UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended October 31, 2006
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number: 001-14547
Ashworth, Inc.
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| Delaware
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84-1052000 |
| (State or other jurisdiction of
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(I.R.S. Employer |
| incorporation or organization)
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Identification No.) |
2765 LOKER AVENUE WEST, CARLSBAD, CA 92010
(Address of Principal Executive Office, including Zip Code)
(760) 438-6610
(Registrant’s Telephone Number, including Area Code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: common stock, $.001 par value
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule
405 of the Securities Act. Yes o No þ
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or
Section 15(d) of the Act. Yes o No þ
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the Registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes þ No o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is
not contained herein, and will not be contained, to the best of Registrant’s knowledge, in
definitive proxy or information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. þ
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer,
or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in
Rule 12b-2 of the Exchange Act (Check one).
Large accelerated filer o Accelerated filer þ Non-accelerated filer o
Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the
Exchange Act. Yes o No þ
The aggregate market value of the Registrant’s common stock held by non-affiliates based upon
the last reported sales price of its common stock on April 30, 2006 as reported on the NASDAQ
Global Market was $94,095,942.
There were 14,520,175 shares of common stock, $.001 par value, outstanding at the close of
business on January 31, 2007.
EXPLANATORY NOTE
On January 16, 2007, Ashworth, Inc. (the “Company”) filed its Annual Report on Form 10-K for
the year ended October 31, 2006 with the Securities and Exchange Commission. Because the Company
has determined that it will not file its definitive proxy statement within 120 days following the
last day of its last fiscal year, the Company is providing Items 10, 11, 12, 13, and 14 of Part III
of Form 10-K in this Form 10-K/A filing. Except as set forth in Part III below, no other changes
are made to the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2006.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Directors of the Company
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Class I Directors |
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John M. Hanson, Jr., age 66
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2009 |
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Mr. Hanson is a certified public accountant. He was
a stockholder and officer of the accounting firm,
John M. Hanson & Co., from 1968 until 1998, at which
time he retired. He now practices as a tax
specialist for a limited number of clients. |
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James B. Hayes, age 68
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In July 2001, Mr. Hayes retired as President and
Chief Executive Officer of Junior Achievement, Inc.,
a not-for-profit organization providing economic
education for young people in the U.S. and
throughout the world. Mr. Hayes served as Chairman
of Junior Achievement’s national board of directors
from 1991 to 1993 and as a board member from 1987 to
1995. Prior to 1995, Mr. Hayes had a 35-year career
in magazine publishing. He was Publisher of FORTUNE
Magazine from 1986 to 1994. Mr. Hayes also served
as Publisher of DISCOVER Magazine from 1984 to 1986;
Advertising Sales Director of MONEY Magazine from
1982 to 1984; and held a number of executive
positions with SPORTS ILLUSTRATED from 1959 to 1982. |
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Class II Directors |
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Detlef H. Adler, age 48
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2006 |
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2007 |
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Mr. Adler is the Chief Executive Officer (“CEO”) of
Seidensticker, which is both a supplier of woven
shirts to the Company and a significant shareholder
of the Company (owning approximately 5% of the
outstanding shares). Mr. Adler has been with
Seidensticker since 1994 and served as the Chief
Financial Officer from 1994 to 1996 when he was
named the CEO. From 1989 to 1994, he served as the
Director of Finance for Goldwell AG, then a
subsidiary of Kao Corp. Japan, where he oversaw the
finance-related function of all international
subsidiaries. |
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Directors of the Company, continued:
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Class II Directors, continued |
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Stephen G. Carpenter, age 67
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1999 |
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2007 |
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Mr. Carpenter was a commercial banker for 36 years
and has been retired since 1998. He was with
California United Bank and served as Chairman and
Chief Executive Officer from 1994 to 1998 and
President and Chief Executive Officer from 1992 to
1994. Prior to 1992, Mr. Carpenter served as Vice
Chairman of Security Pacific Bank for three years,
as Executive Vice President with Wells Fargo Bank
for seven years, and as Senior Vice President of
First National Bank of Boston for 17 years. He also
served as a director of the Los Angeles Board of the
Federal Reserve Bank of San Francisco. Currently,
he serves as the non-employee Chairman of California
United Bank, a new commercial bank formed in 2004
and opened in June 2005. |
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Peter M. Weil, age 55
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2006 |
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Mr. Weil previously served as a full-time consultant
to the Company and member of the Company’s Office of
the Chairman (an interim executive body utilized
until a new Chief Executive Officer was identified)
from September 12, 2006 until October 30, 2006 when
he was appointed as Chief Executive Officer. Mr.
Weil was appointed to the Company’s Board of
Directors on May 8, 2006 and continues to serve as a
member of the Board. Mr. Weil is currently an
inactive Partner of Lighthouse Retail Group LLC, a
consulting firm specializing in improving operating
and positioning strategies for retailers. From 1996
to 2004, Mr. Weil served as Senior Vice
President/Director of Management Horizons (formerly,
PricewaterhouseCoopers – retail consulting group).
His consulting clients have included Hewlett
Packard, Disney, Brooks Brothers, Nordstrom, Family
Dollar and Loblaws. Mr. Weil previously held Senior
Vice President positions with Macy’s, Marshalls and
J Baker/Morse Shoe in merchandising and supply chain
management. Mr. Weil holds an M.B.A. from the
Harvard Business School and a B.A. from the
University of Michigan. |
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Class III Directors |
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David M. Meyer, age 38
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Mr. Meyer is a Managing Member of Knightspoint
Partners LLC, an investment firm he co-founded in
2003. Mr. Meyer was appointed to the Company’s
Board of Directors on May 8, 2006. Since 2004, Mr.
Meyer has served as Chairman of the Board of
Directors of CPI Corp., a consumer services company
that operates the Sears Portrait Studios, and
served, from 2004 to 2005, as a member of the
interim Office of the Chief Executive of CPI Corp.
Mr. Meyer joined the Board of Directors of Sharper
Image Corporation in 2006 and presently serves as
Chairman of its Compensation Committee. From 1995
to 2002, Mr. Meyer served in various capacities at
Credit Suisse First Boston, including as a director
in the Mergers and Acquisitions and Global
Industrial and Services Groups in the firm’s London
office. Mr. Meyer received a B.S. in
Engineering/Operations Research from Princeton
University in 1990 and an M.B.A. from Stanford
University in 1995. |
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Directors of the Company, continued:
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Class III Directors, continued |
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James G. O’Connor, age 64
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In January 2005, Mr. O’Connor retired from his
position as Ford Motor Company Group Vice President
for North America Marketing, Sales and Service. Mr.
O’Connor was responsible for overseeing Ford,
Lincoln-Mercury and Ford Customer Service divisions,
Dealer Development, Ford Performance Group, Global
Marketing and export markets around the world. From
1998 to 2002, he was Ford Motor Company Vice
President and President of Ford Division responsible
for the marketing, sales and distribution of all
Ford brand cars and trucks in the U.S. |
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John W. Richardson, age 61
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Mr. Richardson is the Senior Vice President,
Controller and Chief Accounting Officer of Qwest
Communications International (“Qwest”), a global
provider of a variety of telecommunications
services. Mr. Richardson joined Qwest in April
2003. From October 2002 to April 2003, Mr.
Richardson was an independent consultant. In
October 2002 Mr. Richardson retired from Goodyear
Tire & Rubber Company (“Goodyear”), a worldwide
manufacturer of tires, engineered products and
chemicals where he served as the Vice President of
Finance for its North American Tire business unit
from 1999 to 2002. Mr. Richardson held general
management and financial positions within the
Goodyear operations in Great Britain and Ohio from
1967 to 1999. Mr. Richardson holds a Certified
Public Accountant license from the State of Ohio
(inactive) and received a B.B.A. degree from Ohio
University in 1967. |
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Executive Officers of the Company
Set forth below are the names and business backgrounds of the executive officers of the
Company, other than Peter M. Weil whose position and business background are described above.
Gary I. (‘Sims’) Schneiderman, age 45
President
Mr. Schneiderman joined the Company in September 2001 and served as Vice President of Sales
for Ashworth and Callaway Golf apparel Retail Sales until January 2004 when he was promoted to
Senior Vice President of Sales and had the added responsibility for Callaway Golf apparel Green
Grass Sales. In September 2005, Mr. Schneiderman was promoted to Executive Vice President of
Sales, Marketing and Customer Service and in September 2006 he was promoted to President. Prior to
joining the Company, Mr. Schneiderman was with Tommy Hilfiger USA where he served in a number of
capacities including as National Sales Manager for men’s sportswear. Prior to 1990, he served as a
Regional Sales Manager for Pincus Brothers Maxwell Tailored Clothing from 1985 to 1990.
Peter E. Holmberg, age 55
Executive Vice President – Green Grass Sales and Merchandising
Mr. Holmberg joined the Company in July 1998 and served as the Director of Corporate Sales
until December 1999. He served as Vice President of Corporate Sales from December 1999 to August
2001 when he was promoted to Senior Vice President of Sales and had the added responsibility of
Ashworth Green Grass Sales. Mr. Holmberg then served as the Senior Vice President of Merchandising
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and Design from May 2005 until September 2005 when he was promoted to Executive Vice President
of Merchandising, Design and Production. Since October 2006, Mr. Holmberg has been serving as the
Company’s Executive Vice President of Green Grass Sales and Merchandising. Prior to
joining the Company, Mr. Holmberg served as National Corporate Sales Manager for Cutter & Buck,
Inc. from 1995 to 1998 and as Regional Manager and Buyer for Patrick James, Inc. from 1992 to 1995.
