<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (section mark)240.14a-11(c) or
(section mark)240.14a-12
FIELDCREST CANNON, INC.
(Name of Registrant as Specified In Its Charter)
FIELDCREST CANNON, INC.
(Name of Person(s) Filing Proxy Statement)
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(j)(2).
[ ] $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:
4) Proposed maximum aggregate value of transaction:
[ ] 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>
[Fieldcrest Cannon Logo appears here]
FIELDCREST CANNON, INC.
326 EAST STADIUM DRIVE
EDEN, NORTH CAROLINA 27288
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 16, 1994
TO THE STOCKHOLDERS OF
FIELDCREST CANNON, INC.
The annual meeting of stockholders of Fieldcrest Cannon, Inc. will
be held at the Company's Offices at One Lake Drive, Kannapolis, North
Carolina, on May 16, 1994, at 9:00 a.m., for the following purposes:
I. To elect eight directors to the Company's Board of Directors;
II. To consider and vote upon a proposal to ratify the selection of
Ernst & Young as independent accountants to audit the accounts
of the Company for the year ending December 31, 1994;
and to act upon such other matters as may properly come before the
meeting or any adjournment thereof.
Only holders of Common Stock at the close of business on April 4,
1994, will be entitled to vote at the meeting or any adjournment
thereof.
By Order of the Board of Directors,
M. KENNETH DOSS
SECRETARY
Eden, North Carolina
April 7, 1994
IMPORTANT -- YOUR PROXY IS ENCLOSED
Stockholders are requested to execute and promptly return the enclosed
proxy in the enclosed envelope. No postage is required for mailing in the
United States.
<PAGE>
April 7, 1994
FIELDCREST CANNON, INC.
326 EAST STADIUM DRIVE
EDEN, NORTH CAROLINA 27288
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
MAY 16, 1994
The enclosed proxy is solicited by the Board of Directors of Fieldcrest
Cannon, Inc., a Delaware corporation (the "Company"). Arrangements will be made
with brokerage houses and other custodians, nominees and fiduciaries to send
proxy material to their principals, and the Company will reimburse them for
their reasonable expenses in doing so. Copies of this proxy statement and
accompanying proxy card will first be mailed to stockholders on or soon after
April 7, 1994.
The expense of this solicitation will be paid by the Company. In addition
to solicitation by mail, officers and other employees of the Company may solicit
proxies by personal interview, telephone or other methods of telecommunication.
The Company has retained Morrow & Company, Inc. ("Morrow") to assist in such
solicitation. The Company has been advised that the fee of Morrow is estimated
not to exceed $33,000, plus reasonable out-of-pocket costs and expenses.
When the enclosed proxy is properly executed and returned, the shares it
represents will be voted in accordance with the directions indicated thereon, or
if no direction is indicated, it will be voted in favor of the election of the
eight nominees for director identified below and the ratification of the
selection of Ernst & Young as independent accountants. Any stockholder giving a
proxy has the power to revoke it at any time before it is voted.
Only the holders of Common Stock of record at the close of business on
April 4, 1994, will be entitled to vote at the meeting. On that date 8,649,767
shares of Common Stock having one vote each were outstanding.
<PAGE>
I. ELECTION OF DIRECTORS
The Company's Bylaws provide that the number of directors of the Company
shall be determined by resolution of the Board of Directors. The Board of
Directors presently consists of nine directors. Charles R. Charbonnier, who
presently is a director of the Company, will resign from the Board of Directors
of the Company effective at the 1994 annual meeting of stockholders, at which
time the number of directors of the Company will be set at eight. Eight persons
have been nominated to serve for one year terms and until their successors have
been duly elected and qualified. Each nominee for director has indicated a
willingness to serve if elected, and the persons named as proxies intend to vote
for such nominees absent instructions to the contrary on the enclosed proxy.
However, if any nominee for director becomes unavailable for election, the
persons named on the enclosed proxy intend to vote for such other person as the
Board of Directors may recommend in his place. Each nominee is currently a
director of the Company and has served as such since the year set forth in the
table below. None of the nominees is related by blood, marriage or adoption to
any other nominee or any executive officer of the Company.
