 7,000 | | | $ | 34,721 | |
Name | Year | | 401(k) Match | | | Qualified Plan Contributions | | | Non-Qualified Plan Contributions | | | Perquisites(a) | | | Total “All Other Compensation” | |
Helen P. Johnson-Leipold | 2017 | | $ | 7,771 | | | $ | 10,800 | | | $ | 37,622 | | | $ | 17,000 | | | $ | 73,193 | |
| 2016 | | $ | 7,950 | | | $ | 10,600 | | | $ | 20,201 | | | $ | 0 | | | $ | 38,751 | |
| 2015 | | $ | 7,950 | | | $ | 10,400 | | | $ | 15,935 | | | $ | 8,500 | | | $ | 42,785 | |
| | | | | | | | | | | | | | | | | | | | | |
David W. Johnson | 2017 | | $ | 8,113 | | | $ | 10,800 | | | $ | 9,995 | | | $ | 7,115 | | | $ | 36,023 | |
| 2016 | | $ | 8,193 | | | $ | 10,600 | | | $ | 6,093 | | | $ | 9,584 | | | $ | 34,470 | |
| 2015 | | $ | 8,035 | | | $ | 10,400 | | | $ | 5,041 | | | $ | 5,161 | | | $ | 28,637 | |
| | | | | | | | | | | | | | | | | | | | | |
| (a) | Perquisites consist of reimbursements made to the named executive officer under the Executive Flexible Spending Account Plan for personal financial planning services, for purchases of office equipment for business needs and/or for certain association membership dues. Ms. Johnson-Leipold is allowed reimbursements of up to $8,500 per calendar year for covered expenses. Mr. Johnson is allowed reimbursements of up to $7,000 per calendar year for covered expenses. In addition, for Mr. Johnson, the amount for 2016 includes use of a condominium reimbursed by the Company. |
Grants of Plan-Based Awards
The following table sets forth information regarding all incentive plan awards that were granted to the named executive officers during fiscal 2016,2017, including equity-based, non-equity based and other plan-based awards. Disclosure on a separate line item is provided for each grant made to a named executive officer during the fiscal year. Non-equity incentive plan awards are awards that are not subject to FASB Accounting Standards Codification Topic 718 and are intended to serve as an incentive for performance to occur over a specified period, and include performance bonus awards under the Cash Bonus Plan. Equity incentive plan awards include the performance-based restricted stock units awarded under the Stock Incentive Plan and are awards subject to a performance condition or a market condition as those terms are defined by FASB Accounting Standards Codification Topic 718. We did not grant any stock options during fiscal 2016.2017.
Name | | Grant Date | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards ($ value(1)) | | | Estimated Future Payouts Under Equity Incentive Plan Awards (number of shares(2)) | | | All Other Stock Awards: Number of Shares of Stock | | | Grant Date Fair Value of Stock and Option Awards(5) | |
| | | | | Threshold | | | Target | | | Maximum | | | Threshold | | | Target | | | Maximum | | | | | | | |
Helen P. | | 12/1/15 | | | | --- | | | | --- | | | | --- | | | | --- | | | | --- | | | | --- | | | | 19,536 | (3) | | $ | 471,990 | |
Johnson- | | | --- | | | $ | 153,515 | | | $ | 614,059 | | | $ | 1,228,118 | | | | --- | | | | --- | | | | --- | | | | --- | | | | --- | |
Leipold | | 12/1/15 | | | | --- | | | | --- | | | | --- | | | | 8,278 | | | | 16,556 | | | | 24,834 | | | | --- | | | $ | 399,993 | |
| | 12/1/15 | | | | --- | | | | --- | | | | --- | | | | --- | | | | --- | | | | --- | | | | 3,175 | (3) | | $ | 76,708 | |
| | 12/1/15 | | | | --- | | | | --- | | | | --- | | | | --- | | | | --- | | | | --- | | | | 2,690 | (4) | | $ | 64,990 | |
David W. | | | --- | | | $ | 46,138 | | | $ | 184,550 | | | $ | 369,101 | | | | --- | | | | --- | | | | --- | | | | --- | | | | --- | |
Johnson | | 12/1/15 | | | | --- | | | | --- | | | | --- | | | | 1,345 | | | | 2,690 | | | | 4,035 | | | | --- | | | $ | 64,990 | |
Name | | Grant Date | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards ($ value(1)) | | | Estimated Future Payouts Under Equity Incentive Plan Awards (number of shares(2)) | | | All Other Stock Awards: Number of Shares of Stock | | | Grant Date Fair Value of Stock and Option Awards(4) | |
| | | | | Threshold | | | Target | | | Maximum | | | Threshold | | | Target | | | Maximum | | | | | | | |
Helen P. Johnson-Leipold | | | --- | | | $ | 158,473 | | | $ | 633,891 | | | $ | 1,267,782 | | | | --- | | | | --- | | | | --- | | | | --- | | | | --- | |
| 12/6/16 | | | | --- | | | | --- | | | | --- | | | | 4,639 | | | | 9,278 | | | | 13,917 | | | | --- | | | $ | 400,021 | |
David W. Johnson | | 12/6/16 | | | | --- | | | | --- | | | | --- | | | | --- | | | | --- | | | | --- | | | | 1,508 | (3) | | $ | 65,017 | |
| | --- | | | $ | 50,299 | | | $ | 201,197 | | | $ | 402,394 | | | | --- | | | | --- | | | | --- | | | | --- | | | | --- | |
| 12/6/16 | | | | --- | | | | --- | | | | --- | | | | 870 | | | | 1,740 | | | | 2,610 | | | | --- | | | $ | 75,020 | |
1. | These amounts show the range of payouts targeted for fiscal 20162017 performance under the Cash Bonus Plan as described in the section of this Proxy Statement titled “Compensation Discussion and Analysis.” The Cash Bonus Plan entitles participants to earn bonus awards based upon Company financial performance and the participant’s individual objectives for a given fiscal year. The targeted bonus amounts are equal to a percentage of the named executive officer’s base salary. The target was set at 90% of the base salary for Ms. Johnson-Leipold and 55% of the base salary for Mr. Johnson for fiscal 2016.2017. For both the individual objectives component and the Company financial performance component of our annual bonus under the Cash Bonus Plan, the eligible bonus can be paid out from 0-200% of the target bonus amount for that component. The target eligible bonus amounts for fiscal 20162017 are set in the table above and represent the aggregate target under both the Company performance component and the individual objectives component. If either or both components are met at targeted performance levels, the payout equals 100% of the eligible bonus for such component. A participant may earn up to a maximum of 200% of the target bonus amount if the Company performance component is met at 160% of goal. A participant may earn a minimum of 25% of the target bonus amount if the Company performance component is met at 70% of goal. The amount under the column “Maximum” is limited to 200% of the target bonus award. See the following sections for additional information: “Summary Compensation Table” and “Compensation Discussion and Analysis.” |
2. | These awards were issued under the Stock Incentive Plan and consisted of an award of performance-based restricted stock units tied to achievement of certain Company financial objectives to be measured over a three-year performance period. For fiscal 2016,2017, the performance-based award is tied to three-year sales and operating profit goals aligned with our strategic plan. Fifty percent of the performance-based piece of the award is tied to achievement of cumulative net sales over a three year period (fiscal 20162017 - 2018)2019) and the remaining fifty percent is tied to achievement of cumulative operating profit over the same three year period (fiscal 20162017 - 2018)2019). Awards are only paid if at least 80% of the target level of net sales and operating profit are met and maximum payouts are made if 120% or more of target levels of net sales and operating profit are achieved. The payouts for achievement of the threshold levels of performance are equal to 50% of the target award amount. The payouts for achievement of maximum levels of performance are equal to 150% of the target award amount. Each of the financial metrics receives a fifty percent weighting in determining the aggregate award amount. Awards are subject to downward adjustments in the event the Company has not achieved a specified minimum average return on invested capital per year during the three year performance period and are also subject to downward adjustments (by up to 25 percentage points) related to certain qualitative business or other factors determined by the Compensation Committee.period. See “Compensation Discussion & Analysis” above for additional information on the terms of the performance-based restricted stock units issued to the named executive officers during fiscal 2016.2017. On December 1, 2015,6, 2016, consistent with the methodology described above, the Compensation Committee established a $400,000 performance award target for Ms. Johnson-Leipold and a $65,000$75,000 performance award target for Mr. Johnson. The number of performance-based shares at target was determined using a grant date share price of $24.16$43.12 and resulted in a target grant of 16,5569,278 shares for Ms. Johnson-Leopold and 2,6901,740 shares for Mr. Johnson. The actual number of shares tied to the performance-based awards to be earned, if any, will be determined based on performance over the fiscal 2016-20182017-2019 period. The threshold number of shares equals 50% of the target number of shares and the maximum number of shares equals 150% of the target number of shares. |
3. | The restricted stock award was granted on December 1, 2015 (during fiscal 2016 but based on fiscal 2015 performance) and vests on December 1, 2017, the second anniversary of the grant date. On December 2, 2014, our Compensation Committee established a performance award target for fiscal 2015 of $400,000 for Ms. Johnson-Leipold and $65,000 for Mr. Johnson. These awards, if earned, were required to be paid in the form of shares of restricted stock with two-year vesting, if a minimum level of economic value added was achieved (called JVA or Johnson Value Added) by the end of fiscal 2015. JVA for fiscal 2015 was based on Net Operating Profit After Tax (NOPAT), less the sum of Company Net Working Capital and Fixed Assets, multiplied by the Company’s Cost of Capital (i.e., JVA=NOPAT-((Net Working Capital + Fixed Assets)* Cost of Capital)). The Company’s Cost of Capital was determined by the Compensation Committee at the beginning of the fiscal year. The Committee set the Cost of Capital at a level determined by using a market-based cost of capital analysis of companies in the outdoor products industry. The amount earned under these awards could range from 0 percent to 150 percent of the target amount based on a level of JVA generated during fiscal 2015, which ranged from 50 percent to 250 percent of the JVA goal. No awards would be earned if JVA generated in fiscal 2015 was less than 50 percent of goal for the applicable period. Based upon our results for fiscal 2015, on December 1, 2015 the Compensation Committee determined that the performance award goals were achieved at a level of 154% of the goal. Accordingly, the value of the restricted stock award was granted at 118% of the targeted levels or $472,000 for Ms. Johnson-Leipold and $76,700 for Mr. Johnson. The shares awarded as noted above were based upon a grant date fair value per share of $24.16.
|
4. | The restricted stock award was granted on December 1, 20156, 2016 and vests on December 1, 2019,6, 2020, the fourth anniversary of the grant date. This award was issued by the Compensation Committee to further the Company's retention objectives and was based upon a target award value of $65,000 for Mr. Johnson established by the Compensation Committee on December 2, 2014.1, 2015. On December 1, 20156, 2016 the Compensation Committee approved the payment of the award at the target level with the number of shares of restricted stock issued under the award being based upon the grant date fair value per share of $24.16 as of December 1, 2015.$43.12. |
5.4. | The value of the restricted stock and restricted stock units is based upon the December 1, 20156, 2016 grant date fair value of $24.16$43.12 per share for each share of restricted stock and each restricted stock unit (based upon the target number of shares issued as part of the award), determined pursuant to FASB Accounting Standards Codification Topic 718. The grant date fair value is the amount the Company expenses in the financial statements over the award’s vesting schedule. See the Notes to the Consolidated Financial Statements in the fiscal year 20162017 Annual Report on Form 10-K filed with the SEC on December 13, 20168, 2017 for the assumptions relied on in determining the value of these awards. |
Outstanding Equity Awards at Fiscal Year End
The following table provides information regarding unvested shares of restricted stock or restricted stock units held by the named executive officers at September 30, 2016.29, 2017. Neither of the named executive officers held any unexercised stock options as of September 30, 2016.29, 2017.
