UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 19, 2011
LaCROSSE FOOTWEAR, INC.
(Exact name of registrant as specified in its charter)
| Wisconsin | 0-23800 | 39-1446816 | ||
| (State or other jurisdiction of incorporation) | (Commission file number) | (IRS employer identification number) |
17634 NE Airport Way, Portland, Oregon 97230
(Address of principal executive offices, including zip code)
(503) 262-0110
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
ITEM 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
2012 Incentive Compensation Program
On December 19, 2011, the Compensation Committee of the Board of Directors of LaCrosse Footwear, Inc. (the “Company”) approved the Company’s 2012 Annual Incentive Compensation Plan (the “Incentive Program”). Executive officers and other non-union employees who meet certain conditions will be eligible to participate in the Incentive Program.
Each participating employee is eligible to receive compensation under the Incentive Program based on a target incentive compensation amount derived from the employee’s base compensation and the Company’s achievement of annual financial goals for net sales and pre-tax profit, excluding the impact of certain contract military orders. Achievement of the Company’s financial goals at the targeted level entitles participating employees to receive 100% of their target compensation. The payable percentage of target compensation increases if the Company achieves greater than 100% of the applicable financial goals, and decreases if the Company achieves less than 100% of the applicable goals, subject to minimum thresholds below which no payment will be made based on the applicable goal. Participating employees are eligible to receive additional compensation under the Incentive Program based on gross margin dollars attributable to qualifying military contract orders.
All payments under the Incentive Program are subject to the Company’s achievement of a minimum threshold for pre-tax profit.
The Incentive Program description as distributed to the Company’s non-union employees is included as Exhibit 10.1 to this Current Report and is incorporated herein by reference. The foregoing description of the Incentive Program does not purport to be complete and is qualified in its entirety by reference to such exhibit.
2012 Compensation of Certain Executive Officers
On December 19, 2011, the Compensation Committee of the Company’s Board of Directors approved the 2012 salary, incentive compensation and equity compensation for the Company’s executive officers.
The annual base salary of Joseph P. Schneider, the Company’s President and Chief Executive Officer, will remain unchanged from the current level of $470,000. Mr. Schneider will be eligible to receive additional compensation under the Incentive Program as described in the first paragraph of this Current Report. If 100% of the Incentive Program goals are achieved, Mr. Schneider will be eligible to receive incentive compensation equal to 100% of his 2012 annual base salary. Effective January 3, 2012, Mr. Schneider will be awarded a stock option exercisable for 24,000 shares of the Company’s common stock at an exercise price equal to the closing price of the Company’s common stock on January 3, 2012.
The annual base salary of David P. Carlson, the Company’s Executive Vice President and Chief Financial Officer, will remain unchanged from the current level of $335,000. Mr. Carlson will be eligible to receive additional compensation under the Incentive Program as described in the first paragraph of this Current Report.
If 100% of the Incentive Program goals are achieved, Mr. Carlson will be eligible to receive incentive compensation equal to 70% of his 2012 annual base salary. Effective January 3, 2012, Mr. Carlson will be awarded a stock option exercisable for 17,000 shares of the Company’s common stock at an exercise price equal to the closing price of the Company’s common stock on January 3, 2012.
The annual base salary of Ross M. Vonhoff, the Company’s Senior Vice President of Operations, will remain unchanged from the current level of $200,000. Mr. Vonhoff will be eligible to receive additional compensation under the Incentive Program as described in the first paragraph of this Current Report. If 100% of the Incentive Program goals are achieved, Mr. Vonhoff will be eligible to receive incentive compensation equal to 50% of his 2012 annual base salary. Effective January 3, 2012, Mr. Vonhoff will be awarded a stock option exercisable for 6,000 shares of the Company’s common stock at an exercise price equal to the closing price of the Company’s common stock on January 3, 2012.
The annual base salary of C. Kirk Layton, the Company’s Vice President of Finance, will remain unchanged from the current level of $190,000. Mr. Layton will be eligible to receive additional compensation under the Incentive Program as described in the first paragraph of this Current Report. If 100% of the Incentive Program goals are achieved, Mr. Layton will be eligible to receive incentive compensation equal to 35% of his 2012 annual base salary. Effective January 3, 2012, Mr. Layton will be awarded a stock option exercisable for 3,000 shares of the Company’s common stock at an exercise price equal to the closing price of the Company’s common stock on January 3, 2012.
| ITEM 9.01 | FINANCIAL STATEMENTS AND EXHIBITS. |
(d) Exhibits
| Exhibit |
Description | |
| 10.1 | LaCrosse Footwear, Inc. 2012 Annual Incentive Compensation Plan Document | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed by the undersigned thereunto duly authorized.
| LaCROSSE FOOTWEAR, INC. | ||||
| Dated: December 22, 2011 | By: | /s/ David P.Carlson | ||
| David P. Carlson | ||||
| Executive Vice President and Chief Financial Officer | ||||
EXHIBIT INDEX
| Exhibit |
Description | |
| 10.1 | LaCrosse Footwear, Inc. 2012 Annual Incentive Compensation Plan Document |
Exhibit 10.1
LaCrosse Footwear, Inc.
