SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11c or Section 240.14a-12
ROCKY SHOES & BOOTS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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ROCKY SHOES & BOOTS, INC.
39 East Canal Street
Nelsonville, Ohio 45764
April 18, 2003
Dear Shareholder:
I am pleased to invite you to the Annual Meeting of Shareholders of
Rocky Shoes & Boots, Inc. to be held on Tuesday, May 20, 2003, at 4:00 p.m., at
Porter, Wright, Morris & Arthur LLP, 29th Floor, located at 41 South High
Street, Columbus, Ohio. We look forward to meeting all of our shareholders who
are able to attend.
At the Annual Meeting, you will be asked to elect Class I Directors. A
copy of the Proxy Statement and the proxy card are enclosed.
It is very important that your shares are represented and voted at the
meeting whether or not you plan to attend. Accordingly, please sign, date, and
return your proxy card in the enclosed envelope at your earliest convenience. If
you attend the meeting, you may vote in person if you wish, and your proxy will
not be used.
Your interest and participation in the affairs of the Company are
greatly appreciated. Thank you for your continued support.
Sincerely,
Mike Brooks
Chairman, President, and
Chief Executive Officer
ROCKY SHOES & BOOTS, INC.
39 East Canal Street
Nelsonville, Ohio 45764
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
April 18, 2003
To Our Shareholders:
The Annual Meeting of Shareholders of Rocky Shoes & Boots, Inc. will be
held at Porter, Wright, Morris & Arthur LLP, 29th Floor, located at 41 South
High Street, Columbus, Ohio, on Tuesday, May 20, 2003, at 4:00 p.m. local time,
for the following purposes:
(1) To elect three Class I Directors of the Company, each
to serve for a two-year term expiring at the 2005
Annual Meeting of Shareholders.
(2) To transact any other business which may properly
come before the meeting or any adjournment thereof.
Owners of record of common stock of the Company at the close of
business on March 24, 2003, will be entitled to vote at the meeting.
You will be most welcome at the meeting, and we hope you can attend.
Directors and officers of the Company and representatives of its independent
public accountants will be present to answer your questions and to discuss its
business.
We urge you to execute and return the enclosed proxy as soon as
possible so that your shares may be voted in accordance with your wishes. If you
attend the meeting, you may vote in person and your proxy will not be used.
By Order of the Board of Directors,
Curtis A. Loveland
Secretary
PLEASE SIGN AND MAIL THE ENCLOSED PROXY
IN THE ACCOMPANYING ENVELOPE
NO POSTAGE NECESSARY IF MAILED IN THE UNITED STATES
ROCKY SHOES & BOOTS, INC.
39 East Canal Street
Nelsonville, Ohio 45764
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
MAY 20, 2003
This Proxy Statement is furnished to the shareholders of Rocky Shoes &
Boots, Inc. (the "Company") in connection with the solicitation of proxies to be
used in voting at the Annual Meeting of Shareholders to be held on May 20, 2003,
and at any adjournment thereof. The enclosed proxy is solicited by the Board of
Directors of the Company. This Proxy Statement and the enclosed proxy will be
first sent or given to the Company's shareholders on approximately April 18,
2003.
The Company will bear the cost of the solicitation of proxies,
including the charges and expenses of brokerage firms and others for forwarding
solicitation material to beneficial owners of stock. Representatives of the
Company may solicit proxies by mail, telegram, telephone, or personal interview.
The shares represented by the accompanying proxy will be voted as
directed if the proxy is properly signed and received by the Company before the
meeting. The proxy will be voted FOR the nominees for director named herein,
and, at the discretion of the persons acting under the proxy, to transact such
other business as may properly come before the meeting or any adjournment
thereof. Any shareholder giving a proxy has the power to revoke it at any time
before it is exercised by filing a written notice with the Secretary of the
Company prior to the meeting. Shareholders who attend the meeting may vote in
person and their proxies will not be used.
Holders of record of common stock of the Company at the close of
business on March 24, 2003, will be entitled to vote at the Annual Meeting. At
that time, the Company had 4,051,430 shares of common stock outstanding and
entitled to vote. Each share of common stock outstanding on the record date
entitles the holder to one vote on each matter submitted at the Annual Meeting.
The presence, in person or by proxy, of a majority of the outstanding
shares of common stock of the Company is necessary to constitute a quorum for
the transaction of business at the Annual Meeting. Abstentions and broker
non-votes are counted for purposes of determining the presence or absence of a
quorum. Broker non-votes occur when brokers, who hold their customers' shares in
street name, sign and submit proxies for such shares and vote such shares on
some matters, but not others. Typically, this would occur when brokers have not
received any instructions from their customers, in which case the brokers, as
the holders of record, are permitted
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to vote on "routine" matters, which typically include the election of directors
and ratification of independent public accountants.
The election of each director nominee requires the favorable vote of a
plurality of all votes cast by the holders of common stock at a meeting at which
a quorum is present. Proxies that are marked "Withhold Authority" and broker
non-votes will not be counted toward such nominee's achievement of a plurality
and thus will have no effect. Each other matter to be submitted to the
shareholders for approval or ratification at the Annual Meeting requires the
affirmative vote of the holders of a majority of the common stock present and
entitled to vote on the matter. For purposes of determining the number of shares
of common stock voting on the matter, abstentions will be counted and will have
the effect of a negative vote; broker non-votes will not be counted and thus
will have no effect.
ELECTION OF DIRECTORS
The Company's Code of Regulations provides for a classified board of
directors with two classes. Each class of directors consists, as nearly as
practical, of one-half of the total number of directors. The total number of
authorized directors has been fixed by the Board of Directors at seven. The
Board of Directors proposes the election of all three incumbent directors at the
2003 Annual Meeting of Shareholders to continue their service as Class I
Directors. The four incumbent Class II Directors will continue in office. The
nominees for Class I Directors, if elected, will serve for a two-year term
expiring at the 2005 Annual Meeting of Shareholders.
Mike Brooks, Glenn E. Corlett, and James L. Stewart are currently Class
I Directors of the Company and are being nominated by the Board of Directors for
re-election as Class I Directors.
