SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
(Amendment No. )
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Paragraph 240.14a-11(c) or Paragraph
240.14a-12
TRIANGLE PACIFIC CORP.
(Name of Registrant as Specified In Its Charter)
TRIANGLE PACIFIC CORP.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
....................................................................
2) Aggregate number of securities to which transaction applies:
....................................................................
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
filinig fee is calculated and state how it was determined:
....................................................................
4) Proposed maximum aggregate value of transaction:
....................................................................
5) Total fee paid:
....................................................................
[ ] 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:
....................................................................
2) Form, Schedule or Registration Statement No.:
....................................................................
3) Filing Party:
....................................................................
4) Date Filed:
....................................................................
<PAGE>
TRIANGLE PACIFIC CORP.
16803 Dallas Parkway
Dallas, Texas 75248
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held On May 7, 1997
To the Shareholders of
Triangle Pacific Corp.:
The annual meeting of shareholders of Triangle Pacific Corp., a Delaware
corporation (the "Company"), will be held on Wednesday, May 7, 1997, at 9:00
a.m., local time, at the Company's offices, 16803 Dallas Parkway, Dallas,
Texas, for the following purposes:
1. To elect three directors, comprising the members of the class of
directors designated as Class I and whose term expires at the annual
meeting, for a three-year term expiring at the 2000 annual meeting;
2. To approve the appointment of Arthur Andersen LLP as independent
auditors for the Company for the fiscal year ending January 2, 1998;
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on March 21, 1997
as the record date for the determination of shareholders entitled to notice of
and to vote at the annual meeting or any adjournment thereof. Only holders of
record of Common Stock at the close of business on the record date are
entitled to notice of and to vote at the meeting. A complete list of such
shareholders will be available for examination at the offices of the Company
in Dallas, Texas during normal business hours for a period of 10 days prior to
the meeting.
A record of the Company's activities during 1996 and financial statements
for the fiscal year ended January 3, 1997 are contained in the Company's 1996
Annual Report to shareholders and in the Company's Form 10-K filed with the
Securities and Exchange Commission. The Annual Report and Form 10-K do not
form any part of the material for solicitation of proxies.
All shareholders are cordially invited to attend the meeting.
Shareholders are urged, whether or not they plan to attend the meeting, to
sign, date and mail the enclosed proxy card in the postage-paid envelope
provided. If a shareholder who has returned a proxy attends the meeting in
person, such shareholder may revoke the proxy and vote in person on any or all
matters submitted at the meeting.
By Order of the Board of Directors
Darryl T. Marchand
Secretary
Dallas, Texas
March 21, 1997
<PAGE>
TRIANGLE PACIFIC CORP.
16803 Dallas Parkway
Dallas, Texas 75248
PROXY STATEMENT
For Annual Meeting of Shareholders
To Be Held on May 7, 1997
GENERAL
This proxy statement is furnished to shareholders of Triangle Pacific
Corp. (the "Company") in connection with the solicitation by the Board of
Directors of the Company of proxies for use at the annual meeting of
shareholders to be held at the time and place and for the purposes set forth
in the accompanying notice. The approximate date of mailing of this proxy
statement and the accompanying proxy card is March 21, 1997.
Proxy Cards
The enclosed proxy card serves to appoint proxies for record holders of
Common Stock of the Company. Shares represented by a proxy in such form, duly
executed and returned to the Company and not revoked, will be voted at the
meeting in accordance with the directions given. If no direction is made, the
proxy will be voted for election of the directors named in the proxy, approval
of the appointment of Arthur Andersen LLP as independent auditors for the
Company for the fiscal year ending January 2, 1998, and in favor of all
proposals. Any shareholder giving a proxy may revoke it at any time before it
is voted by communicating such revocation in writing to the Secretary of the
Company or by executing and delivering a later-dated proxy.
Voting Procedures and Tabulation
The Company will appoint one or more inspectors of election to act at the
meeting and to make a written report thereof. Prior to the meeting, the
inspectors will sign an oath to perform their duties in an impartial manner
and according to the best of their ability. The inspectors will ascertain the
number of shares outstanding and the voting power of each, determine the
shares represented at the meeting and the validity of proxies and ballots,
count all votes and ballots, and perform certain other duties as required by
law.
The inspectors will tabulate (i) the number of votes cast for or withheld
as to the vote on each nominee for director, (ii) the number of votes cast
for, against or withheld, as well as the number of abstentions and broker non-
votes, as to the proposal to approve the appointment of the independent
auditors, and (iii) the number of votes cast for, against or withheld, as well
as the number of abstentions and broker non-votes, as to each other proposal.
The treatment and effect of abstentions and broker non-votes under Delaware
law and the Company's Certificate of Incorporation and Bylaws are described in
the following paragraphs.