Mr. Holmberg was the proprietor of The Country Gentleman, an upscale retail store in Bellevue,
Washington, from 1975 to 1992.
Greg W. Slack, age 45
Vice President – Finance, Corporate Controller and Principal Accounting Officer
Mr. Slack was appointed Principal Accounting Officer on October 25, 2006. Mr. Slack joined
the Company as Director of Internal Audit in October 2005, was promoted to Corporate Controller in
February 2006 and appointed Vice President of Finance in July 2006. From September 2004 until
October 2005, Mr. Slack worked on the Company’s Sarbanes-Oxley project as an independent
consultant. Mr. Slack was with JMC Management, Inc. from December 2001 through August 2004 where
he served as the Chief Financial Officer from January 2003 to August 2004 and as the Controller
from December 2001 to January 2003. Prior to that Mr. Slack held various accounting related
positions at Bay Logics, Inc. and PricewaterhouseCoopers LLP. He holds a Certified Public
Accountant license from the State of California and a B.S. degree in Accountancy from San Diego
State University.
Former Officers as of December 31, 2006:
Randall L. Herrel, Sr., age 56
President and Chief Executive Officer and Chairman of the Board
Mr. Herrel joined the Company in December 1996 when he was appointed Director, President and
Chief Executive Officer and resigned from his positions with the Company effective October 17,
2006. Mr. Herrel served as the Company’s Chairman from April 2001 until September 2006. From 1994
to 1996, Mr. Herrel served as President and Chief Operating Officer of Quiksilver, Inc., a young
men’s and women’s apparel company. Mr. Herrel joined Quiksilver in 1989 and also served at various
times as Chief Financial Officer, Chief Operating Officer, Treasurer and Secretary.
Winston E. Hickman, age 64
Executive Vice President, Chief Financial Officer and Treasurer
Mr. Hickman joined the Company on February 23, 2006 as Executive Vice President, Chief
Financial Officer and Treasurer and resigned from his position with the Company effective November
17, 2006. Mr. Hickman previously served as Executive Vice President and Chief Financial Officer of
REMEC, Inc., a NASDAQ-listed designer and manufacturer of advanced wireless subsystems used in
commercial and defense communications applications. Mr. Hickman joined REMEC in 2003 from
privately-held Paradigm Wireless System, Inc. where, beginning in 2000, he was an investor, Chief
Financial Officer and a member of the board of directors. Mr. Hickman has also served as a board
member, Chief Financial Officer, and financial advisor to a number of public and private companies.
Mr. Hickman served as Chief Financial Officer of Pacific Scientific Company, a NYSE-listed company
with sales in excess of $300 million. Prior to Pacific Scientific, he held senior financial
positions at Rockwell International, Allied-Signal, and Vans, Inc. He currently serves as a member
of the board of directors of SRS Labs, Inc., a NASDAQ-listed company, where he is Chairman of the
Audit Committee. Mr. Hickman holds an M.B.A. from the University of Southern California and a B.A.
from California State University, Long Beach.
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Communicating with the Board of Directors
Stockholders may communicate with the Board of Directors, its Committees, Mr. James B. Hayes,
its Chairman, or any other member of the Board of Directors by sending a letter care of our
Corporate Secretary at 2765 Loker Avenue West, Carlsbad, CA 92010. The Board of Directors’ policy
is to have all stockholder communications compiled by the Corporate Secretary and forwarded
directly to the Board, the Committee or the director as indicated in the letter. All letters will
be forwarded to the appropriate party. The Board of Directors reserves the right to revise this
policy in the event that this process is abused, becomes unworkable or otherwise does not
efficiently serve the purpose of the policy.
Meetings and Committees of the Board of Directors
The Company has standing Audit, Compensation and Human Resources, and Corporate Governance and
Nominating Committees. Other committees, including the Special Committee, are discussed below.
The Audit Committee
The Audit Committee represents the Board of Directors in assessing the independence and
objectivity of the Company’s independent registered public accounting firm, the integrity of
management, the appropriateness of accounting policies and procedures and the adequacy of
disclosures to stockholders. In this regard, the Audit Committee assists the Board of Directors by
reviewing the financial information disclosure, the internal control over financial reporting
established by management, and the internal and external audit process. It is the Audit
Committee’s responsibility to select and retain the independent auditors to audit the financial
statements of the Company and its divisions and subsidiaries. The Audit Committee currently
consists of Messrs. Hanson (Chairman), Carpenter, O’Connor and Richardson. The Audit Committee has
been established in accordance with the Nasdaq Stock Market, Inc. (“NASDAQ”) and Securities and
Exchange Commission (the “SEC”) rules and regulations, and all the members of the Audit Committee
are independent as independence for audit committee members is defined under applicable NASDAQ
listing standards and SEC rules and regulations. The Audit Committee and the Board of Directors
has determined that each of Mr. John M. Hanson, Jr., the Audit Committee Chairman, and Mr. John W.
Richardson qualifies as an “audit committee financial expert” within the meaning of SEC rules and
regulations. The Audit Committee has the authority to retain legal and other advisors of its
choice, at the Company’s expense, which advisors report directly to the Committee. The Audit
Committee Charter is accessible via the Company’s website at www.ashworthinc.com under the heading,
“Investor Info.”
The Compensation and Human Resources Committee
The Compensation and Human Resources Committee assists the Board of Directors in discharging
its responsibilities relating to the compensation for executive officers and outside directors and
has the authority to administer the Company’s equity incentive plans. The Compensation and Human
Resources Committee currently consists of Messrs. O’Connor (Chairman), Adler, Hayes, Meyer and
Richardson, all of whom are independent directors as independence is defined under the NASDAQ
listing standards. The Compensation and Human Resources Committee has the authority to retain
legal and other advisors of its choice, at the Company’s expense, which advisors report directly to
the Compensation and Human Resources Committee. The Compensation and Human Resources Committee
Charter is accessible via the Company’s website at
www.ashworthinc.com under the heading, “Investor
Info.”
Compensation Committee Interlocks and Insider Participation
The members of the Compensation and Human Resources Committee, Messrs. O’Connor, Adler, Hayes,
Meyer and Richardson, are not current or former officers or employees of the Company. There
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are no Compensation and Human Resources Committee interlocks between the Company and other
entities involving Ashworth’s executive officers and directors.
The Corporate Governance and Nominating Committee
The Board of Directors established the Corporate Governance and Nominating Committee in
January 2004. The purpose of the Corporate Governance and Nominating Committee is to assist the
Board by identifying qualified individuals to become directors of the Company, to consider and
recommend to the Board the director nominees for each annual meeting of stockholders and to fill
vacancies on the Board, to consider and recommend to the Board the composition of the Board, its
committees and the chairpersons thereof, to monitor and assess the effectiveness of the Board and
its committees, and to perform a leadership role in shaping and implementing the Company’s
corporate governance policies. The Company has adopted several corporate governance policies among
which are policies specifying the minimum number of independent and total directors, limiting each
director’s service to a maximum number of public company boards, limiting the length of service for
non-employee directors and designating stock ownership levels for the Company’s directors and
listed executive officers. The Corporate Governance and Nominating Committee currently consists of
Messrs. Carpenter (Chairman), Adler, Hanson and Hayes, all of whom are independent directors as
independence is defined under applicable NASDAQ listing standards. The Corporate Governance and
Nominating Committee has the authority to retain legal and other advisors of its choice, at the
Company’s expense, which advisors report directly to the Corporate Governance and Nominating
Committee. The Corporate Governance and Nominating Committee Charter is accessible via the
Company’s website at www.ashworthinc.com under the heading, “Investor Info.”
The Corporate Governance and Nominating Committee considers stockholder nominations for
candidates for membership on the Board when properly submitted in accordance with the Company’s
bylaws. The Corporate Governance and Nominating Committee will review and evaluate such
stockholder nominations in the same manner as it evaluates all other nominees.
The Company’s bylaws provide that nominations for the election of directors may be made by any
stockholder entitled to vote in the election of directors; provided, however, that a stockholder
may nominate a person for election as a director at a meeting only if advance written notice of
such stockholder’s intent to make such nomination has been given to the Company’s Secretary in
accordance with the Company’s bylaws. Each notice must set forth: (i) the name and address of the
stockholder who intends to make the nomination and of the person or persons to be nominated; (ii)
the class and number of shares of the Company’s stock which are beneficially owned by the
stockholder and a representation that the stockholder is a holder of record of stock of the Company
entitled to vote at such meeting and intends to appear in person or by proxy at the meeting and
nominate the person or persons specified in the notice; (iii) a description of all arrangements or
understandings between the stockholder and each nominee and any other person or persons (naming
such person or persons) pursuant to which the nomination or nominations are to be made by the
stockholder; (iv) such other information regarding each nominee proposed by such stockholder as
would be required to be included in a proxy statement filed pursuant to the proxy rules of the SEC
had the nominee been nominated, or intended to be nominated, by the Board; and (v) the consent of
each nominee to serve as a director of the Company if so elected.