It is intended that, unless otherwise directed, the shares represented
by the enclosed proxy will be voted FOR the election of Messrs. Brooks, Corlett,
and Stewart as Class I Directors. In the event that any of the nominees for
director should become unavailable, the number of directors of the Company may
be decreased pursuant to the Company's Code of Regulations, or the Board of
Directors may designate a substitute nominee, in which event the shares
represented by the enclosed proxy will be voted for such substitute nominee.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
ELECTION OF EACH OF THE NOMINEES FOR DIRECTOR.
The following table sets forth for each nominee and each continuing
director of the Company, such person's name, age, the year in which he became a
director of the Company, and his position with the Company and the Company's
subsidiaries, Five Star Enterprises Ltd. ("Five Star") and Lifestyle Footwear,
Inc. ("Lifestyle"):
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CLASS I DIRECTORS
(NOMINEES - TERMS TO EXPIRE IN 2005)
DIRECTOR
NAME AGE SINCE POSITION
- ---------------- --------- ----------- -------------------------------------------
Mike Brooks 56 1992 Director, Chairman of the Board, President,
and Chief Executive Officer of the Company,
Five Star, and Lifestyle
Glenn E. Corlett 59 2000 Director of the Company
James L. Stewart 70 1996 Director of the Company
- -------------------------------------------------------------------------------------------------
CLASS II DIRECTORS
(TERMS EXPIRE IN 2004)
DIRECTOR
NAME AGE SINCE POSITION
- ------------------ --------- ----------- -------------------------------------------
Leonard L. Brown 71 1993 Director of the Company
David Fraedrich 53 1992 Director, Senior Vice President and Treasurer
of the Company; Senior Vice President and
Treasurer of Five Star and Lifestyle
Curtis A. Loveland 56 1993 Director and Secretary of the Company;
Secretary of Five Star and Lifestyle
Robert D. Rockey 61 2000 Director of the Company
- -------------------------------------------------------------------------------------------------
Mike Brooks has served as Chairman, President, and Chief Executive
Officer of the Company since August 1991. Mr. Brooks also has served Lifestyle
as President since November 1988 and as Chairman and Chief Executive Officer
since December 1992, and Five Star as President since March 1987, as Chairman
since August 1991, and as Chief Executive Officer since December 1992. Mr.
Brooks is a pattern engineering and shoe design graduate of the Ars Satoria in
Milan, Italy. After employment with U.S. Shoe Corporation and various tanning
companies, Mr. Brooks returned to the family shoe business in Nelsonville, Ohio,
in 1975, serving first as Manager of Product Development and a national salesman
and then, in 1984, becoming President. He has been a director of Footwear
Industries of America since April 1986 and currently serves on the Executive
Board as Chairman of that organization.
Glenn E. Corlett has been Dean and Philip J. Gardner, Jr. Leadership
Professor of the College of Business at Ohio University, Athens, Ohio, since
July 1, 1997. From 1993 to 1996, Mr. Corlett was Executive Vice President and
Chief Operating Officer of N.W. Ayer & Partners, an international advertising
agency, headquartered in New York, New York. Mr. Corlett also served as Chief
Financial Officer of N.W. Ayer & Partners from 1990 to 1995. Prior to joining
N.W. Ayer & Partners, Mr. Corlett had a long history with Price
3
Waterhouse where he was partner-in-charge for mergers and acquisitions in New
York from 1988 to 1990; tax partner-in-charge in Denver from 1984 to 1988 and in
Cleveland from 1979 to 1984; and held partner and staff positions from 1971 to
1979. Mr. Corlett also serves on the Board of Directors of Pubco Corp., a
company with a printer supplies business and a construction products business,
and Frederick Brewing Co., a specialty brewery.
James L. Stewart has served as the proprietor of Rising Wolf Ranch,
Inc., East Glacier, Montana, a summer resort and a winter rehabilitation center
for teenage boys involved with drug abuse. Mr. Stewart also consults for various
retail and catalog companies. Between 1984 and 1991, Mr. Stewart served as the
President and CEO of Dunns Inc. and as the Vice President and General Manager of
Gander Mountain Inc. Before that time, he served Sears Roebuck & Co. for 28
years.
Leonard L. Brown has served as President of Leonard L. Brown, Inc.,
Cincinnati, Ohio, a management consulting firm, since 1985, and as Managing
Partner of L & O Realty Co., a private real estate investment company, since
1980. From 1974 to 1985, Mr. Brown served as Chief Executive Officer of Elmex
Corp., a toy wholesale company. From 1971 to 1978, the period during which Elmex
Corp. was a unit of W. R. Grace & Co., Mr. Brown also served as a Vice President
and Division Executive of W. R. Grace & Co.
David Fraedrich has served as Senior Vice President and Treasurer since
June 2001. Prior to his appointment as Senior Vice President and Treasurer, Mr.
Fraedrich served as Executive Vice President, Chief Financial Officer, and
Treasurer of the Company from October 1992 until June 2001. Mr. Fraedrich joined
the Company in 1971 after graduating from Miami University in Oxford, Ohio, with
a B.S. degree in Business Administration. He has served in various positions,
assuming executive officer responsibilities in July 1975. Mr. Fraedrich has also
served as an executive officer of Lifestyle and Five Star since November 1988
and March 1987, respectively, and currently serves as Senior Vice President and
Treasurer of these corporations.
Curtis A. Loveland has served as Secretary of the Company since October
1992 and of Five Star and Lifestyle since December 1992. Mr. Loveland has been a
practicing attorney for 30 years and has been a partner in the law firm of
Porter, Wright, Morris & Arthur LLP, Columbus, Ohio since 1979. Mr. Loveland
also serves on the Board of Directors of Applied Innovation Inc., a
telecommunications products manufacturer.
Robert D. Rockey served as Chairman and Chief Executive Officer of Duck
Head Apparel Company, Inc., Winder, Georgia, from March 1999 until March 2001,
and was Chairman and Chief Executive Officer of the Lennox Group from June 1997
to March 1999, and President of Levi Strauss & Company, N.A. from March 1978 to
June 1997.