Stock Awards | Stock Awards | | Stock Awards | |
Named Executive Officer | | Number of Shares or Units of Stock That Have Not Vested | | | Market Value of Shares or Units of Stock That Have Not Vested (1) | | | Number of Shares or Units of Stock That Have Not Vested | | | Market Value of Shares or Units of Stock That Have Not Vested (1) | |
Helen P. Johnson-Leipold | | | 8,025 | (2) | | | $291,869 | | | | 8,025 | (2) | | $ | 588,072 | |
| | | 13,825 | (3) | | | $502,815 | | |
| | | 10,763 | (4) | | | $391,450 | | |
| | | 6,066 | (5) | | | $220,620 | | | | 9,278 | (8) | | $ | 679,892 | |
| | | 7,398 | (6) | | | $269,065 | | | | 7,398 | (4) | | $ | 542,125 | |
| | | 19,536 | (7) | | | $710,524 | | | | 19,536 | (5) | | $ | 1,431,598 | |
| | | 16,556 | (9) | | | $602,142 | | | | 16,556 | (7) | | $ | 1,213,224 | |
David W. Johnson | | | 2,347 | (2) | | | $85,360 | | | | 2,347 | (2) | | $ | 171,988 | |
| | | 4,042 | (3) | | | $147,008 | | | | 1,740 | (8) | | $ | 127,507 | |
| | | 3,147 | (4) | | | $114,456 | | | | 1,508 | (3) | | $ | 110,506 | |
| | | 1,774 | (5) | | | $64,520 | | | | 2,163 | (4) | | $ | 158,505 | |
| | | 2,163 | (6) | | | $78,668 | | | | 3,175 | (5) | | $ | 232,664 | |
| | | 3,175 | (7) | �� | | $115,475 | | | | 2,690 | (6) | | $ | 197,123 | |
| | | 2,690 | (8) | | | $97,835 | | | | 2,690 | (7) | | $ | 197,123 | |
| | | 2,690 | (9) | | | $97,835 | | |
| (1) | Market value equals the closing per share market price of our Class A common stock on September 30, 2016,29, 2017, which was $36.37,73.28, multiplied by the number of shares of restricted stock or the number of restricted stock units, as applicable. |
| (2) | The shares of restricted stock vest on December 3, 2017, the fourth anniversary of the grant date. |
| (3) | The shares of restricted stock vest on December 5, 2016, the fifth anniversary of the grant date. |
(4) | The shares of restricted stock vest on December 4, 2016,6, 2020, the fourth anniversary of the grant date. |
(5) | The shares of restricted stock vest on December 2, 2016, the second anniversary of the grant date. |
(6)(4) | The shares of restricted stock vest on December 2, 2018, the fourth anniversary of the grant date. |
(7) | (5) | The shares of restricted stock vest on December 1, 2017, the second anniversary of the grant date. |
(8) | (6) | The shares of restricted stock vest on December 1, 2019, the fourth anniversary of the grant date. |
(9) | (7) | This award constitutes restricted stock units that represent one share of Class A common stock for each restricted stock unit. The restricted stock units are subject to performance-based vesting criteria over a three year performance period (fiscal 2016 through fiscal 2018). See “Compensation Discussion and Analysis” above for additional information on these awards. The number of restricted stock units identified in the table above represent the number of shares of Class A common stock issuable at 100% of the target grant level. |
| (8) | This award constitutes restricted stock units that represent one share of Class A common stock for each restricted stock unit. The restricted stock units are subject to performance-based vesting criteria over a three year performance period (fiscal 2017 through fiscal 2019). See “Compensation Discussion and Analysis” above for additional information on these awards. The number of restricted stock units identified in the table above represent the number of shares of Class A common stock issuable at 100% of the target grant level. |
Option Exercises and Stock Vested
The following table sets forth information relating to the restricted stock awards that vested during fiscal 20162017 for each of the named executive officers on an aggregate basis. No common stock options were exercised by the named executive officers during fiscal 2016.2017. No outstanding restricted stock units were earned during fiscal 2016.2017.
| | Stock Awards | | | Stock Awards | |
Name | | Number of Shares Acquired on Vesting (#) | | | Value Realized on Vesting ($)(1) | | | Number of Shares Acquired on Vesting (#) | | | Value Realized on Vesting ($)(1) | |
Helen P. Johnson-Leipold | | | 40,668 | | | | $969,421 | | | | 30,654 | | | $ | 1,293,908 | |
David W. Johnson | | | 11,891 | | | | $283,451 | | | | 8,963 | | | $ | 378,329 | |
(1) | Value realized equals the closing market price of our Class A common stock as of the vesting date or, if not a trading date, on the last preceding trading date, multiplied by the number of shares that vested on such date. |
Non-Qualified Deferred Compensation
Named Executive Officer | | Executive Contributions in Last Fiscal Year | | | Registrant Contributions in Last Fiscal Year (1) | | | Aggregate Earnings in Last Fiscal Year(2) | | Aggregate Withdrawals/ Distributions | | Aggregate Balance at Last Fiscal Year End | |
Helen P. Johnson-Leipold | | $ | 164,680 | | | $ | 20,201 | | | $ | 400,443 | | None | | $ | 3,674,688 | |
David W. Johnson | | $ | 38,883 | | | $ | 6,093 | | | $ | 49,616 | | None | | $ | 411,243 | |
(1) | The amounts included in the column titled “Registrant Contributions in Last Fiscal Year” for each named executive officer are included in the “All Other Compensation” column of the Summary Compensation Table. |
(2) | None of the earnings on assets in the Nonqualified Deferred Compensation Plan were above market or preferential. |
A description of our Nonqualified Deferred Compensation Plan is provided below under the heading “Nonqualified Deferred Compensation.”
Employment Agreements
The Company has not entered into any employment agreements with the named executive officers.
Incentive Compensation Recovery (Clawback) Policy
The Company’s Board of Directors has adopted an Incentive Compensation Recovery (Clawback) Policy effective as of December 2, 2015. A copy of this policy is available on the Company’s website at www.johnsonoutdoors.com, 24 hours a day and free of charge. The Company is not including the information contained on or available through its website as part of, or incorporating such information by reference into, this Proxy Statement. The policy is administered by our Board of Directors and covers all current and former executive officers. Under this policy, the Board of Directors will require reimbursement or forfeiture of any excess incentive compensation awarded or paid in the event of an accounting restatement resulting from material noncompliance with financial reporting requirements under federal securities laws. The incentive compensation covers all awards granted or paid during the last three completed fiscal years including, but not limited to, annual performance bonuses (including any amounts deferred) and long-term incentive grants, including any of the following, provided that, such compensation is granted, earned or vested based wholly or in part on the attainment of a financial reporting measure (as defined in the policy): cash bonuses and incentive cash compensation; stock options; restricted stock; restricted stock units; and performance-based units. The amount to be recovered is the excess amount of the incentive compensation received by the executive officer based on the erroneous data from the accounting restatement. The policy applies to all incentive compensation approved, awarded or granted after the effective date of the policy.
Post-Employment Compensation
Pension Benefits
Currently, Johnson Outdoors does not provide the named executive officers with pension benefits. U.S.-based executive officers are eligible to participate in the Johnson Outdoors Retirement and Savings 401(k) Plan on the same terms as other U.S.-based employees. In any plan year, the Company may make matching contributions to a participant’s account equal to 50 percent of the first six percent of an employee’s annual wages. All named executive officers participated in the 401(k) Plan during fiscal 2016 and received Company provided matching contributions. In addition, the Company also has a discretionary retirement contribution component to its 401(k) program in which the named executive officers are also eligible to participate. Under this component, a discretionary retirement contribution can be made to the participant’s 401(k) Plan account. This discretionary contribution ranges from 0-6% of an employee’s eligible base calendar year earnings. The Company made a discretionary contribution of 4% in 2016 for all participants.
Non-Qualified Deferred Compensation
Named Executive Officer | | Executive Contributions in Last Fiscal Year | | | Registrant Contributions in Last Fiscal Year (1) | | | Aggregate Earnings in Last Fiscal Year(2) | | Aggregate Withdrawals/ Distributions | | Aggregate Balance at Last Fiscal Year End | |
| | | | | | | | | | | | | | | | |
Helen P. Johnson-Leipold | | $ | 161,257 | | | $ | 20,199 | | | $ | 720,341 | | None | | $ | 4,576,485 | |
| | | | | | | | | | | | | | | | | |
David W. Johnson | | $ | 38,567 | | | $ | 6,112 | | | $ | 80,783 | | None | | $ | 536,706 | |
(1) | The amounts included in the column titled “Registrant Contributions in Last Fiscal Year” for each named executive officer are included in the “All Other Compensation” column of the Summary Compensation Table. |
(2) | None of the earnings on assets in the Nonqualified Deferred Compensation Plan were above market or preferential. |
A description of our Nonqualified Deferred Compensation Plan is provided below under the heading “Nonqualified Deferred Compensation.”
Employment Agreements
The Company has not entered into any employment agreements with the named executive officers.
Incentive Compensation Recovery (Clawback) Policy
The Company’s Board of Directors has adopted an Incentive Compensation Recovery (Clawback) Policy effective as of December 2, 2015. A copy of this policy is available on the Company’s website at www.johnsonoutdoors.com, 24 hours a day and free of charge. The Company is not including the information contained on or available through its website as part of, or incorporating such information by reference into, this Proxy Statement. The policy is administered by our Board of Directors and covers all current and former executive officers. Under this policy, the Board of Directors will require reimbursement or forfeiture of any excess incentive compensation awarded or paid in the event of an accounting restatement resulting from material noncompliance with financial reporting requirements under federal securities laws. The incentive compensation covers all awards granted or paid during the last three completed fiscal years including, but not limited to, annual performance bonuses (including any amounts deferred) and long-term incentive grants, including any of the following, provided that, such compensation is granted, earned or vested based wholly or in part on the attainment of a financial reporting measure (as defined in the policy): cash bonuses and incentive cash compensation; stock options; restricted stock; restricted stock units; and performance-based units. The amount to be recovered is the excess amount of the incentive compensation received by the executive officer based on the erroneous data from the accounting restatement. The policy applies to all incentive compensation approved, awarded or granted after the effective date of the policy.
Post-Employment Compensation
Pension Benefits
Currently, Johnson Outdoors does not provide the named executive officers with pension benefits. U.S.-based executive officers are eligible to participate in the Johnson Outdoors Retirement and Savings 401(k) Plan on the same terms as other U.S.-based employees. In any plan year, the Company may make matching contributions to a participant’s account equal to 50 percent of the first six percent of an employee’s annual wages. All named executive officers participated in the 401(k) Plan during fiscal 2017 and received Company provided matching contributions. In addition, the Company also has a discretionary retirement contribution component to its 401(k) program in which the named executive officers are also eligible to participate. Under this component, a discretionary retirement contribution can be made to the participant’s 401(k) Plan account. This discretionary contribution ranges from 0-6% of an employee’s eligible base calendar year earnings. The Company made a discretionary contribution of 4% in 2017 for all participants.
Non-Qualified Deferred Compensation
The Johnson Outdoors’ Deferred Compensation Plan was amended and restated on September 18, 2007. The Non-Qualified Deferred Compensation Plan provides an opportunity for the named executive officers to defer a portion of their compensation and uses such deferral to encourage the continued loyalty and service of such persons to the Company. Eligible participants of this plan are designated by the Compensation Committee as Highly Compensated Employees (HCE) under the definition of the Internal Revenue Code as well as employees with designated titles, including executive, director, senior manager or employees whose positions are recognized as key technical lead positions. The Compensation Committee has delegated authority to the Pension Committee to determine annual eligibility based upon the criteria noted above. A participant’s election shall specify the percentage (in increments of one percent to a maximum of 13 percent) of the participant’s base compensation. Participants may also specify the percentage (in increments of one percent to a maximum of seven percent) of their cash bonus for deferral under the plan. A participant who makes a bonus deferral under this plan may be entitled to a matching contribution credit, determined and credited following the conclusion of each plan year, equal to 50 percent of the first six percent of the participant’s annual bonus award that the participant elects to have contributed to his/her account as a bonus deferral. Participants designate how his or her account shall be deemed to be invested among the investment options. Each day that the U.S. financial markets are open, the account of each participant will be credited (or charged) based upon the investment gain (or loss) that the participant would have realized with respect to his or her account since the immediately preceding valuation date had the account been invested in accordance with the participant’s investment election. The named executive officers have made elections for distributions allowed by the Non-Qualified Deferred Compensation Plan upon separation from service. The distribution of the named participant’s pre-2005 account, if applicable, would be made or commence on the first day of the month that is at least 60 days following the date the participant separates from service. Named participants’ post-2004 account distributions, if applicable, would commence on the first day of the month following the six month anniversary of the participant’s separation from service.
Potential Payments/Benefits Upon Termination or Change of Control
Pursuant to the terms of the Stock Incentive Plan, the Compensation Committee in its discretion may, at the time of an award or at any time thereafter, provide (1) for the immediate vesting of all outstanding stock options and shares of restricted stock upon a change of control of the Company or (2) that any outstanding performance-based restricted stock units shall be deemed earned at the target grant amount. The grant agreements for shares of restricted stock have generally provided for immediate vesting upon a change of control of the Company and the grant agreements for performance-based restricted stock units have generally provided that 100% of the target grant is deemed earned upon a change of control of the Company. The following table sets forth the unvested stock options, shares of restricted stock and restricted stock units held by the named executive officers as of September 30, 201629, 2017, that would become vested or earned as of such date in the event of a change of control of Johnson Outdoors.