In addition to stockholder nominations as described above, the Corporate Governance and
Nominating Committee may utilize a variety of methods for identifying potential nominees for
directors, including considering potential candidates who come to their attention through current
officers, directors, professional search firms or other persons. Stockholders may also recommend
director nominees for consideration to the Corporate Governance and Nominating Committee by
submitting the names and any relevant information to our Corporate Secretary at 2765 Loker Avenue
West, Carlsbad, CA 92008. Once a potential nominee has been identified, the Corporate Governance
and Nominating Committee evaluates
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whether the nominee has the appropriate skills and characteristics required to become a
director in light of the then current make-up of the Board of Directors. This assessment includes
an evaluation of the nominee’s judgment and skills, such as experience at a strategy/policy setting
level, financial sophistication, leadership and objectivity, all in the context of the perceived
needs of the Board of Directors at that point in time. The Board of Directors believes that, at a
minimum, all members of the Board should have the highest professional and personal ethics and
values. In addition, each member of the Board must be committed to increasing stockholder value
and should have enough time to carry out his or her responsibilities as a member of the Board.
The Special Committee
The purpose of the Special Committee is to review, analyze and consider strategic alternatives
for the Company and to promptly report all conclusions and recommendations to the Company’s full
Board for the Board’s information and consideration of any binding action. Except as expressly
provided in its charter, the Special Committee acting alone shall not have any power to act on
behalf of or otherwise bind the Company in any way. The Special Committee currently consists of
Messrs. Carpenter, Hayes, Meyer and Weil. The Special Committee has the authority to advise on and
recommend to the full Board regarding the need for retaining any outside counsel, experts, or other
advisors it determines appropriate to assist it in the full performance of its functions. In
September 2006, the Special Committee determined that future meetings would be held only if and
when strategic alternatives opportunities were presented. The Special Committee Charter is
accessible via the Company’s website at www.ashworthinc.com under the heading, “Investor Info.”
The Executive Committee
The purpose of the Executive Committee was to act on behalf of the Board of Directors of the
Company between Board meetings, to provide additional support and resources to management of the
Company in the nature of that provided by the Board, and to provide for closer, more regular
communication between the Board and management of the Company between regular meetings of the
Board. In June 2005, the Board elected to suspend the Executive Committee.
Board and Committee Meetings
During fiscal year 2006, the Board of Directors met in person seven times, met telephonically
17 times and took action twice by written consent in lieu of a meeting. During fiscal year 2006:
the Audit Committee met in person six times and met telephonically six times; the Compensation and
Human Resources Committee met in person seven times and met telephonically twice; the Corporate
Governance and Nominating Committee met in person five times and met telephonically five times; and
the Special Committee met telephonically five times. During fiscal year 2006, each of the
directors attended at least 75% of the aggregate number of the Board of Directors’ meetings and
meetings of the Committees on which they served.
Policy Regarding Director Attendance at Annual Meetings of Stockholders
The Company encourages director attendance at its annual meetings of stockholders and requests
that directors make reasonable efforts to attend such meetings. The Company’s 2006 Annual Meeting
of Stockholders was attended by all of the members of the then-current Board of Directors.
Compliance with Section 16(a) of the Exchange Act
Pursuant to Section 16(a) of the Securities Exchange Act of 1934, as amended, the rules
promulgated thereunder and the requirements of NASDAQ, executive officers and directors of the
Company and persons who beneficially own more than 10% of the common stock of the Company are
required to file with the SEC and NASDAQ and furnish to the Company reports of ownership and change
in ownership with respect to all equity securities of the Company.
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Based solely on its review of the copies of such reports received by the Company during or
with respect to the fiscal year ended October 31, 2006 and/or written representations from such
reporting persons, the Company believes that its officers, directors and 10% stockholders complied
with all Section 16(a) filing requirements applicable to such individuals.
Code of Ethics
The Company has adopted a Code of Business Conduct and Ethics that applies to all directors
and employees, including the Company’s principal executive, financial and accounting officers. The
Code of Business Conduct and Ethics is posted on the Company website at www.ashworthinc.com
under the heading “Investor Info.” The Company intends to satisfy the requirements under Item 5.05
of Form 8-K regarding disclosure of amendments to provisions of our Code of Business Conduct and
Ethics that apply to our directors and principal executive, financial and accounting officers by
posting such information on the Company’s website.
Compensation of Directors
During fiscal 2006, directors who are not employees of the Company each received annual cash
compensation of $30,000, plus $1,000 for in-person attendance and $500 for telephonic attendance at
each Board meeting or Committee meeting that is not in conjunction with a Board meeting. In
January 2007, non-employee directors also received an annual grant of an option to purchase 10,000
shares of the Company’s common stock, vesting quarterly over a 12-month period, at 2,500 shares for
each quarter during which they serve or served as directors. In addition, each director who served
as the Audit Committee chairman, the Compensation and Human Resources Committee chairman, the
Corporate Governance and Nominating Committee chairman or the Lead Director received additional
annual cash compensation of $10,000, $7,500, $5,000 and $5,000, respectively, plus an option to
purchase 5,000 shares of the Company’s common stock, vesting quarterly over a 12-month period, at
1,250 shares for each quarter during which they serve or served as a committee chairman or Lead
Director. All options have an exercise price equal to 100% of the common stock’s fair market value
(“FMV”) on the date of grant. All directors receive reimbursement of expenses for attendance at
each Board meeting and an annual $1,000 allowance for Company apparel.
On September 12, 2006, Mr. Hayes was elected to serve as the Chairman of the Board and his
compensation for all services as a Director was changed to include a cash retainer of $50,000 per
quarter, payable in monthly installments, and an additional quarterly grant of a stock option for
5,000 shares of the Company’s common stock (i.e., in addition to the option grants to all
non-employee directors and with the first quarterly grant made on September 12, 2006). The terms
of such stock option grants include an exercise price of 100% of FMV on the date of grant, vesting
on a daily basis, with week-ends and holidays included, over three months and an expiration date
ten (10) years from the date of grant. Mr. Hayes was compensated as Lead Director during the
period of November 1, 2005 to September 11, 2006 and as Chairman of the Board starting on September
12, 2006.
On September 12, 2006, Mr. Weil entered into an agreement (the “Weil Agreement”) with the
Company whereby Mr. Weil would provide expertise and counsel on corporate management and operations
and decision-making within the Office of the Chairman on an at-will basis. All assignments under
the Weil Agreement would have to be approved by mutual agreement of Mr. Weil and either the
Chairman of the Board or the Board. In consideration of the essentially full-time commitments
associated with the duties under the Weil Agreement, as well as his continuing duties as director,
Mr. Weil was entitled to receive a cash retainer of $30,000 per month and a non-qualified stock
option grant to purchase 25,000 shares with an exercise price equal to 100% of FMV of the stock on
the grant date and vesting over a three-month period on a daily basis. If the Weil Agreement was
not terminated earlier, an option grant to purchase 25,000 shares with comparable terms and
conditions was to be made on each three-month anniversary of September 12, 2006. Vesting would
cease upon termination of the Weil
8
Agreement, and the options were to be exercisable for a period of five years after the grant
date. The options granted pursuant to the Weil Agreement were in addition to, and not in lieu of,
options grants to Mr. Weil for his continuing service on the Board. Mr. Weil did not receive a
separate cash retainer or per Board meeting fees for his continuing service as director of the
Board during the term of the Weil Agreement. Mr. Weil was reimbursed for reasonable out-of-pocket
expenses incurred in connection with the performance of his services under the Weil Agreement.
Effective October 30, 2006, the Weil Agreement was terminated in connection with Mr. Weil’s
appointment to the position of Chief Executive Officer. Mr. Weil thus ceased to be a non-employee
director and therefore received no further compensation for his services as a director.
No other arrangement exists pursuant to which any director of the Company was compensated
during the Company’s last fiscal year for any service provided as a director.
Item 11. EXECUTIVE COMPENSATION.
The following information sets forth the total compensation for the Company’s named executive
officers for fiscal year 2006, as well as the total compensation paid to each such individual for
the two previous fiscal years.
