-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BuRtGoo9R3rsvp8XWsF5NE7erXHxeFYVXXiBvji7Q/t60o9b0trC92E3sDVlF86M tUfeP4wFUL/5ymbszczceg== 0000014995-98-000004.txt : 19980202 0000014995-98-000004.hdr.sgml : 19980202 ACCESSION NUMBER: 0000014995-98-000004 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970124 FILED AS OF DATE: 19980130 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: DIXON TICONDEROGA CO CENTRAL INDEX KEY: 0000014995 STANDARD INDUSTRIAL CLASSIFICATION: PENS, PENCILS & OTHER ARTISTS' MATERIALS [3950] IRS NUMBER: 230973760 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: SEC FILE NUMBER: 001-08689 FILM NUMBER: 98518398 BUSINESS ADDRESS: STREET 1: 195 INTERNATIONAL PKWY STREET 2: STE 200 CITY: HEATHROW STATE: FL ZIP: 32746-5036 BUSINESS PHONE: 4078759000 MAIL ADDRESS: STREET 1: PO BOX 958413 STREET 2: STE 200 CITY: HEATHROW STATE: FL ZIP: 32795-8413 FORMER COMPANY: FORMER CONFORMED NAME: BRYN MAWR CORP/DE/ DATE OF NAME CHANGE: 19831002 FORMER COMPANY: FORMER CONFORMED NAME: BRYN MAWR GROUP INC DATE OF NAME CHANGE: 19730619 FORMER COMPANY: FORMER CONFORMED NAME: BRYN MAWR CAMP RESORTS INC DATE OF NAME CHANGE: 19700608 DEF 14A 1 1997 PROXY STATEMENT 1 DIXON TICONDEROGA COMPANY 195 International Parkway Heathrow, Florida 32746 NOTICE OF ANNUAL MEETING OF SHAREHOLDERS March 6, 1998 To the Shareholders of DIXON TICONDEROGA COMPANY Notice is hereby given that the Annual Meeting of Shareholders of DIXON TICONDEROGA COMPANY a Delaware corporation (hereinafter called the "Company"), will be held at 195 International Parkway, Heathrow, Florida, 32746 on March 6, 1998 at 11:00 a.m., for the following purposes: (1) To elect two Directors for a three-year term. (2) To transact such other business as may properly come before the meeting or any adjournment thereof. In accordance with the By-Laws of the Company, the Board of Directors has fixed the close of business on January 6, 1998 as the record date for the determination of shareholders entitled to notice of, and to vote at such meeting or any adjournment thereof. By Order of the Board of Directors, Laura Hemmings Secretary Heathrow, Florida February 3, 1998 YOUR VOTE IS IMPORTANT All shareholders are cordially invited to attend the meeting. Whether or not you plan to attend in person, you are urged to mark, date and sign the enclosed proxy and return it promptly in the envelope provided. This will assure your representation at the meeting. If you do attend the meeting in person, you may revoke your proxy by giving written notice of its revocation to the Secretary of the meeting before the proxy is voted or by casting your vote in person. 2 DIXON TICONDEROGA COMPANY 195 International Parkway, Heathrow, Florida 32746 PROXY STATEMENT The enclosed proxy statement is solicited on behalf of the Board of Directors of Dixon Ticonderoga Company (hereinafter the "Company") for use at the Annual Meeting of Shareholders to be held at the time, place and for the purposes set forth in the accompanying Notice of Annual Meeting or at any adjournment thereof. If the enclosed proxy card is executed and returned by a shareholder, it nevertheless may be revoked at any time before it has been voted. Abstentions and broker non-votes will be counted only for the purpose of determining the existence of a quorum. The shares represented at the meeting by the enclosed proxy will be voted as marked on all matters to be acted upon at the meeting. Only shareholders of record at the close of business on January 6, 1998 will be entitled to vote at the meeting. The outstanding voting