An abstention or broker non-vote with respect to the election of directors
will have no effect on the voting on such matter, provided a quorum is
present, because directors are elected by a plurality of the shares of Common
Stock present in person or by proxy at the meeting and entitled to vote.
<PAGE>
The Company's Bylaws provide that the vote required to approve matters
other than the election of directors is the affirmative vote of the holders of
a majority of the shares entitled to vote on the matter and present or
represented by proxy at the meeting. The shares represented by a broker non-
vote (or other limited proxy) will not be entitled to be voted on any proposal
at the meeting and therefore will not be considered part of the voting power
present with respect to such proposal. Thus, the effect of such non-votes
with respect to each proposal (other than the election of directors) will be
to reduce the number of affirmative votes required to block approval of such
proposal. Abstentions with respect to such proposal will effectively count as
a vote against such proposal.
VOTING SECURITIES
The only voting security of the Company outstanding is its Common Stock,
par value $.01 per share ("Common Stock"). Only holders of record of Common
Stock at the close of business on March 21, 1997, the record date for the
meeting, are entitled to notice of and to vote at the meeting. On the record
date for the meeting, there were 14,712,083 shares of Common Stock outstanding
and entitled to be voted at the meeting. A majority of such shares, present
in person or represented by proxy, is necessary to constitute a quorum. Each
share of Common Stock is entitled to one vote.
ELECTION OF DIRECTORS
The Certificate of Incorporation and Bylaws of the Company provide for
three classes of directors, designated Class I, Class II and Class III, with
approximately one-third of the directors constituting each class. Directors
serve for staggered terms of three years each. The Class I directors, whose
term expires at the 1997 annual meeting, are Floyd F. Sherman, M. Joseph
McHugh and Bruce A. Karsh. The Board of Directors has nominated Messrs.
Sherman, McHugh and Karsh for re-election as directors of the Company to serve
a three-year term expiring at the 2000 annual meeting.
The directors will be elected by a plurality of the shares of Common Stock
present in person or represented by proxy at the meeting and entitled to vote.
All duly submitted and unrevoked proxies in the form enclosed will be voted
for the nominees selected by the Board of Directors, except where
authorization so to vote is withheld. The Board recommends that shareholders
vote FOR the election of its nominees for director.
Information with respect to the directors nominated for election this
year, and the directors whose terms do not expire at the 1997 annual meeting,
is presented below.
<PAGE>
CLASS I DIRECTORS
Floyd F. Sherman,
age 57, director since 1982 Mr. Sherman has served as Chairman of the
Board and Chief Executive Officer since
July, 1992. Prior to November, 1994 he
served as President of the Company since
1981. Prior to 1981, he served as
Executive Vice President of the Company.
He has been an employee of the Company
since 1973.
M. Joseph McHugh,
age 59, director since 1986 Mr. McHugh has served as President and
Chief Operating Officer of the Company
since November, 1994. Prior thereto, he
served as Senior Executive Vice President
and Treasurer of the Company since 1981.
Prior to 1981, he served as Executive Vice
President of the Company. He has been an
employee of the Company since 1976. Mr.
McHugh is also a director of Pillowtex
Corporation, a manufacturer of pillows and
other bedroom textile furnishings.
Bruce A. Karsh,
age 41, director since 1997 Mr. Karsh has served as President and
Principal of Oaktree Capital Management,
LLC ("Oaktree"), since May, 1995. He has
also served as a general partner of TCW
Special Credits ("Special Credits"), a
general partnership of which TCW Asset
Management Company ("TAMCO") is the
managing general partner, since September,
1988. Prior to May, 1995, he served as a
Managing Director of TAMCO and as
Portfolio Manager of TCW Special Credits
Fund V - The Principal Fund. Oaktree and
Special Credits provide investment advice
and management services to institutional
and individual investors, including
affiliates of the TCW Group, Inc.
CLASS II DIRECTORS
David R. Henkel,
age 45, director since 1992 Mr. Henkel has been Chief Operating
Officer of 7th Level, Inc., an interactive
entertainment company since 1995. He has
been a director since 1993. Prior to that,
he was Executive Vice President and Chief
Financial Officer, since January, 1994.
Prior thereto, Mr. Henkel had been a
director, Senior Vice President and Chief
Financial Officer of Value-Added
Communications, Inc., since April, 1993.
From April, 1991 to April, 1993, Mr.
Henkel served as Executive Vice President,
Chief Financial Officer and a director of
Micrografx, Inc., a personal computer
graphics software company. Prior thereto,
he was an audit partner at Arthur Andersen
LLP.
<PAGE>
Karen Gordon Mills,
age 43, director since 1988 Mrs. Mills has been President of MMP
Group, a management advisory company to
leveraged buyouts and company owners,
since January, 1993. From December, 1983
to January, 1993, she was a Managing
Director of ES Jacobs & Company, and Chief
Operating Officer of its Industrial Group.
