<PAGE>
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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
[ ] 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 Rule 14a-11(c) or Rule 14a-12
Cone Mills Corporation
(Name of Registrant as Specified In Its Charter)
Terry L. Weatherford, Secretary
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
PAYMENT OF FILING FEE (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] 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 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:
<PAGE>
April 6, 1995
DEAR SHAREHOLDER:
On behalf of the Board of Directors, we are pleased to invite you to attend
the Annual Meeting of Shareholders of Cone Mills Corporation to be held at 10:00
a.m. on Tuesday, May 9, 1995, at the Koury Convention Center, Holiday Inn Four
Seasons, 3121 High Point Road at Interstate 40, Greensboro, NC.
The notice of meeting and proxy statement accompanying this letter describe
the matters on which action will be taken. At the Annual Meeting we will also
review the Corporation's activities and provide time for questions from
shareholders.
Please sign and return the enclosed proxy form in the envelope provided as
soon as possible to ensure that your shares will be voted at the meeting.
Sincerely,
(Signature of Dewey L. Trogdon)
Dewey L. Trogdon
Chairman of the Board
(Signature of J. Patrick Danahy)
J. Patrick Danahy
President and Chief Executive Officer
(Cone logo appears here)
<PAGE>
CONE MILLS CORPORATION
1201 MAPLE STREET, GREENSBORO, NC 27405
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 6, 1995
TO THE HOLDERS OF COMMON STOCK OF
CONE MILLS CORPORATION:
The Annual Meeting of the Shareholders of Cone Mills Corporation will be
held at the Koury Convention Center, Holiday Inn Four Seasons, 3121 High Point
Road, in Greensboro, North Carolina, on Tuesday, May 9, 1995, at 10:00 a.m. for
the following purposes:
1. To elect three directors as Class III Directors, for a term of three
years or until their successors are elected and qualified.
2. To ratify the appointment of McGladrey & Pullen as independent auditors
for the Corporation for the fiscal year ending December 31, 1995.
3. To act upon such other business as may properly come before the meeting
and any adjournment thereof.
The Board of Directors of the Corporation has fixed the close of business
on March 17, 1995, as the record date for the determination of shareholders
entitled to notice of and to vote at the meeting.
YOUR PROXY IS ENCLOSED. YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING,
BUT WHETHER OR NOT YOU PLAN TO ATTEND, PLEASE DATE AND SIGN YOUR PROXY AND
RETURN IT IN THE ENCLOSED POSTAGE PAID ENVELOPE. THE GIVING OF THIS PROXY WILL
NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IN THE EVENT YOU FIND IT CONVENIENT TO
ATTEND.
TERRY L. WEATHERFORD
SECRETARY
<PAGE>
CONE MILLS CORPORATION
1201 MAPLE STREET
GREENSBORO, NC 27405
PROXY STATEMENT FOR
ANNUAL MEETING TO BE HELD MAY 9, 1995
DATED: APRIL 6, 1995
Your proxy is solicited on behalf of the Board of Directors of Cone Mills
Corporation (the "Corporation" or "Cone") for use at the Annual Meeting of
Shareholders to be held at the time and place set forth in the accompanying
Notice of Annual Meeting. It may be revoked by you at any time before it is
exercised. All unrevoked proxies that are properly executed will be voted and,
if a choice is specified with respect to any matter to be acted on, the shares
will be voted in accordance with such specifications. If no specifications are
given, the persons named in the accompanying proxy intend to vote the shares
represented thereby in favor of: (i) election of the three nominees for Director
(Class III) named herein for terms of three years; and (ii) ratification of the
Board of Directors' appointment of McGladrey & Pullen as independent auditors.
This Proxy Statement and the enclosed proxy are being first mailed to
shareholders on or about April 6, 1995. The cost of soliciting proxies will be
borne by the Corporation. In addition to solicitation by mail, arrangements will
be made with brokerage houses and other custodians, nominees and fiduciaries to
send proxy materials to their principals, and the Corporation will reimburse
them for their expenses in so doing. Personal solicitation may also be conducted
by telephone and mail by officers and employees of Cone without added
compensation. In addition the Corporation has retained Georgeson & Company, Inc.
to assist in the solicitation of proxies and distribution of proxy materials for
which it will pay approximately $5,000 in fees plus expenses.
Holders of Common Stock of record at the close of business March 17, 1995,
will be entitled to vote at the meeting. On that date 27,380,409 shares of
Common Stock were outstanding. Each share is entitled to one vote and a majority
of the shares of Common Stock outstanding is necessary to constitute a quorum
for the meeting.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth each person or entity who may be deemed to
have beneficial ownership of more than five percent (5%) of the Company's
outstanding Common Stock:
<TABLE>
<CAPTION>
NAME OF AND ADDRESS AMOUNT AND NATURE OF
OF BENEFICIAL OWNER (1) BENEFICIAL OWNERSHIP PERCENTAGE OF CLASS
<S> <C> <C>
The Equitable Companies Incorporated................................................ 2,046,600(2) 7.47%
787 Seventh Avenue
New York, N.Y. 10019
Windsor Fund, Inc................................................................... 1,900,000(3) 6.94%
P.O. Box 2600
Valley Forge, PA 19482
State of Wisconsin Investment Board................................................. 2,106,000(4) 7.69%
P.O. Box 7842
Madison, WI 53707
</TABLE>
(1) Does not include Crestar Bank, trustee of the Cone Employee Equity Plan
which held of record for the plan 2,867,418 shares of Common Stock on March
17, 1995. This represents 10.47% of the Company's outstanding Common Stock.
The plan trustee votes shares held in the plan only if participants do not
exercise pass-through voting rights, and exercises investment or dispositive
rights only in accordance with the terms of the plan. The trustee,
therefore, disclaims beneficial ownership.
(2) According to a Schedule 13G filed with the Securities and Exchange
Commission and received by the Corporation from The Equitable Companies
Incorporated ("Equitable), these shares may be deemed to be owned by a group
consisting of Equitable, AXA (a French holding company), and five French
mutual insurance companies consisting of AXA Assurances I.A.R.D. Mutuelle,
AXA Assurances Vie Mutuelle, Alpha Assurances I.A.R.D. Mutuelle, Alpha
Assurances Vie Mutuelle and Uni Europe Assurance Mutuelle. According to the
Schedule 13G, the shares are held by Alliance Capital Management L.P., a
subsidiary of Equitable. The Schedule 13G states that the group may be
deemed to exercise sole voting power as to 1,510,200 shares and sole
investment power as to 2,046,600 shares.