Summary Compensation Table
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| |
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Annual Compensation |
|
Long-Term Compensation |
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Payouts |
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Securities |
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Long-Term |
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Fiscal |
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|
|
Other Annual |
|
Underlying |
|
Incentive |
|
All Other |
| Name and Principal Position |
|
Year |
|
Salary |
|
Bonus |
|
Compensation |
|
Options |
|
Plan Payouts |
|
Compensation |
| |
|
|
|
|
|
($) |
|
($) |
|
($) |
|
(#) |
|
($) |
|
($) |
Peter M. Weil(1) |
|
|
2006 |
|
|
|
3,077 |
|
|
|
— |
|
|
|
— |
|
|
|
129,808 |
(2) |
|
|
— |
|
|
|
— |
|
Chief Executive Officer |
|
|
2005 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
2004 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gary I. Schneiderman |
|
|
2006 |
|
|
|
288,180 |
|
|
|
125,000 |
(3) |
|
|
— |
|
|
|
20,000 |
(4) |
|
|
— |
|
|
|
— |
|
President |
|
|
2005 |
|
|
|
216,701 |
|
|
|
85,000 |
(5) |
|
|
80,891 |
(6) |
|
|
38,000 |
(7) |
|
|
— |
|
|
|
— |
|
|
|
|
2004 |
|
|
|
187,338 |
|
|
|
123,769 |
(8) |
|
|
— |
|
|
|
4,015 |
(9) |
|
|
— |
|
|
|
— |
|
|
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|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
|
|
|
|
|
Peter E. Holmberg |
|
|
2006 |
|
|
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211,754 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Executive Vice President – |
|
|
2005 |
|
|
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197,716 |
|
|
|
— |
|
|
|
— |
|
|
|
35,000 |
(10) |
|
|
— |
|
|
|
— |
|
Green Grass Sales and |
|
|
2004 |
|
|
|
191,812 |
|
|
|
20,000 |
|
|
|
— |
|
|
|
6,755 |
(9) |
|
|
— |
|
|
|
— |
|
Merchandising |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
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|
|
Gregory W. Slack(11) |
|
|
2006 |
|
|
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147,072 |
|
|
|
154,453 |
(12) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Vice President – Finance, |
|
|
2005 |
|
|
|
7,692 |
|
|
|
— |
|
|
|
— |
|
|
|
5,000 |
(4) |
|
|
— |
|
|
|
— |
|
Corporate Controller and |
|
|
2004 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Principal Accounting Officer |
|
|
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|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
Former Officers:
Randall L. Herrel, Sr. (13) |
|
|
2006 |
|
|
|
429,810 |
|
|
|
— |
|
|
|
653,889 |
(14) |
|
|
— |
|
|
|
— |
|
|
|
7,280 |
(15) |
Former Chief Executive |
|
|
2005 |
|
|
|
422,074 |
|
|
|
— |
|
|
|
— |
|
|
|
45,000 |
(16) |
|
|
— |
|
|
|
4,209 |
(15) |
Officer and President |
|
|
2004 |
|
|
|
387,231 |
|
|
|
150,000 |
|
|
|
— |
|
|
|
17,713 |
(9) |
|
|
— |
|
|
|
4,209 |
(15) |
|
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|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Winston E. Hickman(17) |
|
|
2006 |
|
|
|
206,538 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Former Executive Vice |
|
|
2005 |
|
|
|
— |
|
|
|
— |
|
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|
— |
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|
— |
|
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|
— |
|
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|
— |
|
President, Chief Financial |
|
|
2004 |
|
|
|
— |
|
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|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Officer and Treasurer |
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
Peter S. Case (18) |
|
|
2006 |
|
|
|
73,391 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Former Executive Vice |
|
|
2005 |
|
|
|
188,558 |
|
|
|
— |
|
|
|
— |
|
|
|
25,000 |
(19) |
|
|
— |
|
|
|
— |
|
President, Chief Financial |
|
|
2004 |
|
|
|
156,365 |
|
|
|
30,000 |
|
|
|
— |
|
|
|
3,543 |
(9) |
|
|
— |
|
|
|
— |
|
Officer and Treasurer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9
|
|
|
| (1) |
|
Mr. Weil was appointed the Company’s Chief Executive Officer effective October 30,
2006. Under Mr. Weil’s employment agreement, Mr. Weil’s annual base salary is $400,000. |
| |
| (2) |
|
Mr. Weil was granted an option for 4,808 shares on June 1, 2006 for service as a
member of the Board of Directors. Mr. Weil was granted an option for 25,000 shares on
September 12, 2006 upon entry into a consulting services agreement with the Company. Options
for 12,100 shares of the 25,000 granted were terminated upon Mr. Weil’s appointment as Chief
Executive Officer effective October 30, 2006, On November 1, 2006, Mr. Weil was granted an
option for 100,000 shares as part of his compensation as the Company’s Chief Executive
Officer. |
| |
| (3) |
|
Mr. Schneiderman was paid a retention bonus of $85,000 in February 2006 and a
retention bonus of $40,000 in January 2007 pursuant to an employment agreement. |
| |
| (4) |
|
Option grant made on offer of employment, promotion or pursuant to an employment
agreement. |
| |
| (5) |
|
Mr. Schneiderman was paid a retention bonus of $85,000 in September 2005 pursuant to
an employment agreement. |
| |
| (6) |
|
Includes a payment of $45,000 for the purchase of a golf club membership plus
$25,039 for the gross-up of applicable income taxes. Upon termination of his employment, Mr.
Schneiderman is required to reimburse the golf club membership cost (current market value at
the time of sale minus the club transfer fee) to the Company. |
| |
| (7) |
|
Includes 20,000 options granted pursuant to an employment agreement and 18,000
options granted on December 21, 2004 based on performance for fiscal year 2004. |
| |
| (8) |
|
Mr. Schneiderman’s bonus in fiscal 2004 consists of $78,769 earned for calendar year
2003 and $45,000 earned for fiscal year 2004. |
| |
| (9) |
|
Option grant made in fiscal year 2004 based upon performance for fiscal year 2003. |
| |
| (10) |
|
Includes 20,000 options granted pursuant to an employment agreement and 15,000
options granted on December 21, 2004 based on performance for fiscal year 2004. |
| |
| (11) |
|
Mr. Slack joined the Company on October 10, 2005 and served as Director of Internal
Audit until February 8, 2006 when he was promoted to Corporate Controller. Mr. Slack was
promoted to Vice President of Finance on July 17, 2006 and appointed the Principal Accounting
Officer on October 25, 2006. |
| |
| (12) |
|
Mr. Slack was paid a retention bonus of $145,603 in September 2006 pursuant to an
employment agreement and a bonus of $8,850 based upon performance for
fiscal year 2006. |
| |
| (13) |
|
Mr. Herrel resigned effective October 17, 2006. |
| |
| (14) |
|
Mr. Herrel’s severance payment of $653,889 pursuant to an agreement related to Mr.
Herrel’s employment agreement was deposited in a rabbi trust account on October 17, 2006 and
is due to be paid to Mr. Herrel on May 1, 2007. |
| |
| (15) |
|
Includes a $1,138 premium payment made for life insurance and a $3,071 premium
payment made for disability insurance for fiscal years 2005 and 2004. Fiscal year 2006 amount
includes a $1,138 premium payment made for life insurance and a $6,142 premium payment made
for disability insurance. |
| |
| (16) |
|
Option grant made on December 21, 2004 based on performance for fiscal year 2004. |
| |
| (17) |
|
Mr. Hickman joined the Company on February 23, 2006 and served Executive Vice
President, Chief Financial Officer and Treasurer until he resigned effective November 17,
2006. |
10
|
|
|
| (18) |
|
Mr. Case joined the Company in June 2000 and was promoted to Executive Vice
President, Chief Financial Officer and Treasurer in September 2005. Mr. Case resigned
effective February 1, 2006. |
| |
| (19) |
|
Includes 20,000 options granted pursuant to an employment agreement and 5,000
options granted on December 21, 2004 based on performance for fiscal year 2004. |
Fiscal Year 2006 Stock Option Grants
The following table provides information regarding stock options granted under the Company’s
equity incentive plans during fiscal year 2006 to the named executive officers in the Summary
Compensation Table.
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|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Potential Realizable |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value at Assumed |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual Rate of Stock |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Price Appreciation |
| Individual Grants |
|
For Option Term |
| |
|
Number of |
|
|
|
|
|
% of Total |
|
|
|
|
|
|
|
|
| |
|
Securities |
|
|
|
|
|
Options |
|
|
|
|
|
|
|
|
| |
|
Underlying |
|
|
|
|
|
Granted to |
|
|
|
|
|
|
|
|
| |
|
Options |
|
|
|
|
|
Employees in |
|
Exercise or |
|
Expiration |
|
|
|
|
| Name |
|
Granted |
|
|
|
|
|
Fiscal Year |
|
Base Price |
|
Date |
|
5% |
|
10% |
| |
|
(#) |
|
|
|
|
|
(%) |
|
($/sh) |
|
|
|
|
|
($) |
|
($) |
Peter M. Weil |
|
|
4,808 (1) |
|
|
|
|
|
|
|
4.19 |
|
|
|
9.21 |
|
|
|
6/1/16 |
|
|
|
27,849 |
|
|
|
70,574 |
|
Peter M. Weil |
|
|
25,000 (2) |
|
|
|
|
|
|
|
21.78 |
|
|
|
6.55 |
|
|
|
9/12/11 |
|
|
|
45,241 |
|
|
|
99,971 |
|
Gary I. Schneiderman |
|
|
20,000 (3) |
|
|
|
|
|
|
|
17.42 |
|
|
|
6.55 |
|
|
|
9/12/16 |
|
|
|
121,691 |
|
|
|
308,389 |
|
Winston E. Hickman |
|
|
23,555 (4) |
|
|
|
|
|
|
|
20.52 |
|
|
|
8.49 |
|
|
|
2/23/16 |
|
|
|
125,773 |
|
|
|
318,733 |
|
Winston E. Hickman |
|
|
26,444 (4) |
|
|
|
|
|
|
|
23.03 |
|
|
|
8.49 |
|
|
|
2/23/16 |
|
|
|
141,193 |
|
|
|
357,810 |
|
|
|
|
| (1) |
|
These options were granted on June 1, 2006 for service as a member of the Board of
Directors. |
| |
| (2) |
|
These options were granted on September 12, 2006 upon entry into a consulting
services agreement. Options for 12,100 shares of the 25,000 granted were terminated upon Mr.