shares of the Company at the close of business on January 6, 1998 consisted of 3,731,277 shares of the Common Stock and each such share is entitled to one vote. Shareholders do not have cumulative voting rights. On the record date there were 3,731,277 shares of the Company's Common Stock outstanding and entitled to vote. A majority of the shares entitled to vote, present in person or represented by proxy, constitutes a quorum at the meeting. The mailing of this Proxy Statement, together with the Company's Annual Report on Form 10-K for fiscal year ended September 30, 1997, commenced on February 3, 1998. 3 MAJOR STOCKHOLDERS The only stockholders known by the Company to own beneficially more than 5% of the shares of common stock outstanding as of December 15, 1997, are as follows: Shares of Stock Percentage Name & Address Nature of Beneficial Beneficially of Voting Beneficial Owner Ownership Owned Securities Gino N. Pala Sole Voting & 195 International Pkwy. Investment Power 524,570 15.5% Heathrow, FL 32746 Sole Voting Power & Shared Investment Power 245,775 7.2% Option 25,000 0.7% Hollybank, Investments, L.P. Sole Voting & One Financial Center Investment Power 371,700 11.0% Suite 1600 Boston, MA 02111 SECURITY OWNERSHIP OF MANAGEMENT The following table sets forth, as of December 15, 1997, the number of shares of the Company's voting securities owned beneficially to the knowledge of the Company by each director and by all executive officers and directors of the Company as a group. All shares are subject to the person's sole voting and investment power except where otherwise indicated. Name of Amount and Nature of Percentage of Beneficial Owner Beneficial Ownership Voting Securities Gino N. Pala 795,345(1) 23.4% Richard F. Joyce 34,435(2) 1.0% John E. Ramondo 400 * Joseph R. Sadowski 8,550 * Philip M. Shasteen 9,969 * Ben Berzin, Jr. 500 * Kent Kramer 500 * Richard Asta 32,645 (3) * Richard H. D'Antonio 6,720 (4) * Leonard D. Dahlberg, Jr. 9,594 (5) * All Executive Officers and Directors as a Group (13 Persons) 924,637(6) 26.8% - ------------------- * Indicates ownership is less than 1%. 4 (1) This includes 524,570 shares owned by him over which he has full voting and investment power and 245,775 shares over which he has sole voting and shared investment power only. In addition, this includes an option to purchase 25,000 shares that can be exercised within the next sixty days. (2) This includes options to purchase 15,000 shares that can be exercised within the next sixty days. This does not include an irrevocable trust having 97,420 shares for which Deborah Joyce (daughter of Gino N. Pala and spouse of Richard F. Joyce) acts as Trustee. (3) This includes options to purchase 16,750 shares that can be exercised within the next sixty days. (4) This includes options to purchase 6,500 shares that can be exercised within the next sixty days. (5) This includes options to purchase 4,000 shares that can be exercised within the next sixty days. (6) This includes options to purchase 78,750 shares that can be exercised within the next sixty days. 5 ELECTION OF DIRECTORS The Certificate of Incorporation of the Company provides that the members of Dixon Ticonderoga Company Board of Directors shall be divided into three classes, as nearly equal in number as possible, each of which is to serve for three years, with one class being elected each year. The terms of the Directors in Class I expire with this Annual Meeting. Currently eight members are seated on the Board of Directors. Certain seats within the three classes remain vacant. Directors