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INFORMATION CONCERNING THE DIRECTORS, EXECUTIVE OFFICERS,
AND PRINCIPAL SHAREHOLDERS
MEETINGS, COMMITTEES, AND COMPENSATION OF THE BOARD OF DIRECTORS
The Board of Directors of the Company held a total of six meetings
during 2002. During 2002, each of the directors attended 75% or more of the
total number of (i) meetings of the Board, and (ii) meetings of committees of
the Board on which such director served. The Company compensates each director
who is not an officer or employee of the Company in cash at a rate of $1,500 per
Board meeting, plus $750 for each committee meeting which does not occur on the
same day as a Board meeting. All directors receive reimbursement of reasonable
out-of-pocket expenses incurred in connection with the Board or committee
meetings. On January 2, 2002, the Company granted each independent director an
annual retainer payable in shares of restricted stock valued at $10,000, which
vests quarterly upon continued service as a director. Accordingly, 1,733 shares
of restricted stock were issued to each of Messrs. Stewart, Brown, Loveland,
Corlett and Rockey, based on a stock price of $5.77 per share. In addition,
pursuant to the Company's 1995 Stock Option Plan, each of the independent
directors is granted an option to purchase 5,000 shares of the Company's common
stock each year. The exercise price of such options equals 100% of the fair
market value of the shares on the date of grant. The options are not exercisable
until a period of one year from the date of grant and terminate on the sixth
anniversary of the date of grant. Accordingly, on January 2, 2002, nonqualified
options to purchase 5,000 shares of common stock were granted to each of Messrs.
Stewart, Brown, Loveland, Corlett and Rockey at an exercise price of $5.77 per
share. These nonqualified options became exercisable on January 2, 2003 and
expire on January 2, 2008.
The Company has a standing Audit Committee and Stock Option and
Compensation Committee. The members of the Audit Committee are Messrs. Corlett
(Chairman), Brown, and Loveland. All members of the Audit Committee meet the
independence standards established by the National Association of Securities
Dealers (NASD). The Audit Committee met five times during 2002. The Audit
Committee recommends the annual appointment of the Company's auditors, with whom
the Committee will review the scope of the audit, any non-audit assignments and
related fees, the accounting principles used by the Company in financial
reporting, internal financial auditing procedures, and the adequacy of the
Company's internal control procedures. The Audit Committee's responsibilities
are further outlined in its written charter. The audit committee report relating
to the 2002 fiscal year appears on page 18.
During 2002 the members of the Stock Option and Compensation Committee
were Messrs. Stewart (Chairman), Brown, and Rockey. The Stock Option and
Compensation Committee met twice during 2002. This Committee administers the
1995 Stock Option Plan and recommends to the Board of Directors compensation for
the Company's executive officers. The Stock Option and Compensation Committee
report relating to the 2002 fiscal year appears on page 15.
EXECUTIVE OFFICERS
In addition to Mike Brooks and David Fraedrich, the following
individuals are executive officers of the Company:
David Sharp, 47, serves as Executive Vice President and Chief Operating
Officer. He served as Senior Vice President - Sales and Operations from June
2001 until March 2002, as Vice President of Sales and Marketing from October
2000 until June 2001, and as Vice President of Manufacturing Operations and
Marketing
5
from June 2000 until October 2000. Prior to joining the Company, from September
1994 until October 1999, Mr. Sharp served in various capacities, including Vice
President and General Manager, of an operating division of H.H. Brown, Inc., a
wholly owned subsidiary of Berkshire-Hathaway, Inc., engaged in the footwear
business. Mr. Sharp also has held various senior sales and marketing positions
at Acme Boot Co., Inc. and Converse, Inc. from June 1991 until September 1994.
James E. McDonald, 42, joined the Company in June 2001 and serves as
Vice President and Chief Financial Officer. Prior to joining the Company, from
July 1996 until June 2001, Mr. McDonald served as Chief Financial Officer for
two operating divisions of H.H. Brown, Inc., a wholly owned subsidiary of
Berkshire-Hathaway, Inc., engaged in the footwear business. Mr. McDonald also
served as Controller of Wright's Knitwear Corporation, a privately held
manufacturer of apparel.
Officers are elected annually by the Board of Directors and serve at
its discretion. There are no family relationships among directors and executive
officers of the Company.
OWNERSHIP OF COMMON STOCK BY MANAGEMENT
The following table sets forth information regarding beneficial
ownership of the Company's common stock by each director, each of the Company's
executive officers named in the Summary Compensation Table, and the directors
and executive officers of the Company as a group as of February 28, 2003:
NUMBER OF SHARES BENEFICIALLY PERCENT OF
NAME OWNED(1) CLASS(1)
- -------------------------------- ----------------------------- -------------------
Mike Brooks 453,437 (2) 9.9%
Leonard L. Brown 27,960 (2)(3) *
Glenn E. Corlett 14,710 (2)(3) *
David Fraedrich 174,100 (2)(4) 3.8%
James E. McDonald 12,500 (2) *
Curtis A. Loveland 58,210 (2)(3) 1.3%
Robert D. Rockey 15,960 (2)(3) *
David Sharp 32,500 (2) *
James L. Stewart 33,210 (2)(3) *
All Directors and Executive
Officers as a Group (9 persons) 822,587 (2) 17.2%
- --------------------------
* indicates less than 1%
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission which generally attribute beneficial
ownership of securities to persons who possess sole or shared voting power
and/or investment power with respect to those securities. Except as
otherwise noted, none of the named individuals shares with another person
either voting or investment power as to the shares reported. "Percentage of
Class" is calculated by dividing the number of shares beneficially owned by
the total number of outstanding shares of the Company on February 28, 2003,
plus the number of shares such person has the right to acquire within 60
days of February 28, 2003.
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(2) Includes 96,500 shares of common stock for Mr. Brooks, 25,000 shares of
common stock for Mr. Brown, 12,500 shares of common stock for Mr. Corlett,
75,000 shares of common stock for Mr. Fraedrich, 25,000 shares of common
stock for Mr. Loveland, 12,500 shares of common stock for Mr. McDonald,
13,750 shares of common stock for Mr. Rockey, 32,500 shares of common stock
for Mr. Sharp, 25,000 shares of common stock for Mr. Stewart, and 317,750
shares of common stock for all directors and executive officers as a group,
which could be acquired under stock options exercisable within 60 days of
February 28, 2003.
(3) Includes 477 restricted shares of common stock to which each of Messrs.
Brown, Corlett, Loveland, Rockey, and Stewart has a right to acquire within
60 days of February 28, 2003, as payment of an annual retainer which vests
quarterly upon continued service as a director.