Named Executive Officer | | Number of Shares Underlying Unvested Options | | | Unrealized Value Of Unvested Options (1) | | | Number of Restricted Shares or RSUs that are Unvested or Unearned | | | Unrealized Value of Unvested or Unearned Restricted Stock or RSUs (2) | | | Number of Shares Underlying Unvested Options | | | Unrealized Value Of Unvested Options (1) | | | Number of Restricted Shares or RSUs that are Unvested or Unearned | | | Unrealized Value of Unvested or Unearned Restricted Stock or RSUs (2) | |
Helen P. Johnson-Leipold | | | -- | | | $ | -- | | | | 82,169 | | | | $2,988,487 | | | | -- | | | $ | -- | | | | 51,515 | | | $ | 3,775,019 | |
David W. Johnson | | | -- | | | $ | -- | | | | 22,028 | | | | $801,158 | | | | -- | | | $ | -- | | | | 13,065 | | | $ | 957,403 | |
(1) | The named executive officers held no unvested options at fiscal year-end. Had they held unvested options at year end, unrealized value would equal the closing market value of the Class A common stock as of September 30, 2016,29, 2017, minus the exercise price, multiplied by the number of unvested shares of the Class A common stock as of such date. The closing market value of the Class A common stock on September 30, 201629, 2017 was $36.37.$73.28. |
(2) | With respect to shares of restricted stock, unrealized value equals the closing per share market value of the Class A common stock as of September 30, 2016,29, 2017, multiplied by the number of unvested shares of the Class A common stock as of such date. With respect to unearned, outstanding performance-based restricted stock units, the number of restricted stock units identified in the table above represent the number of shares of Class A common stock issuable at achievement of 100% of the target grant level (i.e., 16,556 and 2,690 shares for Ms. Johnson-Leipold and Mr. Johnson, respectively) and the unrealized value of such units equals the number of shares of Class A common stock underlying the outstanding unearned restricted stock units at 100% of target grant multiplied by the closing per share market value of the Class A common stock as of September 30, 2016.29, 2017. The closing market value of the Class A common stock on September 30, 201629, 2017 was $36.37.$73.28. |
DIRECTOR COMPENSATION
Johnson Outdoors uses a combination of cash and stock-based compensation to attract and retain qualified candidates to serve on the Board of Directors. With respect to fiscal 20162017 and based upon the recommendations of Pearl Meyer, the independent compensation consultant the CompanyCompensation Committee has retained during fiscal 2015 and 2016 (See “Peer Group Benchmarking” above), the outside directors received a $40,000 annual retainer (up from $35,000 during fiscal 2015) and an annual equity award of restricted stock units having a grant date value of $45,000 (up from $35,000 during fiscal 2015).$45,000. For fiscal 2016,2017, the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee chairs received additional annual retainers of $15,000, $10,000 and $7,000, respectively (up from $10,000, $5,000 and $5,000, respectively, during fiscal 2015).respectively. Each director who is not an employee of Johnson Outdoors or one of its subsidiaries (“an outside director”) is generally also entitled to receive $1,500 for each meeting of the Board of Directors or committee he or she attends (non-committee board members receive 75 percent of this amount when such individuals are asked to attend a committee meeting). The Vice Chairman of the Board of Directors receives an additional annual retainer of $40,000.
In connection with the 2012 Annual Meeting of Shareholders, the Board of Directors and the Company’s shareholders approved the Johnson Outdoors Inc. 2012 Non-Employee Director Stock Ownership Plan. This plan replaced the Company’s 2003 Non-Employee Director Stock Ownership Plan. The 2012 Non-Employee Director Stock Ownership Plan provides compensation to outside directors. Directors who are not outside directors receive no additional compensation for service as members of the Board of Directors or of any Board committees. The Company is proposing at the Annual Meeting for approval by the shareholders an amendment to this plan to increase the number of shares available to be issued thereunder.
All directors in fiscal 2016 were outside directors other than Helen P. Johnson-Leipold, the Company’s Chairman and Chief Executive Officer. The 2012 Non-Employee Director Stock Ownership Plan provides for up to 50,000 shares of the Company’s Class A common stock to be issued to outside directors, which number is subject to adjustment as provided by the plan, and which number is the subject of an amendment proposal to be voted upon by the shareholders at the Annual meeting. The plan provides that upon first being elected or appointed as one of the Company’s directors, and thereafter on the first business day after the annual meeting of shareholders, the Company has the option of granting equity awards to such persons containing a value determined by the Compensation Committee. Equity awards may be granted under the plan in the form of stock options, shares of restricted stock or restricted stock units.
The award under the 2012 Non-Employee Director Stock Ownership Plan is intended to deliver a greater portion of director compensation in the form of equity, with the amount on the date of the award being equal to a value or amount determined by the Compensation Committee (which has been set to equal $45,000)$45,000 for fiscal 2017) and the shares of restricted stock being valued at their fair market value per share on the date of the award or, in the case of restricted stock units, at the fair market value per share of the underlying Class A common stock on the date of the award.
Of the 50,000 shares originally authorized under the 2012 Non-Employee Director Ownership Plan, 40,055 shares have been issued leaving only 9,945 shares remaining available. Accordingly, the Board of Directors has authorized an amendment to increase the number of shares available under the Plan from 50,000 shares to 110,000 shares, subject to shareholder approval.
Director Summary Compensation Table
The following table provides information concerning the compensation paid by Johnson Outdoors in fiscal 20162017 to each of the outside directors.
Name | | Fees Earned or Paid in Cash | | | Stock Awards (1) | | | Total | | | Fees Earned or Paid in Cash | | | Stock Awards (1) | | | Total | |
Thomas F. Pyle, Jr. | | $ | 124,500 | | | $ | 44,994 | | | $ | 169,494 | | | $ | 120,000 | | | $ | 45,002 | | | $ | 165,002 | |
John M. Fahey, Jr. | | $ | 71,000 | | | $ | 44,994 | | | $ | 115,994 | | | $ | 70,250 | | | $ | 45,002 | | | $ | 115,252 | |
Terry E. London | | $ | 85,750 | | | $ | 44,994 | | | $ | 130,744 | | | $ | 82,750 | | | $ | 45,002 | | | $ | 127,752 | |
W. Lee McCollum | | $ | 56,875 | | | $ | 44,994 | | | $ | 101,869 | | |
Edward F. Lang | | $ | 70,000 | | | $ | 44,994 | | | $ | 114,994 | | | $ | 66,625 | | | $ | 45,002 | | | $ | 111,627 | |
Richard (“Casey”) Sheahan | | $ | 66,250 | | | $ | 44,994 | | | $ | 111,244 | | | $ | 65,125 | | | $ | 45,002 | | | $ | 110,127 | |
Katherine Button Bell | | $ | 65,875 | | | $ | 44,994 | | | $ | 110,869 | | | $ | 56,500 | | | $ | 45,002 | | | $ | 101,502 | |
Edward Stevens | | | $ | 53,917 | | | $ | 45,007 | | | $ | 98,924 | |
(1) | The amounts in this column reflect the dollar value of long-term equity based compensation awards granted pursuant to our 2012 Non-Employee Director Stock Ownership Plan during fiscal 2016.2017. These amounts equal the grant date fair value of shares of restrictedcommon stock in the case of an award of shares of restricted stock or the grant date fair value of the underlying shares of restricted stock in the case of an award of restricted stock units, computed in each case in accordance with FASB Accounting Standards Codification Topic 718-10. Assumptions used in the calculation of the grant date fair value are included under the caption “Stock Ownership Plans” in the Notes to our Consolidated Financial Statements in the fiscal 20162017 Annual Report on Form 10-K filed with the SEC on December 13, 20168, 2017 and such information is incorporated herein by reference. |
The following table provides certain information regarding restricted stock units issued to our outside directors in fiscal 20162017 pursuant to the 2012 Non-Employee Director Stock Ownership Plan. The restricted stock units all vest on the first anniversary of the date of grant (i.e.; March 3, 2017)2018 and November 1, 2017 for Mr. Stevens). Each restricted stock unit represents one share of Class A common stock issuable on such vesting date.
Director | | Number of Shares | | Grant Date | | Grant Date Fair Market Value (*) | | | Number of Shares | | Grant Date | | Grant Date Fair Market Value (*) | |
Thomas F. Pyle, Jr. | | | 2,010 | | 03/03/2016 | | $ | 44,994 | | | | 1,279 | | 03/03/2017 | | $ | 45,002 | |
John M. Fahey, Jr. | | | 2,010 | | 03/03/2016 | | $ | 44,994 | | | | 1,279 | | 03/03/2017 | | $ | 45,002 | |
Terry E. London | | | 2,010 | | 03/03/2016 | | $ | 44,994 | | | | 1,279 | | 03/03/2017 | | $ | 45,002 | |
W. Lee McCollum | | | 2,010 | | 03/03/2016 | | $ | 44,994 | | |
Edward F. Lang | | | 2,010 | | 03/03/2016 | | $ | 44,994 | | | | 1,279 | | 03/03/2017 | | $ | 45,002 | |
Richard (“Casey”) Sheahan | | | 2,010 | | 03/03/2016 | | $ | 44,994 | | | | 1,279 | | 03/03/2017 | | $ | 45,002 | |
Katherine Button Bell | | | 2,010 | | 03/03/2016 | | $ | 44,994 | | | | 1,279 | | 03/03/2017 | | $ | 45,002 | |
Edward Stevens | | | | 1,257 | | 11/01/2016 | | $ | 45,007 | |
* | The value of the award is based upon the grant date fair value of the award determined in accordance with FASB Accounting Standards Codification Topic 718-10. See Note 10 to our consolidated financial statements filed with the SEC on December 13, 20168, 2017 as part of the Annual Report on Form 10-K for the assumptions relied on in determining the value of these awards. |
The following table identifies the aggregate number of stock options, shares of restricted Class A common stock (all of which are fully vested as of September 30, 2016)29, 2017) and shares of Class A common stock underlying unvested restricted stock units held by each outside director as of September 30, 2016.29, 2017.
Name of Outside Director | | Number of Shares of Class A Common Stock Subject to Common Stock Options Outstanding as of September 30, 2016 | | | Number of Shares of Restricted Class A Common Stock Outstanding as of September 30, 2016 | | | Number of Restricted Stock Units Outstanding as of September 30, 2016 | | | Number of Shares of Class A Common Stock Subject to Common Stock Options Outstanding as of September 29, 2017 | | | Number of Shares of Restricted Class A Common Stock Outstanding as of September 29, 2017 | | | Number of Restricted Stock Units Outstanding as of September 29, 2017 | |
Thomas F. Pyle, Jr. | | | ---- | | | | 23,637 | | | | 2,010 | | | | ---- | | | | 23,637 | | | | 1,279 | |
John M. Fahey, Jr. | | | ---- | | | | 19,885 | | | | 2,010 | | | | ---- | | | | 18,537 | | | | 1,279 | |
Terry E. London | | | ---- | | | | 20,637 | | | | 2,010 | | | | ---- | | | | 20,637 | | | | 1,279 | |
W. Lee McCollum | | | ---- | | | | 15,975 | | | | 2,010 | | |
Edward F. Lang | | | ---- | | | | 15,387 | | | | 2,010 | | | | ---- | | | | 15,387 | | | | 1,279 | |
Richard Casey Sheahan | | | ---- | | | | ---- | | | | 2,010 | | | | ---- | | | | ---- | | | | 1,279 | |
Katherine Button Bell | | | ---- | | | | ---- | | | | 2,010 | | | | ---- | | | | ---- | | | | 1,279 | |
Edward Stevens | | | | ---- | | | | ---- | | | | 1,257 | |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Related Person Transactions
The Company purchases certain services primarily from S.C. Johnson & Son, Inc. (“S.C. Johnson”) and, to a lesser extent, from other organizations controlled by Johnson Family members (including Ms. Johnson-Leipold) and other related parties. For example, the Company leases its headquarters facility from Johnson Financial Group and S.C. Johnson provides the Company with (1) administrative services, conference facilities and transportation services, (2) information processing, and (3) from time to time, certain loaned employees. The Company believes that the amounts paid to these organizations are no greater than the fair market value of the services. The total amount incurred by the Company for the foregoing services during fiscal 20162017 was approximately $1,196,000.$1,144,000.
Review and Approval of Related Person Transactions
The charter for the Audit Committee provides that it is responsible for the review and approval of related party transactions in accordance with NASDAQ listing requirements. Based upon the Audit Committee’s review, the Company believes that all related person transactions described above were at arms-length and contained terms that were no less favorable than what could have been obtained from an unaffiliated third party. The Board of Directors has also adopted a formal written set of policies and procedures for the review, approval and ratification of related person transactions.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company’s executive officers, directors, and more than 10 percent shareholders to file with the SEC reports on prescribed forms of their beneficial ownership and changes in beneficial ownership of Company stock and furnish copies of such forms to the Company. Based solely on a review of the copies of such forms furnished to the Company, or written representations that no Form 5 reports were required to be filed, the Company believes that during fiscal 20162017 and fiscal 20172018 to date, all reports required by Section 16(a) to be filed by the Company’s officers, directors and more than 10 percent shareholders were filed on a timely basis, except David W. Johnson filed an amended Form 4 report on December 8, 2015 disclosing a stock transaction occurring on December 3, 2015.basis.
PROPOSAL 3: NON-BINDING ADVISORY VOTE ON EXECUTIVE COMPENSATION
The Proposal
As required by the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and SEC rules and regulations (and consistent with the similar proposal on executive compensation submitted to the Company’s shareholders in connection with prior Annual Meetings of Shareholders), the Company’s Board of Directors has authorized a non-binding advisory shareholder vote to approve the compensation of the Company’s named executive officers as reflected in the section herein titled “Executive Compensation,” the disclosures regarding named executive officer compensation provided in the various tables included in this Proxy Statement, the accompanying narrative disclosures and the other executive compensation information provided in this Proxy Statement. This proposal, commonly known as a “Say on Pay” proposal, gives the Company’s shareholders the opportunity to endorse or not endorse the Company’s executive pay programs and policies.