<TABLE>
<CAPTION>
DIRECTOR
NAME AND AGE SINCE BOARD COMMITTEE MEMBERSHIPS
<S> <C> <C>
Tom H. Barrett, 63...................................... 1992 Compensation; Nominating; Executive
James M. Fitzgibbons, 59................................ 1985 Executive
William E. Ford, 68..................................... 1993 Audit Review; Retirement Review
John C. Harned, 66...................................... 1985 Audit Review; Compensation; Retirement Review
S. Roger Horchow, 65.................................... 1994 Audit Review; Nominating
Charles G. Horn, 54..................................... 1988 Executive
W. Duke Kimbrell, 69.................................... 1993 Executive; Compensation; Nominating
C. J. Kjorlien, 77...................................... 1989 Audit Review; Retirement Review; Nominating
</TABLE>
TOM H. BARRETT formerly served as Chairman of the Board (from 1989 until
June 1991), Chief Executive Officer (from 1988 until June 1991), President (from
1983 until April 1991) and Chief Operating Officer (from 1983 until 1988) of
Goodyear Tire & Rubber Company prior to his retirement in June 1991. He is also
a Director of A.O. Smith Corporation, Rubbermaid, Inc., Mutual Life Insurance
Company of New York and Air Products and Chemicals, Inc., and a partner in
American Investment Partners, a private investment company.
JAMES M. FITZGIBBONS was appointed Chairman of the Company's Board of
Directors and Chief Executive Officer on October 15, 1990. Previously, Mr.
Fitzgibbons served as President of Amoskeag Company (from March 9, 1987 until
March 6, 1992) and President and a director of Howes Leather Company, Inc., a
company which manufactures sole leather for the shoe industry. Mr. Fitzgibbons
continues to serve as Chairman of Howes Leather Company, Inc., and is also a
Trustee of The Boston Company Funds, which provides a variety of investment
services through a series of mutual funds and a Director of Barrett Resources
Corporation, an oil and gas exploration company.
WILLIAM E. FORD was appointed the Goodyear Executive Professor at Kent
State University's College of Business Administration and Graduate School of
Management in January 1994, and is presently teaching a course entitled
"Strategy & Operations in a Global Economy." Mr. Ford has served as President of
Bejai, Inc., a venture capital company, since 1991. He served as President of
VMI, a Dutch Company producing high tech equipment for the tire industry, from
1986 until 1991. In addition, he has served as a consultant on international
ventures to The United Nations and as a senior advisor to a development project
in China.
JOHN C. HARNED has been President of Bedford Advisors, Inc., a corporate
financial consulting company, for more than five years. Mr. Harned also has
served as Executive Vice President, Chief Financial Officer and Director of
Financial Protection Services, Inc. (from 1989 - 1990), Vice President of
Dartmouth College and Executive Vice President and Chief Financial Officer of
Penn Central Corporation.
S. ROGER HORCHOW served as Chairman of Horchow Collection from 1973 until
1990. Since 1990, he has been active in numerous civic and charitable
organizations and has produced the Broadway Play CRAZY FOR YOU. He is also a
director of American Friends of the British Museum, the American Heart
Association -- Dallas Chapter, American Institute for Public Service, American
Public Radio, Better Business Bureau of Dallas, Dallas
2
<PAGE>
Museum Art, Friends of Art and Preservation in Embassies, KERA 90.1 Public
Broadcasting, and White House Historical Society, and serves on the Board of
Governors of Yale University Art Gallery.
CHARLES G. HORN has been Chief Operating Officer since August 15, 1990,
President since December 1, 1987, and a director since February 4, 1988. He
served as Executive Vice President (from June 1985 until December 1987), and as
Senior Vice President (from December 1983 until June 1985). He also served as
President of the Bed and Bath Division (from June 1985 until December 1987) and
as President of the Carpet and Rug Division (from December 1983 until June
1985).