1
<PAGE>
(3) According to a Schedule 13G filed with the Securities and Exchange
Commission, Windsor Funds, Inc. ("Windsor") is a member of the Vanguard
Group of Investment Companies. According to the Schedule 13G, Windsor
exercises sole voting power and shared investment power over the shares.
According to a separate Schedule 13G filed with the Securities and Exchange
Commission, Wellington Management Company, 75 State Street, Boston, Mass.
02109, exercises shared investment power over the 1,900,000 shares and may
be deemed to be beneficial owner of the shares in its capacity as an
investment advisor to Windsor.
(4) According to a Schedule 13G filed with the Securities and Exchange
Commission and received by the Corporation from State of Wisconsin
Investment Board, this public pension fund has sole voting and investment
power with respect to these shares.
SECURITY OWNERSHIP OF DIRECTORS, NOMINEES
AND NAMED EXECUTIVE OFFICERS
The following table sets forth certain information with respect to the
beneficial ownership of the Corporation's Common Stock as of March 17, 1995:
<TABLE>
<CAPTION>
NAME OF DIRECTOR AMOUNT AND NATURE OF
NOMINEE OR OFFICER BENEFICIAL OWNERSHIP (1)(2)
<S> <C>
John L. Bakane (3).............................................................. 209,777
Doris R. Bray................................................................... 16,000
J. Patrick Danahy (3)(4)........................................................ 316,093
Leslie W. Gaulden (5)........................................................... 371,900
Jeanette C. Kimmel.............................................................. 123,000
Charles M. Reid................................................................. 6,000
John W. Rosenblum............................................................... 2,000
Lester J. Smith................................................................. 215,200
Dewey L. Trogdon (6)............................................................ 919,194
Richard S. Vetack (3)(7)........................................................ 213,726
Bud W. Willis III (3)(8)........................................................ 263,835
All Directors, Nominees and Officers as a Group (17 persons)(3)................. 3,448,758
<CAPTION>
NAME OF DIRECTOR
NOMINEE OR OFFICER PERCENTAGE OF CLASS
<S> <C>
John L. Bakane (3).............................................................. *
Doris R. Bray................................................................... *
J. Patrick Danahy (3)(4)........................................................ 1.15%
Leslie W. Gaulden (5)........................................................... 1.36%
Jeanette C. Kimmel.............................................................. *
Charles M. Reid................................................................. *
John W. Rosenblum............................................................... *
Lester J. Smith................................................................. *
Dewey L. Trogdon (6)............................................................ 3.36%
Richard S. Vetack (3)(7)........................................................ *
Bud W. Willis III (3)(8)........................................................ *
All Directors, Nominees and Officers as a Group (17 persons)(3)................. 12.55%
</TABLE>
* Represents less than 1%.
(1) Unless otherwise indicated, all shares are owned of record and the
beneficial ownership consists of sole voting power and sole investment
power. Includes shares subject to options which are presently exercisable or
are exercisable within 60 days of March 17, 1995 as follows: Mr. Bakane
(15,000 shares), Mr. Danahy (20,000 shares), Mr. Vetack (25,000 shares), Mr.
Willis (22,600 shares), 1,000 shares for each of Mrs. Bray, Mr. Gaulden,
Mrs. Kimmel, Mr. Reid, Mr. Rosenblum and Mr. Trogdon, and all Directors,
Nominees, and Officers as a Group (101,400 shares). Does not include 1,000
shares to be granted to each nonemployee director as of May 16, 1995,
pursuant to the 1994 Stock Option Plan for Non-Employee Directors.
(2) Does not include shares of the Corporation's Class A Preferred Stock
allocated to the individual accounts of officers in the Cone Mills
Corporation 1983 ESOP.
(3) Includes shares of Common Stock allocated to the individual accounts of
directors and Named Executive Officers in the Cone Mills Corporation
Employee Equity Plan as of December 31, 1994, as follows:
<TABLE>
<S> <C>
Mr. Bakane.................................................................................. 27,848 shares
Mr. Danahy.................................................................................. 39,731 shares
Mr. Vetack.................................................................................. 21,191 shares
Mr. Willis.................................................................................. 46,234 shares
All Directors, Nominees and Officers as a group (17 persons)................................ 244,448 shares
</TABLE>
(4) Includes 72,000 shares owned of record by Mr. Danahy's wife.
(5) Includes 100,000 shares owned of record by Mr. Gaulden's wife.
(6) Includes 250,000 shares owned of record by Mr. Trogdon's wife and 50,694
shares owned of record by the Trustee for Mr. Trogdon's Individual
Retirement Account.
(7) Includes 60,667 shares owned of record by Mr. Vetack's wife. Mr. Vetack
retired on December 31, 1994 as an active employee and officer of the
Corporation.
(8) Includes 81,506 shares owned of record by Mr. Willis' wife and two children.
2
<PAGE>
ELECTION OF DIRECTORS
The Restated Articles of Incorporation of Cone Mills Corporation provide
for a Board of Directors consisting of not less than nine (9) or more than
fifteen (15) members as determined by the majority vote of the entire Board of
Directors. The Board has set the number of directors at ten. The Restated
Articles of Incorporation further provide that the Board shall be divided into
three classes, as nearly equal in number as the then total number of directors
constituting the entire Board permits. The terms of three Class III Directors
expire at the 1995 Annual Meeting, and the persons elected at the Annual Meeting
to fill the Class III vacancies will serve terms of three years or until their
successors are elected and qualified. The Board of Directors proposes that the
three persons nominated below be elected as Class III Directors for terms
expiring at the 1998 Annual Meeting. Each person nominated below is an incumbent
director of the Corporation.
The persons nominated below will be elected if they receive a plurality of
the votes cast for their election. Abstentions and broker nonvotes will not
affect the election results if a quorum is present. Unless otherwise specified,
the persons named in the accompanying proxy intend to vote the shares
represented by proxy for election of the nominees named below. If any nominee
should not be available to serve for any reason (which is not anticipated), the
proxy holders may vote for substitute nominees designated by the Board of
Directors.