Prior thereto, Mrs. Mills had been a
consultant with McKinsey & Co. and a
product manager with General Foods Corp.
Mrs. Mills is also a director of Arrow
Electronics, Inc., Telex Communications
Inc. and the Scotts Company.
Carson R. McKissick,
age 64, director since 1993 Mr. McKissick has been Senior Advisor of
Trust Company of the West, an investment
management company, since 1992. Prior
thereto, he was Managing Director of the
Mergers and Acquisitions department of
Citibank. Mr. McKissick is also a
director of Alexander & Baldwin, Inc.
CLASS III DIRECTORS
B. William Bonnivier,
age 54, director since 1992 Mr. Bonnivier has been the Vice Chairman
and Director of Corporate Planning of
Maxim Technologies, Inc., an environmental
consulting firm since May, 1995. He has
been the Chairman and Chief Executive
Officer of Refrigerant Management Systems
Inc., since December, 1993, and is a
director. Prior thereto, Mr. Bonnivier
had been the Chairman and Chief Executive
Officer of Princeton Packaging, Inc. since
March, 1991. Prior thereto he was the
President, Chief Operating Officer and a
director of SnyderGeneral Corporation, a
manufacturer of heating and air
conditioning products.
Charles M. Hansen, Jr.,
age 56, director since 1992 Mr. Hansen has been president of Pillowtex
Corporation since 1974 and, in addition,
became Chairman and Chief Executive
Officer of that company in December, 1992.
Pillowtex Corporation manufactures pillows
and other bedroom textile furnishings.
Jack L. McDonald,
age 63, director since 1992 Mr. McDonald has been a private investor
and consultant for over five years. He
served as President and Chief Operating
Officer of Centex Corporation from 1978
until his retirement in 1985. He is a
director of Amre, Inc., Bally's Grand,
Inc., U.S. Homes Corp. and American Home
Star Corp.
<PAGE>
ADDITIONAL INFORMATION REGARDING THE BOARD OF DIRECTORS
Board Meetings and Committees
During 1996 the Board of Directors held five meetings. Each director of
the Company attended at least 75% of the aggregate number of meetings of the
full Board and of the Board committees on which he or she served in 1996.
[This applies to Board and Committee Combined]
The Company has a standing Finance/Audit Committee and a standing
Compensation Committee. The Company does not have a standing nominating
committee. The members of the committees, number of meetings held by each
committee in 1996 and a brief description of the functions performed by each
committee are set forth below:
Finance/Audit Committee (two meetings). The Finance/Audit Committee
consists of four non-employee directors, Messrs. Bonnivier, Henkel ,
McDonald and Karsh. This committee is primarily responsible for reviewing
the quality of the financial reporting of the Company and the
effectiveness of the audit of the Company's financial statements by its
independent public accountants; reviewing the scope and results of such
audits; reviewing the organization and scope of the Company's internal
systems of accounting and financial control; and establishing the
accounting standards and principles to be followed by the Company.
Compensation Committee (three meetings). The Compensation Committee
consists of four non-employee directors, Messrs. Hansen, McDonald and
McKissick and Mrs. Mills. This committee approves the compensation of
officers and makes awards under the Company's 1993 Long-Term Incentive
Compensation Plan.
Compensation Committee Interlocks and Insider Participation. Mr.
McHugh, an executive officer of the Company, serves as a director of
Pillowtex Corporation. As an outside director, Mr. McHugh participated in
reviewing and approving target goals under Pillowtex Corporation's annual
manamgement incentive compensation plan. Mr. Hansen, a director of the
Company and a member of the Company's Compensation Committee, is an
executive officer and director of Pillowtex Corporation.
Compensation of Directors
Fees. Directors who are not also employees of the Company receive an
annual retainer of $30,000 or $35,000 in the event that the director is a
committee chairman for serving as such, plus $1,000 per meeting attended for
each meeting of the Finance/Audit Committee or the Compensation Committee not
held in conjunction with a regularly scheduled quarterly meeting of the Board
of Directors.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth as of March 21, 1997 information with
respect to the only persons who were known to the Company to be the beneficial
owners of more than five percent of the outstanding shares of Common Stock.
<TABLE>
Common Stock Beneficially Owned (1)
-----------------------------------
Name and Address of Number Percent of
Beneficial Owner of Shares Class
- ------------------- --------- ----------
<S> <C> <C>
The TCW Group, Inc. (through certain
affiliates which act as general partners
of limited partnerships, trustees of
certain trusts and investment managers
of third party accounts which hold shares
of Common Stock) (2) 5,909,184 40.2 %
865 South Figueroa Street
Los Angeles, California 90017
Hibridge Capital Corporation (3) 804,146 5.2 %
Seven Mile Beach
Grand Cayman, Cayman Islands
British West Indies
United High Income Fund, Inc. 788,286 5.4 %
and United High Income Fund II, Inc.