W. DUKE KIMBRELL has been Chairman of the Board, Chief Executive Officer,
and a director of Parkdale Mills, Inc., a textile manufacturer, since 1961. He
is also a director of Wachovia Corporation, Inman Mills, Wrap Spun Yarns,
Textile/Clothing Technology Corporation, Foundation of University of North
Carolina/Charlotte, and North Carolina State Textile Foundation.
C. J. KJORLIEN was President of West Point-Pepperell, Inc. for a number of
years prior to his retirement in 1986. He is also a Director of Johnston
Industries, Inc. and Service America, Inc.
The laws of Delaware, under which the Company is incorporated, provide that
directors shall be elected by a plurality of the votes of the shares present in
person or represented by proxy at the meeting and entitled to vote on the
election of directors. Votes withheld for director nominees will be counted for
purposes of determining the existence of a quorum for the meeting, but shares
held of record by a broker, as nominee, that are not voted on any matter will
not be counted as present for such purposes. Votes withheld for director
nominees and broker non-votes will not be counted as votes in favor of any of
the nominees for directors.
3
<PAGE>
SECURITY OWNERSHIP
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The Company knows of no one who beneficially owns in excess of five percent
of a class of the Company's voting securities except as set forth in the table
below. Except as indicated in the footnotes, each shareowner set forth below
has, to the best of the Company's knowledge, the sole power to vote and to
dispose of the shares beneficially owned by such shareowner. Common Stock has
one vote per share.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
TITLE OF BENEFICIAL PERCENT
CLASS NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP OF CLASS
<S> <C> <C> <C>
Common Stock FMR Corp. 1,169,716 (1) 12.5%
82 Devonshire Street
Boston, MA 02109-3614
Common Stock Gabelli Funds, Inc. 952,801 (2) 10.5%
One Corporate Center
Rye, New York 10580-1434
Common Stock The TCW Group, Inc. 682,962 (3) 7.3%
865 S. Figueroa Street
Los Angeles, CA 90017
</TABLE>
(1) FMR Corp. advised the Company that, as of March 28, 1994, it is the
beneficial owner of 1,169,716 shares or 12.5% of the Company's Common Stock
(including 694,016 shares of Common Stock that may be acquired upon the
conversion of 406,000 shares of the Company's $3.00 Convertible Preferred
Stock). FMR Corp. has sole voting power with respect to 15,956 shares and
sole dispositive power with respect to all 1,169,716 shares.
(2) According to information contained in a statement on Schedule 13D filed with
the Securities and Exchange Commission, as of December 15, 1993, Gabelli
Funds, Inc., GAMCO Investors, Inc., Gabelli & Company, Inc., Safety Railway,
and Mario J. Gabelli had the sole voting and dispositive power over 952,801
shares of the Company's Common Stock (including 389,601 shares that may be
acquired upon the conversion of $17,240,000 principal amount of the
Company's 6% Convertible Subordinated Debentures). Mr. Gabelli is deemed to
have beneficial ownership of the securities beneficially owned by each of
the foregoing persons, and Gabelli Funds, Inc. is deemed to have beneficial
ownership of the securities owned beneficially by each of the foregoing
persons other than Mr. Gabelli.
(3) The TCW Group, Inc. advised the company that, as of February 28, 1994, it
had the sole voting and dispositive power over 682,962 shares of the
Company's Common Stock (including 660,341 shares that may be acquired upon
the conversion of 386,300 shares of the Company's $3.00 Convertible
Preferred Stock and 22,621 shares that may be acquired upon the conversion
of $1,001,000 principal amount of the Company's 6% Convertible Subordinated
Debentures).
4
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership at April 4, 1994, of each class of equity securities of the
Company, by each director, nominee for director and executive officer named in
the Summary Compensation Table under the heading "Executive Compensation,"
below, and for all directors and executive officers of the Company as a group.