are elected by plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors. Unless authority with respect thereto is withheld in the proxy, it is the intention of the persons named as proxies in the enclosed proxy card to vote for the election as directors the nominees named below to serve as directors until their respective terms expire and until their successors shall have been elected and qualified. In the event that any nominee shall become unable or unwilling to serve as a director, the proxies named in the enclosed proxy card intend to vote for such other person as they deem proper. The Board of Directors knows of no reason why any nominee will be unable or unwilling to serve as a director. The Company has not nominated a person to fill the board seat of one Class I Director whose term expires at the annual meeting to be held on March 6, 1998 because it has not completed it's search for a suitable replacement. Proxies cannot be voted for a greater number of persons that the number of nominees named. Shareholders may vote for, or withhold their vote from, the entire slate of nominees by marking the appropriate box on the proxy card. Shareholders may withhold their votes from any particular nominee by writing that nominee's name in the place indicated on the proxy card. At the 1997 Annual Meeting of Shareholders 95.7% of the Common Shares were present in person or by proxy and the percentage of total shares cast for and withheld from the vote for each nominee is shown in the following table: Percentage Withholding Nominee Percentage For Authority John E. Ramondo 89.7% 6.0% Kent Kramer 89.7% 6.0% Ben Berzin, Jr. 89.2% 6.5% 6 DIRECTORS WHO ARE NOMINATED FOR ELECTION
Year First Class & Year Became Principal Occupation or Employment During the Past Five In Which Name Age Director Years and Directorships of Other Public Companies Term Expires - --------------------------------------------------------------------------------------------------------------------------- Gino N. Pala 69 1978 Chairman of the Board of the Company since February, 1989; Class I (Father-in-law of President Chief Executive Officer since July 1985. 1998 Richard F. Joyce) Richard F. Joyce 42 1982 Vice Chairman of the Board since January, 1990; President and Chief Class I (Son-in-law of Operating Officer, Consumer Group since March 1996; Executive Vice 1998 Gino N. Pala) President and Chief Legal Executive, since February 1991. CONTINUING DIRECTORS WHOSE TERMS ARE NOT EXPIRING Joseph R. Sadowski 66 1986 Retired Co-chairman, Atlas Energy Group, Inc., Coraopolis, PA, Class III since December 1993. Founder and President, Atlas Energy Group, 1999 Inc., since 1971. (1) Philip M. Shasteen 48 1986 Attorney/Shareholder, Johnson, Blakely, Pope, Ruppel Class III & Burns, P.A., Tampa, FL, since August, 1992. (1) 1999 Kent Kramer 53 1997 Chief Executive Officer of Professional Sports Marketing, Inc., Class II Dallas, TX, since November, 1996 (1) prior thereto President of 2000 Professional Sports Marketing, Inc., since 1985. Ben Berzin, Jr. 49 1994 Senior Vice President, PNC Capital Recovery Corp. (formerly Class II Midlantic Bank, N.A.), East Brunswick, NJ, since 1990. (1) 2000 John E. Ramondo 69 1986 President and CEO, Power Construction Consultants, Inc., (1) Class II Bankston, AL; prior thereto Senior Vice President of 2000 Construction, Simco Corp.,(1) Brownsville, TN; prior thereto Manager of Projects, Cogeneration Services, Inc. (1) (a division of Kamine Development Corp.) Union, N.J. since 1990. (1) Not parents, subsidiaries or other affiliates of the Company.