6300 Lamar Avenue
P. O. Box 29217
Shawnee Mission, Kansas 66201-9217
Bea Associates . 774,779 5.3 %
153 East 53rd Street (4)
One City Corp. Center
New York, New York 10022
- ----------
<FN>
(1) The information contained in this table with respect to beneficial
ownership reflects "beneficial ownership" as defined in Rule 13d-3 under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"). All
information with respect to the beneficial ownership of any beneficial
owner is based upon filings made by such beneficial owner with the
Securities and Exchange Commission and, unless otherwise indicated, each
beneficial owner has sole voting and investment power with respect to
shares listed as beneficially owned by such beneficial owner.
(2) The TCW Group, Inc. ("TCW") and its affiliates may be deemed to be
beneficial owners of all shares of Common Stock currently held by such
limited partnerships, third party accounts and trusts for purposes of the
reporting requirements of the Exchange Act. In a Schedule 13D filed by
TCW on March 4, 1997, TCW stated that the filing of the Schedule 13D shall
not be construed as an admission that TCW or any of its affiliates is, for
purposes of Section 13(d) or for any other purpose under the Exchange Act,
the beneficial owner of any securities covered by the Schedule 13D.
Oaktree and Special Credits provide investment advice and management
services to the entities that own 5,773,407 of the shares of Common Stock
included in the table.
(3) Hibridge Capital Corporation may be deemed to beneficially own the number
of shares of Common Stock shown opposite its name in the table by virtue
of the ownership of certain warrants to purchase such shares which have
exercise prices that range from $22.39 to $37.31 per share.
(4) In a Schedule 13G filed by BEA Associates on February 11, 1997, BEA
Associates stated that it disclaims beneficial ownership of all the shares
reported and that such securities are held in discretionary accounts which
Bea Associates manages.
</TABLE>
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth as of March 21, 1997, the beneficial
ownership of Common Stock by each director of the Company, each named
executive officer listed in the Summary Compensation Table appearing elsewhere
in this proxy statement, and all directors and executive officers as a group.
<TABLE>
Common Stock Beneficially Owned (1)
-----------------------------------
Number Percent of
Name of Shares Class
- ---- --------- ----------
<S> <C> <C>
Directors
B. William Bonnivier (2).................. 11,500 *
Charles M. Hansen, Jr. (2)................ 6,500 *
David R. Henkel (2)....................... 11,500 *
Bruce A. Karsh (3)....................... 124,278 *
Jack L. McDonald (2)...................... 6,500 *
M. Joseph McHugh (4)...................... 153,081 1.0%
Carson R. McKissick (2)................... 7,500 *
Karen Gordon Mills (2).................... 9,367 *
Floyd F. Sherman (4)...................... 205,181 1.4%
Named Executive Officers (excluding
any director named above)
Robert J. Symon (4)....................... 120,331 *
Michael J. Kearins (4).................... 72,352 *
Charles A. Engle (4)...................... 51,152 *
All directors and executive
officers as a group (18 persons)........ 980,169 6.4%
* less than 1%
- ----------
<FN>
(1) The information contained in this table with respect to beneficial
ownership reflects "beneficial ownership" as defined in Rule 13d-3 under
the Exchange Act. All information with respect to the beneficial
ownership of any director or named executive officer has been furnished by
such director or named executive officer and, unless otherwise indicated,
each director or named executive officer has sole voting and investment
power with respect to shares listed as beneficially owned by such director
or named executive officer.
(2) The number of shares set forth above as being beneficially owned by Mrs.
Mills and Messrs. Bonnivier, Hansen, Henkel, McKissick and McDonald
include 6,500 shares issuable to each of such individuals upon exercise of
stock options granted to them under the Company's Nonemployee Director
Option Plan.
(3) Does not include 5,773,407 shares of Common Stock of which Oaktree and
Special Credits may be deemed the beneficial owners, as further described
in footnote (2) under "Security Ownership of Certain Beneficial Owners"
above.
(4) The number of shares set forth above as being beneficially owned by
Messrs. Sherman, McHugh, Symon, Kearins, and Engle include 127,568,
92,468, 70,518, 43,526, and 33,681 shares, respectively, issuable to such
individuals upon exercise of currently exercisable stock options held by
them.
</TABLE>
<PAGE>
EXECUTIVE COMPENSATION
The following report of the compensation committee on executive
compensation and the information herein under "Executive Compensation-
Performance Graph" shall not be deemed to be "soliciting material" or to be
"filed" with the Securities and Exchange Commission (the "SEC") or subject to
the SEC's proxy rules, except for the required disclosure herein, or to the
liabilities of Section 18 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and such information shall not be deemed to be
incorporated by reference into any filing made by the Company under the
Securities Act of 1933, as amended, or the Exchange Act .