The Company believes its compensation policies and procedures align the executive officers’ compensation with the Company’s short-term and long-term performance and provide the compensation and incentives needed to attract, motivate and retain key executives who are important to the Company’s continued success. The Compensation Committee periodically reviews and approves the Company’s compensation policies and procedures, and periodically reviews its executive compensation programs and takes any steps it deems necessary to continue to fulfill the objectives of the Company’s compensation programs.
Shareholders are encouraged to carefully review the “Executive Compensation” section of this Proxy Statement for a detailed discussion of our executive compensation programs. These programs have been designed to promote a performance-based culture which aligns the interests of our named executive officers and other managers with the interests of the shareholders. This includes annual incentive cash compensation based on the named executive officers achieving their individual goals and objectives, together with incentive compensation based on the Company achieving specified financial performance measures. A substantial portion of our named executive officers’ compensation is also based on equity awards with long-term vesting or performance-based requirements.
Highlights of the Company’s compensation programs include the following:
| · | Neither of the named executive officers have any employment agreements with the Company; |
| · | The Company is not required to provide any severance or termination pay or benefits to any named executive officer; |
| · | The named executive officers are not entitled to any tax gross-up payments in connection with any Company compensation programs; |
| · | Although the Company is a “Controlled Company,” and is therefore exempt from certain independence requirements of the NASDAQ Stock Market rules, including the requirement to maintain a Compensation Committee composed entirely of independent directors, each member of the Company’s Compensation Committee is independent under the applicable standards of the NASDAQ Stock Market; |
| · | The Company’s compensation focuses on performance, with base pay accounting for only 27% of total compensation opportunity for Ms. Johnson‑Leipold and 39%37% of total compensation opportunity for Mr. Johnson for fiscal 2016.2017. The remainder of their total compensation opportunity is comprised of cash incentive bonuses based on achieving individual goals and Company financial performance, and long‑term equity awards; |
| · | A substantial portion of the named executive officers’ compensation consists of annual cash incentives based upon achieving specific goals and objectives under our Cash Bonus Plan. In order for named executive officers to receive an annual incentive cash bonus, the Company must also meet an additional hurdle based on a minimum level of net income and return of profit to shareholders; |
| · | The Company has a “clawback” or compensation recovery policy which provides for the recoupment of incentive compensation in the event of certain accounting restatements; |
| · | The Compensation Committee continually monitors Company performance and adjusts compensation practices accordingly. For example, beginning with fiscal 2016, all of the equity awards made to our CEO are based on achieving a specified level of financial performance for the Company. Beginning in fiscal 2016, the Compensation Committee also modified the portion of the long-term equity incentive awards (i.e., the portion issued in the form of performance-based restricted stock units) that are linked to achieving Company performance goals to be based on a three-year performance period rather than a one year period, to better coincide with the Company’s three year strategic plan; and |
| · | The Compensation Committee regularly assesses the Company’s individual and total compensation programs against peer companies, the general marketplace and other industry data points and the Compensation Committee utilizes an independent consultant to engage in ongoing independent review of all aspects of our executive compensation programs. |
Accordingly, shareholders are being asked to vote on the following resolution:
“Resolved, that the compensation paid to Johnson Outdoors’ named executive officers, as disclosed in this Proxy Statement pursuant to the compensation disclosure rules of the SEC, including the compensation tables and narrative disclosures, is hereby approved by the shareholders of Johnson Outdoors Inc.”
Because this shareholder vote is advisory, it will not be binding on the Board of Directors. However, the Compensation Committee will take into account the outcome of the vote when considering future executive compensation arrangements.
Vote Required for Approval
If a quorum exists, the approval of the non-binding advisory proposal on our executive compensation described in this Proxy Statement requires the votes cast, in person or by proxy, and entitled to vote thereon, for this proposal to exceed the votes against this proposal. Abstentions and broker non-votes will not count toward the determination of whether this proposal is approved and will have no impact on the vote.
Board of Directors Recommendation
The Board of Directors recommends a vote “FOR” the non-binding advisory resolution approving our executive compensation.
PROPOSAL 4: NON-BINDING ADVISORY VOTE ON THE FREQUENCY OF FUTURE ADVISORY VOTES ON EXECUTIVE COMPENSATION
The Proposal
As noted above, the Company is submitting a “Say on Pay” proposal to its shareholders pursuant to Proposal 3 as required by the Dodd-Frank Act and SEC rules and regulations. The Dodd-Frank Act also requires that we submit to a vote of our shareholders once every six years a non-binding advisory proposal on the frequency of future “Say on Pay” votes. Shareholders may vote on an advisory basis as to whether future “Say on Pay” votes should occur every 1 year, 2 years or 3 years.
The enclosed proxy allows shareholders to vote for 1 year, 2 years or 3 years for the non-binding advisory proposal for the frequency of future “Say on Pay” votes, or to abstain. The Company has historically held “Say on Pay” votes every year and the Board of Directors recommends that shareholders also vote for “1 year” for the non-binding advisory proposal on the frequency of future advisory votes on executive compensation because:
| · | it will help our Board of Directors and Compensation Committee obtain contemporaneous and more direct feedback from our shareholders regarding our compensation practices and policies; |
| · | it provides a higher level of accountability to the shareholders and fosters more frequent communication between our Compensation Committee and our shareholders; |
| · | an annual vote furthers our commitment to maintaining high standards of corporate governance; |
| · | if we receive a negative response to our “Say on Pay” vote we will be able to make any necessary changes to our practices and not have to wait two or three years to receive shareholder feedback on our changes; and |
| · | providing for annual “Say on Pay” votes eases the procedural burden on the Company as opposed to implementing a biennial or triennial vote because an annual vote creates procedural consistency from year to year. |
Because this shareholder vote is advisory, it will not be binding on the Board of Directors. However, the Board of Directors will take into account the outcome of the vote when considering the frequency of future “Say on Pay” votes.
Vote Required for Approval
For the non-binding advisory proposal on the frequency of future advisory votes on executive compensation, shareholders may vote on an advisory basis as to whether future “Say on Pay” votes should occur every 1 year, 2 years or 3 years, or to abstain. A plurality of the votes cast is required for the approval of a choice among every 1 year, 2 years or 3 years for this proposal. This means that whichever of 1 year, 2 years or 3 years receives the most votes will be approved. Abstentions and broker non-votes will not count toward the determination of whichever of 1 year, 2 years or 3 years is approved.
Board of Directors Recommendation
The Board of Directors recommends a vote “FOR” approval of every “1 year” for the non-binding advisory proposal on the frequency of future advisory votes on executive compensation. Although the Board of Directors recommends that you vote for every “1 year,” the enclosed proxy allows you to vote for 1 year, 2 years or 3 years, or to abstain. You are not voting simply to approve or disapprove the Board of Directors’ recommendation.
EQUITY COMPENSATION PLAN INFORMATION
The following table summarizes share information, as of September 30, 2016, for the Company’s equity compensation plans, including the Johnson Outdoors Inc. 2012 Non-Employee Director Stock Ownership Plan, the Johnson Outdoors Inc. 2010 Long-Term Stock Incentive Plan and the Johnson Outdoors Inc. 2009 Employees’ Stock Purchase Plan. All of these plans have been approved by the Company’s shareholders.
Plan Category | | Number of Common Shares to Be Issued Upon Exercise of Outstanding Options, Warrants and Rights | | | Weighted-average Exercise Price of Outstanding Options, Warrants and Rights | | | Number of Common Shares Available for Future Issuance Under Equity Compensation Plans | |
2010 Long-Term Stock Incentive Plan | | | - | | | | - | | | | 578,515 | |
2012 Non-Employee Director Stock Ownership Plan | | | 17,008 | | | | - | | | | 11,202 | |
2009 Employees’ Stock Purchase Plan | | | - | | | | - | | | | 12,403 | |
Total All Plans | | | 17,008 | | | | | | | | 602,120 | |
PROPOSAL 5: TO ADOPT AND APPROVE AMENDING THE JOHNSON OUTDOORS 2012 NON-EMPLOYEE DIRECTOR STOCK OWNERSHIP PLAN
The Proposal; Amendment to Increase Authorized Shares
The Board of Directors unanimously approved the adoption of the Johnson Outdoors 2012 Non-Employee Director Stock Ownership Plan (the “2012 Director Plan”) on December 4, 2012 and the 2012 Director Plan was approved and adopted by the Company’s shareholders at the Annual Meeting of Shareholders held on February 28, 2013. The purpose of the 2012 Director Plan is to enhance the ability of the Company to attract and retain outside directors who will make substantial contributions to the Company’s long-term business growth and to provide meaningful incentives to such persons which are directly linked to the profitability of the Company’s businesses and increases in shareholder value.
The number of shares of Class A Common Stock originally available under the 2012 Director Plan was 50,000 shares. As of January 13, 2017, the number of shares available for future issuance under the 2012 Director Plan is only 9,945 shares. Accordingly, the Company is proposing an amendment to the 2012 Director Plan to approve an additional 60,000 shares of Class A common stock for a total of 110,000 shares authorized under the 2012 Director Plan and a total of 69,945 shares available for future grants under the 2012 Director Plan. During the 2016 fiscal year, 14,070 restricted stock units were granted to non-employee directors. The number of shares granted each year will depend on the fair market value of a share of Class A Common Stock on the date of grant. See “Director Compensation” for additional information on grants under the 2012 Director Plan. The increase in the number of shares of Class A common stock under the 2012 Director Plan is the only amendment to this plan being proposed by the Company for approval by the shareholders.
Description of the Plan
The following description of the 2012 Director Plan is qualified in its entirety by reference to the copy of the amended plan, which is attached to this Proxy Statement as Appendix A.
The 2012 Director Plan provides for the grant to non-employee directors of non-statutory stock options, shares of restricted stock and restricted stock units. The 2012 Director Plan, as proposed to be amended hereby provides that up to a total of 110,000 (of which 40,055 are outstanding) shares of Class A common stock (subject to adjustment as described below) will be available for the granting of awards thereunder. If any shares subject to awards granted under the 2012 Director Plan, or to which any award relates, are forfeited or if an award otherwise terminates, expires or is cancelled prior to the delivery of all of the shares issuable pursuant to the award, such shares (assuming the holder of the award did not receive dividends on the shares or exercise other indicia of ownership) will be available for the granting of new awards under the 2012 Director Plan.
Each non-employee director is eligible to receive grants of awards under the 2012 Director Plan. The Board of Directors has designated the Compensation Committee of the Board to administer the 2012 Director Plan. The 2012 Director Plan requires that such committee shall consist of at least two directors, each of whom must qualify as (a) a “non-employee director” within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934, as amended, and (b) an “independent” director pursuant to the definition of independence in the listing requirements of the principal national securities exchange, national securities association or over-the-counter market on which the Company’s Class A common stock is traded. If at any time no such committee exists, the 2012 Director Plan will be administered by the members of the Board of Directors who do qualify as “non-employee directors” and “independent directors.”
As noted above, the 2012 Director Plan provides for the grant to non-employee directors of non-statutory stock options, shares of restricted stock and restricted stock units. The plan terminates on December 4, 2022. Vesting is determined by the Compensation Committee at the time of grant. Awards of stock options, restricted stock or restricted stock units may be granted without any vesting requirements or other restrictions. Awards of restricted stock or restricted stock units that vest based on performance conditions must have a performance period of at least one year and awards of restricted stock or restricted stock units that vest based on service for a period of time must have a vesting period of at least one year. The Company is prohibited from repricing any stock options without obtaining shareholder approval. All stock options must have an exercise price equal to or greater than the fair market value of a share of Class A common stock on the date the option is granted. Except as otherwise authorized by the Compensation Committee, no stock option, share of restricted stock or restricted stock unit may be sold, assigned, transferred, pledged or otherwise encumbered other than by will or the laws of descent and distribution. Restricted stock units provide for the delivery to recipients of shares of Class A common stock after the vesting or other conditions to the right to receive the shares are satisfied. In connection with the grant of restricted stock units, the Compensation Committee may establish conditions to the issuance of the shares subject to the award based on continued service, the attainment of specific performance goals or such other factors or criteria as the Compensation Committee may determine. Restricted stock units may be subject to forfeiture if a grantee’s service relationship with Johnson Outdoors terminates before the end of the restriction period or if any of the other conditions precedent to the delivery of the shares subject to the award are not satisfied. In the event of a change of control (as defined in the 2012 Director Plan), the Compensation Committee has the right, in its sole and absolute discretion, to accelerate the vesting of all outstanding stock options and to cause all restrictions applicable to any restricted stock and restricted stock units to lapse.