7 MEETINGS AND COMMITTEES OF THE BOARD For the fiscal year ending September 30, 1997, the Board of Directors of the Company met five times, including the annual meeting of directors following the 1997 Annual Meeting of Shareholders. No director attended less than seventy-five percent (75%) of (a) the Board meetings or (b) the meetings of all committees on which he serves held during fiscal year. Committee appointments are reviewed by the Board in March each year. The Company does not have a Nominating Committee. Audit Committee The Board of Directors has an Audit Committee currently composed of the following directors: Ben Berzin Jr. (Chairman), Philip M. Shasteen and Kent Kramer. The Audit Committee is primarily concerned with the effectiveness of the Company's accounting policies and practices, financial reporting and internal controls. Specifically, the Committee reviews and approves the scope of the annual audit of the books and records of the Company and reviews the findings and recommendations of the outside auditors on completion of the audit; considers the organization, scope and adequacy of the Company's internal controls function; monitors the extent to which the Company has implemented changes recommended by the independent auditors or the Committee; and provides oversight with respect to accounting principles employed in the Company's financial reporting. The Committee, comprised entirely of non-employee directors, met three times during the past fiscal year. Compensation Committee Compensation Committee Interlocks and Insider Participation The Board of Directors has a Compensation Committee currently composed of the following directors: John Ramondo (Chairman) Joseph R. Sadowski and Bobby Brantley. The Compensation Committee is primarily concerned with the Company's organization, salary and non-salary compensation and benefit programs. The Committee also recommends to the Board of Directors annual salaries, bonus programs and stock option plans covering the Chief Executive Officer. The Committee met once during the past fiscal year. No Compensation Committee members areor have been officers or employees of the Company and none had interlocking relationships with any other entities, including any of the type that would be required to be disclosed herein. Board Compensation Committee Report on Executive Compensation Under the guidelines established by the previously adopted Management Incentive Program ("MIP"), the Committee evaluates Dixon Ticonderoga's manage- ment employee performance. Factors which are considered under the MIP guidelines include: corporate performance, business unit performance and personal performance. The corporate performance rating is largely based upon the Company's growth in earnings per share. The business unit ratings are based primarily on profit performance, return on equity and budgetary success. The personal performance can include such factors as meeting set strategic planning goals and organizational and management development. 8 Under the MIP, incentive awards are made annually to key management employees as determined by top corporate management and approved by the Committee and include both cash and stock incentives. The objectives of the MIP are to motivate and reward the accomplishment of corporate and business unit annual objectives, reinforce a strong performance orientation and provide a fully competitive compensation package which will attract, reward and retain individuals of the highest quality. As a pay-for-performance plan, year- end cash bonus awards are paid only upon the achievement of performance objectives established for the fiscal year. Appropriate performance objectives are established for each fiscal year in support of the Company's annual strategic plan and a weighting is established for each component based on the relative importance of each to the individual. Stock options may also be granted to key employees as part of the Company's incentive program. The Committee meets annually to evaluate the Chief Executive Officer's performance and reports on that evaluation to the independent