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the "Committee") is
composed of Messrs. Charles M. Hansen, Jr., Carson R. McKissick and Jack L.
McDonald, and Mrs. Karen Gordon Mills. The Committee determines on an annual
basis the compensation to be paid to the Chief Executive Officer and, based
upon the recommendations of the Chief Executive Officer, the other executive
officers. Under the supervision of the Committee, the Corporation has
developed and implemented compensation policies, plans and programs which seek
to enhance the profitability of the Company, and thus shareholder value, by
aligning closely the financial interests of the Company's executives with
those of its shareholders. The objectives of the Company's executive
compensation program are to:
- - Support the achievement of Company strategic operating objectives.
- - Provide compensation that will attract and retain superior talent and
reward the executives based upon Company and individual performance.
- - Align the executive officers' financial interests with the success of the
Company by placing a substantial portion of pay at risk (i.e. pay that is
dependent upon Company performance).
The Company's executive officer compensation program is comprised of base
salary, annual cash incentive compensation, long-term incentive compensation
in the form of stock options, restricted stock and deferred cash awards and
various benefits, including medical and profit sharing plans generally
available to salaried employees of the Company.
The objective of the compensation program is to set base salary levels for
the Company's executive officers relative to companies in the building
products manufacturing industry and to maintain base salaries that are below
the average amounts paid to senior executives with comparable qualifications,
experience and responsibilities at other companies engaged in the same or
similar business as the Company. The Compensation Committee believes base
salaries for the Company's executive officers in fiscal 1996 were below the
average for the peer group companies.
Annual cash incentive compensation payments to executive officers related
to fiscal 1996 were awarded under a performance-based annual incentive plan
(the "Annual Cash Incentive Bonus System") that made annual bonus awards based
upon pre-established objectively measurable Company and individual performance
criteria. The size of the awards made under the plan were established to
maintain the objective of providing awards sufficient to place the total cash
compensation of the executive officers at or above the average for their peer
group when the Company performs in an outstanding manner in relation to the
peer group.
<PAGE>
The Triangle Pacific Corp. 1993 Long-Term Incentive Compensation Plan (the
"Long-Term Incentive Plan") was approved by the Board of Directors and the
stockholders in 1993. The specific objective of the Long-Term Incentive Plan
is to align executive and shareholder long-term interests by creating a strong
link between executive pay and shareholder return. It is the intention of the
Company that executives develop and maintain a significant, long-term stock
ownership position in the Company's Common Stock. It is the Committee's
intention that the size of awards made to any participant under the Long-Term
Incentive Plan be in an amount that bears a relationship to the executive's
organizational responsibility and such that it encourages a balanced
perspective between short-term and long-term strategic decision making.
Under the Long Term Incentive Plan, on February 15, 1996 and April 30,
1996 the Compensation Committee awarded stock options to officers and certain
key employees of the Company.
Mr. Floyd F. Sherman has served as Chairman of the Board and Chief
Executive Officer of the Company since July, 1992. His base salary paid in
fiscal year 1996 was $350,000. Mr. Sherman's salary is reviewed annually by
the Committee. Mr. Sherman's bonus for fiscal 1996 totaled $394,940. The
bonus was determined in accordance with the Annual Cash Incentive Bonus System
based upon pre-established criteria which were approved by the Board of
Directors. The earnings performance of the Company and the Committee's
analysis of Mr. Sherman's individual contribution to the achievement of the
Company's performance were also taken into consideration. The profit sharing
and medical benefits provided to Mr. Sherman during fiscal 1996 are consistent
with the benefits provided to substantially all employees of the Company, and
where applicable, are shown in the Summary Compensation Table contained
herein.
Members of the Compensation Committee
Jack L. McDonald, Chairman
Charles M. Hansen, Jr.
Carson R. McKissick
Karen Gordon Mills
<PAGE>
The following table sets forth summary compensation data for the Chief
Executive Officer of the Company and each of the other four most highly-paid
executive officers of the Company (collectively, the "named executive
officers") for the 1996 fiscal year.
