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):
[ 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:
---------------------------------------------------------------
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 filing 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:
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<PAGE>
TRIANGLE PACIFIC CORP.
16803 Dallas Parkway
Dallas, Texas 75248
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held On May 5, 1998
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 Tuesday, May 5, 1998, 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 II and whose term expires at the annual
meeting, for a three-year term expiring in 2001;
2. To approve the appointment of Arthur Andersen LLP as
independent auditors for the Company for the fiscal year ending January
1, 1999; and
3. To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
The Board of Directors has fixed the close of business on March 23, 1998
as the record date for the determination of shareholders entitled to notice of
and to vote at the annual meeting or any adjournment or postponement 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 1997 and financial statements
for the fiscal year ended January 2, 1998 are contained in the Company's 1997
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
Paul L. Barrett
Secretary
Dallas, Texas
April 2, 1998
<PAGE>
TRIANGLE PACIFIC CORP.
16803 Dallas Parkway
Dallas, Texas 75248
PROXY STATEMENT
For Annual Meeting of Shareholders
To Be Held on May 5, 1998
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 April 2, 1998.
Proxy Cards
The enclosed proxy card serves to appoint proxies for record holders of
the common stock, par value $.01 per share (the "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 (i) for election of the directors named in the proxy, (ii) for
approval of the appointment of Arthur Andersen LLP as independent auditors for
the Company for the fiscal year ending January 1, 1999, and (iii) in
accordance with the discretion of the named attorneys-in-fact on other matters
properly brought before the meeting. 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.
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 votes required to block approval of such proposal.
Abstentions with respect to such proposal will effectively count as a vote
against such proposal.
<PAGE>
VOTING SECURITIES
The only outstanding voting security of the Company is its Common Stock.
Only holders of record of Common Stock at the close of business on March 23,
1998, 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 14,749,845
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 II directors, whose
term expires at the 1998 annual meeting, are David R. Henkel, Karen Gordon
Mills and Carson R. McKissick. The Board of Directors has nominated Mrs.
Mills and Messrs. Henkel and McKissick for re-election as directors of the
Company, each to serve a three-year term expiring at the 2001 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 1998 annual meeting,
is presented below.
CLASS I DIRECTORS
Floyd F. Sherman,
age 58, 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 60, 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. Pillowtex
Corporation manufactures and markets textile
furnishings for the bedroom and bathroom.
Bruce A. Karsh,
age 42, director since 1997 Mr. Karsh currently serves as President and
Principal of Oaktree Capital Management, LLC
("Oaktree"), an investment management firm
which he co-founded in April 1995. He also
serves 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 the
founding of Oaktree, he served as a Managing
Director of TAMCO and its affiliated entity
Trust Company of the West. Oaktree and
Special Credits provide investment advice and
asset management services, primarily to
institutional investors. Mr. Karsh is a
director of Furniture Brands International,
the parent company of the Broyhill, Lane and
Thomasville furniture companies and
Littelfuse, Inc., a manufacturer of fuses for
electronic products and automobiles.
<PAGE>
CLASS II DIRECTORS
David R. Henkel,
age 46, director since 1992 Mr. Henkel is a private investor. From 1994
to 1997, he was with 7th Level, Inc., an
interactive entertainment company; serving
from 1995 to 1997 as Chief Operating Officer
and from 1994 to 1995 as Executive Vice
President and Chief Financial Officer. Mr.
Henkel had also been a director of 7th Level
from 1993 to 1997. Prior thereto, Mr. Henkel
had been 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.
Karen Gordon Mills,
age 44, 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 E.S. 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 65, director since 1993 Mr. McKissick has been Managing Director of
Corporate Development Company since 1992.
From 1992 to December 1996 he had been a
Senior Advisor of Trust Company of the West,
an investment management company. Mr.
McKissick is also a director of Alexander &
Baldwin, Inc. and Peregrine Real Estate Trust.