The following information is furnished with respect to the nominees:
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION; BUSINESS
EXPERIENCE PAST FIVE YEARS; DIRECTOR
NAME PRESENT AGE AND OTHER DIRECTORSHIPS SINCE
<S> <C> <C> <C>
NOMINEES FOR THREE-YEAR TERM (CLASS III)
Doris R. Bray 57 Partner, Schell Bray Aycock Abel & Livingston L.L.P. (Attorneys at Law) 1989
(1987-Present); Director, Vanguard Cellular Systems, Inc.
Dewey L. Trogdon 63 Retired March 31, 1992; Chairman of the Board of Directors 1978
(1981-Present); Chief Executive Officer of the Corporation (1980-1990);
President of the Corporation (1979-1980; 1987-1989); Director, First Union
Corporation
Bud W. Willis III 52 Executive Vice President of the Corporation as of February 17, 1995; Vice 1988
President of the Corporation (1985-1995); Executive Vice President of the
Textile Products Group (1991-1992); President, Denim Division of Textile
Products Group (1992-1994); and President, Textile Product Group since January
1, 1995
</TABLE>
The following information is furnished with respect to directors continuing
in office.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION; BUSINESS
EXPERIENCE PAST FIVE YEARS; DIRECTOR
NAME OF NOMINEE PRESENT AGE AND OTHER DIRECTORSHIPS SINCE
<S> <C> <C> <C>
CLASS I (TERM EXPIRING IN 1996)
John L. Bakane 44 Executive Vice President of the Corporation as of February 17, 1995; Chief 1989
Financial Officer of the Corporation
(1988-Present); Vice President of the Corporation (1986-1995)
Charles M. Reid 60 Director, President and Chief Executive Officer, United Guaranty Corporation 1988
(1987-Present)
Richard S. Vetack 58 Retired December 31, 1994; Senior Vice President of the Corporation and 1988
President of the Textile Products Group (1987-1994)
<CAPTION>
CLASS II (TERM EXPIRING IN 1997)
<S> <C> <C> <C>
J. Patrick Danahy 51 President and Chief Executive Officer of the Corporation (1990-Present); 1989
President and Chief Operating Officer (1989-1990); Vice President of the
Corporation and President of the Cone Finishing Division (1986-1989)
Leslie W. Gaulden 72 Retired November 30, 1987; Vice President and Controller of the Corporation 1986
(1984-1987)
Jeanette C. Kimmel 56 Private Investment Management 1971
John W. Rosenblum 51 Tayloe Murphy Professor of the Darden Graduate School of Business 1993
Administration, University of Virginia (1993-Present); Dean, Darden Graduate
School of Business Administration (1982-1993); Director, Cadmus Communications
Corporation; Chesapeake Corporation, Comdial Corporation; The Providence
Journal Company; and T. Rowe Price & Associates.
</TABLE>
3
<PAGE>
COMMITTEES AND DIRECTOR ATTENDANCE
During the year ended January 1, 1995, the Board of Directors of the
Corporation held seven meetings and the Executive, Audit, and Compensation
Committees held five, four, and two meetings respectively. Each director
attended at least 75% of the aggregate of Board of Directors' meetings and
meetings of Committees of the Board on which he or she served during 1994.
The Executive Committee generally has the same authority as the Board to
manage the affairs of the Corporation but may not make determinations with
respect to dissolutions, mergers, amendments to the Articles of Incorporation or
Bylaws, compensation or removal of directors, or declaration of dividends.
Executive Committee members are Dewey L. Trogdon, Chair, John L. Bakane, Doris
R. Bray, J. Patrick Danahy and Charles M. Reid.
The Audit Committee's principal responsibilities consist of recommending to
the Board of Directors the selection of the Corporation's independent
accountants, reviewing the scope and results of completed audits, reviewing the
Corporation's internal audit staff functions and evaluating the quality of the
Corporation's financial reporting and internal control systems. Audit Committee
members are Leslie W. Gaulden, Chair, Jeanette C. Kimmel and Doris R. Bray.
The Corporation also has a Compensation Committee. See "Compensation
Committee Report on Executive Compensation" and "Compensation Committee
Interlocks and Insider Participation."
The Board of Directors does not have a standing nominating committee;
however, in relation to nominations, the Executive Committee considers and makes
recommendations to the Board with respect to the size and composition of the
Board and candidates for membership on the Board. The Committee has not
established procedures for the submission by shareholders of proposed candidates
for its consideration.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Under federal securities laws, the Company's directors, its executive
officers, and any persons holding more than 10 percent of the Company's stock
are required to report their ownership of the Company's stock and any changes in
that ownership to the Securities and Exchange Commission. Specific due dates for
these reports have been established and the Company is required to report in
this proxy statement any failure to file by these dates during fiscal 1994. All
of these filing requirements were satisfied by its directors and officers except
that the report of one transaction in the Company's Common Stock was filed five
days late by Eugene A. Trout, Vice President of the Company. In making these
statements, the Company has relied on the written representations of its
directors and officers and copies of the reports that they have filed with the
Commission. The Company is not aware of the existence of any ten percent (10%)
holders other than Crestar Bank (see Security Ownership table on page 1).
EXECUTIVE COMPENSATION
The following information relates to all compensation awarded to, earned by
or paid pursuant to a plan or otherwise, to (i) the Chief Executive Officer of
the Corporation (the "CEO") and (ii) the four most highly compensated executive
officers, other than the CEO, who were serving as executive officers of the
Corporation on December 30, 1994, the last business day of the fiscal year
ending on January 1, 1995. The CEO and the four most highly compensated officers
are referred to herein as the Named Executive Officers.
The following information does not reflect any compensation earned and paid
to the Named Executive Officers subsequent to January 1, 1995, unless otherwise
indicated. Any such compensation earned and paid to the Named Executive Officers
during 1995 will be recorded in the proxy statement for the Corporation's 1996
Annual Meeting of Shareholders, unless such compensation is required to be
reported previously.