(4) Includes 400 shares of common stock owned by Mr. Fraedrich's spouse. Mr.
Fraedrich disclaims beneficial ownership of these shares.
OWNERSHIP OF COMMON STOCK BY PRINCIPAL SHAREHOLDERS
The following table sets forth information as of February 28, 2003
(except as noted below), relating to the beneficial ownership of common stock by
each person known by the Company to own beneficially more than 5% of the
outstanding shares of common stock.
NUMBER OF SHARES
NAME OF OF COMMON STOCK PERCENT OF
BENEFICIAL OWNER BENEFICIALLY OWNED(1) CLASS(1)
- -------------------------------------- --------------------- ----------
Mike Brooks 453,437 (2) 9.9%
c/o Rocky Shoes & Boots, Inc.
39 East Canal Street
Nelsonville, Ohio 45764
Benson Associates, LLC 420,900 (3) 9.4%
111 S. W. Fifth Avenue, Suite 2130
Portland, Oregon 97204
Fifth Third Bancorp / Fifth Third Bank 378,350 (4) 8.5%
Fifth Third Center
Cincinnati, Ohio 45263
Dimensional Fund Advisors Inc. 297,000 (5) 6.5%
1299 Ocean Avenue
Santa Monica, California 90401
Thomas G. Berlin 268,389 (6) 6.0%
37500 Eagle Road
Willoughby Hills, Ohio 44094
Fleet Boston Corporation 265,700 (7) 6.0%
One Federal Street
Boston, Massachusetts 02110
- ----------------------
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(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission which generally attribute beneficial
ownership of securities to persons who possess sole or shared voting power
and/or investment power with respect to those securities. Except as
otherwise noted, none of the named individuals shares with another person
either voting or investment power as to the shares reported. "Percentage of
Class" is calculated by dividing the number of shares beneficially owned by
the total number of outstanding shares of the Company on February 28, 2003,
plus the number of shares such person has the right to acquire within 60
days of February 28, 2003.
(2) Includes 96,500 shares of common stock for Mike Brooks which could have
been acquired under stock options exercisable within 60 days of February
28, 2003.
(3) Based on information filed on Schedule 13G with the Securities and Exchange
Commission on February 5, 2003. As of March 6, 2003, Benson Associates, LLC
owned no shares of the Company's common stock.
(4) Based on information filed on Schedule 13G with the Securities and Exchange
Commission on February 14, 2003.
(5) Based on information filed on Schedule 13G with the Securities and Exchange
Commission on February 10, 2003.
(6) Based on information filed on Schedule 13D with the Securities and Exchange
Commission on July 30, 2002.
(7) Based on information filed on Schedule 13G with the Securities and Exchange
Commission on February 14, 2003.
8
EXECUTIVE COMPENSATION
The following table sets forth certain information regarding
compensation paid during each of the Company's last three complete fiscal years
to the Company's Chief Executive Officer and the only other executive officers
of the Company whose combined salary and bonus exceeded $100,000 for 2002.
SUMMARY COMPENSATION TABLE
LONG TERM
ANNUAL COMPENSATION COMPENSATION
NAME AND FISCAL YEAR ------------------- ------------ ALL OTHER
PRINCIPAL POSITION ENDED SALARY BONUS OPTIONS (#) COMPENSATION
- ---------------------------- ----------- -------- -------- ------------ ------------------
Mike Brooks(1) 12/31/02 $250,000 $52,500 20,000 $ 33,012 (2)(3)(4)
Chairman, President, and 12/31/01 $210,000 $72,823 12,000 $ 33,007 (2)(3)
Chief Executive Officer of 12/31/00 $210,000 $ 0 10,000 $ 13,402 (2)(3)
the Company, Five Star, and
Lifestyle
David Fraedrich(1) 12/31/02 $175,000 $20,000 10,000 $ 24,652 (2)(3)(4)
Senior Vice President and 12/31/01 $175,000 $38,500 12,000 $ 24,907 (2)(3)
Treasurer of the Company, 12/31/00 $160,000 $ 0 10,000 $ 8,446 (2)(3)
Five Star, and Lifestyle
David Sharp(6) 12/31/02 $200,000 $36,000 10,000 $ 16,500 (4)
Executive Vice President and 12/31/01 $175,000 $38,500 20,000 $ 0
Chief Operating Officer of 12/31/00 $ 82,692 $ 0 40,000 $ 0
the Company, Five Star, and
Lifestyle
James E. McDonald(7) 12/31/02 $165,000 $18,000 10,000 $ 23,400 (5)
Vice President and Chief 12/31/01 $ 85,673 $17,135 40,000 $ 0
Financial Officer of the
Company, Five Star, and
Lifestyle
- ------------------------
(1) The Company has entered into employment agreements with Messrs. Brooks and
Fraedrich (See "Employment Agreements" below).
(2) The Company has also entered into deferred compensation agreements with
Messrs. Brooks and Fraedrich (individually, an "Employee"). Each agreement
provides that certain benefits will be paid to the Employee or a designated
beneficiary upon retirement, death, or termination of employment with the
Company (or an affiliate). Under the agreements, the Employee qualifies for
the benefits after 15 years of service with the Company or a predecessor
corporation. If the Employee retires after age 65, the Employee or his
beneficiary will receive monthly payments ranging from $1,250 to $2,500 for
a ten-year period commencing 90 days after retirement. If the Employee dies
prior to age 55, but after qualifying for the benefits, the Employee's
9
beneficiary will receive $17,250 annually for ten years. If the Employee
dies after age 55, but before age 65, the beneficiary will receive the
greater of $17,250 annually or the amount the Employee would have received
had he terminated his employment after age 65, reduced by an amount equal
to 5/9ths of one percent times the number of months remaining before the
Employee would have reached age 65. If the Employee terminates his
employment with the Company for any reason prior to age 65, the Employee
will be entitled to receive the greater of the cash surrender value of a
policy of insurance purchased by the Company on the life of the Employee or
the amount the Employee would have received had he terminated his
employment after age 65, reduced by an amount equal to 5/9ths of one
percent times the number of months remaining before the Employee would have
reached age 65. Finally, the agreement provides that the Employee will not,
during or after his employment with the Company, directly or indirectly,
compete with the Company or disclose any confidential information relative
to the business of the Company. If the Employee breaches this or any other
covenant under the agreement, no further payments are due or payable by the
Company to the Employee or his beneficiary and the Company has no further
liability under the agreement. The benefits under these agreements have
vested for Messrs. Brooks and Fraedrich. The amounts shown under "All Other
Compensation" for Messrs. Brooks and Fraedrich include $17,261 and $12,568,
respectively for 2001, and $6,269 and $4,081, respectively for 2002,
reflecting the present value of the benefits earned during the year
indicated. The amounts shown under "All Other Compensation" for Messrs.