CLASS III DIRECTORS
B. William Bonnivier,
age 55, director since 1992 Mr. Bonnivier has been President, Chief
Executive Officer and a director of Chatham
Technologies, Inc. ("Chatham"), a company that
he co-founded in August 1997. Chatham designs,
manufacturers and markets custom, integrated
electronic enclosures, primarily for the
global telecommunications industry. Mr.
Bonnivier has been Vice Chairman and a
Director of Maxim Technologies, Inc., an
environmental consulting firm since May 1995.
Prior thereto, he had been the Chairman and
Chief Executive Officer of Princeton
Packaging, Inc. since March 1991. Prior
thereto, Mr. Bonnivier was President, Chief
Operating Officer and a director of Snyder
General Corporation, a manufacturer of heating
and air conditioning products.
Charles M. Hansen, Jr.,
age 57, director since 1992 Mr. Hansen has been President of Pillowtex
Corporation since 1974 and, in addition,
became Chairman of the Board and Chief
Executive Officer of that company in December
1992. Pillowtex Corporation manufactures and
markets textile furnishings for the bedroom
and bathroom.
Jack L. McDonald,
age 64, director since 1992 Mr. McDonald has been Chairman of the Board
and Chief Executive Officer of New Millennium
Homes, L.L.C. since September 1997. Prior
thereto, Mr. McDonald was a private investor
and consultant for over five years. He also
served as President and Chief Operating
Officer of Centex Corporation from 1978 until
his retirement from Centex in 1985. Mr.
McDonald is a director of Bally's Grand, Inc.
and American Home Star Corp.
ADDITIONAL INFORMATION REGARDING THE BOARD OF DIRECTORS
<PAGE>
Board Meetings and Committees
During 1997, the Board of Directors held seven 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 1997,
with the exception of Mr. Karsh.
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 1997 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
(Chairman), Karsh and McDonald. 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 (two meetings). The Compensation Committee
consists of four non-employee directors, Messrs. Hansen, McDonald
(Chairman) 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 management
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 23, 1998 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>
<CAPTION>
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 40.1%
865 South Figueroa Street
Los Angeles, California 90017
Hibridge Capital Corporation (3) 804,146 5.5%
Seven Mile Beach
Grand Cayman, Cayman Islands
British West Indies
United High Income Fund, Inc.
and United High Income Fund II, Inc. 788,286 5.3%
6300 Lamar Avenue
P. O. Box 29217
Shawnee Mission, Kansas 66201-9217
BEA Associates 774,879 5.3%
153 East 53rd Street
One City Corp. Center
New York, New York 10022
</TABLE>
[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").
Certain 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 (the "SEC") 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 the most recent Schedule
13D filed by TCW, 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 TCW affiliates provide investment advice and management
services to entities that own 5,570,131 of the shares of Common Stock
included in the table. Oaktree may be deemed to be a beneficial owner of
an additional 159,716 shares of Common Stock owned by a third party
managed account for which Oaktree provides investment advisory and
management services.
(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.
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of March 23, 1998, 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>
<CAPTION>
Common Stock Beneficially Owned (1)
-----------------------------------
Number Percent of
Name of Shares Class
- ---- -------------- -----------
<S> <C> <C>
Directors
B. William Bonnivier (2) 13,000 *
Charles M. Hansen, Jr. (2) 8,000 *
David R. Henkel (2) 13,000 *
Bruce A. Karsh (3) 124,278 *
Jack L. McDonald (2) 8,000 *
M. Joseph McHugh (4) 176,831 1.2%
Carson R. McKissick (2) 9,000 *
Karen Gordon Mills (2) 10,867 *
Floyd F. Sherman (4) 225,618 1.5%
Named Executive Officers (excluding
any director named above)
Robert J. Symon (4) 135,331 *
Michael J. Kearins (4) 91,102 *
Charles A. Engle (4) 66,862 *
All directors and executive
officers as a group (20 persons) 1,116,539 7.6%
* less than 1%
</TABLE>
[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 8,000 shares issuable to each of such individuals upon exercise
of stock options granted to them under the Company's Nonemployee Director
Stock Option Plan.