<TABLE>
SUMMARY COMPENSATION TABLE
Long Term
Annual Compensation Compensation
--------------------------- --------------------
- --------
All
Other Re- Options
De- Other
Annual stricted (number
ferred Compen-
Name and Compen- Stock of
Cash sation
Principal Position Year Salary Bonus sation (1) shares)
Awards (2)
- ------------------ ---- ------ ----- ------ -------- -------
- ------ -------
<S> <C> <C> <C> <C> <C> <C>
<C> <C>
Floyd F. Sherman 1996 $350,000 $394,940 $50,484 - 45,000
- - $12,210
Chairman of the Board 1995 300,000 275,000 52,070 - -
- - 12,037
and Chief Executive 1994 285,000 250,000 49,218 $71,088 106,300
$72,646 14,156
Officer
M. Joseph McHugh 1996 $265,000 $299,026 $22,106 - 35,000
- - $12,206
President and 1995 225,000 200,000 25,221 - -
- - 12,037
Chief Operating 1994 179,000 138,316 23,766 $40,838 63,700
$41,390 14,156
Officer
Robert J. Symon 1996 $215,000 $242,606 $23,151 - 20,000
- - $12,203
Executive Vice 1995 190,000 135,000 24,789 - -
- - 12,037
President, Treasurer 1994 170,000 128,945 21,766 $40,838 43,700
$41,390 14,156
and Chief Financial
Officer
Michael J. Kearins 1996 $160,000 $169,824 $26,510 - 20,000
- - $12,201
Vice President 1995 155,000 104,718 29,064 - -
- - 12,037
1994 150,000 115,757 23,976 $30,250 37,700
$29,713 14,156
Charles A. Engle 1996 $165,000 $ 82,533 $21,799 - 20,000
- - $12,201
Executive Vice 1995 123,000 84,194 23,525 - -
- - 9,496
President 1994 113,000 52,636 22,254 - 25,000
- - 9,780
<FN>(1) There were 12,100 restricted shares at January 3, 1997 valued at
$207,213.
Of such 12,100 restricted shares, Mr. Sherman received 4,700 restricted
shares, Messrs. McHugh and Symon each received 2,700 restricted shares and
Mr. Kearins received 2,000 restricted shares. Twenty-five percent of the
restricted shares awarded vested at the date of grant. As of February 16,
1997 all restricted shares were vested and distributed.(2) Amounts shown
for each officer consist of amounts contributed by the
Company to the Company's Profit Sharing Plan and to the Company's
Supplemental Profit Sharing and Deferred Compensation Plan that are
allocable to such officer for fiscal 1994, 1995 and 1996.
</TABLE>
<TABLE>
OPTIONS GRANTED IN 1996
Potential
realizable value at
assumed rates of stock
price
appreciation
% of Total for
stock option terms
Number of Options Exercise Expiration ------
- ----------------
Name Shares Granted Price Date 5%
10%
- ------------------ --------- --------- -------- ---------- ------
- -- ----------
<S> <C> <C> <C> <C> <C>
<C>
Floyd F. Sherman 45,000 18.9% $16.38 2/15/06
$463,417 $1,174,389
M. Joseph McHugh 35,000 14.7% $16.38 2/15/06
$360,435 $ 913,414
Robert J. Symon 20,000 8.4% $16.38 2/15/06
$205,963 $ 521,950
Michael J. Kearins 20,000 8.4% $16.38 2/15/06
$205,963 $ 521,950
Charles A. Engle 20,000 8.4% $16.38 2/15/06
$205,963 $ 521,950
</TABLE>
The following table sets forth certain information with respect to the
options exercised and value realized during the 1996 fiscal year, and the
unexercised options held at January 3, 1997, and the value thereof, by each of
the named executive officers. No options were exercised during 1996 by the
named officers, and the Company has not issued any stock appreciation rights.
<PAGE>
<TABLE>
OPTION VALUES AT JANUARY 3, 1997
Value of Unexercised
In-the-Money
Options at 1/3/97
Options at
(Number of shares)
1/3/97
Shares ------------------- ----
- ---------------
Acquired
Date on
of Exer- Value Exer- Unexer-
Exer- Unexer-
Name Grant cise Realized cisable cisable
cisable cisable
- ---------------- ------- ------ -------- ------- ------- ----
- --- ---------
<S> <C> <C> <C> <C> <C> <C>
<C>
Floyd F. Sherman 6/10/92 35,018 --
$731,351 --
2/16/94 4,725 1,575
41,340 $ 13,781
3/21/94 50,000 50,000
471,875 471,875
2/15/96 -- 45,000
- -- 337,500
M. Joseph McHugh 6/10/92 35,018 --
$731,351 --
2/16/94 2,775 925
24,281 $ 8,094
3/21/94 30,000 30,000
283,125 283,125
2/15/96 -- 35,000
- -- 262,500
Robert J. Symon 6/10/92 3,200 $61,232 31,818 --
$664,519 --
2/16/94 2,775 925
24,281 $ 8,094
3/21/94 20,000 20,000
188,750 188,750
2/15/96 -- 20,000
- -- 150,000
Michael J. Kearins 6/10/92 2,500 $52,681 9,576 --
$199,995 --
2/16/94 2,025 675
17,719 $ 5,906
3/21/94 17,500 17,500
165,156 165,156
2/15/96 -- 20,000
- -- 150,000
Charles A. Engle 6/10/92 2,145 $43,190 9,931 --
$207,409 --
3/21/94 17,500 17,500
117,969 $117,969
2/15/96 -- 20,000
- -- 150,000
</TABLE>
Performance Graph The following graph sets forth an indication of the
total shareholder return to a purchaser of Common Stock as compared to the
Standard & Poor's 400 MidCap Stock Price Index and the Standard & Poor's
Building Materials Industry Group Index. COMPARISON OF QUARTERLY
CUMULATIVE TOTAL RETURN (1) AMONG TRIANGLE PACIFIC CORP., STANDARD &
POOR'S 400 MIDCAP INDEX
AND STANDARD & POOR'S BUILDING MATERIALS INDEX
<TABLE>
------------------------------------------------------------------------
8/11/193 12/31/93 12/30/94 12/29/95 1/3/97
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Company $100 $159 $123 $171 $239