Brooks and Fraedrich do not include losses of $8,704 and $7,311,
respectively for 2000.
(3) The amounts shown under "All Other Compensation" for Messrs. Brooks and
Fraedrich include $13,402 and $8,446, respectively for 2000, $15,746 and
$12,339, respectively for 2001, and $15,356 and $11,709, respectively for
2002, representing the dollar value of the benefit of premiums paid for a
split-dollar life insurance policy reflecting the present value of the
economic benefit of the premiums paid by the Company during the fiscal year
indicated. The Company has since ceased these premium payments on behalf of
Messrs. Brooks and Fraedrich.
(4) The amounts shown under "All Other Compensation" for Messrs. Brooks,
Fraedrich, and Sharp include $11,388, $8,862, and $16,500, respectively,
reflecting life insurance premiums paid by the Company in 2002.
(5) The amount shown under "All Other Compensation" for Mr. McDonald reflects
relocation costs paid by the Company to Mr. McDonald in 2002.
(6) Mr. Sharp joined the Company in June 2000.
(7) Mr. McDonald joined the Company in June 2001.
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OPTION GRANTS IN LAST FISCAL YEAR
The following table provides certain information regarding stock
options granted during 2002 to each of the executive officers.
INDIVIDUAL GRANTS POTENTIAL REALIZABLE VALUE
----------------------------------------------------- AT ASSUMED ANNUAL RATES
% OF TOTAL OF STOCK PRICE APPRECIATION
OPTIONS FOR OPTION TERM(1)
OPTIONS GRANTED TO EXERCISE --------------------------------
GRANTED EMPLOYEES IN PRICE EXPIRATION
NAME (#) FISCAL YEAR ($/SHARE) DATE 0%($) 5%($) 10%($)
- ----------------- --------- ------------ --------- ---------- ----- ------- --------
Mike Brooks 20,000(2) 12.2% $5.77 1/2/2010 $0 $55,098 $131,970
David Fraedrich 10,000(2) 6.1% $5.77 1/2/2010 $0 $27,549 $ 65,985
David Sharp 10,000(2) 6.1% $5.77 1/2/2010 $0 $27,549 $ 65,985
James E. McDonald 10,000(2) 6.1% $5.77 1/2/2010 $0 $27,549 $ 65,985
- ----------
(1) The amounts under the columns labeled "5%($)" and "10%($)" are included by
the Company pursuant to certain rules promulgated by the Securities and
Exchange Commission and are not intended to forecast future appreciation,
if any, in the price of the Company's common stock. Such amounts are based
on the assumption that the option holders hold the options granted for
their full term. The actual value of the options will vary in accordance
with the market price of the Company's common stock. The column headed
"0%($)" is included to illustrate that the options were granted at fair
market value and option holders will not recognize any gain without an
increase in the stock price, which increase benefits all shareholders
commensurately.
(2) On January 2, 2002, incentive options to purchase 20,000, 10,000, 10,000,
and 10,000 shares, respectively, of common stock were granted to Messrs.
Brooks, Fraedrich, Sharp, and McDonald. All incentive options were granted
at an exercise price equal to the fair market value of the Company's common
stock on the date of grant. These options vest and become exercisable at a
rate of 25% per year employed after the date of grant, and expire on the
eighth anniversary of the date of grant.
11
AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUE TABLE
The following table provides certain information regarding the exercise
of stock options during 2002, and the number and value of stock options held by
the executive officers named in the Summary Compensation Table as of December
31, 2002.
VALUE OF UNEXERCISED
SHARES NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS AT
ACQUIRED ON VALUE OPTIONS AT FISCAL YEAR END FISCAL YEAR END ($)(1)
EXERCISE REALIZED -------------------------- ----------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------- ------------ -------- ----------- ------------- ----------- -------------
Mike Brooks -- -- 78,500 61,500 $ 4,095 $12,285
David Fraedrich -- -- 59,500 31,500 $ 4,095 $12,285
David Sharp -- -- 25,000 45,000 $16,625 $30,275
James E. McDonald -- -- 10,000 40,000 $ 5,900 $17,700
- ----------
(1) Represents the total gain which would have been realized if all
in-the-money options held at fiscal year-end had been exercised, determined
by multiplying the number of shares underlying the options by the
difference between the per share option exercise price and per share fair
market value at year-end. An option is in-the-money if the fair market
value of the underlying shares exceeds the exercise price of the option.
12
RETIREMENT PLAN
The Company's Restated Retirement Plan for Non-Union Employees (the
"Retirement Plan") is a defined benefit pension plan which is intended to
qualify under Sections 401(a) and 501(a) of the Internal Revenue Code of 1986,
as amended (the "Code"). Employees, excluding leased employees and those
employees covered by a collective bargaining agreement, are eligible to
participate in the Retirement Plan if they are at least 21 years old and have
worked at least 1,000 hours for the Company over a period of one year.
The Retirement Plan provides for the payment of a monthly retirement
benefit commencing at age 65, subject to certain early and late retirement
options. The amount of the monthly benefit is determined pursuant to a formula
contained in the Retirement Plan which takes the greater of 1.5% of the
employee's average monthly compensation, or $12.00, and multiplies it by the
employee's number of years of credited service up to a maximum of 35 years. The
average monthly compensation is determined for the three consecutive years which
gives the participant the highest average. Compensation for this purpose means
wages which are subject to federal income tax withholding.
The following table illustrates the operation of the Retirement Plan by
showing various annual retirement benefits payable to participating employees in
the compensation and years of service classifications indicated, assuming that
participants retire at age 65 and that each participant elects a joint and
survivor annuity for the lives of the participant and his or her spouse. There
is no reduction of benefits for Social Security retirement income.