(3) Does not include 5,729,847 shares (38.9%) of the outstanding Common Stock
of which Oaktree or TCW and its affiliates 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 163,818,
107,618, 78,118, 59,776 and 48,391 shares, respectively, issuable to such
individuals upon exercise of stock options held by them, as determined in
accordance with Rule 13d-3 under the Exchange Act.
<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 SEC or subject to the SEC's proxy rules, except for the
required disclosure herein, or to the liabilities of Section 18 of 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 1997 were below the
average for the peer group companies.
Annual cash incentive compensation payments to executive officers related
to fiscal 1997 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.
The Triangle Pacific Corp. 1993 Long-Term Incentive Compensation Plan
(the "Long-Term Incentive Plan") was approved by the Board of Directors and
the shareholders 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.
<PAGE>
Under the Long-Term Incentive Plan, on May 7, 1997 the Compensation
Committee awarded stock options to certain officers and 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 1997 was $400,000. Mr. Sherman's salary is reviewed annually by
the Committee. Mr. Sherman's bonus for fiscal 1997 totaled $448,720. 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 1997 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 1997 fiscal year).
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long Term
Annual Compensation Compensation
------------------------- -------------------
Other Options
Annual (number All other
Name and Compen- of Compen-
Principal Position Year Salary Bonus sation shares) sation(1)
- ------------------ ---- ------ ----- ------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
Floyd F. Sherman 1997 $400,000 $448,720 $45,280 -- $12,638
Chairman of the Board 1996 350,000 394,940 50,484 45,000 12,210
and Chief Executive 1995 300,000 275,000 52,070 -- 12,037
Officer
M. Joseph McHugh 1997 $300,000 $352,230 $22,296 -- $12,638
President and 1996 265,000 299,026 22,106 35,000 12,206
Chief Operating 1995 225,000 200,000 25,221 -- 12,037
Officer
Robert J. Symon 1997 $240,000 $281,784 $24,722 -- $12,638
Executive Vice 1996 215,000 242,606 23,151 20,000 12,203
President, Treasurer 1995 190,000 135,000 24,789 -- 12,037
and Chief Financial
Officer
Michael J. Kearins 1997 $168,000 $185,842 $27,609 20,000 $12,638
Vice President 1996 160,000 169,824 26,510 20,000 12,201
1995 155,000 104,718 29,064 -- 12,037
Charles A. Engle 1997 $178,333 $109,613 $28,980 20,000 $12,638
Vice President 1996 165,000 82,533 21,799 20,000 12,201
1995 123,000 84,194 23,525 -- 9,496
</TABLE>
[FN]
(1) 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 1995, 1996 and 1997.
<PAGE>
<TABLE>
OPTIONS GRANTED IN 1997
<CAPTION>
Potential realized
value at assumed
rates of stock price
% of appreciation for
Number Total Exer- Expir- stock option terms
of Options cise ation --------------------
Name Shares Granted Price Date 5% 10%
- ------------------ ------ ------- ----- ------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Floyd F. Sherman -- -- -- -- -- --
M. Joseph McHugh -- -- -- -- -- --
Robert J. Symon -- -- -- -- -- --
Michael J. Kearins 20,000 7.2% $28.375 5/07/07 $356,898 $904,449
Charles A. Engle 20,000 7.2% $28.375 5/07/07 $356,898 $904,449
</TABLE>
The following table sets forth certain information with respect to
options exercised and value realized during the 1997 fiscal year, and the
unexercised options held at January 2, 1998, and the value thereof, by each of
the named executive officers.