Unless otherwise indicated, individuals named below held sole voting power and
investment power as to the shares.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED AS OF APRIL 4, 1994
FIELDCREST CANNON
COMMON STOCK
NO. OF PERCENT
DIRECTORS SHARES OF CLASS
<S> <C> <C>
Tom H. Barrett..................................................................... 3,000(1) *
Charles R. Charbonnier............................................................. 5,400(2) *
James M. Fitzgibbons............................................................... 51,348(2)(3)(4) *
William E. Ford.................................................................... 300 *
John C. Harned..................................................................... 6,000(2) *
S. Roger Horchow................................................................... 0 *
Charles G. Horn.................................................................... 39,700(2)(4) *
W. Duke Kimbrell................................................................... 63,282(5) *
C. J. Kjorlien..................................................................... 25,000(2) *
NON-DIRECTOR EXECUTIVES:
K. William Fraser, Jr.............................................................. 15,611(6) *
Chris L. Kametches................................................................. 22,597(4) *
Robert E. Dellinger................................................................ 11,006(4) *
All directors and executive officers of the Company as a group
(18 persons, including the ones listed above)..................................... 292,383(7) 3.34%
</TABLE>
* Represents less than 1%.
(1) Includes 2,000 shares of Common Stock which may be purchased upon the
exercise of options granted under the Director Stock Option Plan.
(2) Includes 5,000 shares of Common Stock which may be purchased upon the
exercise of options granted under the Director Stock Option Plan. Mr.
Charbonnier will retire from the Board of Directors effective at the 1994
annual meeting of stockholders.
(3) Includes 20,000 shares of Common Stock covered by an option that the Company
granted to Mr. Fitzgibbons pursuant to a Stock Option Agreement dated as of
September 11, 1991 between the Company and Mr. Fitzgibbons. The option is
exercisable at $14.875 per share, which was the closing price per share of
the Common Stock on the New York Stock Exchange on September 11, 1991, and
may be exercised in whole or in part at any time before September 10, 1998,
provided Mr. Fitzgibbons is on the date of exercise an employee of the
Company. In the event of his death, the option will terminate unless
exercised by Mr. Fitzgibbons' legal representative within 12 months after
the date of death. The number of shares subject to the option and the option
price may be adjusted in the event of certain changes in the Common Stock in
order to prevent dilution or enlargement of Mr. Fitzgibbons' rights under
the option.
(4) Includes outstanding shares of stock granted under the Long-Term Incentive
Plan as of April 4, 1994.
(5) Includes 51,282 shares that may be acquired upon the conversion of 30,000
shares of $3.00 Convertible Preferred Stock owned by Parkdale Mills, Inc.,
of which Mr. Kimbrell is an owner and the Chairman of the Board and Chief
Executive Officer. Mr. Kimbrell shares voting and investment power as to all
the shares owned by Parkdale Mills.
(6) Mr. Fraser retired from the Company effective January 1, 1994.
5
<PAGE>
(7) Includes 27,000 shares of Common Stock that may be purchased by directors
upon the exercise of options granted under the Director Stock Option Plan,
49,685 shares that have been granted to Directors and executive officers
under the Long-Term Incentive Plan and 20,000 shares covered by the option
granted to Mr. Fitzgibbons as described in note (3).
ACQUISITION OF AMOSKEAG COMPANY
On November 24, 1993, the Company completed a tender offer for all of the
outstanding shares of Amoskeag Company ("Amoskeag") for a cash price of $40 per
share, or an aggregate of approximately $141.7 million including certain costs.
The transaction was financed with the net proceeds from the sale of preferred
stock and through borrowings under the Company's revolving credit facility.
Prior to the transaction, Amoskeag owned 3.6 million shares of the Company's
Class B Common Stock, representing approximately 30% of the equity of the
Company and approximately 80% of the voting power of all classes of stock of the
Company. The Company believes its acquisition of Amoskeag has shifted control of
the Company from Amoskeag to the public stockholders of the Company.
INFORMATION CONCERNING THE BOARD OF DIRECTORS
During 1993, the Board of Directors held seventeen meetings. Each director,
except one, attended more than 75 percent of the 1993 Board meetings and
meetings of Board Committees of which he was a member. One director, F. C.
Dumaine, attended 62.5% of such meetings.