SUMMARY COMPENSATION TABLE
The following table sets forth for the Named Executive Officers for each of
the last three fiscal years annual compensation amounts as indicated by the
applicable table headings. Annual Compensation, columns (c), (d) and (e),
includes base salary and bonus earned during the year covered and, if
applicable, other annual compensation not properly categorized as salary or
bonus. Long-Term Compensation, column (g), reports the number of shares
underlying stock option grants to the Named Executive Officers during 1994. The
Named Executive Officers were not awarded, granted or paid any forms of
compensation that are required to be reported in the Long-Term Compensation
columns (f) or (h).
4
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
AWARDS
ANNUAL COMPENSATION PAYOUTS
(G)
(E) SECURITIES (H)
(C) (D) OTHER ANNUAL (F) UNDERLYING LTIP
(A) (B) SALARY BONUS COMPENSATION RESTRICTED STOCK OPTIONS PAYOUTS
NAME AND PRINCIPAL POSITION YEAR ($) ($)(1) ($)(2)(3) AWARDS ($) (#) ($)
<S> <C> <C> <C> <C> <C> <C> <C>
J. Patrick Danahy 1994 425,000 $100,000 -- 40,000
President and 1993 400,000 290,000 50,501 -- 30,000 --
Chief Executive Officer 1992 375,000 300,000 967,086 -- -- --
Richard S. Vetack 1994 285,000 95,000 -- --
Senior Vice President, 1993 270,000 162,000 84,374 -- 25,000 --
the Corporation; President, 1992 250,000 212,000 2,128,192 -- -- --
Textile Products Group
John L. Bakane 1994 260,000 72,000 -- -- 25,000
Vice President and 1993 245,000 165,000 67,499 -- 25,000 --
Chief Financial Officer 1992 230,000 171,000 1,775,977 -- -- --
Bud W. Willis III 1994 250,000 93,000 -- -- 25,000
Vice President, the 1993 235,000 137,000 -- -- 25,000 --
Corporation; President 1992 220,000 147,000 994,960 -- -- --
Denim Division
Lester J. Smith 1994 210,000 47,000 -- -- -- --
Vice President 1993 200,000 104,000 -- -- -- --
Cotton Purchasing 1992 190,000 124,000 1,586,099 -- -- --
<CAPTION>
(I)
ALL OTHER
(A) COMPENSATION
NAME AND PRINCIPAL POSITION ($)(4)
<S> <C>
J. Patrick Danahy 7,458
President and 10,784
Chief Executive Officer 6,974
Richard S. Vetack 6,484
Senior Vice President, 9,076
the Corporation; President, 6,104
Textile Products Group
John L. Bakane 6,310
Vice President and 8,652
Chief Financial Officer 5,965
Bud W. Willis III 6,240
Vice President, the 8,483
Corporation; President 5,895
Denim Division
Lester J. Smith 3,712
Vice President 5,392
Cotton Purchasing 5,229
</TABLE>
(l) All bonuses were paid pursuant to a Management Incentive Plan for the fiscal
years shown. See "Compensation Committee Report on Executive Compensation."
(2) Does not include the amount of the incremental cost of certain incidental
benefits, perquisites and other benefits, securities or property which in
the aggregate do not exceed the lesser of $50,000 or 10% of the total amount
of salary and bonus reported for the Named Executive Officer.
(3) Represents cash payments based upon federal and state income tax savings
expected to be realized by the Corporation upon the exercise of Nonqualified
Options under the Cone Mills Corporation 1984 Stock Option Plan. See
"Compensation Committee Report on Executive Compensation."
(4) Represents the Corporation's matching contributions to the 401(k) plans
(Supplemental Retirement Plan and Employee Equity Plan) and the dollar value
of insurance premiums paid by the Corporation with respect to group term
life insurance for benefit of the Named Executive Officers as follows:
A. 401(k) Plan matching contributions for 1994 respectively: Mr. Danahy
($4,500); Mr. Vetack ($4,500); Mr. Bakane ($4,500); Mr. Willis ($4,500)
and Mr. Smith ($2,250).
B. Insurance Premiums for 1994 respectively: Mr. Danahy ($2,958); Mr.
Vetack ($1,984); Mr. Bakane ($1,810); Mr. Willis ($1,740); and Mr.
Smith ($1,462).
5
<PAGE>
STOCK OPTION GRANTS IN LAST FISCAL YEAR
The following sets forth certain information with respect to options
granted to the Named Executive Officers during the fiscal year ended January 1,
1995.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
(B) (C)
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS (D)
UNDERLYING GRANTED EXERCISE OR (E)
(A) OPTIONS TO EMPLOYEES BASE PRICE EXPIRATION
NAME GRANTED (#) (1) IN FISCAL YEAR ($/SH) DATE
<S> <C> <C> <C> <C> <C>
J. Patrick Danahy 40,000 9.76 12.00 11/08/2004
Richard S. Vetack -- -- -- --
John L. Bakane 25,000 6.10 12.00 11/08/2004
Bud W. Willis, III 25,000 6.10 12.00 11/08/2004
Lester J. Smith -- -- -- --
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF STOCK
PRICE APPRECIATION FOR OPTION TERM (2)
(A) (F) (G)
NAME 5% ($) 10% ($)
<S> <C><C> <C>
J. Patrick Danahy 302,000 764,800
Richard S. Vetack -- --
John L. Bakane 188,750 478,000
Bud W. Willis, III 188,750 478,000
Lester J. Smith -- --
</TABLE>
(1) Options granted in 1994 are Nonqualified Stock Options which are exercisable
six months after the grant date (November 9, 1994), with 20% of the shares
covered thereby becoming exercisable at that time and an additional 20% of
the option shares becoming exercisable on each successive anniversary date.
However, no more than 50% of the option shares can be exercised in any one
calendar year. The price for shares that may be purchased pursuant to the
options is equal to the fair market value of the Corporation's Common Stock
on the date of grant. The grant of the options includes a provision that the
Company will pay to the optionee after exercise an amount in cash equal to
the tax benefit the Company realizes from the exercise of the option.
(2) The dollar amounts under these columns assume that the market price per
share of the Corporation's Common Stock appreciates in value from the date
of grant to the expiration of the option at the annualized rates indicated.
These rates are set by the Securities and Exchange Commission and are not
intended to forecast possible future appreciation, if any, of the price of
the Common Stock. If the stock price increased by 5% or 10% per year for a
period of ten years from the date of grant (November 9, 1994), the total
increase in shareholder value would be $209,350,375 and $530,534,954
respectively.