<TABLE>
OPTION EXERCISES IN LAST FISCAL YEAR AND OPTION VALUES AT JANUARY 2, 1998
<CAPTION>
Options Value of Unexercised
at 1/2/98 In-the-Money
(Number Options at
of Shares) 1/2/98
--------------- --------------------
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 -- $1,081,531 --
2/16/94 -- -- 6,300 -- 118,125 --
3/21/94 -- -- 75,000 25,000 1,457,813 $485,938
2/15/96 -- -- 11,250 33,750 196,875 590,625
M. Joseph McHugh 6/10/92 8,600 $243,036 26,418 -- $ 815,920 --
2/16/94 -- -- 3,700 -- 69,375 --
3/21/94 -- -- 45,000 15,000 874,688 $291,563
2/15/96 -- -- 8,750 26,250 153,125 459,375
Robert J. Symon 6/10/92 3,400 $ 93,534 28,418 -- $ 877,690 --
2/16/94 -- -- 3,700 -- 69,375 --
3/21/94 -- -- 30,000 10,000 583,125 $194,375
2/15/96 -- -- 5,000 15,000 87,500 262,500
Michael J. Kearins 6/10/92 2,500 $ 72,838 7,076 -- $ 218,542 --
2/16/94 -- -- 2,700 -- 50,625 --
3/21/94 -- -- 26,250 8,750 510,234 $170,078
2/15/96 -- -- 5,000 15,000 87,500 262,500
5/7/97 -- -- -- 20,000 -- 110,000
Charles A. Engle 6/10/92 1,000 $ 28,260 8,931 -- $ 275,834 --
3/21/94 -- -- 18,750 6,250 364,453 $121,484
2/15/96 -- -- 5,000 15,000 87,500 262,500
5/7/97 -- -- -- 20,000 -- 110,000
</TABLE>
<PAGE>
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>
<CAPTION>
- ------------------------------------------------------------------------------
8/11/93 12/31/93 12/30/94 12/29/95 1/03/97 1/02/98
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Company 100 159 123 171 239 339
S&P 400 MidCap 100 106 96 128 151 196
S&P Building Materials 100 116 86 110 128 154
- ------------------------------------------------------------------------------
</TABLE>
[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.
<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, Charles A. Engle and five
other current executive officers of the Company (each an "Employment
Agreement" and collectively the "Employment Agreements"). The Employment
Agreements provide for base compensation at the employees' then 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 Messrs.
Kearins, Engle 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). Mr. Symon's
agreement has been modified to the extent that it will remain in full force
and effect except as amended to allow for his retirement on December 31, 1998,
whereupon it will terminate. Thereafter, Mr. Symon will provide services for
a period of five months as a consultant to the Company.
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 Exchange Act 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. Based solely on a review of the
copies of such reports furnished to the Company, the Company believes that 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
fiscal year 1998, 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 1999 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 3, 1998.
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 1997 ANNUAL REPORT. COPIES OF THE
COMPANY'S 1997 FORM 10-K MAY BE OBTAINED WITHOUT CHARGE BY ANY PERSON WHOSE
PROXY IS SOLICITED HEREBY UPON WRITTEN REQUEST TO PAUL L. BARRETT, 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
April 2, 1998
<PAGE>
[Proxy Card]
TRIANGLE PACIFIC CORP.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY.
WITHHOLD
AUTHORITY
FOR all to vote for FOR all nominees, except
nominees all nominees vote withheld for those named below:
[ ] [ ] [ ]
--------------------
Nominee Exceptions
1. Election of Directors
Nominees: David R. Henkel, Karen Gordon Mills,
Carson R. McKissick
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
2. Approval of appointment of Arthur Andersen LLP as independent
auditors for the Company for the fiscal year ending January 1, 1999.
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 or postponement thereof.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
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.
- ----------------------------------------------------------------
Signature(s) Date
- ----------------------------------------------------------------
Signature(s) Date
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.
<PAGE>
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 Paul L.
Barrett, 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 23, 1998, at the annual meeting of
shareholders to be held on May 5, 1998 at 9:00 a.m. at Dallas, Texas, and at
any adjournment or postponement 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.
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, AND THE PROXIES WILL USE THEIR DISCRETION WITH
RESPECT TO ANY MATTER REFERRED TO IN ITEM 3.
IMPORTANT: TO BE SIGNED AND DATED ON THE REVERSE SIDE