The business of the Company is under the general management of the Board of
Directors as provided by the laws of Delaware and the Bylaws of the Company. The
Board of Directors has established an Executive Committee, Audit Review
Committee, Compensation Committee, Retirement Review Committee and Nominating
Committee.
The Executive Committee may exercise, during intervals between
meetings of the Board, all the powers of the Board of Directors except to the
extent limited by law. The Executive Committee consists of three members and did
not meet during 1993.
The Audit Review Committee consists of four members who are not salaried
employees and who are, in the opinion of the Board of Directors, free from any
relationship that would interfere with their exercise of independent judgment as
Audit Review Committee members. During 1993, the Audit Review Committee held
three meetings. The functions of the Audit Review Committee are to recommend the
engagement of the Company's independent auditors and to review with them the
plan and scope of their audit for each year, the status of their audit during
the year, the results of the audit when completed, the auditors' letter on their
observations and recommendations to the Company and their fees for services
performed. The Committee also reviews the results of the annual audit with
management, both jointly with the independent auditors and separately, reviews
financial statements and filings with the Securities and Exchange Commission,
discusses with management the adequacy of internal controls, monitors the work
of the Company's Internal Audit Department and reports to the entire Board with
respect to audit-related matters.
The Compensation Committee consists of one or more non-employee directors
and met once during 1993. The functions of the Committee are to review the
compensation of the Company's corporate officers and to make adjustments with
respect thereto. The Compensation Committee also administers other aspects of
the Company's executive compensation program and makes recommendations to the
full Board with respect to compensation for Board service. The present members
of the committee are Messrs. Barrett, Harned and Kimbrell.
The Retirement Review Committee consists of three members and met six times
during 1993. This Committee monitors, reviews and reports to the Board on the
Company's defined benefit and contribution plans, and any future, new or
substituted plans, the level of benefits provided and proposed thereunder, and
the investment of assets by investment managers of such plans.
The Nominating Committee consists of four members and met twice during
1993. The function of the Committee is to make recommendations to the full Board
as to the desirable number of directors and candidates to fill any positions on
the Board. The Committee will consider candidates suggested by stockholders of
the Company, and suggestions for candidates, accompanied by biographical
information for evaluation, should be sent to the Secretary of the Company at
the address appearing on the first page of this Proxy Statement. See
"Stockholder Proposals."
6
<PAGE>
COMPENSATION OF DIRECTORS
Effective January 1, 1994, non-employee directors of the Company are paid
quarterly retainers of $4,500 and a fee of $1,000 for each Board or Committee
meeting attended, except that Committee Chairmen are paid a fee of $1,500 per
Committee meeting. Non-employee directors are also paid a fee of $600 for each
short telephonic meeting. Directors, including employee directors, are
reimbursed for travel and other expenses relating to their functions served as
directors. In addition, the Company presently has a consulting arrangement with
C. J. Kjorlien pursuant to which Mr. Kjorlien provides from time to time
consulting services to certain executive officers of the Company. During 1993,
Mr. Kjorlien received $4,822 in consideration for his services under this
arrangement.
DIRECTOR STOCK OPTION PLAN
On February 7, 1990, the Board of Directors adopted, and on April 24, 1990
the stockholders approved, the Director Stock Option Plan of Fieldcrest Cannon,
Inc. The purpose of the plan is to encourage and enable directors to acquire or
increase their ownership of the Company's common stock and to promote a closer
identification of their interests with those of the Company and its
stockholders. The plan provides for an annual grant of an option for 1,000
shares of Common Stock to each person who is a director. The grant is made on
the fifth business day after the annual meeting of stockholders. 500,000 shares
of Common Stock have been reserved for issuance pursuant to the plan.