directors of the Board. In 1997, the Committee rated highly the Chief Executive Officer's role in enhancing shareholder value, raising corporate earnings and his leadership in developing the Company's management structure and succession and further carrying out the Company's other strategic objectives. The Chief Executive Officer's salary remained at $235,000 per annum and he received a bonus payment of $81,013 under the Management Incentive Program discussed above. The foregoing report is submitted by the members of the Compensation Committee: John E. Ramondo (Chairman) Joseph R. Sadowski Bobby Brantley COMPENSATION OF DIRECTORS Each non-employee director receives a retainer of $7,500.00 a year plus $400.00 for each meeting of the Board of Directors he attends, and $450.00 for each Committee meeting he attends. Officer-directors receive $350.00 for each Board meeting attended. The Company also reimburses its directors for travel, lodging and related expenses incurred in attending Board and committee meetings and provides each director with liability insurance. 9 EXECUTIVE OFFICERS OF THE COMPANY Name Age Title ---- --- ----- Gino N. Pala 69 Chairman of the Board since February, 1989; President and Chief Executive Officer since July, 1985. Richard F. Joyce 42 Vice Chairman of the Board since January, 1990; President and Chief Operating Officer, Consumer Group since March, 1996; Executive Vice President and Chief Legal Executive since February, 1991. Richard A. Asta 41 Executive Vice President of Finance and Chief Financial Officer since February, 1991. In 1996, Mr. Asta entered into a plea agreement relating to his indictment in 1995 stemming from his prior employment with the accounting firm of Laventhol & Horwath and audits of a client of that firm. In 1997, he was ordered to make partial restitution and sentenced to three years probation and community service. Leonard D. Dahlberg, Jr. 46 Executive Vice President, Industrial Group, since March, 1996; prior thereto Executive Vice President of Manufacturing/Consumer Products Division since August, 1995; prior there to Senior Vice President of Manufacturing since February, 1993; prior thereto Vice President of Manufacturing since March, 1990. Kenneth A. Baer 51 Vice President and Treasurer since January, 1991. John Adornetto 56 Vice President and Corporate Controller since January, 1991. Richard H. D'Antonio 49 Senior Vice President and Chief Information Officer since March, 1996; prior thereto Vice President of Information Services since October, 1993; prior thereto Principal of RHD Consulting since May, 1990. RHD Consulting is not a parent, subsidiary or other affiliate of the Company. Laura Hemmings 46 Corporate Secretary of the Company since January, 1986. 10 EXECUTIVE COMPENSATION To meet the goal of providing the shareholders a concise, comprehensive overview of compensation awarded, earned or paid in the reporting period, the Summary Compensation Table is presented below. The Summary Compensation Table includes individual compensation information on the Chief Executive Officer and four other most highly compensated executives, for services rendered in all capacities during the fiscal years ended September 30, 1997, 1996 and 1995. SUMMARY COMPENSATION TABLE
Securities Underlying ANNUAL COMPENSATION Options Name/Title Year Salary Bonus Other(1) Granted Gino N. Pala 1997 $ 234,805 $81,013 $67,123 42,000 President and 1996 $ 204,375 $43,100 $30,821 -0- Chief Executive Officer 1995 $ 200,000 $ -0- $53,581 10,000 Richard F. Joyce, 1997 $ 150,625 $40,414 $39,840 75,000- President and Chief Operating 1996 $ 141,700 $23,780 $32,554 -0- Officer, Consumer Group and 1995 $ 128,460 $ -0- $48,420 10,000 and Executive Vice President and Chief Legal Executive Richard A. Asta 1997 $ 147,373 $38,897 $35,370 36,000 Executive Vice President 1996 $ 141,110 $23,367 $21,353 -0- of Finance and Chief 1995 $ 134,706 $ -0- $20,359 10,000 Financial Officer Leonard D. Dahlberg, Jr. 1997 $ 110,000 $14,850 $24,960 20,000 Executive Vice President 1996 $ 97,665 $12,077 $19,826 -0- Industrial Division 1995 $ 90,349 $ -0- $26,977 2,000 Richard H. D'Antonio 1997 $ 107,167 $19,800 $14,136 20,000 Senior Vice President, 1996 $ 99,083 $12,219 $ 7,740 2,000 Chief Information Officer 1995 $ 90,933 $ -0- $ 6,365 4,000