2012 Annual Incentive Compensation Plan Document
Objective/Overview
The LaCrosse Footwear, Inc. Incentive Compensation Plan (the “Plan”) is designed to reward performance based on the achievement of desired annual corporate results. The Plan seeks to drive positive performance by targeting our greatest opportunity to increase shareholder value, which we’ve identified as profitable sales growth. The financial metrics for 2012 are net sales and pre-tax profit.
LaCrosse funds the Plan solely from Company profits. The Company must achieve at least 75% of planned/budgeted 2012 pre-tax profit in order for any Incentive Compensation payout, regardless of the achievement of any other performance metric. Our Board of Directors approves the budgeted net sales and pre-tax profit annually.
The guidelines for the 2012 Incentive Compensation Plan are as follows:
Plan Year and Eligibility Requirements
The incentive compensation plan year runs from January 1st through December 31st. All non-union LFI employees are eligible for the Incentive Compensation Plan unless the individual is on a Sales Commission Plan or another incentive compensation plan administered by a wholly-owned subsidiary of LaCrosse Footwear, Inc. No employee can be on more than one incentive compensation plan. Employees hired during the Plan year are eligible effective with their date of hire.
The employee must be employed by the Company on the payment date in order to receive any incentive compensation payout. Incentive compensation is not earned until paid. The payment date is anticipated to be by the end of the first quarter of 2013, but the timing is at the discretion of the Company.
An employee must have a minimum individual performance rating of “S” (“Successful”) to be eligible to receive any incentive compensation payout. An employee whose last overall performance rating is “B” (“Below Expectations”) or is on written warning, will not be eligible to receive incentive compensation until such time as the associated corrective action plan has been successfully completed.
Incentive Payout Calculation
The incentive compensation payout, if any, is based on the individual’s pro-rated annual base pay (plus overtime earnings).
An individual’s incentive compensation target is set as a percentage of annual base pay. The incentive target compensation level for each employee is commensurate with his or her duties and responsibilities within the organization. The target levels are reviewed annually and employees are notified of any changes. Changes in target incentive compensation percentage are pro-rated for the months each rate is in effect.
Communication
To ensure the success of our Incentive Compensation Plan, we will inform each participant of their target compensation percentage and the specific corporate performance targets. In addition, we will provide an update of the Company’s operating results and incentive compensation targets periodically throughout the year.
Company’s Discretion
The Company has full authority to modify, change, amend or terminate this Plan at its complete discretion.
FINANCIAL COMPONENTS
The financial components or metrics will be computed at the corporate level as follows:
| 50% | Net Sales | |
| 50% | Pre-Tax Profit |
All Contract Military Sales (defined below) will be excluded from the Net Sales and Pre-Tax Profit calculation except for Contract Military Sales in backlog status at 12/31/2011.
50% – NET SALES
Incentive compensation payouts will be computed according to actual Net Sales results for 2012.
| Actual results versus budget | Incentive Compensation Amount | |
| < 94% of budget net sales | No incentive compensation payout on this portion of the plan. | |
| Equal to or > 94% of budget net sales | Incentive compensation based on an incremental scale. There is no cap. | |
50% – PRE-TAX PROFIT
Incentive compensation payouts will be computed according to actual Pre-Tax Profit results for 2012.
| Actual results versus budget | Incentive Compensation Amount | |
| < 75% of budget pre-tax profit | No incentive compensation payout on entire plan. | |
| Equal to or >75% of budget pre-tax profit | Incentive compensation based on an incremental scale. There is no cap. | |
CONTRACT MILITARY COMPONENT
Definition: Contract Military Sales include orders to domestic and international governmental agencies, typically in excess of 10,000 pairs. Sales to ongoing customers (e.g. AAFES) would be excluded except when they are acting as a third party provider for an order to a major branch of the armed forces, likely in excess of 10,000 pairs. At each quarterly board meeting, the Board of Directors will review specific orders for classification as Contract Military Sales.
Payout Calculation: IC payout = 15% of gross margin dollars for all qualifying Contract Military Sales. Gross margin dollars will include all manufacturing variances associated with contract military production (e.g. over-absorption of overhead costs as a result of increased volume). The Company must achieve a minimum of 75% of budget pre-tax profit, exclusive of the financial impact of Contract Military Sales, to qualify for IC payout.
EXTRAORDINARY ITEMS AND BOARD OF DIRECTORS APPROVAL:
Extraordinary items will be evaluated by the Compensation Committee of the LaCrosse Footwear, Inc. Board of Directors on a case-by-case basis as to the impact on incentive compensation. Extraordinary items include items/events which are non-recurring and are not reflective of the on-going operation of the business as well as items considered to be beyond management control.
All payments under this Plan are subject to Compensation Committee recommendation and Board of Directors approval, after the audit of the Company’s year-end financial statements has been completed.