Under the terms of the plan, the option exercise price is the per share
fair market value of the Common Stock on the date of grant. The fair market
value is deemed to be the closing price per share of the Common Stock on the New
York Stock Exchange on the last trading day prior to the date the Option is
granted. Options may be exercised up to seven years from the date of grant, but
no option may be exercised during the six-month period following its grant
except in the case of death or disability, and no option may be exercised unless
(subject to certain exceptions) the optionee is a director at the time of
exercise and has continuously served as a director since the date of grant. Any
option (or portion thereof) which is not exercised before the expiration of the
option will terminate. In 1993 options for 12,000 shares were granted at a per
share price of $23.625. At April 4, 1994, 6,000 of these options were
outstanding and exercisable.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation earned by the Chief
Executive Officer and the other four most highly compensated executive officers
(the "Named Executives") for the years ended December 31, 1993, 1992, and 1991.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION AWARDS
SECURITIES
RESTRICTED UNDERLYING
NAME AND ANNUAL COMPENSATION STOCK OPTIONS/ ALL OTHER
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($)(A) AWARDS ($)(B) SARS (#)(C) COMPENSATION ($)(D)
<S> <C> <C> <C> <C> <C> <C>
J. M. Fitzgibbons (e) 1993 $515,000 $174,998 $93,718 1,000/0 $36,296
Chairman and Chief 1992 500,000 200,000 52,856 4,000/0 29,859
Executive Officer 1991 500,000 60,000 -- 23,000/0 --
C. G. Horn (f) 1993 515,000 174,998 93,718 1,000/0 36,296
President and Chief 1992 500,000 200,000 52,856 4,000/0 29,859
Operating Officer 1991 500,000 60,000 55,719 3,000/0 --
K. W. Fraser, Jr. (g) 1993 267,493 93,718 -- -- 21,389
Senior Vice President 1992 259,700 103,880 32,494 -- 13,854
and Chief Financial Officer 1991 245,000 29,400 27,306 -- --
C. L. Kametches (e) 1993 240,196 81,619 53,615 -- 20,258
Senior Vice President 1992 233,200 93,280 30,263 -- 12,102
1991 220,000 26,400 24,523 -- --
R. E. Dellinger (e) 1993 240,196 81,619 53,615 -- 20,258
Vice President and 1992 233,200 93,280 30,263 -- 12,102
President Bath Division 1991 220,000 26,400 24,523 -- --
</TABLE>
(a) The amount shown in this column represents annual bonuses under the
Company's short-term incentive compensation plan. Awards under this plan are
at the discretion of the Board of Directors.
7
<PAGE>
(b) Amounts set forth in this column represent the value of shares awarded to
the Named Executives during 1993, 1992, and 1991 under the Company's
Long-Term Incentive Plan. The value of such shares is determined by
multiplying the number of shares of stock earned by the value of the
Company's Common Stock at the close of business on the date of award. The
number (and value) of shares of stock held by the Named Executives at
December 31, 1993, (including 1990 shares which vested on January 3, 1994)
is as follows: J. M. Fitzgibbons -- 6,093 ($150,040) shares; C. G.
Horn -- 12,185 ($300,056) shares; K. W. Fraser, Jr. -- 4,718 ($116,181)
shares; C. L. Kametches -- 6,168 ($151,887) shares; and R. E.
Dellinger -- 6,168 ($151,887) shares. The Named Executives are entitled to
dividends and voting rights with respect to such stock awards as of the
grant date.
(c) Includes options granted under the Director Stock Option Plan and options
granted under the Stock Option Agreement between the Company and J. M.
Fitzgibbons. In 1992, the Company amended its Director Stock Option Plan to,
among other things, increase the period during which options granted under
the plan (including options outstanding at the time of the amendment) may be
exercised from one year to seven years. Options outstanding at the time of
this amendment may be deemed to have been regranted and are therefore shown
as granted during 1992. At the time of the amendment, J. M. Fitzgibbons and
C. G. Horn each held options to purchase 3,000 shares of the Company's
Common Stock under the plan.
(d) The amount shown in this column consists of deferred compensation allocated
by the Company to the account of the Named Executives under the Executive
Capital Accumulation Plan, a nonqualified deferred compensation profit
sharing plan and the value of stock as of the grant date representing the
Company match under the Company's Retirement Savings Plan.