AGGREGATED OPTION EXERCISES AND YEAR-END OPTION VALUE TABLE
The following table shows stock option exercises by the Named Executive
Officers during 1994, including the aggregate value of gains on the date of
exercise ("Value Realized"). In addition, this table includes the number of
shares covered by exercisable and unexercisable options as of January 1, 1995.
Also reported, both as to exercisable and unexercisable options, are the values
of "in-the-money" options, which are options with a positive spread between the
fiscal year-end market price of the underlying Common Stock and the exercise
price of such stock options.
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1994 AND
FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
(D)
NUMBER OF
SECURITIES
UNDERLYING
(B) UNEXERCISED OPTIONS
SHAREES (C) AT 1/1/95
(A) ACQUIRED ON VALUE REALIZED EXERCISABLE/
NAME EXERCISE (#) ($)(1) UNEXERCISABLE
<S> <C> <C> <C>
J. Patrick Danahy -- -- 12,000/58,000
Richard S. Vetack -- -- 25,000/0
John L. Bakane -- -- 10,000/40,000
Bud W. Willis III -- -- 17,600/40,000
Lester J. Smith -- -- --
<CAPTION>
(E)
VALUE OF UNEXERCISED
IN-THE-MONEY OPTIONS
AT 1/1/95 ($)(2)
(A) EXERCISABLE/
NAME UNEXERCISABLE
<S> <C>
J. Patrick Danahy 0/0
Richard S. Vetack 0/0
John L. Bakane 0/0
Bud W. Willis III 50,350/0
Lester J. Smith --
</TABLE>
6
<PAGE>
(1) Fair market value on date of exercise less exercise price.
(2) Based on $11.875 fair market value per share on December 30, 1994, the last
trading day of fiscal year 1994.
LONG-TERM INCENTIVE PLAN AWARDS TABLE
The Corporation does not have a long-term incentive plan in effect.
PENSION PLAN TABLE
The following table sets forth in the ERP column the estimated annual
benefits payable upon retirement in 1995 at age 65 under the Employees'
Retirement Plan of Cone Mills Corporation (the "ERP") in the compensation and
years of service categories indicated. Benefit amounts shown are payable for
life with no contingent death benefits. Benefits are based upon total annual
salary and bonus, compensation in excess of the amount covered by Social
Security as determined in the year of retirement and total years of service. The
years of service credited as of March 31, 1995, for the Named Executive Officers
are: Mr. Danahy -- 23 years; Mr. Vetack -- 31 years; Mr. Bakane -- 19 years; Mr.
Willis -- 24 years; and Mr. Smith -- 25 years (see Employment and Other Related
Agreements for calculation of Mr. Smith's years of service).
Pension benefits under the ERP are subject to certain limitations imposed
by the Internal Revenue Code of 1986, as amended (the "Code"). The aggregate
annual pension which may be paid under the ERP and all other defined benefit
plans of the Corporation taken together is generally restricted to $118,800 in
1994 and $120,000 in 1995. In addition, the Code limited annual compensation of
each employee that can be taken into account in computing pension benefits to
$150,000 in 1994 and 1995. These amounts may be adjusted for cost of living as
provided in the Code. Pension benefits that cannot be paid from the ERP by
reason of the limitations in the Code are provided by the Corporation's Excess
Benefit Plan and by the Supplemental Executive Retirement Plan, both of which
are unfunded, nonqualified benefit plans. Such amounts are identified in the
following table in the columns headed "NQP". The Corporation accrues annually
the estimated expense for providing benefits under the ERP and the nonqualified
plans, as determined by an independent consulting actuary; however, this expense
cannot be specifically allocated to any individual or to the Named Executive
Officers as a group under the funding method used by the actuary.
APPROXIMATE ANNUAL BENEFIT FOR YEARS OF SERVICE INDICATED (1)
<TABLE>
<CAPTION>
AVERAGE ANNUAL
COMPENSATION FOR HIGHEST
CONSECUTIVE FIVE YEARS
DURING LAST TEN YEARS 15 YEARS 20 YEARS 25 YEARS 30 YEARS
BEFORE RETIREMENT ERP NQP ERP NQP ERP NQP ERP NQP
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$200,000 $ 60,929 $ 1,976 $ 79,702 $ 1,976 $ 91,984 $ 1,208 $ 103,496 $ 1,208
$300,000 61,064 18,309 79,894 23,194 92,217 25,404 103,759 28,392
$400,000 61,064 34,778 79,894 44,603 92,217 49,832 103,759 55,840
$500,000 61,064 67,715 79,894 87,421 92,217 98,689 103,759 110,735
$600,000 61,064 100,652 79,894 130,239 92,217 147,545 103,759 165,630
$700,000 61,064 133,589 79,894 173,057 92,217 196,402 103,759 220,525
$800,000 61,064 166,526 79,894 215,875 92,217 245,258 103,759 275,420
$900,000 61,064 199,463 79,894 258,693 92,217 294,115 103,759 330,315
<CAPTION>
AVERAGE ANNUAL
COMPENSATION FOR HIGHEST
CONSECUTIVE FIVE YEARS
DURING LAST TEN YEARS 35 YEARS
BEFORE RETIREMENT ERP NQP
<S> <C> <C>
$200,000 $ 110,351 $ 659
$300,000 110,635 29,469
$400,000 110,635 58,563
$500,000 110,635 116,752
$600,000 110,635 174,941
$700,000 110,635 233,129
$800,000 110,635 291,318
$900,000 110,635 349,507
</TABLE>
(1) Pension benefits provided by the ERP with respect to service after 1983 are
subject to a "floor offset" arrangement in conjunction with the Cone Mills
Corporation 1983 ESOP (the "1983 ESOP"), a separate defined contribution
pension plan maintained by the Corporation. The amounts shown in the above
table are calculated on the assumption that the participant elects to
receive the maximum pension benefit available under the ERP, and in
accordance with the terms of each plan, authorizes a transfer of funds in
his 1983 ESOP account to the trustee of the ERP in a dollar amount equal to
the actuarial equivalent of the pension benefit attributable to service
after 1983. The balance, if any, in the 1983 ESOP account will be
distributed to the participant. To the extent that a participant's 1983 ESOP
account is insufficient to fund the pension benefits attributable to service
after 1983, the cost of benefits not covered by the 1983 ESOP will be funded
through the ERP. If the participant does not elect to transfer funds from
his 1983 ESOP account to the trustee of the ERP, his account balance will be
distributed in accordance with the terms of the 1983 ESOP, and his pension
payable from the ERP with respect to service after 1983 will be reduced (but
not below zero) by the actuarial equivalent of his 1983 ESOP account
balance. The 1983 ESOP is designed to invest primarily in qualifying
securities under ERISA. Assets of the
7
<PAGE>
1983 ESOP consist of shares of the Corporation's Class A Preferred Stock and
other money market and marketable debt securities which are allocated to
individual accounts of participants. The fair market value of the stock is
determined by independent appraisal performed several times each year. No
contributions to the 1983 ESOP have been made for salaried employees since
1986. The value of the account in the 1983 ESOP for each of the Named
Executive Officers as of December 31, 1994, was: Mr. Danahy -- $101,635; Mr.