In the event of any stock dividend, stock split, combination or exchange of shares, merger, consolidation, spin-off, recapitalization or other distribution affecting the Class A common stock such that an adjustment is determined by the Board of Directors or the Compensation Committee to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the 2012 Director Plan, then the Board of Directors or the Compensation Committee may, in such manner as it may deem equitable, adjust any or all of (1) the number and type of shares that may be issued under the 2012 Director Plan, and (2) the number and type and exercise price of shares subject to outstanding awards under the 2012 Director Plan; provided, however, that such adjustments are consistent with the effect on other shareholders arising from any such action.
Except as set forth below, the Board of Directors may at any time amend, suspend or terminate the 2012 Director Plan; provided, however, that shareholder approval of any amendment of the 2012 Director Plan will be obtained if otherwise required by (a) the Internal Revenue Code or any rules promulgated thereunder, (b) the listing requirements of the principal national securities exchange, national securities association or over-the-counter market on which the Class A common stock is then traded, or (c) any other applicable law. The Board of Directors is prohibited from amending the 2012 Director Plan to permit repricing.
New Plan Benefits
For fiscal 2016, each non-employee director received grants of restricted stock units under the 2012 Director Plan with a fair market value of approximately $45,000, representing 2,010 restricted stock units based on fair market value for Class A common stock on March 3, 2016. The amount and type of such awards for future years have not been set as of the date of this Proxy Statement and the benefits or amounts to be received in the future by, or allocated to, specific non-employee directors under the 2012 Director Plan is not currently determinable.
Vote Required for Approval
If a quorum exists, the 2012 Director Plan will be amended pursuant to the above-described proposal if the votes cast at the Annual Meeting in favor of the amendment exceed the votes cast against the amendment. Any shares not voted at the meeting (whether by broker non-votes or otherwise) and any abstentions will have no impact on the vote.
Board of Directors Recommendation
The Board of Directors recommends a vote “FOR” the proposal to adopt and approve amending the Johnson Outdoors Inc. 2012 Non-Employee Director Stock Ownership Plan.
PROPOSAL 6: TO ADOPT AND APPROVE AMENDING THE JOHNSON OUTDOORS INC. 2009 EMPLOYEES’ STOCK PURCHASE PLAN.
The Proposal; Amendment to Increase Authorized Shares and Revise Terms of Offerings
The Board of Directors unanimously approved the adoption of the Johnson Outdoors Inc. 2009 Employees’ Stock Purchase Plan (the “ESPP”) on December 7, 2009, and Company shareholders approved the ESPP at the 2010 Annual Meeting of Shareholders. The purpose of the ESPP is to provide employees of the Company and its subsidiaries with the opportunity to purchase shares of Class A common stock of the Company (“Company Shares”) and thereby share in the ownership of the Company. We believe the ESPP helps us retain the services of our employees, secure and retain the services of new employees, and provide incentives for such persons to exert maximum efforts for our success. In addition, the ESPP is designed to encourage and provide opportunities for stock ownership by employees, which increases their proprietary interest in the Company, and, consequently, their identification with the interests of the shareholders of the Company.
The Company is proposing for approval by the shareholders at the Annual Meeting amendments to the ESPP. There were originally 80,000 shares available to be purchased under the ESPP and only 12,403 shares remain and are available to be purchased under the ESPP. The amendment proposes to make an additional 80,000 shares or a total of 160,000 shares authorized under the ESPP and a total of 92,403 shares available for future offerings under the ESPP. For calendar year 2016, the Company offered 18,000 shares under the ESPP. With only 12,403 shares available, the Company believes the additional shares are necessary to cover the 2017 and future ESPP offerings to Company employees. We continue to believe that the ESPP furthers the corporate objectives of attracting, retaining and motivating employees and ensuring that employees’ objectives are aligned with those of the Company and, therefore, we are requesting Company shareholders approve the amendment to the ESPP to allow for future offerings under the ESPP.
The Company is also proposing certain additional amendments under the ESPP including eliminating a 30-day limitation on Purchase Periods under the ESPP. Historically, there was one 30-day Purchase Period each year. The amended ESPP provides the Compensation Committee the flexibility to determine the length and frequency of Purchase Periods. The Compensation Committee currently intends to provide for two, six month Purchase Periods each year.
Description of the Plan
The following description of the ESPP is qualified in its entirety by reference to the copy of the amended plan, which is attached to this Proxy Statement as Appendix B.
The ESPP is administered by the Compensation Committee of the Board of Directors of the Company. The Compensation Committee has the discretionary authority to administer and interpret the ESPP, including the authority to: (i) determine when and how rights to purchase common stock are granted and the terms and conditions of each offering, (ii) adopt such rules or regulations which may become necessary or advisable for the operation of the ESPP, (iii) exercise such other powers and perform such other acts deemed necessary to carry out the intent of the ESPP in accordance with its terms, (iv) interpret the ESPP and the rights offered under it. Determinations of the Compensation Committee as to any disputed question arising under the ESPP, including questions of construction and interpretation, shall be final, binding and conclusive upon all participants in the ESPP.
The Compensation Committee, in its discretion, may appoint one or more individuals (the “Plan Administrative Committee”) to assist the Compensation Committee in corresponding with employees, with record keeping and in performing other ministerial functions in connection with the ESPP; provided, however, that the Plan Administrative Committee shall exercise no discretion with respect to the interpretation of the ESPP or of the rights to purchase Company Shares pursuant to the ESPP.
The Compensation Committee shall designate the affiliates whose employees may participate in the ESPP (a “Designated Corporation”). On any date as of which a determination of eligibility is made, the term “Eligible Employee” shall mean a full-time employee of a Designated Corporation. For purposes of the ESPP, a “full-time” employee of a Designated Corporation means an employee who customarily works at least 20 hours per week and more than five months per calendar year.
The following employees shall be excluded from eligibility under the ESPP: (i) highly compensated employees with annual compensation at or above the compensation limit as provided under Internal Revenue Code section 401(a)(17), (ii) employees who if granted the right to purchase any Company Shares in accordance with the ESPP would own, directly or indirectly, stock possessing five percent or more of the total combined voting power or value of all classes of stock of the Company or any subsidiary or any parent of the Company, and (iii) employees who if granted a right to purchase Company Shares under the ESPP, combined with all other employee stock purchase plans, would accrue stock of the Company and its parent and subsidiary corporations at a rate which exceeds $25,000 of the fair market value of such stock for each calendar year.
At the discretion of the Compensation Committee, each calendar year, or more frequently if deemed appropriate, beginning on such date as the Committee may specify (the “Grant Date”), each employee who is then an Eligible Employee of a Designated Corporation shall be granted the right to purchase a maximum of 250 Company Shares during the calendar year. The maximum number of shares can be adjusted by the Compensation Committee at its discretion for all Eligible Employees. Each purchase right shall be exercisable during the period designated by the Compensation Committee following the Grant Date (such period is hereinafter referred to as the “Purchase Period”). Eligible Employees may exercise their rights to purchase Company Shares granted under the Plan, by timely submitting an enrollment form. Employees participating in the ESPP may purchase shares of Common Stock at 85 percent of the fair market value of a share on the first day of the Purchase Period or the last day of the Purchase Period, whichever is lower. For purposes of the ESPP, fair market value per share as of a particular date will mean the closing sales price of the Common Stock on the applicable date (or the last trading date prior to such date). If applications to purchase a number of Company Shares in excess of the maximum number of Purchase Period Company Shares are received by the Plan Administrative Committee, each employee properly exercising purchase rights during such Purchase Period shall be entitled to purchase the number of Company Shares equal to a pro rata portion of the Company Shares available based on the number of shares with respect to which such employee has exercised his purchase rights and the aggregate number of shares with respect to which all employees have exercised purchase rights during the Purchase Period.
In the event of a reorganization, recapitalization, stock split, stock dividend, combination of shares, merger, consolidation or other change in Company Shares, the Compensation Committee shall make appropriate changes in the number of Company Shares which may be purchased pursuant to the ESPP, the purchase price and such other changes in the ESPP and outstanding purchase rights as the Compensation Committee may deem appropriate under the circumstances.
The Compensation Committee shall impose such non-discriminatory restrictions on the transfer of any shares of stock acquired pursuant to the exercise of a purchase right under the ESPP as it may deem advisable, including, without limitation, restrictions under applicable federal securities laws, under the requirements of any stock exchange upon which such shares of stock are then listed, if any, and under any state and foreign securities laws applicable to such shares.
The Board of Directors may amend or terminate the ESPP at any time, but any such amendment or termination shall not affect purchase rights outstanding at the time of termination. However, the Board of Directors may not, without the approval of the shareholders of the Company, amend the ESPP to (i) increase the maximum number of Company Shares which may be purchased pursuant to the ESPP; (ii) modify eligibility requirements for participation in the ESPP; (iii) change the class of corporations whose employees will be granted purchase rights under the ESPP; or (iv) materially increase the benefits to participants under the ESPP.
New Plan Benefits
No directors who are not employees will receive any benefit under the ESPP. The ESPP is subject to the determination of benefits by the Compensation Committee and the discretion of Eligible Employees to participate in the ESPP. As a result, the benefits that will be received under the ESPP by the Company’s current executive officers and by all Eligible Employees are not currently determinable.
Vote Required for Approval
If a quorum exists, the ESPP will be amended pursuant to the above described proposal if the votes cast at the Annual Meeting in favor of amendment of the ESPP exceed the votes cast against the amendment of the ESPP. Any shares not voted at the meeting (whether by broker non-votes or otherwise) and any abstentions will have no impact on the vote.
Board of Directors Recommendation
The Board of Directors recommends a vote “FOR” the proposal to adopt and approve amending the Johnson Outdoors Inc. 2009 Employees’ Stock Purchase Plan.
SHAREHOLDER PROPOSALS
All shareholder proposals pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended (“Rule 14a-8”), for presentation at the 20182019 Annual Meeting of Shareholders must be received at the offices of the Company, Attention: Corporate Secretary, 555 Main Street, Racine, Suite 342, Wisconsin 53403 by September 15, 201714, 2018 (120 days prior to the anniversary date of the mailing of this Proxy Statement) for inclusion in the proxy statement and form of proxy relating to the meeting. In addition, a shareholder who otherwise (other than pursuant to SEC Rule 14a-8) intends to present business at the 20182019 Annual Meeting of Shareholders must comply with the requirements set forth in the Company’s Bylaws. Among other things, to bring business before an annual meeting, a shareholder must give written notice thereof, complying with the Bylaws, to the Secretary of the Company not more than 120 days prior to the first anniversary date of the preceding year’s annual meeting and not less than the close of business on the 90th day prior to the first anniversary date of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the shareholder must be so delivered not earlier than the close of business on the 120th day prior to the date of such annual meeting and not later than the close of business on the later of the 90th day prior to the date of such annual meeting or, if the first public announcement of the date of such annual meeting is less than 100 days prior to the date of such annual meeting, the 10th day following the day on which public announcement of the date of such meeting is first made by the corporation. Under the Bylaws, if the Company does not receive notice of a shareholder proposal submitted otherwise than pursuant to Rule 14a-8 (namely, proposals shareholders intend to present at the 20182019 Annual Meeting of Shareholders but do not intend to have included in the Company’s proxy statement and form of proxy for such meeting) prior to the close of business on December 2, 2017,1, 2018, then the notice will be considered untimely and the Company will not be required to present such proposal at the 20182019 Annual Meeting of Shareholders. If the Board of Directors chooses to present such proposal at the 20182019 Annual Meeting of Shareholders, then the persons named in the proxies solicited by the Board of Directors for the 2018 Annual Meeting of Shareholders may exercise discretionary voting power with respect to such proposal.
OTHER MATTERS
The Company has filed an Annual Report on Form 10-K with the SEC for the fiscal year ended September 30, 201629, 2017. This Form 10-K will be mailed on or around January 13, 201712, 2018, to each person who is a record or beneficial holder of shares of Class A common stock or Class B common stock on the record date for the Annual Meeting. Pursuant to, and in accordance with, the rules of the SEC, the Company, where allowed, is delivering only one copy of the Company’s 20162017 Annual Report on Form 10-K and this Proxy Statement to multiple shareholders sharing an address unless the Company has received contrary instructions from one or more of the shareholders. Upon written or oral request, the Company will promptly deliver a separate copy of the Company’s 20162017 Annual Report on Form 10-K and/or this Proxy Statement to any shareholder at a shared address to which a single copy of the document was delivered. If you are a shareholder residing at a shared address and would like to request an additional copy of the Company’s 20162017 Annual Report on Form 10-K and/or this Proxy Statement now or with respect to future mailings (or to request to receive only one copy of the Annual Report and Proxy Statement if you are currently receiving multiple copies), then you may notify the Company (1) by writing to the Corporate Secretary, Johnson Outdoors Inc., 555 Main Street, Suite 342, Racine, Wisconsin 53403 or (2) via email to: proxy@johnsonoutdoors.com.