YEARS OF SERVICES
----------------------------------------------------
REMUNERATION 15 20 25 30 35
- ------------- -------- -------- -------- -------- --------
$ 80,000 $ 18,000 $ 24,000 $ 30,000 $ 36,000 $ 42,000
100,000 22,500 30,000 37,500 45,000 52,500
125,000 28,125 37,500 46,875 56,250 65,625
150,000 33,750 45,000 56,250 67,500 78,750
175,000 39,375 52,500 65,625 78,750 91,875
200,000* 45,000 60,000 75,000 90,000 105,000
* The maximum pay level recognized at this time is $200,000. This maximum is
indexed with the COLA % each year, with $10,000 incremental increases.
For each of the executive officers named in the Summary Compensation
Table, the compensation covered by the Retirement Plan for 2002, was $200,000
for Mr. Brooks, $175,000 for Mr. Fraedrich, $200,000 for Mr. Sharp, and $165,000
for Mr. McDonald. The Code imposes limitations on the amount of annual benefits
payable to an individual under the Retirement Plan. This limit for the 2002 Plan
Year is $160,000. The estimated years of service for each of the executive
officers as of December 31, 2002, was 27.7 years for Mr. Brooks, 31.5 years for
Mr. Fraedrich, 2.5 years for Mr. Sharp, and 1.5 years for Mr. McDonald.
13
EMPLOYMENT AGREEMENTS
On July 1, 1995, Messrs. Brooks and Fraedrich entered into employment
agreements with the Company. Each of these employment agreements provides for a
minimum base salary and a covenant not-to-compete. The employment agreements are
substantially identical, except with respect to minimum annual base salary,
which was $250,000 for Mr. Brooks and $175,000 for Mr. Fraedrich for fiscal
2002. The employment agreements are "at will" and, therefore, do not have a
stated term.
The covenant not-to-compete contained in Messrs. Brooks and Fraedrich's
employment agreements is for the time of employment, plus a one-year period
following termination of employment; provided, that if the employee's employment
is terminated following a change in control (as defined in the employment
agreements), the covenant not-to-compete will terminate immediately. If the
agreement is terminated as a result of a change in control, or if the employee
resigns after a change in control, the employee is entitled to receive 2.99
times his average annual compensation, including bonuses and taxable fringe
benefits, over the last five taxable years immediately preceding the date of
change in control, but in no event will such payments constitute excess
parachute payments within the meaning of the Code. Under the employment
agreements, a change in control is deemed to have occurred if (i) the Company or
50% or more of its assets or earning power is acquired and less than a majority
of the outstanding voting shares of the survivor of such acquisition is owned,
immediately after such acquisition, by the owners of the voting shares of the
Company outstanding immediately prior to such acquisition, or (ii) there is a
change in a majority of the Board of Directors of the Company over any two-year
period, which has not been approved in advance by at least two-thirds of the
directors of the Company in office at the beginning of the period.
14
The following Compensation Committee Report, Performance Graph, and
Audit Committee Report shall not be deemed incorporated by reference by any
general statement incorporating by reference this Proxy Statement into any of
the Company's filings under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, except to the extent that the
Company specifically incorporates this information by reference, and shall not
otherwise be deemed filed under such Acts.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
The Stock Option and Compensation Committee (the "Compensation
Committee") has the authority and responsibility to determine and administer the
Company's officer compensation policies and to establish the salaries of
executive officers, the formula for bonus awards to executive officers, and the
grant of stock options to executive officers and other key employees under the
Company's 1995 Stock Option Plan. The Compensation Committee consists solely of
independent directors of the Company. In general, the philosophy of the
Compensation Committee is to attract and retain qualified executives, reward
current and past individual performance, provide short-term and long-term
incentives for superior future performance, and relate total compensation to
individual performance and performance of the Company.
On July 1, 1995, the Company entered into employment contracts,
approved by the Company's Board of Directors, with Mr. Brooks and Mr. Fraedrich.
The base salaries under the employment contracts are subject to review by the
Compensation Committee and may be increased periodically.
The determination of executive officer base salaries for the fiscal
year ended December 31, 2002, including increases to the minimum base salaries
fixed by the employment contracts of certain executive officers (see EMPLOYMENT
AGREEMENTS above), was based primarily on subjective factors, such as the
Compensation Committee's perception of individual performance and the executive
officer's contribution to the overall performance of the Company, and not on
specific criteria. No specific weight was given to any of these factors because
each of these factors was considered significant and the relevance of each
varies depending upon an officer's responsibilities. These factors were also
taken into account when the Compensation Committee established Mike Brooks'
salary at $250,000 for the fiscal year ended December 31, 2002.
The Company established an executive bonus program for 2002. The
bonuses payable under the executive bonus program were based on percentages of a
participant's salary. The amount of the percentage bonus depended on the
Company's pre-tax and pre-bonus profits. The percentages payable to executive
officers ranged from 11% to 75%, depending on the officer and the amount of
pre-tax profit. Four of the Company's executive officers, including Mike Brooks,
were eligible to participate in the executive bonus pool for 2002. The
percentages issued under the program were allocated at the beginning of 2002
among these four executive officers based upon the Compensation Committee's
subjective perception of each executive officer's contribution to the overall
profitability of the Company. Under the formula established by the program, Mr.
Brooks was allocated 21% of his salary as his bonus for 2002. Under the
executive bonus program, $126,500 in bonuses were awarded to executive officers
for 2002.
The purpose of the Company's 1995 Stock Option Plan is to provide
long-term incentives to key employees and motivate key employees to improve the
performance of the Company's common stock. Stock option awards are considered
annually by the Compensation Committee. The value of the stock options awarded
is entirely dependent upon the Company's stock performance over a period of
time.
15
The number of shares of common stock subject to the options granted
during 2002, was determined based on a subjective evaluation of the past
performance of the individual, the total compensation being paid to the
individual, the individual's scope of responsibility, and the anticipated value
of the individual's contribution to the Company's future performance. No
specific weight was given to any of these factors. Although information as to
the options awarded to each executive officer during previous years was reviewed
by the Compensation Committee, the Compensation Committee did not consider the
total amount of options held by an officer in determining the size of an option
awarded for 2002.