Vetack -- $59,341; Mr. Bakane -- $54,508; Mr. Willis -- $117,428; and Mr.
Smith -- $116,624.
COMPENSATION OF DIRECTORS
Directors who are also officers of the Corporation do not receive
additional compensation for service as directors or as members of committees of
the Board of Directors. Nonemployee directors receive a retainer fee of $17,000
per year and an attendance fee of $1,000 per diem for meetings of the Board of
Directors and any committee of the Board held on the same day. The fee for a
Committee meeting not held on the same day as a Board meeting is $500. Travel
expenses of directors incurred in attending meetings are reimbursed by the
Corporation. In 1994, retainers and attendance fees paid to all directors
totaled $154,250.
The Shareholders approved at the 1994 annual meeting the 1994 Non-Employee
Director Stock Option Plan whereby each nonemployee director receives each year
after the annual meeting of shareholders a stock option grant to purchase 1,000
shares of Common Stock at the fair market value of a share of Common Stock on
the grant date. The grant date is the fifth business day after the annual
meeting.
The Board of Directors has approved a Consulting Agreement between the
Corporation and Dewey L. Trogdon whereby Mr. Trogdon provides consultation and
advice. Mr. Trogdon's consulting fee was $15,000 per calendar quarter in 1994
and is $15,000 per calendar quarter in 1995. In addition, Mr. Trogdon was
reimbursed for expenses incurred by him in providing such consulting services.
The consulting fee payments are in addition to any pension or other supplemental
retirement benefits that Mr. Trogdon is entitled to receive by reason of his
service as an employee of the Corporation.
EMPLOYMENT AND OTHER RELATED AGREEMENTS
The Corporation entered into an agreement with Lester J. Smith on November
3, 1983, amended December 1, 1984, whereby the Corporation agreed to pay Mr.
Smith supplemental retirement benefits to those earned pursuant to the ERP. The
agreement provides that if Mr. Smith remains in the employ of the Corporation
until retirement age as defined in the ERP, the Corporation will pay to him upon
retirement, out of the general corporate funds, the amount his pension would
have been increased if his accredited service under the Plan at retirement had
been increased by 9 years and 1 month. The agreement in effect will give Mr.
Smith 25 years of service at age 65. Mr. Smith has 17 years and 2 months of
service as of March 1, 1995 and has obtained age of 65. See the Pension Plan
Table above for an estimate as to the value of the supplemental benefits. The
agreement further provides that the Corporation will not merge or consolidate
with another entity or permit its business to be taken over unless the rights
and obligations of the Corporation pursuant to the agreement are assumed. Mr.
Smith entered into a covenant not to compete that would go into effect for five
(5) years after payment commences and agreed to provide consulting services as
the Corporation may require so long as he is receiving benefits and his health
permits.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The current members of the Compensation Committee are Mr. Charles M. Reid,
Mrs. Jeanette C. Kimmel, and Dr. John W. Rosenblum, all of whom are directors
who are not currently or formerly employees of the Corporation.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Corporation's executive compensation program is administered by the
Compensation Committee of the Board of Directors. The Committee's membership is
comprised of nonemployee directors, none of which participate in any of the
plans administered by the Committee. It is the responsibility of the
Compensation Committee to review and make recommendations to the Board of
Directors concerning the salaries and incentive compensation and to approve
stock option grants for the Chief Executive Officer and the other executive
officers of the Corporation.
COMPENSATION POLICY
The Corporation strives to provide executives an opportunity to earn
compensation that is fair, reasonable and competitive with that paid by
comparable companies to executives in similar positions with similar duties and
responsibilities. In accordance with the policy, the Committee is guided by
three goals as it considers the compensation of executive officers.
8
<PAGE>
First, executive compensation must be effective in attracting, motivating and
retaining executives who possess the skills and experience necessary to ensure
the Corporation's success. Second, the Corporation should recognize and reward
executives for their contributions to the success of the business. Third, the
corporation must be aware of the importance of planning and controlling the cost
of executive compensation.
To implement this policy, the Corporation maintains an executive
compensation program that consists of base salaries, annual incentive plans,
stock option plans and competitive benefits. It is the belief of the Committee
that through these components executives are provided compensation and benefits
that are competitive; are provided incentives for additional annual compensation
that is earned only upon achievement of performance standards as established and
approved each year; and are provided long-term incentive compensation through
the grant of stock options that can appreciate in value.
SALARIES
The Committee's objective in establishing the base salaries of the named
executive officers is to provide salaries at competitive market levels with
other industry leaders in order to reward and encourage individual performance.
The salary of the Chief Executive Officer is evaluated solely by the
Compensation Committee and the salary of other executive officers is determined
by the Committee based upon recommendations from the Chief Executive Officer.
Final approval of salaries of the Chief Executive Officer and the other
executive officers are made by the independent members of the Board of Directors
after receiving recommendations of the Committee. The Committee deems its
compensation decisions to be a cumulative process involving a substantial amount
of judgement concerning an executive's experience and responsibilities against
objective information furnished by compensation consultants.