(1) The totals in this column reflect the aggregate value of the Company contributions under a modified 401(k) Thrift Plan, 401(k) Mirror Plan, gain from the exercise of stock options and perquisites, (including personal and non-plan benefits). 11 EMPLOYMENT AGREEMENTS In March, 1995, the Company entered into employment agreements with the Chief Executive Officer and the Executive Vice President and Chief Legal Executive. The agreements provide for the continuation of salary and related employee benefits for a period of 24 months following their termination of employment under certain changes in control of the Company. In addition, all options held by these officers would become immediately exercisable upon the date of termination and remain exercisable for 90 days thereafter. OUTSTANDING STOCK OPTIONS The following table sets forth cumulative information concerning outstanding options to purchase shares of the Company's Common Stock originally granted prior to December 15, 1997. The options (except those made May 16, 1997) were granted pursuant to the 1988 Dixon Ticonderoga Company Executive Stock Plan, as amended, (the "1988 Plan"). The 1988 Plan was amended again in December 1996. The Dixon Ticonderoga Amended and Restated Stock Option Plan ("New Plan") was adopted by the Shareholders in 1997. The outstanding options under the 1988 Plan vest 25% after one year; 25% after two years; and 50% after three years, and remain exercisable for a period of three years from the date of vesting. Under the New Plan, options vest on the same schedule but expire five years from the date of vesting. All options expire three months after termination of employment. At December 15, 1997, there were 519,495 options outstanding and 100,927 shares available for future grants under the New Plan. The New Plan provides for participation by officers or key management employees of the Company or its subsidiaries. The following table discloses (for the Chief Executive Officer and other named officers) the gain or "spread" that would be realized if the options granted were exercised on the expiration date when the Company's stock price had appreciated by the percentage levels indicated annually from the market price on the date of the grant. 12 OPTION GRANTS
% of Total Exercise Final Assumed Stock Assumed Stock Options Options Granted of Base Expiration Appreciation Appreciation Name and Title Granted (#) in Year of Grant Price ($/Sh) Date 5% ($) 10% ($) Gino N. Pala 20,000 20.0% $8.62 10/00 $ 49,996 $112,060 President and Chief 10,000 10.6% $6.75 12/01 $ 19,575 $ 43,875 Executive Officer 42,000 12.0% $8.87 05/05 $158,330 $371,422 Richard F. Joyce 10,000 10.0% $8.62 10/00 $ 24,998 $ 56,030 President and Chief 10,000 10.6% $6.75 12/01 $ 19,575 $ 43,875 Operating Officer-Consumer 75,000 7.6% $7.75 12/98 $ 7,866 $ 17,631 Executive Vice President 10,000 10.0% $8.62 10/00 $ 24,998 $ 56,030 of Finance and Chief 10,000 10.6% $6.75 12/0l $ 19,575 $ 43,875 Financial Officer 36,000 10.3% $8.87 05/05 $135,711 $318,362 Leonard D. Dahlberg, Jr. 2,000 4.3% $7.75 12/98 $ 4,495 $ 10,075 Executive Vice President 2,000 2.0% $8.62 10/00 $ 5,000 $ 11,206 Industrial Group 2,000 2.1% $6.75 12/01 $ 3,915 $ 8,775 20,000 5.7% $8.87 05/05 $ 75,395 $176,868 Richard H. D'Antonio 2,000 100.0% $6.12 02/00 $ 3,550 $ 7,956 Senior Vice President 2,000 2.0% $8.62 10/00 $ 5,000 $ 11,206 Chief Information Officer 4,000 4.2% $6.75 12/01 $ 7,830 $ 17,550 2,000 11.8% $7.12 08/02 $ 4,130 $ 9,256 20,000 5.7% $8.87 05/05 $ 75,395 $176,868 Granted December 18, 1992 under the 1988 Dixon Ticonderoga Company Executive Stock Option Plan. Granted October 21, 1994 under the 1988 Dixon Ticonderoga Company Executive Stock Option Plan. Granted December 15, 1995 under the 1988 Dixon Ticonderoga Company Executive Stock Option Plan. Granted August 28, 1996 under the 1988 Dixon Ticonderoga Company Executive Stock Option Plan. Granted May 16, 1997 under the New Plan.