The cost of soliciting proxies will be borne by the Company. The Company expects to solicit proxies primarily by mail. Proxies may also be solicited in person or by telephone by certain officers and employees of the Company. It is not anticipated that anyone will be specially engaged to solicit proxies or that special compensation will be paid for that purpose. The Company will also reimburse brokerage firms, custodians, nominees, fiduciaries and others for expenses incurred in forwarding proxy material to the beneficial owners of the Company’s common stock.
Neither the Board of Directors nor management intends to bring before the Annual Meeting any matters other than those referred to in the Notice of Annual Meeting and this Proxy Statement. In the event that any other matters shall properly come before the Annual Meeting, it is the intention of the persons named in the proxy forms to vote the shares represented by each such proxy in accordance with their judgment on such matters.
| By Order of the Board of Directors |
| Secretary
|
January 13, 2017 | Secretary |
January 12, 2018
APPENDIX A
JOHNSON OUTDOORS INC. 2012 NON-EMPLOYEE DIRECTOR STOCK OWNERSHIP PLAN
Section 1. Purpose
The purpose of the Johnson Outdoors Inc. 2012 Non-Employee Director Stock Ownership Plan (the “Plan”) is to promote the long-term growth and financial success of Johnson Outdoors Inc. (the “Company”) by attracting and retaining non-employee directors of outstanding ability and assisting the Company in promoting a greater identity of interest between the Company’s non-employee directors and its shareholders.
Section 2. Definitions
As used in the Plan, the following terms have the respective meanings set forth below:
(a) “Award” means any Stock Option, Restricted Stock or Restricted Stock Unit granted under the Plan.
(b) “Award Agreement” means a written or electronic agreement between the Company and a Participant, in such form as may be approved by the Committee, setting forth the terms, conditions and restrictions of an Award granted to a Participant under the Plan.
(c) “Black-Scholes Model” means the Black-Scholes Option Pricing Model, which shall be used to calculate the fair value of Stock Option grants under the Plan, as of the date of such grant. Six factors are required to calculate the value of a Stock Option using the Black-Scholes Model: the Stock Option’s exercise price; the current market price of the Common Stock; the dividend yield of the Common Stock; the Stock Option’s time to expiration; the risk-free market rate of return; and the future volatility of the Common Stock. Only the future volatility of the Common Stock cannot be objectively determined. In connection with using the Black-Scholes Model to calculate the fair value of Stock Option grants under the Plan, the Committee may use such variations of the Black-Scholes Model and parameters and procedures respecting the Black-Scholes Model, including, without limitation, parameters and procedures used to measure the historical volatility of the Common Stock as of the relevant grant date, as the Committee deems reasonably appropriate in its sole discretion.
(d) “Board” means the Company’s Board of Directors.
(e) “Code” means the Internal Revenue Code of 1986, as amended from time to time, or any successor provisions thereto.
(e) “Change of Control” means the occurrence, in a single transaction or series of related transactions, of any one or more of the following events:
(i) the consummation of a sale or other disposition of all or substantially all of the consolidated assets of the Company and its subsidiaries;
(ii) the consummation of a liquidation or dissolution of the Company;
(iii) the consummation of a sale or other disposition of at least a majority of the outstanding shares of Common Stock;
(iv) the consummation of a merger, consolidation or similar transaction following which the Company is not the surviving corporation; or
(v) the consummation of a merger, consolidation or similar transaction following which the Company is the surviving corporation but the shares of Common Stock outstanding immediately preceding the merger, consolidation or similar transaction are converted or exchanged by virtue of the merger, consolidation or similar transaction into other property, whether in the form of securities, cash or otherwise.
The Committee in its sole discretion will determine if there has been a Change of Control.
(f) “Committee” means the Compensation Committee of the Board or any other committee of the Board that the Board designates to administer the Plan. The Committee shall consist of not less than two directors, each of whom shall qualify as a “non-employee director” within the meaning of Rule 16b-3. If at any time the Committee shall not be in existence, then the members of the Board that qualify as non-employee directors shall administer the Plan and shall be deemed to be the Committee for purposes of the Plan.
(g) “Common Stock” means the Class A Common Stock, $.05 par value per share, of the Company and such other securities or property as may become subject to Awards pursuant to an adjustment made under Section 5(b) of the Plan.
(h) “Fair Market Value” means the fair market value of the Common Stock determined by such methods or procedures as shall be established from time to time by the Committee; provided, however, that the Fair Market Value shall not be less than the par value of the Common Stock; and provided further, that so long as the Common Stock is traded on a national securities exchange, such as the NASDAQ Stock Market, the Fair Market Value shall be the average of the high and low prices of a share of Common Stock on the principal securities exchange on which the Common Stock is traded on the specified date (or if no sales occurred on such date, the last preceding date on which sales occurred); provided, however, that if the principal market for the Common Stock is an over-the-counter market, the Fair Market Value shall be the average of the bid and asked prices of a share of Common Stock in the applicable over-the-counter market on the specified date, as reported by the National Association of Securities Dealers (or if no sales occurred on such date, the last preceding date on which sales occurred). The determination of Fair Market Value shall comply with Section 409A and Treasury Regulation Section 1.409A-1(b)(5)(iv) promulgated thereunder.
(i) “1934 Act” means the Securities Exchange Act of 1934, as amended from time to time, and any successor thereto.
(j) “Participant” means a member of the Board who is not an employee of the Company, any entity that is directly or indirectly controlled by the Company or any entity in which the Company has a significant interest as determined by the Committee.
(k) “Restricted Stock” means an Award to a Participant comprised of shares of Common Stock granted under Section 7(b) of the Plan.
(l) “Restricted Stock Unit” means an Award of a right granted to a Participant under Section 7(c) of the Plan to receive a share of Common Stock at the end of a specified period, which right shall be conditioned on the satisfaction of specified performance, service or other criteria.
(m) “Rule 16b-3” means Rule 16b-3 promulgated by the Securities and Exchange Commission under the 1934 Act, or any successor provisions thereto.
(n) “Section 409A” means Section 409A of the Code and Department of Treasury regulations and other interpretive guidance issued thereunder, including those issued after the date hereof.
(o) “Stock Option” means an Award in the form of the right to purchase a specified number of shares of Common Stock at a specified price during a specified period granted under Section 7(a) of the Plan.
Section 3. Effective Date
The Plan shall become effective on December 5, 2012. Awards under the Plan in excess of 50,000 shares of Common Stock shall be subject to the approval of the amendment to the Plan authorizing additional shares under the Plan at the Company’s 2017 annual meeting of its shareholders. To the extent that any Awards in excess of 50,000 shares are granted under the Plan prior to such approval by Company shareholders, such excess grants shall be contingent on approval of the amendment to the Plan by the shareholders of the Company authorizing such additional shares. No awards may be made under the Plan after December 5, 2022 or earlier termination of the Plan by the Board.
Section 4. Administration
The Committee shall be responsible for administering the Plan. The Committee shall have the sole power and authority: (a) to interpret the Plan; (b) to prescribe, amend and rescind rules and regulations relating to the Plan, to provide for conditions and assurances deemed necessary or advisable to protect the interests of the Company, and to make all other determinations necessary or advisable for the administration of the Plan, but only to the extent not contrary to the express provisions of the Plan; and (c) to determine what form of Awards are to be granted under the Plan, and to determine the terms and conditions of any Award granted under the Plan (including, but not limited to, the number of shares, the share price, any restriction or limitation and any vesting acceleration or forfeiture waiver regarding any Award), which terms and conditions shall, in every case, be set forth or incorporated by reference in the Award Agreement and shall be consistent with the provisions of the Plan. Determinations, interpretations or other actions made or taken by the Committee pursuant to the provisions of the Plan shall be final and binding and conclusive for all purposes and upon all persons, including, without limitation, the Company, the shareholders, the directors (as Participants) and any persons having any interests in any Awards which may be granted under the Plan.
Section 5. Stock Available for Awards
(a) Common Stock Available. The aggregate number of shares of Common Stock available for Awards under the Plan shall be 110,000 shares of Common Stock (subject to adjustment pursuant to Section 5(b) hereof).
(b) Adjustments and Reorganizations. In the event that the Committee shall determine that any dividend (other than a normal cash dividend) or other distribution (whether in the form of cash, Common Stock, other securities or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of Common Stock or other securities of the Company, issuance of warrants or other rights to purchase Common Stock or other securities of the Company, or other similar corporate transaction or event affects the Common Stock such that an adjustment is determined by the Committee to be necessary or appropriate to prevent dilution or enlargement of the benefits or potential benefits intended to be made available to Participants under the Plan, then the Committee may, in such manner as it may deem equitable, adjust any or all of the (i) number and type of securities or other property available under the Plan and that thereafter may be made the subject of Awards under the Plan, and (ii) number and type of securities or other property subject to outstanding Awards and the exercise price of outstanding Stock Options, provided any such adjustments are consistent with the effect on shareholders arising from any such action. The Committee may also make such similar appropriate adjustments in the calculation of Fair Market Value as it deems necessary or appropriate to prevent dilution or enlargement of the benefits or potential benefits intended to be made available to Participants under the Plan. Notwithstanding the foregoing, (x) Stock Options subject to grant or previously granted under the Plan at the time of any event described above shall be subject to only such adjustment as shall be necessary to maintain the proportionate interest of the Participant and preserve, without exceeding, the value of such Stock Options, and (y) the number of shares of Common Stock subject to Restricted Stock or Restricted Stock Units under the Plan at the time of any event described above shall be subject to only such adjustment as shall be necessary to maintain the relative proportionate interest represented by such Restricted Stock or Restricted Stock Units immediately prior to any such event.
(c) Change of Control. In order to preserve a Participant’s rights under outstanding Awards in the event of a Change of Control, the Committee in its discretion may, at the time the Award is granted or at any time thereafter, take one or more of the following actions: (i) provide for the acceleration of any time period relating to the exercise of any Stock Options or the lapsing of any forfeiture provisions on any Restricted Stock or Restricted Stock Units; (ii) provide for the purchase or cancellation of each outstanding Stock Option for an amount of cash or other property equal to the difference between the net amount per share payable to holders of Common Stock in the Change of Control or as a result of the Change of Control and the exercise price per share of the Stock Option and provide for the purchase or cancellation of each outstanding Restricted Stock Unit for an amount of cash or other property equal to the net amount per share payable to holders of Common Stock in the Change of Control or as a result of the Change of Control; (iii) adjust the terms of any Stock Options, Restricted Stock or Restricted Stock Units in the manner determined by the Committee to reflect the Change of Control; (iv) cause any Award to be assumed or a new right substituted for the Award by another entity; or (v) make such other provision as the Committee may consider equitable and in the best interests of the Company. If the terms of Section 5(b) and Section 5(c) would apply to a transaction, then the transaction will be subject to this Section 5(c) and not Section 5(b).
(d) Common Stock Usage. If, after the effective date of the Plan, any shares of Common Stock covered by an Award granted under the Plan, or to which any Award relates, are forfeited or if an Award otherwise terminates, expires or is cancelled prior to the delivery of all of the shares of Common Stock or of other consideration issuable or payable pursuant to such Award and if such forfeiture, termination, expiration or cancellation occurs prior to the payment of dividends or the exercise by the holder of other indicia of ownership of the shares of Common Stock to which the Award relates, then the number of shares of Common Stock counted against the number of shares of Common Stock available under the Plan in connection with the grant of such Award, to the extent of any such forfeiture, termination, expiration or cancellation, shall again be available for granting of additional Awards under the Plan.
Section 6. Awards
(a) Annual Awards. The Company may issue to each Participant, on the first business day following each annual meeting of shareholders until the Plan is terminated, an Award consisting of any combination of Stock Options, Restricted Stock and/or Restricted Stock Units as determined by the Committee (an “Annual Award”). A Participant's Annual Award shall have an aggregate value (calculated as of the date of the Annual Award using the Black-Scholes Model for Stock Options and Fair Market Value for Restricted Stock and Restricted Stock Units) equal to such amount as the Committee may approve in connection with the Annual Award. A Participant who is first appointed as a director of the Company after an annual meeting of shareholders and who receives on the date of appointment an Initial Award pursuant to Section 6(b) hereof shall not be eligible to receive an Annual Award pursuant to this Section 6(a) until the first business day following the second annual meeting of shareholders after the director's appointment. The Committee shall specifically approve each grant of an Annual Award to a continuing director.
(b) Awards Upon Initial Appointment. If a Participant initially is appointed as a director during the existence of the Plan other than by election at an annual meeting of shareholders, the Committee may issue to such Participant, on the date on which such Participant is first appointed as a director, an Award in the form and with the aggregate value of the Annual Award such Participant would have received if such Participant had been a director on the first business day following the most recent annual meeting of shareholders (the “Initial Award”). The Committee shall specifically approve each grant of the Initial Award to a newly appointed director. An Initial Award shall be valued as of the date of grant (calculated using the Black-Scholes Model for Stock Options and Fair Market Value for Restricted Stock and Restricted Stock Units).
(c) Award Agreements. All Awards made under the Plan shall be evidenced by an Award Agreement in such form as the Committee shall prescribe. The Committee need not require the execution of any Award Agreement, in which case receipt of such Award Agreement by the respective Participant will constitute agreement to the terms of the Award Agreement.