Weil’s appointment as Chief Executive Officer effective October 30, 2006. On November 1, 2006
Mr. Weil was granted an option for 100,000 shares as part of his compensation as the Company’s
Chief Executive Officer. |
| |
| (3) |
|
These options were granted per an employment contract. |
| |
| (4) |
|
These options were terminated upon Mr. Hickman’s resignation effective November 17,
2006. |
11
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values
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|
|
|
|
| |
|
|
|
|
|
|
|
|
|
Number of Securities |
|
|
| |
|
|
|
|
|
|
|
|
|
Underlying Unexercised |
|
Value of Unexercised |
| |
|
|
|
|
|
|
|
|
|
Options at Fiscal Year- |
|
In-The-Money Options |
| |
|
Shares Acquired |
|
|
|
|
|
End |
|
at Fiscal Year-End |
| Name |
|
on Exercise |
|
Value Realized |
|
Exercisable/Unexercisable |
|
Exercisable/Unexercisable |
| |
|
(#) |
|
($) |
|
(#) |
|
($) |
Peter M. Weil |
|
|
0 |
|
|
|
0 |
|
|
|
15,208/100,000 |
|
|
|
84,495/0 |
|
Gary I. Schneiderman |
|
|
0 |
|
|
|
0 |
|
|
|
47,015/20,000 |
|
|
|
30,250/131,000 |
|
Peter E. Holmberg |
|
|
0 |
|
|
|
0 |
|
|
|
55,755/0 |
|
|
|
228,510/0 |
|
Greg W. Slack |
|
|
0 |
|
|
|
0 |
|
|
|
5,000/0 |
|
|
|
0/0 |
|
Randall L. Herrel,
Sr.(1) |
|
|
99,000 |
|
|
|
225,910 |
|
|
|
147,213/0 |
|
|
|
580,938/0 |
|
Winston E. Hickman
(2) |
|
|
0 |
|
|
|
0 |
|
|
|
0/0 |
|
|
|
0/0 |
|
Peter S. Case (3) |
|
|
0 |
|
|
|
0 |
|
|
|
0/0 |
|
|
|
0/0 |
|
|
|
|
| (1) |
|
Mr. Herrel resigned effective October 17, 2006. |
| |
| (2) |
|
Mr. Hickman resigned effective November 17, 2006. |
| |
| (3) |
|
Mr. Case resigned effective February 1, 2006. |
Executive Employment Agreements, Termination of Employment and Change-in-Control Arrangements
The Company previously entered into executive employment agreements with: Peter M. Weil, the
Chief Executive Officer, Randall L. Herrel, Sr., former Chief Executive Officer and President;
Winston E. Hickman, former Executive Vice President, Chief Financial Officer and Treasurer; Peter
S. Case, former Executive Vice President, Chief Financial Officer and Treasurer; Peter E. Holmberg,
the Executive Vice President of Green Grass Sales and Merchandising; Gary I. “Sims” Schneiderman,
the President and Greg W. Slack, the Vice President of Finance, Corporate Controller and Principal
Accounting Officer. Messrs. Hickman, Herrel and Case resigned from the Company effective November
17, 2006, October 17, 2006 and February 1, 2006, respectively.
Agreements With Current Executive Officers
In connection with Peter M. Weil’s appointment on October 25, 2006 as Chief Executive Officer
of Ashworth, Inc., the Company entered into an employment agreement with Mr. Weil (the Weil
“Employment Agreement”) on November 27, 2006. The Weil Employment Agreement provides for
compensation consisting of, among other things: an annual base salary of $400,000; a performance
bonus opportunity of 50% of annual base salary under certain circumstances; a grant of options to
purchase 100,000 shares of the Company’s common stock, with 50% of the options vesting on each of
the first two anniversaries of the grant date; eligibility to participate in the Company’s 401(k)
plan; coverage under the Company’s medical, dental and life insurance benefits programs; a clothing
allowance in accordance with Company policy; an automobile allowance of $1,250 per month; and an
allowance for reasonable residential expenses, in lieu of moving expenses, and until such time as
the Compensation and Human Resources Committee or the Board takes further action, which will
include housing and all reasonable expenses (to be grossed up for taxes, if applicable). If Mr.
Weil is terminated without Cause (as defined in the Employment Agreement), then Mr. Weil will
receive (1) severance compensation in an amount equal to 12 months of his then current annual base
salary and (2) accelerated vesting of all stock options granted under the Weil Employment
Agreement. Mr. Weil’s option vesting will also be accelerated as a result of a termination
resulting from a change of control. In the event that Mr. Weil becomes disabled
12
(as defined in the Weil Employment Agreement) during the term of this Agreement for a
continuous period up to 90 days, or upon termination of his employment as a result of his death,
the Company shall pay a pro rata share of the annual bonus in the year in which Mr. Weil was
disabled or died.
Effective October 25, 2006, the Company and Peter E. Holmberg entered into the Amended and
Restated Employment Agreement (the “Holmberg Employment Agreement”). Under the Holmberg Employment
Agreement, Mr. Holmberg shall receive an annual base salary of $225,000 and is eligible to earn an
annual bonus up to a maximum of 40% of his annual base salary based and conditioned on the
Company’s achievement of certain financial targets. Mr. Holmberg shall, among other things, also
receive an automobile allowance of $1,000 per month. If Mr. Holmberg is terminated within two
years of the effective date of the Holmberg Employment Agreement as a result of a Qualifying
Termination (as defined in the Holmberg Employment Agreement) and if Mr. Holmberg delivers and does
not revoke a fully executed release and waiver of all claims against the Company, then the Company
shall pay Mr. Holmberg the equivalent of 12 months of his then-current annual base salary and
continued insurance benefits for up to one year, which is in lieu of any other severance payment
benefits that otherwise may at that time be available under the Company’s applicable policies;
provided, however, that the Holmberg Employment Agreement is not intended to modify or supersede
the change in control agreement between the Company and Mr. Holmberg.
On February 28, 2006, the Company entered into an Amended and Restated Employment Agreement
with Gary I. “Sims” Schneiderman. The agreement with Mr. Schneiderman provides for: a minimum
base salary of $300,000; bonuses to be determined by the Board on the basis of merit and the
Company’s financial success and progress up to a maximum of 82.5% of his base salary; three
guaranteed minimum non-compete/retention payments of $85,000 on September 12, 2005, $85,000 on
November 24, 2005 and $40,000 following the close of final accounting records for 2006; stock
options to purchase 20,000 shares for each of fiscal years 2005, 2006 and 2007; an automobile
allowance of $1,000 per month and a club membership. The agreement also provides that if a
Qualifying Termination (as defined in the agreement) occurs, Mr. Schneiderman will be entitled to
receive severance payments equal to 12 months of his then-current annual base salary, an additional
cash payment of $50,000, payment of insurance premiums for a period of 12 months, and immediate
vesting of all options.
The October 5, 2005 offer of employment agreement with Mr. Greg W. Slack provides for at-will
employment with an initial annual salary of $125,000. The agreement also provides for initial
options to purchase 5,000 shares of the Company’s common stock as well as the opportunity to earn a
bonus of up to 20% of base salary based upon reaching certain performance-related goals. Effective
February 10, 2006, the employment agreement was modified. Mr. Slack was promoted to Corporate
Controller, his base annual salary was set at $140,000, and his bonus opportunity was increased to
up to 25% of base salary. The February 2006 agreement also includes a retention bonus due and
payable in two installment payments. The first installment payment made on September 11, 2006 was
for $145,602. The second payment becomes due and payable on June 30, 2007 (and assuming Mr.
Slack’s salary remains unchanged) is expected to be approximately $44,250. Mr. Slack’s current
annual salary is $177,000.
Agreements With Former Executive Officers
In connection with certain Board and management changes on September 12, 2006, the Company and
Randall L. Herrel, Sr., the Company’s Chief Executive Officer, entered into the Agreement as to
Ashworth, Inc. Executive Employment Agreement with Randall L. Herrel, Sr. (the “Herrel Agreement”),
which amended and confirmed certain understandings regarding the Second Amended and Restated
Executive Employment Agreement dated February 28, 2006 between the Company and Mr. Herrel (the
“Herrel Employment Agreement”). The Herrel Agreement provided for, among other matters, (1) Mr.
Herrel’s confirmation that he will no longer be Chairman of the Board of Directors or President,
and (2) Mr. Herrel’s continued service as Chief Executive Officer until such service was scheduled
to terminate
13
automatically on October 17, 2006, unless earlier terminated pursuant to the Herrel Agreement.
Concurrent with the Herrel Agreement, Mr. Herrel submitted a letter of resignation (the
“Resignation Letter”), which confirmed that Mr. Herrel’s resignation of all employment and director
positions effective October 17, 2006, was not a result of any material disagreement with the
Company as to its operations, policies or practices.