S & P 400 MidCap 100 106 96 128 151
S & P Building Materials 100 116 86 110 128
------------------------------------------------------------------------
<FN>
(1) Total return assuming reinvestment of dividends. Assumes $100 invested on
August 11, 1993, the day quotations for the Common Stock were first
carried on NASDAQ, in Common Stock , the Standard & Poor's 400 MidCap
Stock Price Index and the Standard & Poor's Building Materials Industry
Group Index.
</TABLE>
<PAGE>
Employment Agreements
In March 1995, the Company entered into amended and restated employment
agreements with Floyd F. Sherman, M. Joseph McHugh and Robert J. Symon, and
new employment agreements with Michael J. Kearins and the eight other
executive officers of the Company (each an Employment Agreement and
collectively the "Employment Agreements"). The Employment Agreements provide
for base compensation at the employees' current annual rates through the end
of 1995, with annual percentage increases not less than the percentage
increase in the Consumer Price Index, as defined in the Employment Agreements.
In addition, the Employment Agreements provide that the employees are entitled
to participate in the Annual Cash Incentive Bonus System and all other
incentive compensation plans for executive employees in effect from time to
time.
Each Employment Agreement provides for an initial employment term of three
years (for Messrs. Sherman, McHugh and Symon) or two years (for Mr. Kearins
and other executive officers). On each anniversary of the effective date of
the Employment Agreements (March 8, 1995), the employment term will be
automatically extended for one year, unless either party gives notice not to
extend. The Company may terminate the executive's employment for "cause,"
"total disability" or "inadequate performance", and the executive may
terminate his employment for any reason within six months following a "change
of control" or at any time for "good reason" (as such events permitting
termination are defined in the Employment Agreements).
If the Company terminates the executive's employment other than for cause,
total disability, or inadequate performance, or employment of the executive
terminates (other than voluntarily) within six months following a change of
control, or if the executive terminates employment for good reason, the
Company is required to pay the executive certain amounts, including a lump sum
cash payment equal to three times (for Messrs. Sherman, McHugh and Symon) or
two times (for the other executives) the executive's average annual
compensation for the preceding five years and certain benefits under the
incentive compensation plans. If the Company terminates the executive's
employment for inadequate performance, or if the executive voluntarily
terminates employment following a change of control, the Company is required
to pay the executive certain amounts, including a lump sum cash payment equal
to two times (for Messrs. Sherman, McHugh and Symon) or one and one-half times
(for the other executives) the executive's average annual compensation and
certain benefits under the incentive compensation plans. If any executive's
employment is terminated by reason of death or total disability, the executive
or his estate is entitled to receive a lump sum payment equal to the sum of
(i) one year's base salary plus (ii) the incentive compensation that would
have accrued to the executive's benefit at the end of the year of termination
had his employment continued until then.
In addition, if the Company terminates the executive's employment (other
than for cause, total disability or inadequate performance), or if the
executive terminates employment for good reason, or if a change of control
occurs during the term of the Employment Agreements, (i) all stock options and
other awards the executives hold under any Company incentive compensation or
benefit plans will become fully vested and exercisable or their market value
payable and (ii) the executive will have the right to sell to the Company any
or all shares of common Stock held by the executive at market value. The total
payments to be received by the executive following a change of control are
restricted to the maximum amount which could be deducted by the Company for
federal income tax purposes
<PAGE>
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires directors
and officers of the Company, and persons who own more than 10 percent of the
Common Stock, to file with the SEC initial reports of ownership and reports of
changes in ownership of the Common Stock. Directors, officers and more than
10 percent shareholders are required by SEC regulations to furnish the Company
with copies of all Section 16(a) forms they file.
To the Company's knowledge, based on a review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the year ended January 3, 1997, all Section
16(a) filing requirements applicable to its directors, officers and more than
10 percent beneficial owners were complied with.