(e) Certain executives of the Company are parties to agreements under which they
are entitled to a lump-sum payment of an amount based on their base salary
in the event of a change in control of the Company. Under the agreements,
upon a change in control of the Company, the following executive officers
will be entitled to receive a lump-sum payment of their base salary
otherwise payable over the following number of years: J. M. Fitzgibbons, 3
years; C. L. Kametches, 2 years, and R. E. Dellinger, 2 years.
(f) Compensation was paid to Mr. Horn under the terms of an employment contract
covering his services from January 1, 1988 through December 31, 1993, at an
annual salary of at least $515,000 exclusive of normal incentive
compensation, supplemental retirement and other employee benefits. Upon the
expiration of this agreement and the termination of Mr. Horn's employment by
the Company prior to his reaching the age of sixty (60), the Company shall
pay to him a lump sum equal to three (3) times his annual salary. Upon the
expiration of this agreement or the termination by the Company of Mr. Horn's
employment, the Company shall pay to him beginning on the earlier of Mr.
Horn's 60th birthday or 3 years following the termination of employment for
his life an annual amount, if any, by which 50% of his retirement base
exceeds the amount of the annual retirement benefits payable to him from the
pension, profit-sharing and stock bonus plans qualified under Section 401
(a) of the Internal Revenue Code maintained by the Company.
(g) Compensation was paid to Mr. Fraser under the terms of an employment
contract covering his services from January 1, 1989 through December 31,
1993, at an annual salary of at least $233,100 exclusive of normal incentive
compensation, supplemental retirement and other employee benefits. Upon the
expiration of this agreement or the termination of Mr. Fraser's employment
by the Company, the Company was obligated to pay for a period of 24 months
thereafter an amount equal to Mr. Fraser's then base salary. Upon the
expiration of this agreement and the termination of Mr. Fraser's employment
after his reaching the age of sixty-five (65), the Company was obligated to
pay to him for his life an annual amount, if any, by which 50% of his
retirement base exceeds the amount of the annual retirement benefits payable
to him (excluding therefrom benefits arising from employee contributions)
from the pension, profit-sharing and stock bonus plans qualified under
Section 401 (a) of the Internal Revenue Code maintained by the Company. Mr.
Fraser elected early retirement as of January 1, 1994; therefore no
additional benefits are due him under the contract.
Effective March 1, 1994 the Board of Directors initiated a salary reduction
plan under which Mr. Fitzgibbons' annual salary was reduced by $100,000 and the
annual salaries of all other executive officers were reduced by 10%. In
connection with such reduction, stock appreciation rights ("SAR's") equal to 300
shares per $1,000 of salary reduction will be granted to these employees. The
SAR's may be exercised for cash equal to increases in the market value of the
Company's Common Stock above $28.50, the closing market value on March 1, 1994.
8
<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information with respect to the
stock options granted to the Named Executives during 1993, including the
potential realizable value of such options at assumed annual rates of stock
price appreciation of 5% and 10% for the option terms.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL
% OF TOTAL REALIZABLE VALUE
OPTIONS/SARS, AT ASSUMED ANNUAL
NUMBER AT GRANTED TO RATES OF STOCK
SECURITIES UNDERLYING EMPLOYEES IN EXERCISE PRICE APPRECIATION
OPTIONS/SARS FISCAL OR BASE EXPIRATION FOR OPTION TERM
NAME GRANTED (#)(A) YEAR(B) PRICE ($/SH) DATE 5% ($) 10% ($)
<S> <C> <C> <C> <C> <C> <C>
J. M. Fitzgibbons 1,000/0 8.3% $ 23.625 5-3-2000 $9,618 22,413
Chairman and Chief
Executive Officer
C. G. Horn 1,000/0 8.3% 23.625 5-3-2000 9,618 22,413
President and Chief
Operating Officer
K. W. Fraser, Jr. -- -- -- -- -- --
Senior Vice President and
Chief Financial Officer
C. L. Kametches -- -- -- -- -- --
Senior Vice President
R. E. Dellinger -- -- -- -- -- --
Vice President and
President Bath Division
</TABLE>
(a) The number of options set forth in this table represents options granted
under the Company's Director Stock Option Plan. See "Compensation of
Directors -- Director Stock Option Plan" for more information with respect
to the terms and conditions of options granted under the Director Stock
Option Plan.