Section 7. Terms of Awards
(a) Stock Options. Each Award Agreement for the grant of a Stock Option shall specify: the term of the Stock Option; the number of shares of Common Stock for which the Stock Option is exercisable; the exercise price; any vesting or other restrictions which the Committee may impose; and any other terms and conditions as shall be determined by the Committee at the time of grant of the Stock Option. The per share exercise price of any Stock Option granted under the Plan shall be the Fair Market Value of a share of Common Stock on the date of the grant. Any Stock Option shall be exercisable according to the terms of the Plan and at such times and under such conditions as are determined by the Committee and set forth in the Award Agreement. A Stock Option shall be deemed exercised when the Company receives: [a] written or electronic notice of exercise (in accordance with the Award Agreement) from the person entitled to exercise the Stock Option, and [b] full payment for the shares of Common Stock with respect to which the Stock Option is exercised. The exercise price shall be payable at the time of exercise in cash, previously acquired shares of Common Stock valued at their Fair Market Value or such other forms or combinations of forms of consideration as the Committee may approve. Each Stock Option shall expire at such time as the Committee shall determine when it is granted, which shall be set forth in the Award Agreement, provided that no Stock Option shall have a term of more than ten years. The Company shall issue (or cause to be issued) the shares of Common Stock purchased promptly after the exercise of a Stock Option by the Participant.
(b) Restricted Stock. Each Award Agreement for the grant of Restricted Stock shall specify: the period (the "Restricted Period") during which the Restricted Stock may be subject to forfeiture and terms pursuant to which the Restricted Stock will vest, which may include the attainment of specified performance goals, length of service or such other factors or criteria as the Committee shall determine; the number of shares of Restricted Stock subject to the Award; and any other terms and conditions as shall be determined by the Committee at the time of grant of the Restricted Stock. Each Participant receiving an Award of Restricted Stock shall be issued a certificate in respect of such shares of Restricted Stock unless otherwise provided in the Award Agreement. Such certificate shall be registered in the name of such Participant and shall bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such Award in substantially the form set forth in the Award Agreement. The Committee may require that the certificates evidencing such shares be held in custody by the Company until the restrictions thereon shall have lapsed and that, as a condition of any Award of Restricted Stock, the Participant shall have delivered a stock power, endorsed in blank, relating to the Common Stock covered by such Award. Except as provided in this Section, the Participant shall have, with respect to the shares of Restricted Stock, all of the rights of a shareholder of the Company, including the right to vote the shares and the right to receive any dividends. Unless otherwise provided in the Award Agreement, any dividends payable with respect to any unvested Restricted Stock shall be automatically deferred and shall be payable immediately upon vesting of the shares of Restricted Stock to which such dividends relate.
(c) Restricted Stock Units. Each Award Agreement for the grant of Restricted Stock Units shall specify: the period (the "RSU Period") during which the Restricted Stock Units may be subject to forfeiture and the terms pursuant to which the Restricted Stock Units will vest, which may include the attainment of specified performance goals, length of service or such other factors or criteria as the Committee shall determine; the number of shares of Common Stock subject to the Restricted Stock Units; and any other terms and conditions as shall be determined by the Committee at the time of grant of the Award. The Company shall distribute one share of Common Stock for each Restricted Stock Unit that vests immediately after the end of the applicable RSU Period; provided that, as determined by the Committee, an Award Agreement may permit such recipient to elect to defer issuance of any shares of Common Stock that such recipient may be entitled to receive thereunder as permitted under Section 409A.
Section 8. General Provisions Applicable to Awards
(a) Transferability of Stock Options and Restricted Stock Units. Stock Options and Restricted Stock Units granted under the Plan shall not be transferable other than by will or under the laws of descent and distribution, except as otherwise provided by the Committee.
(b) Legend on Certificates. The Committee may cause a legend or legends to be put on any certificates for shares of Common Stock delivered under the Plan pursuant to any Award to make appropriate references to any applicable transfer restrictions.
(c) Termination of Directorship. If for any reason other than death a Participant ceases to be a director of the Company while holding a vested Stock Option granted under the Plan, such Stock Option shall continue to be exercisable for a period of three years (or such other period set forth in the Award Agreement) after such termination or the remainder of the Stock Option term, whichever is shorter (any unvested Stock Option shall be cancelled as of the date of such termination). If for any reason other than death a Participant ceases to be a director of the Company, any unvested Stock Option granted under the Plan and held by the director shall be cancelled as of the date of such termination. If for any reason other than death a Participant ceases to be a director of the Company during the RSU Period for any Restricted Stock Units or the Restricted Period for any Restricted Stock, or if a Participant fails to satisfy any other conditions precedent to the delivery of shares of Common Stock to which any Restricted Stock Units relate or to the vesting of any Restricted Stock, all such Restricted Stock Units or Restricted Stock shall be forfeited; provided that the Committee may vary such conditions in any Award Agreement and may subsequently waive such conditions, in whole or in part, based on service, performance and such other factors or criteria as the Committee may determine. In the event a Participant dies, any unvested Award granted to such Participant shall immediately vest and, in the case of Stock Options, be exercisable by, the designated beneficiary, or, in the absence of a designated beneficiary, by will or in accordance with the laws of descent and distribution for a period of three years (or such other period set forth in the Award Agreement) following the date of death.
(d) Plan Amendment. The Board may at any time amend, alter, suspend, discontinue or terminate the Plan, including without limitation an amendment to decrease or increase the amount or schedule of the Awards under Section 5; provided, however, that shareholder approval of any amendment of the Plan shall be obtained if otherwise required by (i) the Code or any rules promulgated thereunder, (ii) the listing requirements of the principal national securities exchange, national securities association or over-the-counter market on which the Common Stock is then traded, or (iii) any other applicable law. Termination of the Plan shall not affect the rights of Participants with respect to any Awards previously granted to them, and all unexpired Awards shall continue in force and effect after termination of the Plan except as they may lapse or be terminated by their own terms and conditions. Notwithstanding the foregoing, the Board is from amending Section 8(e) of the Plan without shareholder approval.
(e) Repricing Prohibited. Notwithstanding anything in the Plan to the contrary, and except for the adjustments provided in Section 5(b), the Committee and the Board are prohibited from decreasing the exercise price for any outstanding Stock Option granted to a Participant under the Plan after the date of grant or allowing a Participant to surrender an outstanding Stock Option granted under the Plan to the Company as consideration for the grant of a new Stock Option with a lower exercise price.
(f) No Rights as Shareholder. No Participant shall have any voting or dividend rights or other rights as a shareholder with respect to any shares of Common Stock subject to a Stock Option or a Restricted Stock Unit granted under the Plan before the date the shares are issued to the Participant (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company).
(g) No Right to Continue as Director. Nothing contained in the Plan or any agreement under the Plan will confer upon any Participant any right to continue to serve as a director of the Company.
(h) Severability. If any provision of the Plan or any Stock Option or other form of Award Agreement, if any, or any Award (i) is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction, or as to any person or Award, or (ii) would disqualify the Plan or any Stock Option or other form of Award Agreement under any law deemed applicable by the Committee, then such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan, any Stock Option or other Award Agreement, if any, or Award, such provision shall be stricken as to such jurisdiction, person or Award, and the remainder of the Plan, any such Stock Option or other Award Agreement and any such Award shall remain in full force and effect.
(i) Governing Law. The validity, construction and effect of the Plan, any Stock Option or other form of Award Agreement and any Award, and any actions taken under or relating to the Plan, any Stock Option or other Award Agreement and any Award shall be determined in accordance with the laws of the State of Wisconsin and applicable federal law.
(j) Compliance.
(i) In the event that the Company shall deem it necessary or desirable to register under the Securities Act of 1933, as amended, or any other applicable statute, any Awards or any shares of Common Stock with respect to which an Award may be or shall have been granted or exercised, or to qualify any such Awards or shares under the Securities Act of 1933, as amended, or any other statute, then the Participants shall cooperate with the Company and take such action as is necessary to permit registration or qualification of such Awards or shares.
(ii) Unless the Company has determined that the following representation is unnecessary, each person exercising a Stock Option or receiving shares of Common Stock under the Plan may be required by the Company, as a condition to the issuance of the shares pursuant to exercise of the Stock Option or Award, to make a representation in writing (a) that he or she is acquiring such shares for his own account for investment and not with a view to, or for sale in connection with, the distribution of any part thereof, and (b) that before any transfer in connection with the resale of such shares, he or she will obtain the written opinion of counsel to the Company, or other counsel acceptable to the Company, that such shares may be transferred. The Company may also require that the certificates representing such shares contain legends reflecting the foregoing.
(iii) All Awards and transactions under the Plan are intended to comply with any applicable exemptive conditions under Rule 16b-3, and the Committee shall interpret and administer the Plan, Award Agreements, and any Plan guidelines in a manner consistent therewith. All Awards under the Plan shall be deemed approved by the Committee and shall be deemed an exempt purchase under Rule 16b-3.
(iv) It is the intention of the Company that no payment or entitlement pursuant to the Plan will give rise to any adverse tax consequences to a Participant under Section 409A. The Plan shall be interpreted to that end and, consistent with that objective and notwithstanding any provision herein to the contrary, the Company may unilaterally take any action it deems necessary or desirable to amend any provision herein to avoid the application of or excise tax or other penalties under Section 409A, including any actions to exempt an award from Section 409A or comply with the requirements of Section 409A. Further, no effect shall be given to any provision herein in a manner that reasonably could be expected to give rise to adverse tax consequences under Section 409A. Neither the Company nor its current or former employees, officers, directors, representatives or agents shall have any liability to any current or former Participant with respect to any accelerated taxation, additional taxes, penalties or interest for which any current or former Participant may become liable in the event that any amounts payable under the Plan are determined to violate Section 409A.
(k) Tax Withholding. Whenever shares of Common Stock, cash or other property are to be issued pursuant to an Award, the Company shall have the power to require the recipient of the shares, cash or other property to remit to the Company an amount sufficient to satisfy federal, state and local withholding tax requirements. Unless otherwise determined by the Committee, withholding obligations may be settled with shares of Common Stock, including shares of Common Stock that are part of the Award that gives rise to the withholding requirement. The obligations of the Company under the Plan shall be conditional on such payment or arrangements, and the Company, its subsidiaries and affiliates shall, to the extent permitted by law, have the right to deduct any such taxes from any payment otherwise due to the Participant. The maximum number of shares that a Participant may use toward satisfying the withholding reimbursement shall not exceed the minimum funding required for the withholding. Where a Participant’s withholding reimbursement obligation arises by reason of the Participant’s election under Section 83(b) of the Code with respect to the Award, the Participant may not remit unvested shares in satisfaction of the Participant’s withholding reimbursement obligation.
APPENDIX B
JOHNSON OUTDOORS INC. 2009 EMPLOYEES’ STOCK PURCHASE PLAN
1. Purpose.
The Johnson Outdoors Inc. 2009 Employees’ Stock Purchase Plan (the “Plan”) has been established by Johnson Outdoors Inc., a Wisconsin corporation (the “Company”), to allow employees of the Company and its subsidiaries to purchase shares of Class A Common Stock of the Company (“Company Shares”) and thereby share in the ownership of the Company. The Plan is intended to comply with the requirements of section 423 of the Internal Revenue Code of 1986, as amended (the “Code”).
2. Company Shares Available for Purchase.
Subject to adjustment, in accordance with Paragraph 13, the maximum number of Company Shares, which may be purchased pursuant to the Plan shall be 160,000. Company Shares issued under the Plan may be authorized and unissued shares or treasury shares of the Company.
3. Administration.
The Plan shall be administered by the Compensation Committee of the Board of Directors. All determinations of the Compensation Committee shall be made by at least a majority of its members.
In accordance with the provisions of the Plan, the Compensation Committee shall establish such terms and conditions for the grants of purchase rights as the Compensation Committee may deem necessary or advisable, adopt such rules or regulations which may become necessary or advisable for the operation of the Plan, and make such determinations, and take such other actions, as are expressly authorized or contemplated in the Plan or as may be required for the proper administration of the Plan in accordance with its terms. The Compensation Committee, in its discretion, may appoint one or more individuals (the “Plan Administrative Committee”) to assist the Compensation Committee in corresponding with employees, with record keeping and in performing other administerial type functions in connection with the Plan; provided, however, that the Plan Administrative Committee shall exercise no discretion with respect to the interpretation of the Plan or of the rights to purchase Company Shares pursuant to the Plan. The interpretation of any provision of the Plan by the Compensation Committee and any determination on the matters referred to in this paragraph shall be final.
The Company shall indemnify each employee of the Company who is responsible for administering the Plan against any and all claims, losses, damages, expenses, including reasonable counsel fees, incurred by such employee and any liability, including any amounts paid in settlement with the Company’s approval, arising from the employee’s action or failure to act, except when the same is judicially determined to be attributable to the gross negligence or willful misconduct of the employee.