The Herrel Agreement provided that if Mr. Herrel’s employment terminated on October 17, 2006
in accordance with the Resignation Letter or if he resigned earlier for Constructive Discharge (as
defined in the Herrel Agreement), Mr. Herrel would receive (1) severance compensation in a cash
amount equal to $629,349, (2) immediate vesting of all outstanding stock options upon termination,
which will remain exercisable for two years after the date of termination, provided,
however, that no option can be exercised beyond its original expiration date, (3) certain
employee and other benefits for one year after the date of termination, including medical, dental,
life and disability insurance, an automobile allowance of $1,250 per month, monthly dues for a
country club membership, and a clothing allowance up to $100 per month, and (4) reimbursement for
accrued but unpaid vacation and out-of-pocket business expenses reimbursable under the Herrel
Employment Agreement.
Had Mr. Herrel been terminated without Cause (as defined in the Herrel Agreement) or by death
or disability prior to October 17, 2006, then Mr. Herrel would have been entitled to receive (1)
severance compensation in a cash amount equal to $608,973 plus $582 per each calendar day that Mr.
Herrel was employed by the Company after September 12, 2006 (including weekends and holidays) until
the date of his termination, (2) immediate vesting of all outstanding stock options upon
termination, which will remain exercisable for two years after the date of termination,
provided, however, that no option can be exercised beyond its original expiration
date, (3) certain employee and other benefits for one year after the date of termination, including
medical, dental, life and disability insurance, an automobile allowance of $1,250 per month,
monthly dues for a country club membership, and a clothing allowance up to $100 per month, and (4)
reimbursement for accrued but unpaid vacation and out-of-pocket business expenses reimbursable
under the Herrel Employment Agreement.
Had Mr. Herrel been terminated prior to October 17, 2006 either for Cause by the Company or
because Mr. Herrel resigned earlier for any reason other than Constructive Discharge (as defined in
the Herrel Agreement), then the amount (if any) of severance compensation and benefits would have
been determined in accordance with the relevant provisions of the Herrel Employment Agreement.
The Herrel Employment Agreement provided for a base salary of not less than $325,000 and
bonuses to be determined by the Board on the basis of merit and the Company’s financial success and
progress. No bonus or stock options were awarded to Mr. Herrel under the fiscal 2006 or fiscal
2005 bonus plans. For achieving certain objectives as set forth in the fiscal 2004 bonus plan, Mr.
Herrel was awarded bonuses totaling $150,000 as well as options to purchase 45,000 shares. A
$75,000 bonus, as well as an option to purchase 17,713 shares, was awarded to Mr. Herrel in
December 2003 because the Company achieved the goals set forth in the fiscal 2003 bonus plan. The
Herrel Employment Agreement also provided, among other benefits, for a monthly automobile allowance
and for the Company to maintain a life insurance policy for $1,000,000, the beneficiary of which
may be named by Mr. Herrel. The Herrel Employment Agreement also included severance payments,
ranging from one to two times his then annual base salary, upon termination of employment under
specific circumstances, including death, termination without cause, or change of control. In
addition, in case of death or termination without cause or in connection with a change of control,
all of his unvested stock options would immediately vest.
On February 23, 2006, the Company entered into an employment agreement with Winston E. Hickman
which terminated in connection with his resignation effective November 17, 2006. The agreement
provided for: a base salary of $300,000; a target bonus of 50% of base salary, with the actual
payment subject to the Board’s discretion; the grant of options to purchase 50,000 shares of the
14
Company’s common stock, with half of the options vesting on each of the first two
anniversaries of Mr. Hickman’s employment with the Company; and coverage under the Company’s
benefits programs. No bonus was awarded to Mr. Hickman for fiscal 2006. The agreement also
provided that if Mr. Hickman had been terminated without Cause or resigned under certain specified
circumstances, Mr. Hickman would have been entitled to: a lump sum payment of either one-half or
all of his then current annual salary, depending on the timing and circumstances of his termination
or resignation; a pro rata bonus; and immediate vesting of a pro rata number of stock options.
In connection with Mr. Hickman’s resignation effective November 17, 2006 as Executive Vice
President, Chief Financial Officer and Treasurer of Ashworth, Inc.,, the Company entered into a
release agreement with Mr. Hickman (the “Release Agreement”) on November 16, 2006 whereby Mr.
Hickman provided a standard release of any claims, complaints and lawsuits against the Company and
other related entities and persons. The Release Agreement also provides that Mr. Hickman will
receive continuing medical, dental and Exec-U-Care insurance coverage for a period of 18 months
from December 1, 2006 through May 31, 2008 in exchange for ten (10) full days of consulting
services to be provided by Mr. Hickman on reasonable and mutually agreed upon dates between
November 20, 2006 and May 30, 2008, to assist with a professional transition of Executive Vice
President and Chief Financial Officer responsibilities and to advise on related matters.
On September 16, 2005, the Company entered into an employment agreement with Peter S. Case,
which terminated in connection with his resignation effective on February 1, 2006. The agreement
provided for a base salary of $225,000 and bonuses to be determined by the Board on the basis of
merit and the Company’s financial success and progress up to a maximum of 50% of the base salary,
and a monthly automobile allowance. Mr. Case was also awarded options to purchase 20,000 shares of
the Company’s stock with vesting on the first anniversary of the date of grant. No bonus was
awarded to Mr. Case under the fiscal 2005 bonus plan. The agreement also provided that if a
Qualifying Termination (as defined in the agreement) had occurred within two years of the effective
date of the agreement, Mr. Case would have been entitled to severance payments equal to his
then-current annual base salary, immediate vesting of the options awarded under the agreement, and
continued insurance benefits for up to one year. Mr. Case submitted a letter of resignation, which
confirmed that Mr. Case’s resignation of all employment positions effective February 1, 2006 was
not a result of any material disagreement with the Company as to its operations, policies or
practices.
Change in Control Agreements
Additionally, the Company has entered into change in control agreements with the following
current or former executives: Randall L. Herrel, Sr., Winston E. Hickman, Peter S. Case, Peter E.
Holmberg, Gary I. “Sims” Schneiderman and Greg W. Slack. The change in control agreements with
Messrs Hickman, Herrel and Case terminated due to their resignations from the Company. Upon a
qualifying termination in connection with a change in control, as defined in each agreement, the
executive would be entitled to severance payments (generally equal to the executive’s highest base
salary with the Company in the prior three years, except that Mr. Slack would receive an amount
that is equal to nine months of his highest base salary for the prior three years, that Mr. Herrel,
if his agreement were still in effect, would receive an amount equal to twice the sum of his
highest base salary for the prior three years and his average bonus for the prior two years, and
Mr. Hickman, if his agreement were still in effect, would receive an amount equal to one and a half
times his highest base salary for the prior three years), grossed up for applicable excise taxes
imposed by Section 4999 of the Internal Revenue Code of 1986, as amended. In addition, Mr.
Herrel’s and Mr. Hickman’s change in control agreements, if they were still in effect, provide for
the immediate vesting of all unexercised stock options and the continuation of insurance benefits
for up to two years or 18 months, respectively. Mr. Slack’s change in control agreement provides
for continuation of insurance benefits for up to nine (9) months. Effective as of February 28,
2006, the employment and change in control agreements for each of the then-current
15
executive officers were amended to comply with Section 409A of the Internal Revenue Code, as
amended.
Performance Graph
Set forth below is a line graph comparing the yearly percentage change in the cumulative total
stockholder returns on the Company’s common stock over a five-year period with the cumulative total
return of the Nasdaq Stock Market (U.S. Companies) and the stocks of companies in the same Standard
Industrial Classification as the Company (SIC 2300-2399). The graph assumes that $100.00 was
invested on October 31, 2001 in the Company’s common stock and each index and that all dividends
were reinvested. The comparisons in the graph are required by the Securities and Exchange
Commission and are not intended to forecast nor are they necessarily indicative of possible future
performance of the Company’s common stock.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
Among Ashworth, Inc., The NASDAQ Composite Index
And SIC Code 2300-2399
16
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATER.
The following table sets forth certain information regarding the beneficial ownership of
common stock of the Company as of January 31, 2007 (unless otherwise noted) by: (i) each person
known by the Company to own beneficially more than 5% of the Company’s outstanding shares of common
stock, (ii) each of the Company’s directors, (iii) the Company’s named executive officers, and (iv)
all directors and executive officers of the Company as a group. Unless otherwise noted, each
person listed below has sole voting power and sole investment power with respect to shares shown as
owned by him, her or it. Information as to beneficial ownership is based upon statements furnished
to the Company or filed with the Securities and Exchange Commission by such persons.