13 The following table presents individual grants of options that were made exercised and/or expired during the last three fiscal years to each of the named executives. This table also is intended to allow shareholders to ascertain the number and size of option grants made during the last three years, as well as options exercisable, and their value as of September 30, 1997. AGGREGATED OPTION EXERCISES IN LAST THREE FISCAL YEARS AND FISCAL YEAR-END OPTION VALUES
Number of Options at Value of Options at Fiscal Year-End (#) Fiscal Year-End ($) Shares Acquired Value ------------------------- ------------------------- Name and Title on Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable Gino N. Pala 39,300 $70,740 -0- -0- $ -0- $ -0- President and Chief 21,400 $55,980 -0- -0- $ -0- $ -0- Executive Officer 5,250 $30,188 -0- -0- $ -0- $ -0- 20,000 -0- $85,000 $ -0- 5,000 5,000 $30,625 $ 30,625 -0- 42,000 $ -0- $168,000 Richard F. Joyce 15,000 $44,062 -0- -0- $ -0- $ -0- President and Chief 2,625 $15,094 -0- -0- $ -0- $ -0- Operating Officer-Consumer 10,000 -0- $42,500 $ -0- Group and Executive Vice 5,000 5,000 $30,625 $ 30,625 President and Chief Legal -0- 75,000 $ -0- $300,000 Officer-Corporate Richard A. Asta 15,000 $56,250 -0- -0- $ -0- $ -0- Executive Vice President 875 $ 4,484 1,750 -0- $ 8,969 $ -0- of Finance and Chief 10,000 -0- $42,500 $ -0- Financial Officer 5,000 5,000 $30,625 $ 30,625 -0- 36,000 $ -0- $144,000 Leonard D. Dahlberg, Jr. 16,376 $66,977 -0- -0- $ -0- $ -0- Executive Vice President, 7,094 $25,336 -0- -0- $ -0- $ -0- Industrial Group 500 $ 3,438 1,000 -0- $ 5,125 $ -0- 2,000 -0- $ 8,510 $ -0- 1,000 1,000 $ 6,125 $ 6,125 -0- 20,000 -0- $80,100 Richard H. D'Antonio 2,000 -0- $13,510 $21,562 Senior Vice President 2,000 -0- $ 8,510 $60,000 Chief Information Officer 2,000 2,000 $12,250 $12,250 500 1,500 $ 2,878 $ 8,633 -0- 20,000 -0- $80,100 14 Closing price at fiscal year end was $12.875 per share. Granted at $4.20 per share on July 28, 1986 under the 1979 Dixon Ticonderoga Company Executive Stock Option Plan. Granted February 22, 1991 under the 1988 Dixon Ticonderoga Company Executive Stock Option Plan. Granted December 18, 1992 under the 1988 Dixon Ticonderoga Company Executive Stock Option Plan. Granted October 21, 1994 under the 1988 Dixon Ticonderoga Company Executive Stock Option Plan. Granted December 15, 1995 under the 1988 Dixon Ticonderoga Company Executive Stock Option Plan. An additional 1,750 options were allowed to expire for Gino N. Pala, 875 options were allowed to expire for Richard F. Joyce and Richard A. Asta and 500 options were allowed to expire for Leonard Dahlberg. Granted August 28, 1996 under the 1988 Dixon Ticonderoga Company Executive Stock Option Plan. Granted May 16, 1997 under the New Plan. 15 The following graph demonstrates a five-year comparison of cumulative total returns based upon (1) the Company's fiscal year end and (2) an initial investment of $100.00 in Company stock, as compared with the Russell 2000 Broad Market Index and the Standard Industry Group of Listed Securities for Office Equipment and Supplies.
COMPARISON OF CUMULATIVE TOTAL RETURN OF COMPANY, INDUSTRY INDEX AND BROAD MARKET Dixon Measurement Period Ticonderoga Industry Broad (Fiscal Year Covered) Co. Index Market ------------------- ----------- -------- ------ 1992 100 100 100 1993 122.50 111.55 133.16 1994 195.00 121.15 136.72 1995 155.00 155.34 168.67 1996 152.50 114.53 191.01 1997 257.50 105.82 254.35 EMPLOYEE 401(k) THRIFT PLAN The Company adopted a 401(k) Thrift Plan effective January 1, 1985. The plan permits domestic non-union employee contributions of up to 26% of salary; 16% of which is tax deferred. The Company matches up to 50% of the first 8% providing such match will be contributed from pre-federal income tax profit or accumulated profits and the Company will contribute 3% of gross wages of all domestic non- union employees regardless of profits or employee contributions. Certain tax legislation enacted since 1985 has put further limitation on the tax deferral of matching and employee contributions. 401(k) MIRROR PLAN In April 1996, the Company adopted the Dixon Ticonderoga Company 410(k) Mirror Plan for certain officers. The 401(k) Mirror Plan is a non-qualified plan for federal income tax purposes. The Plan was created to provide similar benefits to officers that had previously been available under the 401(k) Thrift Plan discussed above, before limitations adopted under certain tax legislation. 