4. Eligibility.
From time to time the Compensation Committee shall designate from the group consisting of the Company and subsidiary corporations, the corporations whose employees may participate in the Plan (a “Designated Corporation”). On any date as of which a determination of eligibility is made, the term “Eligible Employee” shall mean a full-time employee of a Designated Corporation, other than a highly compensated employee with annual compensation at or above the compensation limit as provided under Code section 401(a)(17). For purposes of the Plan, (a) “full-time” employee of a Designated Corporation means an employee thereof who customarily works at least 20 hours per week and more than five months per calendar year, (b) “subsidiary” and “parent” have the meanings given such terms in Code section 425(c) “highly compensated employee” has the meaning given to such term in Code section 414(q) and (d) “compensation has the meaning given to such term in Code section 415(c)(3).
5. Grant of Purchase Rights.
In the discretion of the Compensation Committee, each calendar year, or more frequently if deemed appropriate, beginning on such date as the Committee may specify (the “Grant Date”), each employee who is then an Eligible Employee of a Designated Corporation shall be granted the right to purchase a maximum of 250 Company Shares during a calendar year. In its discretion, the Compensation Committee may change the maximum number of Company Shares available for purchase by each Eligible Employee: provided that the maximum number of shares available for purchase shall be the same for all Eligible Employees and all Eligible Employees shall have the same rights and privileges with respect to the purchase of Company Shares under the Plan. However, nothing contained herein shall require the Compensation Committee to cause any purchase rights to be granted hereunder during any calendar year and the Compensation Committee may, in connection with any grant of rights, specify the maximum number of Company Shares in the aggregate available for purchase by all Eligible Employees during any Purchase Period (the “Maximum Number of Purchase Period Company Shares”).
Each purchase right shall be exercisable during the period following the Grant Date as specified by the Compensation Committee (such period may not exceed 27 months and is hereinafter referred to as the “Purchase Period”), subject to the limitations provided in paragraphs 2 and 8. In the event the Compensation Committee decides to cause any purchase rights to be granted under the Plan, the Company shall send to each Eligible Employee a written notice specifying the Grant Date and the terms and conditions of the right, including the purchase price per share of Company Shares subject to such right. No Company Shares may be issued pursuant to the exercise of purchase rights after the maximum number of Company Shares provided for in paragraph 2 has been purchased. Each purchase right granted pursuant to this paragraph 5 shall expire at 12:00 P.M., on the last day of the Purchase Period (the “Purchase Date”).
6. Exercise of Purchase Rights.
An Eligible Employee may elect to participate in the Plan by properly completing an enrollment form provided by the Company (an “Enrollment Form”), and submitting it to the Company, in accordance with the enrollment procedures established by the Plan Administrative Committee. Participation in the Plan is entirely voluntary. By submitting an Enrollment Form, the Eligible Employee authorizes payroll deductions from his or her pay check in an amount equal to at least 1%, but not more than 15% of his or her compensation (which may include base salary, overtime and vacation pay) on each pay day occurring during a Purchase Period (or such other maximum percentage as the Committee may establish from time to time before a Purchase Period begins). Payroll deductions shall commence on the first payroll date following the Grant Date and end on the last payroll date on or before the Purchase Date. The Company shall maintain records of all payroll deductions but shall have no obligation to pay interest on payroll deductions or to hold such amounts in a trust or in any segregated account. Unless expressly permitted by the Committee, a Participant may not make any separate contributions or payments to the Plan.
During the Purchase Period, a Participant may decrease or increase his or her rate of payroll deductions applicable to such Purchase Period only one time. To make such a change, the Participant must submit a new Enrollment Form authorizing the new rate of payroll deductions at least fifteen days before the Purchase Date. A Participant may decrease or increase his or her rate of payroll deductions for future Purchase Periods by submitting a new Enrollment Form authorizing the new rate of payroll deductions at least fifteen days before the start of the next Purchase Period. The deduction rate selected in the Enrollment Form shall remain in effect for subsequent Purchase Periods unless the Participant (a) submits a new Enrollment Form authorizing a new level of payroll deductions in accordance with the prior sentence, (b) withdraws from the Plan in accordance with this paragraph 6, or (c) terminates employment or otherwise becomes ineligible to participate in the Plan.
A Participant’s right to purchase Company Shares will be exercised automatically on the Purchase Date during each Purchase Period. The Participant’s accumulated payroll deductions will be used to purchase the maximum number of whole Company Shares that can be purchased with the amounts in the Participant's notional account. No fractional Company Shares may be purchased but notional fractional Company Shares will be allocated to the Participant’s ESPP share account to be aggregated with other notional fractional Company Shares on future Purchase Dates, subject to earlier withdrawal by the Participant in accordance with this paragraph 6 (at which time the Participant shall be paid the fair market value of any fractional Company Share).
A Participant may withdraw from a Purchase Period offering by submitting to the Company a revised Enrollment Form indicating his or her election to withdraw at least fifteen days before the Purchase Date. The accumulated payroll deductions held on behalf of a Participant in his or her notional account (that have not been used to purchase Company Shares) shall be paid to the Participant promptly following receipt of the Participant’s Enrollment Form indicating his or her election to withdraw and the Participant’s right to purchase Company Shares shall be automatically terminated. If a Participant withdraws from a Purchase Period offering, no payroll deductions will be made during any succeeding Purchase Period offering, unless the Participant re-enrolls in accordance with the terms of the Plan.
A Participant’s election to withdraw from a Purchase Period will not have any effect upon his or her eligibility to participate in succeeding Purchase Periods that commence following the completion of the Purchase Period from which the Participant withdraws.
Upon termination of a Participant’s employment for any reason before the Purchase Date, including death, disability or retirement, or a change in the Participant’s employment status following which the Participant is no longer an Eligible Employee, the Participant will be deemed to have withdrawn from the Plan and the payroll deductions in the Participant’s notional account (that have not been used to purchase Company Shares) shall be returned to the Participant, or in the case of the Participant’s death, to the person(s) entitled to such amounts and the Participant’s right to purchase Company Shares shall be automatically terminated.
If applications to purchase a number of Company Shares in excess of the Maximum Number of Purchase Period Company Shares are received by the Plan Administrative Committee, each employee properly exercising purchase rights during such Purchase Period shall be entitled to purchase: a pro rata portion of the Company Shares available based on the number of shares with respect to which such employee has exercised his purchase rights and the aggregate number of shares with respect to which all employees have exercised purchase rights during the Purchase Period.
Notwithstanding any other provisions in this paragraph 6, the Compensation Committee may adjust the number of Company Shares which may be purchased by an employee according to such non-discriminatory rules and regulations as the Compensation Committee may establish from time to time.
7. Purchase Price.
The purchase price per share of each purchase right granted under the Plan shall be the lesser of (a) 85% of the fair market value of a Company Share on the Grant Date and (b) 85% of the fair market value of a Company Share on the Purchase Date. Unless otherwise determined by the Compensation Committee, the fair market value of a Company Share shall be the closing price of a Company Share in the applicable market on the day of determination, as reported by the Nasdaq Stock Market (or if such day is a day for which no closing price for a Company Share is so set forth, the next preceding day for which a closing price is so set forth). Notwithstanding the foregoing, the purchase price per share of a Company Share shall in no event be less than the par value of a Company Share.
8. Individual Limitation.
No employee shall be granted the right to purchase any Company Shares hereunder if such employee would own, directly or indirectly, stock possessing 5% or more of the total combined voting power or value of all classes of stock of the Company or any subsidiary or any parent of the Company. For purposes of this 5% limitation, an employee will be considered as owning all stock which the employee may purchase under any outstanding right or option, regardless of the characterization and treatment of such right or option under the Code, and a right or option will be considered outstanding even though under its terms it may be exercised only in installments or only after the expiration of a fixed period of time. An employee will be considered as owning stock attributable to him pursuant to Code section 425(d). Moreover, no employee may be granted a right to purchase Company Shares under the Plan which permits such employee’s rights to purchase stock under the Plan and all employee stock purchase plans (as defined in Code section 423) of the Company and its parent and subsidiary corporations to accrue at a rate which exceeds $25,000 of the fair market value of such stock (determined at the time such right is granted) for each calendar year in which such right is outstanding at any time. The right to purchase Company Shares shall be deemed to accrue when the right or option (or any part thereof) first becomes exercisable during the calendar year.
9. Limitations on Exercise of Purchase Rights.
Purchase rights granted under the Plan shall not become exercisable until such time as the Company Shares which may be issued pursuant to the Plan (i) have been registered under the Securities Act of 1933, as amended (the “Act’), and any applicable state and foreign securities laws; or (ii) in the opinion of the Company’s counsel, may be issued pursuant to an exemption from registration under the Act and in compliance with any applicable state and foreign securities laws.
10. Stock Certificates.
Company Shares may be certificated or uncertificated, as provided under the Wisconsin Business Corporation Law, and shall be entered in the books of the Company and registered as they are issued. Company Shares purchased under the Plan shall be issued as soon as reasonably practicable after the last day of a Purchase Period. The Company will pay any taxes or fees in connection with each such issue.
11. Nontransferability of Purchase Rights.
An employee’s right to exercise purchase rights under the Plan shall not be transferable by such employee and may be exercised only by the employee. An employee’s right to exercise purchase rights may not be sold, transferred, pledged, assigned or otherwise alienated or hypothecated. A Participant may file, on forms supplied by the Company, a written designation of beneficiary who is to receive any Company Shares and cash in respect of any fractional Company Shares, if any, from the Participant's ESPP share account under the Plan in the event of such Participant's death. In addition, a Participant may file a written designation of beneficiary who is to receive any cash withheld through payroll deductions and credited to the Participant's notional account in the event of the Participant's death prior to the Purchase Date.
12. Annual Statement.
Participants will be provided with statements at least annually, which shall set forth the contributions made by the Participant to the Plan, the Purchase Price of any Company Shares purchased with accumulated funds, the number of Company Shares purchased.
13. Adjustments.
In order to prevent dilution or enlargement of purchase rights, in the event of reorganization, recapitalization, stock split, stock dividend, combination of shares, merger, consolidation or other change in Company Shares, the Compensation Committee shall make appropriate changes in the number of Company Shares which may be purchased pursuant to the Plan, and the number of Company Shares covered by, and the purchase price under, each outstanding purchase right, and such other changes in the Plan and outstanding purchase rights as the Compensation Committee may deem appropriate under the circumstances. No rights to purchase a fractional Company Share shall result from any such change.
14. Restrictions on Stock Transferability.
The Compensation Committee shall impose such non-discriminatory restrictions on the transfer of any shares of stock acquired pursuant to the exercise of a purchase right under the Plan as it may deem advisable, including, without limitation, restrictions under applicable Federal securities laws, under the requirements of any stock exchange upon which such shares of stock are then listed, if any, and under any state and foreign securities laws applicable to such shares.
15. Amendment/Termination.
The Board of Directors may amend or terminate the Plan at any time, but any such amendment or termination (other than an adjustment contemplated by paragraph 13) shall not affect purchase rights outstanding at the time thereof; provided, however, that the Board of Directors may not, without the approval of the shareholders of the Company, amend the Plan to (i) increase the maximum number of Company Shares which may be purchased pursuant to the Plan (except as provided in paragraph 13); (ii) modify the requirements as to eligibility for participation in the Plan; (iii) change the class of corporations whose employees will be granted purchase rights under the Plan; or (iv) materially increase the benefits to participants under the Plan.
16. Governing Law, Jurisdiction, Venue and Notice.
The validity, construction, and effect of the Plan, any dispute over interpretation of Plan terms or any claims with respect to rights under the Plan, or for other relief, and any rules and regulations relating to the Plan shall be determined in accordance with the laws of the State of Wisconsin and applicable federal law. The exclusive venue for any legal action or proceeding with respect to this Plan, any Award, or for recognition and enforcement of any judgment in respect of this Plan, shall be a court sitting in the County of Racine, or the Federal District Court for the Eastern District of Wisconsin sitting in the County of Milwaukee, in the State of Wisconsin. Service of process, summons, or notice by U.S. registered mail shall be effective with respect to any such proceeding, if directed to the Company at its principal executive offices. All other notices or communication otherwise required or permitted under the Plan shall be in writing and (a) sent by overnight courier, (b) mailed by certified or registered mail, return receipt requested, or (c) by e-mail.
17. Equal Rights and Privileges.
Notwithstanding any provision of the Plan to the contrary and in accordance with Section 423 of the Code, all Eligible Employees who are granted rights under the Plan shall have the same rights and privileges. The Plan is intended to qualify as an "employee stock purchase plan" under Section 423 of the Code. Any provision of the Plan that is inconsistent with Section 423 of the Code shall be reformed to comply with Section 423 of the Code.
18. Effective Date.
The Plan shall become effective as of the date of its adoption by the Board of Directors of the Company, subject to approval of the Plan by the shareholders within twelve months of such effective date. Purchase rights may be granted prior to such approval, provided that such purchase rights shall be subject to such approval.
In the event that the shareholders of the Company do not approve the Plan, all applications to purchase Company Shares shall be revoked and all payments made shall be refunded to affected Eligible Employees as soon as possible following the shareholder’s action.