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent |
| |
|
Shares |
|
Options (2) |
|
Total |
|
Owned (3) |
| Name and Address (1) |
|
(#) |
|
(#) |
|
(#) |
|
(%) |
| |
Detlef H. Adler |
|
|
— |
|
|
|
10,833 |
|
|
|
10,833 |
|
|
|
* |
|
Stephen G. Carpenter |
|
|
17,500 |
(4) |
|
|
78,750 |
|
|
|
96,250 |
|
|
|
* |
|
Peter S. Case(5) |
|
|
9,868 |
|
|
|
— |
|
|
|
9,868 |
|
|
|
* |
|
John M. Hanson, Jr. |
|
|
87,200 |
(6) |
|
|
73,750 |
|
|
|
160,950 |
|
|
|
1.1 |
|
James B. Hayes |
|
|
10,500 |
|
|
|
53,333 |
|
|
|
63,833 |
|
|
|
* |
|
Randall L. Herrel, Sr.(7) |
|
|
105,500 |
|
|
|
147,213 |
|
|
|
252,713 |
|
|
|
1.7 |
|
Winston E. Hickman(8) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Peter E. Holmberg |
|
|
15,000 |
|
|
|
55,755 |
|
|
|
70,755 |
|
|
|
* |
|
David M. Meyer |
|
|
34,200 |
|
|
|
7,308 |
|
|
|
41,508 |
(9) |
|
|
* |
|
James G. O’Connor |
|
|
15,500 |
(10) |
|
|
34,583 |
|
|
|
50,063 |
|
|
|
* |
|
John M. Richardson |
|
|
— |
|
|
|
11,375 |
|
|
|
11,375 |
|
|
|
* |
|
Gary I. Schneiderman |
|
|
1,000 |
|
|
|
47,015 |
|
|
|
48,015 |
|
|
|
* |
|
Greg W. Slack(11) |
|
|
— |
|
|
|
5,000 |
|
|
|
5,000 |
|
|
|
* |
|
Peter M. Weil(12) |
|
|
6,500 |
|
|
|
15,208 |
|
|
|
21,708 |
|
|
|
* |
|
All executive officers and
directors as a group (14 persons) |
|
|
302,768 |
|
|
|
540,123 |
|
|
|
842,891 |
|
|
|
5.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Knightspoint Partners II, L.P.
787 Seventh Avenue, 9th Floor,
New York, NY 10019 |
|
|
1,932,902 |
(13) |
|
|
7,308 |
|
|
|
1,940,210 |
|
|
|
13.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dimensional Fund Advisors LP
1299 Ocean Avenue
Santa Monica, CA 90401 |
|
|
1,222,332 |
(14) |
|
|
— |
|
|
|
1,222,332 |
|
|
|
8.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Heartland Advisors, Inc.
789 North Water Street
Milwaukee, WI 53202 |
|
|
1,044,737 |
(15) |
|
|
— |
|
|
|
1,044,737 |
|
|
|
7.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discovery Group I, LLC
233 South Wacker Drive
Suite 3620
Chicago, IL 60606 |
|
|
1,002,700 |
(16) |
|
|
— |
|
|
|
1,002,700 |
|
|
|
6.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Disciplined Growth Investors, Inc.
100 South Fifth St.
Suite 2100
Minneapolis, MN 55402 |
|
|
956,950 |
(17) |
|
|
— |
|
|
|
956,950 |
|
|
|
6.6 |
|
17
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent |
| |
|
Shares |
|
Options (2) |
|
Total |
|
Owned (3) |
| Name and Address (1) |
|
(#) |
|
(#) |
|
(#) |
|
(%) |
| |
Diker Management LLC
745 Fifth Avenue
Suite 1409
New York, NY 10151 |
|
|
725,757 |
(18) |
|
|
— |
|
|
|
725,757 |
|
|
|
5.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Seidensticker (Overseas) Limited
Room 728, Ocean Center
5 Canton Road
Tsimshatsui
Kowloon, Hong Kong |
|
|
713,980 |
(19) |
|
|
— |
|
|
|
713,980 |
|
|
|
4.9 |
|
|
|
|
| * |
|
Less than one percent. |
| |
| (1) |
|
Unless otherwise indicated, the address for each stockholder is the same as the
address of the Company. |
| |
| (2) |
|
Represents shares of common stock that may be acquired pursuant to currently
exercisable stock options or stock options exercisable within 60 days of January 31, 2007. |
| |
| (3) |
|
Applicable percentage of ownership is based upon 14,520,175 shares of common stock
outstanding as of January 31, 2007, together with applicable stock options for such
stockholder. Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and includes voting and investment power with respect to
shares. Shares of common stock subject to options currently exercisable or exercisable
within 60 days after January 31, 2007 are deemed outstanding for computing the percentage of
ownership of the person holding such stock options, but are not deemed outstanding for
computing the percentage ownership of any other person. |
| |
| (4) |
|
The shares are owned by the Stephen G./Jannell S. Carpenter Trust. Stephen G.
Carpenter and Jannell S. Carpenter have shared voting and investment powers. |
| |
| (5) |
|
Mr. Case was appointed as Executive Vice President, Chief Financial Officer and
Treasurer effective September 16, 2005. The shares are owned by the Peter S. Case Revocable
Trust. Mr. Case has sole voting and investment powers. Mr. Case resigned effective
February 1, 2006 and, therefore, the information presented herein is as of February 1, 2006. |
| |
| (6) |
|
69,700 of these shares are owned by 7296 LTD, a family partnership. Mr. John M.
Hanson, Jr. is the General Partner of 7296 LTD and has sole voting and investment powers.
Mr. Hanson has direct ownership of the remaining 19,700 shares with sole voting and
investment powers. |
| |
| (7) |
|
Mr. Herrel resigned effective October 17, 2006. |
| |
| (8) |
|
Mr. Hickman was appointed Executive Vice President, Chief Financial Officer and
Treasurer effective February 23, 2006. Mr. Hickman resigned effective November 17, 2006. |
| |
| (9) |
|
Includes 200 shares of common stock beneficially owned by Knightspoint Partners
II, L.P. The General Partner of Knightspoint Partners II, L.P. is Knightspoint Capital
Management II LLC. The sole Member of Knightspoint Capital Management II LLC is
Knightspoint Partners LLC. Mr. Meyer is a managing member of Knightspoint Partners LLC, and
thus is deemed to beneficially own shares owned by Knightspoint Partners II, L.P. The
41,508 shares beneficially owned by Mr. Meyer are also included in the 1,940,210 shares
beneficially owned by the Knightspoint Group. (See footnote 13 below.) |
| |
| (10) |
|
The shares are owned by the James G. O’Connor Revocable Trust. Mr. O’Connor has
sole voting and investment powers. |
| |
| (11) |
|
Mr. Slack was appointed the Principal Accounting Officer on October 20, 2006. |
18
|
|
|
| (12) |
|
Mr. Weil was appointed the Chief Executive Officer effective October 30, 2006 and
continues to serve as a director on the Company’s Board of Directors. Mr. Weil was
appointed to the Board of Directors on May 8, 2006. |
| |
| (13) |
|
This information is based upon a Schedule 13D/A filed with the Securities and
Exchange Commission on January 19, 2007. This Schedule 13D/A was filed jointly by
Knightspoint Partners II, L.P., Knightspoint Capital Management II LLC, Knightspoint
Partners, LLC, Michael Koeneke, David Meyer, Starboard Value and Opportunity Master Fund
Ltd., Parche, LLC, Admiral Advisors, LLC, Ramius Capital Group, LLC, C4S & Co., LLC, Peter
A. Cohen, Jeffrey M. Solomon, Morgan B. Stark, Thomas W. Strauss, Black Sheep Partners, LLC
and Brian Black (collectively, the “Knightspoint Group”). In addition, although they do not
affirm their membership in the group that is composed of, and affirmed by, the Knightspoint
Group, each of Michael Glazer, H. Michael Hecht and Andrea Weiss (collectively, the “Other
Reporting Persons” and, together with the Knightspoint Group, the “Reporting Persons”) filed
the Schedule 13D/A. Each Other Reporting Person disclaims beneficial ownership of Common
Stock held by the Knightspoint Group and, similarly, the Knightspoint Group disclaims
beneficial ownership of Common Stock held by the Other Reporting Persons. As of January 19,
2007, the Reporting Persons own an aggregate of 1,940,210 shares of which the Knightspoint
Group owns an aggregate of 1,940,210 shares and the Other Reporting Persons do not own any
shares. |
| |
| (14) |
|
This information is based upon a Schedule 13G/A filed by Dimensional Fund
Advisors LP with the Securities and Exchange Commission on February 1, 2007. As of December
31, 2006, Dimensional Fund Advisors LP has sole voting and investment power of the 1,222,332
shares that it beneficially owns, and, as a company registered under the Investment Advisors
Act of 1940, disclaims beneficial ownership of these shares. |
| |
| (15) |
|
This information is based upon a Schedule 13G/A filed by Heartland Advisors, Inc.
and William J. Nasgovitz with the Securities and Exchange Commission on February 13, 2007.
Mr. Nasgovitz is the President and principal shareholder of Heartland Advisors, Inc.
Heartland Advisors, Inc. and Mr. Nasgovitz have shared dispositive power for 1,044,737
shares and shared voting power for 976,329 shares. Heartland Advisors, Inc. and Mr.