In developing current salary levels, including that of the Chief Executive
Officer, the Committee reviewed the Corporation's assessment of salaries in the
textile industry in addition to an analysis of cash compensation (base salary
and annual bonus or incentives) prepared specifically for the Corporation and
the Compensation Committee by a major compensation consulting firm. In the
analysis, the Corporation's executive positions were matched with similar
positions at other companies based on data from executive compensation surveys,
a proprietary survey of the textile industry and proxy statements of companies
that are in the Peer Group for the Performance Graph set forth below. A weighted
composite was developed, and the Committee compared executive salaries to the
market composite and considered those comparisons in making salary increase
decisions. In general, the Committee targets executive salaries at the market
median; however, in a given year an individual executive's salary may vary from
median due to experience, performance, or other factors deemed relevant by the
Committee and considered on a subjective basis. Specifically, the Committee
determined that a salary increase for the Chief Executive Officer for 1994 was
in order to place his salary closer to the market median rate.
INCENTIVE COMPENSATION
The Corporation has established an annual management incentive plan that
links executive compensation to the performance of the Corporation and the
executive. Under the plan, executive officers and other key management employees
can earn annual cash incentive awards based upon the achievement of corporate
and individual goals established at the beginning of each year. Special awards
can be made to recognize exceptional individual performance at the discretion of
the Committee and the Board. Performance goals are set at the corporate level
and at division levels depending upon the responsibilities of each of the
executives. Corporate level performance targets are determined by measuring
return on capital employed and earnings per share. The Committee examines the
returns on capital employed and earnings of other public companies (including
companies that appear in the Performance Graph below) as it establishes and
approves these targets. Division-level goals are established based upon return
on capital employed for the division. Awards to individual officers and the
aggregate amounts of awards to all key management employees are reviewed by the
Committee and approved by the Board after the close of the fiscal year.
The achievable incentive award for each officer and management employee is
based upon a blend of corporate and/or division and individual goals tailored to
that particular executive, based upon his or her responsibilities. Specifically,
for the Chief Executive Officer, the corporate goals of return on capital
employed and earnings per share account for 80% of his incentive compensation
and 20% is attributable to individual goals. The weight given to each factor
comprising the incentive award varies per each executive.
The incentive compensation awarded to the Chief Executive Officer and the
other Named Executive Officers for 1994 is reported in column (d) of the Summary
Compensation table. Based on 1994 results, officers earned from 12% to 37% of
base salary depending upon the level of achievement of their goals and the scope
of their responsibilities. Before approving the 1994 incentive awards, the
Committee met with the Chief Executive Officer in February, 1995 and reviewed
the structure
9
<PAGE>
and mechanics of the incentive compensation plan and compared the corporate,
division and individual performance goals of the Named Executive Officers with
results. The earnings per share and return on capital employed exceeded the
threshold for payment of incentive compensation but did not meet the 1994
targets established for the Company pursuant to the Management Incentive
Compensation Plan. The earnings per share and return on capital employed for the
divisions ranged from 0% to 118% of the targets established. The Committee
recommended approval of the payment of the incentive compensation pursuant to
the preestablished formulas which reflected a reduction in the amount of
incentive compensation paid from the previous year. Specifically for the Chief
Executive Officer, the Committee was pleased with his leadership of the Company
during a year of restricted margins in the industry. His incentive pay was
impacted by the effect of such margin constraints on the earnings per share and
return on capital employed for the Company during 1994.
STOCK OPTIONS
The Corporation maintains the 1992 Stock Option Plan through which key
management employees have received and may receive grants of stock options. No
additional grants are available under the Corporation's 1984 Stock Option Plan
but some options remain outstanding under that Plan. It is the belief of the
Committee that since executives earn no rewards through these stock options
unless the stock price increases, this form of executive compensation has the
potential to benefit shareholders as well as executives by aligning the
interests of the Corporation's executives with those of shareholders.
The Corporation's stock option plans permit the granting of both incentive
stock options, as defined under the Internal Revenue Code, and nonqualified
options. The exercise price of these options may not be less than 100 percent of
the fair market value of the Common Stock on the date the option is granted.
Nonqualified stock options granted by the Committee may include a provision
whereby the Corporation will pay to the executive an amount that is equal to the
savings the Corporation realizes through tax deductions related to the option
exercise. The amount of payments to the Named Executive Officers under this tax
reimbursement feature of the stock option plans is reported in column (e) of the
Summary Compensation table. The Committee believes this form of compensation is
in accordance with the Compensation Policy of the Committee because it enables
the executives to retain shares that otherwise may be sold to meet tax
obligations.
The Compensation Committee currently operates under the general objective
that stock option grants to executives should be considered on a regular basis.
Recently, the Committee has granted options approximately every two years. It
concurred in the Chief Executive Officer's recommendation that the 1,500,000
shares available for grant under the 1992 Stock Option Plan be granted in blocks
of approximately 400,000 in 1994 and 300,000 biennially thereafter with 100,000
available to be granted from time to time as the Committee so determines. Grants
are recommended to the Committee by the Chief Executive Officer. The
Corporation's consultant provides advice as to equity ownership of and the size
of grants to the named executive officers of public companies within the textile
industry including members of the Company's Peer Group.
As reported in the Option Grants table on page 6, a total of 90,000
nonqualified stock options were granted by the Committee in 1994 to the Chief
Executive Officer and two of the Named Executive Officers. The total number of
options granted to such officers were approximately 22 percent of the total
shares subject to options granted in 1994 pursuant to the 1992 Stock Option
Plan. The Committee's general philosophy is that option shares are allocated in
three tiers, i.e., the Named Executive Officers, other executive and division
officers, and other key employees. The Committee subjectively determines the
number of options to be granted by considering the data on competitive practices
of the groups discussed above in the analysis of "Salaries" as provided by the
Corporation's outside consultant, the responsibilities of the executive, and the
executive's recent performance and expected future contributions. The Committee
awarded the Chief Executive Officer an option to purchase 40,000 shares after
review of competitive pay data including data indicating his salary was below
the market median rate for his position. The number of shares of Common Stock or
outstanding options currently held by each option grantee was not a
consideration in determining the number of options that were granted to each
Named Executive Officer in 1994.