16 SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Section 16(a) of the Securities Exchange Act of 1934 requires executive officers and directors, and persons who beneficially own more than ten percent (10%) of the Company's stock, to file initial reports of ownership and reports of changes in ownership with the Securities & Exchange Commission (SEC) and the American Stock Exchange. Executive officers, directors and greater than ten percent (10%) beneficial owners are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they file. Based solely on a review of the copies of such forms furnished to the Company and written representations from the Executive Officers and Directors, the Company believes that all Section 16(a) filing requirements applicable to its Executive Officers, Directors and greater than ten percent (10%) beneficial owners were complied with. SHAREHOLDERS' RIGHTS PLAN In March, 1995, the Company declared a dividend distribution of one Preferred Stock Purchase Right on each share of Company common stock. Each Right will entitle the holder to buy one-thousandth of a share of a new series of preferred stock at a price of $30.00 per share. The Rights will be exercisable only if a person or group (other than the Company's chairman, Gino N. Pala, and his family members) acquires 20% or more of the outstanding shares of common stock of the Company or announces a tender offer following which it would hold 30% or more of such outstanding common stock. The Rights entitle the holders other than the acquiring person to purchase Company common stock having a market value of two times the exercise prices of the Right. If, following the acquisition by a person or group of 20% or more of the Company's outstanding shares of common stock, the Company were acquired in a merger or other business combination, each Right would be exercisable for that number of the acquiring company's shares of common stock having a market value of two times the exercise prices of the Right. The Company may redeem the Rights at one cent per Right at any time until ten days following the occurrence of an event that causes the Rights to become exercisable for common stock. The Rights expire in ten years. INDEPENDENT PUBLIC ACCOUNTANTS Based on a recommendation from the Audit Committee, the Board of Directors of the Company has selected Coopers & Lybrand L.L.P. to serve as the Company's auditor for the next fiscal year. Representatives of Coopers & Lybrand L.L.P. will be in attendance at the Annual Meeting of Shareholders and will have an opportunity to make a statement if they so desire. Such representatives are expected to be available to respond to appropriate questions from the shareholders. 17 OTHER MATTERS WHICH MAY COME BEFORE THE MEETING The Board of Directors is not at present aware of any other matters to be brought before the meeting, except those incidental to the conduct of the meeting. However, if any such matters should come before the meeting, the persons appointed in the accompanying proxy intend to vote the shares represented thereby in their discretion. SHAREHOLDERS PROPOSALS Any proposal that a shareholder may desire to have included in the Company's proxy material for presentation at the next Annual Meeting must be received at the Company's principal office on or prior to September 29, 1998. SOLICITATION OF PROXIES AND EXPENSES THEREOF It is presently contemplated that proxies will be solicited only by mail and, possibly, by telephone, telegraph or personal calls by officers, directors or regular employees of the Company. However, if the circumstances warrant, the Company may retain the services of a proxy soliciting firm. Any expense incurred in the solicitation of proxies, including the expenses of brokers and other nominees in soliciting non-record owners and of any proxy soliciting firm retained, will be borne by the Company. COPIES OF FORM 10-K The Company will provide without charge to each shareholder, upon written request of such shareholder, a copy of the Company's Annual Report on Form 10-K, including the financial statements and the financial statement schedules, required to be filed with the Securities and Exchange Commission pursuant to Rule 13a-1 under the Securities Exchange Act of 1934 for the Company's most recent fiscal year. Requests for such copies should be made to Laura Hemmings, Secretary, Dixon Ticonderoga Company, 195 International Parkway, Heathrow, Florida 32746. By Order of the Board of Directors, Laura Hemmings Secretary Heathrow, Florida February 3, 1998 -----END PRIVACY-ENHANCED MESSAGE-----