Options were granted under the 1995 Stock Option Plan by the Company
during 2002 to four executive officers, including Mike Brooks, and 31 other key
employees. Each stock option awarded during 2002 had an exercise price equal to
the fair market value of the underlying common stock of the Company on the date
of the grant. The options granted during 2002 vest and become exercisable at the
rate of 25% per year if the option holder remains employed at the time of
vesting and terminate eight years from the date of grant. All options granted
during 2002 to employees are subject to certain forfeiture restrictions in the
1995 Stock Option Plan. Mike Brooks received 20,000 option shares, 12.2% of all
option shares granted to employees during 2002.
The Budget Reconciliation Act of 1993 amended the Code to add Section
162(m) which bars a deduction to any publicly held corporation for compensation
paid to a "covered employee" in excess of $1,000,000 per year. The Compensation
Committee does not believe that this law will impact the Company because the
current level of compensation for each of the Company's executive officers is
well below the $1,000,000 salary limitation.
STOCK OPTION AND COMPENSATION COMMITTEE
James L. Stewart, Chairman
Leonard L. Brown
Robert D. Rockey
16
PERFORMANCE GRAPH
The following Performance Graph compares the performance of the Company
with the NASDAQ Stock Market Composite Index and the Standard & Poor's Footwear
Index, which is a published industry index. The comparison of the cumulative
total return to shareholders for each of the periods assumes that $100 was
invested on December 31, 1997, in the common stock of the Company, and in the
NASDAQ Stock Market Composite Index and the Standard & Poor's Footwear Index and
that all dividends were reinvested.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG ROCKY SHOES & BOOTS, INC., THE NASDAQ STOCK MARKET (U.S.) INDEX
AND THE S & P FOOTWEAR INDEX
[LINE GRAPH]
Cumulative Total Return
--------------------------------------------------------
12/97 12/98 12/99 12/00 12/01 12/02
ROCKY SHOES & BOOTS, INC. 100.00 38.52 50.00 25.41 37.84 34.36
NASDAQ STOCK MARKET (U.S.) 100.00 140.99 261.48 157.42 124.89 86.34
S & P FOOTWEAR 100.00 97.91 116.20 140.77 142.64 118.38
* $100 invested on 12/31/97 in stock or index-including reinvestment of
dividends. Fiscal year ending December 31.
Copyright (C) 2002 Standard & Poor's, a division of The McGraw-Hill Companies,
Inc. All rights reserved. www.researchdatagroup.com/S&P.htm
17
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
GENERAL. In accordance with the Audit Committee Charter adopted by the
Board of Directors, the Audit Committee assists the Board in fulfilling its
responsibility for oversight of the quality and integrity of the accounting,
auditing, and financial reporting practices of the Company. During the 2002
fiscal year, the Audit Committee met five times.
REVIEW AND DISCUSSION WITH INDEPENDENT ACCOUNTANTS AND AUDITORS. In
fulfilling its oversight responsibility as to the audit process, the Audit
Committee obtained from Deloitte & Touche LLP a formal written statement
describing all relationships between Deloitte & Touche LLP and the Company that
might bear on Deloitte & Touche LLP's independence consistent with Independence
Standards Board Standard No. 1, Independence Discussions with Audit Committees,
discussed with Deloitte & Touche LLP any relationships that may impact Deloitte
& Touche LLP's objectivity and independence, and satisfied itself as to Deloitte
& Touche LLP's independence. The Audit Committee also discussed with management
and Deloitte & Touche LLP the quality and adequacy of the Company's internal
controls. In addition, the Audit Committee reviewed and discussed with Deloitte
& Touche LLP all communications required by generally accepted auditing
standards, including those described in Statement on Auditing Standards No. 61,
Communication with Audit Committees, and, with and without management present,
discussed and reviewed the results of Deloitte & Touche LLP's examination of the
consolidated financial statements.
REVIEW WITH MANAGEMENT. The Audit Committee reviewed and discussed the
audited consolidated financial statements of the Company as of and for the
fiscal year ended December 31, 2002 with management. Management has the
responsibility for the preparation of the Company's consolidated financial
statements, and Deloitte & Touche LLP has the responsibility for the examination
of those statements.
AUDIT FEES. The aggregate fees billed for professional services
rendered by Deloitte & Touche LLP, the member firm of Deloitte Touche Tohmatsu,
and their respective affiliates (collectively, "Deloitte & Touche LLP," which
includes Deloitte Consulting), for the audits of the Company's annual
consolidated financial statements, including those for its subsidiary, Lifestyle
Footwear, Inc., for the 2002 fiscal year and the reviews of the financial
statements included in the Company's Quarterly Reports on Form 10-Q for the
fiscal year (collectively, the "Audit Services") were $289,490 (including direct
engagement expenses).
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES. Deloitte
& Touche LLP did not render any professional services described in Paragraph
(c)(4)(ii) of Rule 2-01 of Regulation S-X (17 CFR 210.2-01) (the "Financial
Information Systems Design and Implementation Services") during the 2002 fiscal
year for the Company.
ALL OTHER FEES. The aggregate fees billed for services rendered to the
Company by Deloitte & Touche LLP, other than the Audit Services and the
Financial Information Systems Design and Implementation Services, for the 2002
fiscal year (the "Other Services") were $152,541, including audit related
services of $16,500 and non-audit related services of $136,041. The audit
related services include fees for accounting consultation services related to
standard cost review, accounting treatment for 2002 variable options, and SFAS
No. 142 (goodwill and other intangible assets) implementation, and the non-audit
related services include fees for tax compliance and tax planning.
18
CONCLUSION. Based on the reviews and discussions with management and
Deloitte & Touche LLP noted above, the Audit Committee recommended to the Board
that the Company's audited consolidated financial statements be included in the
Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2002
to be filed with the Securities and Exchange Commission. The Audit Committee
also determined that the provision of the Other Services was compatible with
maintaining Deloitte & Touche LLP's independence.
AUDIT COMMITTEE
Glenn E. Corlett, Chairman
Leonard L. Brown
Curtis A. Loveland
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION / RELATED PARTY
TRANSACTIONS
During 2002, the members of the Stock Option and Compensation Committee
were Messrs. Stewart (Chairman), Brown and Rockey. None of these members was an
executive officer or employee of the Company or its subsidiaries during or prior
to his service as a member of the Stock Option and Compensation Committee.