DEDUCTIBILITY OF COMPENSATION
As part of the Omnibus Budget Reconciliation Act passed by Congress in
1993, the Internal Revenue Code of 1986 was amended to add Section 162(m) which
limits the deductibility for federal income tax purposes of compensation paid to
the Chief Executive Officer and the next four most highly compensated executive
officers of the Company. Under Section 162(m), compensation paid to each of
these officers in excess of $1 million per year is not deductible unless it is
"performance based." The Internal Revenue Service has issued only proposed
regulations under Section 162(m). The Committee did not consider the
deductibility limits in making its compensation decisions for any one of the
Named Executive Officers for 1994 or 1995 fiscal years as the deductibility
limits would not be exceeded under any circumstances. However, the Committee's
policy is to design and administer compensation programs which meet the
objectives set forth above and which reward
10
<PAGE>
executives for corporate performance which meets established financial goals,
and to the extent reasonably practicable and to the extent consistent with its
other compensation objectives, to maximize the amount of compensation expense
that is tax deductible by the Corporation. The Committee will continue to review
the developments of the law and the regulations and will consider amendments to
its compensation plans as deemed appropriate to meet its policies and
objectives.
<TABLE>
<S> <C>
COMPENSATION COMMITTEE
Charles M. Reid, Chair
Jeanette C. Kimmel
John W. Rosenblum
</TABLE>
PERFORMANCE GRAPH
The following graph compares the percentage change in the cumulative total
shareholder return on the Corporation's Common Stock with the cumulative return
of the Standard & Poor's 500 Stock Index and with a peer group index developed
by KPMG Peat Marwick, assuming reinvestment of dividends. The Corporation's
Common Stock was registered under Section 12 of the Securities Exchange Act of
1934 on June 18, 1992, in connection with an initial public offering of
6,000,000 shares. Accordingly, the measurement period selected by the
Corporation for its Performance Graph begins on June 17, 1992, the last trading
day before the initial public trading of Cone Common Stock, and ends on December
30, 1994, the last trading day of the Corporation's fiscal year.
The Peer Group index has been constructed by calculating the cumulative
total return of the common stock of the following companies: Burlington
Industries, Inc.; Delta Woodside Industries, Inc.; Dixie Yarns, Inc.; Fieldcrest
Cannon, Inc.; Guilford Mills, Inc.; and Springs Industries, Inc. The return of
each peer company was weighted according to its stock market capitalization as
of the beginning of the period.
COMPARISON OF SHAREHOLDER RETURN
AMONG CONE MILLS, S&P 500 AND PEER GROUP
(Performance Graph appears here. The plot points are listed below.)
6/17/92 12/31/92 12/31/93 12/31/94
Cone Mills $100 $143 $169 $119
S&P 500 $100 $111 $122 $124
Peer Group $100 $102 $104 $ 92
11
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Doris R. Bray, a Class III director nominated for reelection, is a partner
of Schell Bray Aycock Abel & Livingston, LLP, a law firm that regularly serves
as counsel to the Corporation. The Corporation and its subsidiary, Cornwallis
Development Co., paid to the firm legal fees of $206,569 in 1994.
SELECTION OF AUDITORS
The Corporation's Board of Directors has appointed McGladrey & Pullen,
independent certified public accountants, as auditors of the Corporation's
records for the fiscal year 1995. McGladrey & Pullen or its predecessor has
acted as auditors for the Corporation since 1943 and continue to be considered
by the Board to be well qualified.
Although not required to do so, the Board believes it is desirable to
submit its appointment of said firm to the shareholders at the Annual Meeting
for ratification. Representatives of McGladrey & Pullen are expected to be
present at the meeting and will be available to respond to appropriate questions
or make a statement if they desire to do so.
RECOMMENDATIONS OF THE BOARD OF DIRECTORS
The Board of Directors recommends that shareholders vote FOR electing the
Board of Directors' nominees for director as set forth in this proxy statement,
and FOR ratifying the Board of Directors' appointment of McGladrey & Pullen as
independent auditors for the year ending December 31, 1995.
SHAREHOLDER PROPOSALS
In the event any shareholder wishes to present a proposal at the 1996
Annual Meeting of Shareholders, such proposal must be received by the
Corporation for inclusion in the proxy statement and form of proxy relating to
such meeting on or before December 7, 1995, and must conform to such other
requirements as may be imposed by the Securities and Exchange Commission.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors does not
intend to present, and has not been informed of any matter to be acted upon at
the Annual Meeting other than those specifically referred to in this Proxy
Statement. If other matters should properly come before the Annual Meeting it is
intended that the holders of the proxies will act in respect thereto in
accordance with their best judgment.
By order of the Board of Directors.
TERRY L. WEATHERFORD
SECRETARY
12
<PAGE>
*****************************************************************************
APPENDIX
CONE MILLS CORPORATION
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 9, 1995
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
THE UNDERSIGNED HEREBY APPOINTS TERRY L. WEATHERFORD AND NEIL W. KOONCE, OR
EITHER OF THEM, PROXIES WITH FULL POWER OF SUBSTITUTION TO VOTE ALL SHARES OF
COMMON STOCK OF CONE MILLS CORPORATION, STANDING IN THE NAME OF THE UNDERSIGNED
AT THE ANNUAL MEETING OF SHAREHOLDERS OF THE COMPANY TO BE HELD MAY 9, 1995, AND
ANY ADJOURNMENT THEREOF, AS FOLLOWS:
1. ELECTION OF DIRECTORS (CLASS III).
<TABLE>
<S> <C>
[ ] FOR ALL NOMINEES LISTED BELOW [ ] WITHHOLD AUTHORITY TO VOTE FOR
(EXCEPT ALL NOMINEES LISTED BELOW
AS MARKED TO THE CONTRARY
BELOW)
</TABLE>
DORIS R. BRAY, DEWEY L. TROGDON, BUD W. WILLIS III
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THAT NOMINEE'S NAME ON THE SPACE PROVIDED BELOW).
2. TO RATIFY APPOINTMENT OF MCGLADREY & PULLEN AS INDEPENDENT AUDITORS.
<TABLE>
<S> <C> <C>
[ ] FOR [ ] AGAINST [ ] ABSTAIN
</TABLE>
3. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
(Continued on Reverse Side)
<PAGE>
THIS PROXY WHEN PROPERLY 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 NOMINEES NAMED IN THE PROXY STATEMENT AND FOR PROPOSAL 2.
Please sign exactly as your name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
DATED: , 1995