APPROVAL OF AUDITORS
The Finance/Audit Committee of the Board of Directors has selected, and
the Board of Directors has approved, Arthur Andersen LLP as the principal
independent auditor to audit the financial statements of the Company for 1997,
subject to ratification by the shareholders. If the shareholders do not
approve the selection of Arthur Andersen LLP, the selection of another
independent auditor will be considered by the Finance/Audit Committee.
Representatives of Arthur Andersen LLP are expected to be present at the
annual meeting with the opportunity to make a statement if they desire to do
so, and will be available to respond to appropriate questions.
The Board of Directors unanimously recommends a vote FOR approval of this
selection.
SHAREHOLDER PROPOSALS AND OTHER MATTERS
Shareholder proposals for inclusion in the Company's proxy materials in
connection with the 1998 annual meeting of shareholders must be received by
the Company at its office in Dallas, Texas, addressed to the Secretary of the
Company, no later than December 10, 1997.
The cost of solicitation of proxies will be borne by the Company. In
addition, certain officers and employees of the Company, who will receive no
additional compensation for their services, may solicit proxies in person or
by mail, telephone, facsimile telecommunication or telegraph.
The Board of Directors does not intend to present any other matter at the
meeting and knows of no other matters that will be presented. However, if any
other matter comes before the meeting, the persons named in the enclosed proxy
intend to vote thereon in accordance with their best judgment.
THE COMPANY HAS PROVIDED WITHOUT CHARGE TO EACH PERSON WHOSE PROXY IS
SOLICITED HEREBY A COPY OF THE COMPANY'S 1996 ANNUAL REPORT. COPIES OF THE
COMPANY'S 1996 FORM 10-K MAY BE OBTAINED WITHOUT CHARGE BY ANY PERSON WHOSE
PROXY IS SOLICITED HEREBY UPON WRITTEN REQUEST TO DARRYL T. MARCHAND,
SECRETARY, TRIANGLE PACIFIC CORP., 16803 DALLAS PARKWAY, DALLAS, TEXAS 75248.
TRIANGLE PACIFIC CORP.
Floyd F. Sherman
Chairman of the Board
and Chief Executive Officer
Dallas, Texas
March 21, 1997
<PAGE>
[Proxy Card]
TRIANGLE PACIFIC CORP.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Floyd F. Sherman, M. Joseph McHugh and
Darryl T. Marchand, and each of them, proxies with power of substitution in
each, and hereby authorizes them to represent and to vote, as designated
below, all shares of Common Stock of Triangle Pacific Corp. (the "Company")
standing in the name of the undersigned on March 21, 1997, at the annual
meeting of shareholders to be held on May 7, 1997 at 9:00 a.m. at Dallas,
Texas, and at any adjournment thereof and especially to vote on the items of
business specified below, as more fully described in the notice of the meeting
and the proxy statement accompanying the same, receipt of which is hereby
acknowledged.
1. ELECTION OF DIRECTORS FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to the to vote for all
contrary belos ) [ ] nominees listed
below [ ] FLOYD
F. SHERMAN M. JOSEPH MCHUGH BRUCE A. KARSH(INSTRUCTION:
To withhold authority to vote for any individual nominee, write that nominee's
name in the space provided below.)--------------------------------------------
- ---------------------------------2. FOR [ ] AGAINST [ ] ABSTAIN [ ]
Approval of appointment of Arthur
Andersen LLP as independent auditors for the Company for the fiscal year
ending January 2, 1998.
3. In their discretion, the proxies are authorized to vote upon such other
business or matters as may properly come before the meeting or any
adjournment thereof.
(Continued and to be signed on reverse side)
<PAGE>
[Reverse of Proxy Card]
THIS PROXY, WHEN DULY EXECUTED AND RETURNED, WILL BE VOTED IN THE MANNER
DESIGNATED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF THIS PROXY IS DULY
EXECUTED AND RETURNED, BUT WITHOUT A CLEAR VOTING DESIGNATION, IT WILL BE
VOTED FOR ITEMS 1 AND 2.
The undersigned hereby revokes any proxy or proxies heretofore given to
represent or vote such Common Stock and hereby ratifies and confirms all
actions that said proxies, their substitutes, or any of them, may lawfully
take in accordance with the terms hereof.
Dated: , 1997
--------------------
---------------------------------
---------------------------------
Signature(s) of Shareholder(s)
This proxy should be signed exactly
as your name appears hereon. Joint
owners should both sign. If signed
as attorney, executor, guardian or
in some other representative
capacity, or as officer of a
corporation, please indicate your
capacity or title.
Please complete, date and sign this
proxy and return it promptly in the
enclosed envelope, which requires
no postage if mailed in the United
States.