Certain other directors, executive officers, and principal shareholders of the
Company, or members of their immediate families, have participated in
transactions with, or have had certain business relationships with, the Company
during 2002.
The Company leases its 41,000 square foot manufacturing facility in
Nelsonville, Ohio, from the William Brooks Real Estate Company, an Ohio
corporation, 20% of which is owned by Mike Brooks. The lease expires in March
2004 and is renewable for one-year terms. The lease provides for rent at the
rate of $5,000 per month for the last two years of the lease term. The Company
believes, based on its knowledge of comparable properties, that this lease was
made on terms no less favorable to the Company or its affiliates than it could
have obtained from unrelated parties.
The Company has proposed a transaction in which it would purchase the
home of Mark Pitts, Vice President of National Accounts of the Company and
son-in-law of Mr. Brooks. The Company would purchase the home at an appraised
value, less an amount for customary real estate commission. The Company would
then list the home for sale and pay all costs associated with owning and selling
the home. The Board of Directors, with Mr. Brooks abstaining, has approved the
proposed transaction.
Mr. Loveland, a director of the Company, is a partner in the law firm
of Porter, Wright, Morris & Arthur LLP, which provides legal services to the
Company.
The Company believes that all terms of the transactions and existing
arrangements set forth above are no less favorable to the Company than similar
transactions and arrangements which might have been entered into with unrelated
parties.
19
INDEPENDENT ACCOUNTANTS
Deloitte & Touche LLP served as the independent accountants for the
Company for the 2002 fiscal year and throughout the periods covered by the
consolidated financial statements. Representatives of Deloitte & Touche LLP are
expected to attend the Annual Meeting in order to respond to questions from
shareholders, and they will have the opportunity to make a statement.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's officers and directors, and greater than 10%
shareholders, to file reports of ownership and changes in ownership of the
Company's securities with the Securities and Exchange Commission. Copies of the
reports are required by SEC regulation to be furnished to the Company. Based on
its review of such reports and written representations from reporting persons,
the Company believes that all filing requirements were complied with during
fiscal 2002.
PROPOSALS BY SHAREHOLDERS FOR 2004 ANNUAL MEETING
Each year the Board of Directors submits its nominations for election
of directors at the Annual Meeting of Shareholders. Other proposals may be
submitted by the Board of Directors or the shareholders for inclusion in the
Proxy Statement for action at the Annual Meeting. Any proposal submitted by a
stockholder for inclusion in the Proxy Statement for the Annual Meeting of
Stockholders to be held in 2004 must be received by the Company (addressed to
the attention of the Secretary) on or before December 15, 2003. Any stockholder
proposal submitted outside the processes of Rule 14a-8 under the Securities
Exchange Act of 1934 for presentation at our 2004 annual meeting will be
considered untimely for purposes of Rule 14a-4 and 14a-5 if notice thereof is
received by the Company after March 1, 2004. To be submitted at the meeting, any
such proposal must be a proper subject for stockholder action under the laws of
the State of Ohio.
OTHER MATTERS
As of the date of this Proxy Statement, management knows of no other
business that will come before the meeting. Should any other matter requiring a
vote of the shareholders arise, the proxy in the enclosed form confers upon the
persons designated to vote the shares discretionary authority to vote with
respect to such matter in accordance with their best judgment.
The Company's Annual Report to Shareholders for the fiscal year ending
December 31, 2002, including financial statements, was furnished to shareholders
concurrently with the mailing of this proxy material.
By order of the Board of Directors,
Curtis A. Loveland
Secretary
20
The undersigned gives unto said attorneys and proxies, or substitutes, full
power and authority to do whatsoever in their opinion may be necessary or proper
to be done in the exercise of the power hereby conferred, including the right to
vote for any adjournment, hereby ratifying all that said attorneys and proxies,
or substitutes, may lawfully do or cause to be done by virtue hereof. Any of the
said attorneys and proxies, or substitutes, who shall be present and shall act
at the meeting shall have and may exercise all the powers of said attorneys and
proxies hereunder.
THIS PROXY, WHEN EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE PROPOSAL.
The undersigned hereby acknowledges receipt of the Notice of the Annual
Meeting of Shareholders, dated April 18, 2003, the Proxy Statement and the
Annual Report furnished herewith. Any proxy heretofore given to vote said shares
is hereby revoked.
Please sign and date this Proxy below and return it in the enclosed
envelope.
Dated ____________________, 2003
_________________________________
(Signature)
_________________________________
(Signature)
SIGNATURE(S) SHALL AGREE WITH THE
NAME(S) PRINTED ON THIS PROXY. IF
SHARES ARE REGISTERED IN TWO
NAMES, BOTH SHAREHOLDERS SHOULD
SIGN THIS PROXY. IF SIGNING AS
ATTORNEY, EXECUTOR, ADMINISTRATOR,
TRUSTEE OR GUARDIAN, PLEASE GIVE
YOUR FULL TITLE AS SUCH. THIS
PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS.
ROCKY SHOES & BOOTS, INC.
39 EAST CANAL STREET, NELSONVILLE, OHIO 45764
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS -- MAY 20, 2003
The undersigned hereby appoints MIKE BROOKS, DAVID FRAEDRICH, and
CURTIS A. LOVELAND, or any one of them acting alone, my attorneys and proxies,
with full power of substitution to each, to vote all shares of Common Stock
which the undersigned is entitled to vote at the Annual Meeting of Shareholders
of Rocky Shoes & Boots, Inc. to be held on May 20, 2003, 4:00 p.m., local time,
at Porter, Wright, Morris & Arthur LLP, 29th Floor, located at 41 South High
Street, Columbus, Ohio, and at any adjournment thereof, with all of the powers I
would have if personally present, for the following purposes:
1. ELECTION OF CLASS I DIRECTORS
[ ] FOR all nominees listed below (except as marked to the
contrary).
[ ] WITHHOLD AUTHORITY to vote for all nominees below.
Mike Brooks Glenn E. Corlett James L. Stewart
(INSTRUCTIONS: Do not check "WITHHOLD AUTHORITY" to vote for
only a certain individual nominee. To withhold authority to
vote for any individual nominee, strike a line through the
nominee's name and check "FOR").
2. TO TRANSACT such other business as may properly come before the meeting
and any adjournment thereof.