Nasgovitz each specifically disclaim beneficial ownership of any of the shares reported in
such Schedule 13G/A. |
| |
| (16) |
|
This information is based upon a Schedule 13G/A filed by Discovery Group I, LLC,
Discovery Equity Partners, L.P., Daniel J. Donoghue and Michael R. Murphy, as a group, with
the Securities and Exchange Commission on November 7, 2005. As of November 4, 2005,
Discovery Group I, LLC, Daniel J. Donoghue and Michael R. Murphy had the shared voting and
investment power of the 1,002,700 shares reported as beneficially owned. As of such date,
Discovery Equity Partners, L.P. was the beneficial owner of 863,370 shares for which
Discovery Group I, LLC, Daniel J. Donoghue and Michael R. Murphy had the shared voting and
investment power. |
| |
| (17) |
|
This information is based upon a Schedule 13G/A filed by Disciplined Growth
Investors, Inc. with the Securities and Exchange Commission on February 9, 2007. As of
December 31, 2006, Disciplined Growth Investors, Inc. had the sole voting and investment
power of the 956,950 shares reported as beneficially owned. |
| |
| (18) |
|
This information is based upon a Schedule 13G filed by Diker Management, LLC,
Diker GP, LLC, Charles M. Diker and Mark N. Diker, as a group, with the Securities and
Exchange Commission on January 29, 2007. As of January 18, 2006, by Diker Management, LLC,
Diker GP, LLC, Charles M. Diker and Mark N. Diker had the shared voting and investment power
of the 725,757 shares reported as beneficially owned, and, as affiliates of a registered
investment advisor under the Investment Advisors Act of 1940, disclaim beneficial ownership
of these shares. |
| |
| (19) |
|
This information is based upon a Schedule 13G filed by Seidensticker (Overseas)
Limited with the Securities and Exchange Commission on February 21, 2001 and additional
information provided to the Company by Seidensticker (Overseas) Limited. Seidensticker
(Overseas) Limited has sole voting and investment power for all shares. |
19
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The Company leases its Phenix City, Alabama distribution facility from STAG II Phenix City,
LLC, which purchased the building in fiscal 2006 from 16 Downing, LLC, which was a related party
owned by certain members of Gekko Brands, LLC’s management. Total payments under the operating
lease for this facility made during the years ended October 31, 2006, 2005 and 2004 were $400,000,
$400,000 and $133,000, respectively. The lease agreement requires monthly payments of $33,000
through June 6, 2012.
Seidensticker (Overseas) Limited (“Seidensticker”), a supplier of inventoried products to the
company, owned approximately 5% of the Company’s outstanding common stock at October 31, 2006.
Additionally, the President and Chief Executive Officer of Seidensticker (Overseas) Limited was
elected to the Company’s Board of Directors effective January 1, 2006. During the years ended
October 31, 2006, 2005 and 2004, the Company purchased approximately $1,571,000, $5,800,000 and
$4,000,000, respectively of products from Seidensticker. The Company believes that the terms upon
which it purchased the inventoried products from Seidensticker are consistent with the terms
offered to other, unrelated parties.
On May 5, 2006, the Company entered into a settlement agreement (the “Agreement”) with
Knightspoint Partners II, L.P. and certain other entities and individuals, including Mr. Peter M.
Weil and Mr. David M. Meyer (collectively, the “Knightspoint Group”) under which, among other
matters, the Company agreed to appoint Mr. Weil and Mr. Meyer to its Board of Directors effective
May 8, 2006. Pursuant to the Agreement, the Company reimbursed Knightspoint Group for its actual
expenses incurred in connection with the proxy contest in the amount of approximately $165,000.
Mr. Meyer is a managing member of Knightspoint Partners LLC, an affiliate of Knightspoint Partners
II, L.P. Mr. Meyer currently serves as a director on the Company’s Board.
On September 12, 2006, concurrent with his appointment to the Office of the Chairman, Mr.
Weil, who is currently CEO and a director of the Board, entered into an agreement with the Company
to provide consulting services on corporate management and operations and decision-making within
the Office of the Chairman (the “Weil Agreement”). Mr. Weil was paid approximately $48,000 for
such services for the period of September 12, 2006 through October 29, 2006. Mr. Weil also
received an option grant to purchase 25,000 shares with an exercise price of 100% of then-current
fair market value, 12,900 of which vested and 12,100 were terminated as of October 30, 2006
pursuant to the terms of the Weil Agreement. The Weil Agreement was terminated upon Mr. Weil’s
appointment as Chief Executive Officer effective October 30, 2006.
Item 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
Set forth below are the aggregate fees paid or accrued for professional services rendered to
the Company by Moss Adams LLP (“Moss Adams”) the Company’s independent auditor for fiscal years
2006 and 2005 and KPMG LLP (“KPMG”), the Company’s independent auditor for fiscal year 2004.
| |
|
|
|
|
|
|
|
|
| |
|
Fiscal Years Ended October 31, |
|
| |
|
2006 |
|
|
2005 |
|
Audit Fees — KPMG(1) |
|
$ |
25,000 |
|
|
$ |
287,700 |
|
Audit Fees — Moss Adams(1) |
|
|
691,216 |
|
|
|
455,616 |
|
Audit-related Fees — Moss Adams(2) |
|
|
13,000 |
|
|
|
12,000 |
|
Tax Fees — KPMG(3) |
|
|
26,330 |
|
|
|
— |
|
|
|
|
|
|
|
|
Total Fees |
|
$ |
755,546 |
|
|
$ |
755,316 |
|
|
|
|
|
|
|
|
|
|
|
| (1) |
|
Audit fees represent fees billed for professional services rendered by the
Company’s independent auditor for the audits of the Company’s annual financial statements
and internal control over financial reporting, |
20
|
|
|
| |
|
review of the interim financial statements included in the Company’s quarterly reports on
Form 10-Q, and statutory audits and other SEC filings. |
| |
| (2) |
|
Audit-related fees consisted primarily of employee benefit plan audits. |
| |
| (3) |
|
For fiscal years 2006 and 2005, the Company retained an outside consultant to
provide the tax compliance and tax consulting services except for the $26,330 paid to KPMG
in fiscal 2006 for tax compliance work for the Company’s United Kingdom subsidiary. |
Policy on Audit Committee Pre-approval of Audit and Permissible Non-audit Services of
Independent Auditor
Consistent with policies of the Securities and Exchange Commission regarding auditor
independence and the Audit Committee Charter, the Audit Committee has the responsibility for
appointing, setting compensation and overseeing the work of the independent auditor. The Audit
Committee’s policy is to pre-approve all audit and permissible non-audit services provided by the
independent auditor. Pre-approval is detailed as to the particular service or category of services
and is generally subject to a specific budget. The Audit Committee may also pre-approve particular
services on a case-by-case basis. In assessing requests for services by the independent auditor,
the Audit Committee considers whether such services are consistent with the auditor’s independence,
whether the independent auditor is likely to provide the most effective and efficient service based
upon its familiarity with the Company and staffing, and whether the service could enhance the
Company’s ability to manage or control risk or improve audit quality.
PART IV
Item 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(b) Exhibits
The following are exhibits filed with this report.
| 31.1 |
|
Certification Pursuant to Rules 13a-14 and 15d-14, as Adopted Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 by Peter M. Weil. |
| |
| 31.2 |
|
Certification Pursuant to Rules 13a-14 and 15d-14, as Adopted Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 by Greg W. Slack. |
21
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
| |
|
|
|
|
|
|
| |
|
ASHWORTH, INC. |
|
|
| |
|
(Registrant) |
|
|
|
|
|
|
|
|
|
Date: February 28, 2007
|
|
BY:
|
|
/s/ Peter M. Weil |
|
|
|
|
|
|
|
|
|
| |
|
Peter M. Weil. |
|
|
| |
|
Chief Executive Officer |
|
|
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the Registrant and in the capacities and on the
dates indicated.
| |
|
|
|
|
| Signature |
|
Title |
|
Date |
/s/ Peter M. Weil
Peter M. Weil
|
|
Chief Executive Officer,
and Director (Principal Executive
Officer and Acting Principal
Financial Officer)
|
|
February 28, 2007 |
|
|
|
|
|
/s/ Greg W. Slack
Greg W. Slack
|
|
Vice-President of Finance
and Corporate Controller
(Principal Accounting Officer)
|
|
February 28, 2007 |
|
|
|
|
|
/s/Detlef H. Adler
Detlef H. Adler
|
|
Director
|
|
February 28, 2007 |
|
|
|
|
|
/s/ Stephen G. Carpenter
Stephen G. Carpenter
|
|
Director
|
|
February 28, 2007 |
|
|
|
|
|
/s/ John M. Hanson, Jr.
John M. Hanson, Jr.
|
|
Director
|
|
February 28, 2007 |
|
|
|
|
|
/s/ James B. Hayes.
James B. Hayes
|
|
Director
|
|
February 28, 2007 |
|
|
|
|
|
/s/ David M. Meyer
David M. Meyer
|
|
Director
|
|
February 28, 2007 |
|
|
|
|
|
/s/ James G. O’Connor
James G. O’Connor
|
|
Director
|
|
February 28, 2007 |
|
|
|
|
|
/s/ John W. Richardson
John W. Richardson
|
|
Director
|
|
February 28, 2007 |
22
EXHIBIT INDEX
| |
|
|
| Exhibit |
|
|
| Number |
|
Description of Exhibit |
31.1
|
|
Certification Pursuant to Rules 13a-14 and 15d-14, as Adopted
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by
Peter M. Weil |
|
|
|
31.2
|
|
Certification Pursuant to Rules 13a-14 and 15d-14, as Adopted
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by
Greg W. Slack |
23