(b) Percent of total options granted to employees includes options granted to
non-employee directors.
AGGREGATE OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
The following table sets forth the number of unexercised options held by
the Named Executives at December 31, 1993 and the value of such options at
December 31, 1993, as represented by the positive spread between the exercise
price of such options and the value of shares of the Company's Common Stock at
December 31, 1993.
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF SECURITIES IN-THE-MONEY
UNDERLYING UNEXERCISED OPTIONS/SARS
OPTIONS/SARS AT FY-END AT FY-END
DECEMBER 31, 1993 (#) DECEMBER 31, 1993 ($)
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C>
J. M. Fitzgibbons 25,000 0 $ 237,875 --
Chairman and Chief Executive Officer
C. G. Horn 5,000 0 42,875 --
President and Chief Operating Officer
K. W. Fraser, Jr. 0 0 -- --
Senior Vice President and Chief Financial Officer
C. L. Kametches 0 0 -- --
Senior Vice President
R. E. Dellinger 0 0 -- --
Vice President and President Bath Division
</TABLE>
RETIREMENT PLAN FOR SALARIED EMPLOYEES
Each of the Named Executives listed in the summary compensation table and
all other salaried employees are participants in this plan. The plan is a
qualified, defined benefit plan which, until January 1, 1981, was contributory
on the part of the participants. For the calendar year 1993, the Company's
aggregate contribution for all participants in the plan amounted to
approximately 4.17% of the total plan compensation of the participants.
9
<PAGE>
Plan compensation of participants is limited to base salary and incentive
bonuses earned and specifically excludes items required to be added to W-2 wages
such as moving expenses and other similar forms of compensation. The plan
provides benefits upon early or normal retirement of the Named Executives and
employees.
Upon normal retirement at age 65 or early retirement, the participant is
paid a monthly pension by the trust based on years of participation in the plan.
The participant's annual benefit at normal retirement is 1.5% of career average
earnings, as defined, times the number of years of service up to a maximum of 20
years, plus .75% of career average earnings times the number of years of service
in excess of 20 years. The normal form of benefit is a life annuity. Actuarially
computed reductions in vested benefits are made in the event of early retirement
or termination. The table below illustrates the estimated annual pension benefit
payable by the Company under this formula to a person at normal retirement in
specified average salary "Remuneration" and years of service classifications.
<TABLE>
<CAPTION>
YEARS OF SERVICE
REMUNERATION 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
<S> <C> <C> <C> <C> <C>
125,000 28,125 37,500 42,188 46,875 51,563
150,000 33,750 45,000 50,625 56,250 61,875
175,000 39,375 52,500 59,063 65,625 72,188
200,000 45,000 60,000 67,500 75,000 82,500
225,000 50,625 67,500 75,938 84,375 92,813
250,000 56,250 75,000 84,375 93,750 103,125
300,000 67,500 90,000 101,250 112,500 123,750
350,000 78,750 105,000 118,125 131,250 144,375
400,000 90,000 120,000 135,000 150,000 165,000
450,000 101,250 135,000 151,875 168,750 185,625
500,000 112,500 150,000 168,750 187,500 206,250
550,000 123,750 165,000 185,625 206,250 226,875
600,000 135,000 180,000 202,500 225,000 247,500
700,000 157,500 210,000 236,250 262,500 288,750
800,000 180,000 240,000 270,000 300,000 330,000
900,000 202,500 270,000 303,750 337,500 371,250
</TABLE>
The Company funds the entire cost of the plan by periodic contributions to
the Fieldcrest Cannon, Inc. Retirement Plan Trust Funds, which are determined on
an actuarial basis. To the extent that the annual retirement benefit exceeds the
limit established by the Employee Retirement Income Security Act ("ERISA") for
payments from qualified trust funds, the difference will be paid from the
general operating funds of the Company in accordance with the Excess Benefit
Plan described below. The Company's contributions are not allocated to the
account of any particular employee. Officers participate in the plan on the same
basis as approximately 2,100 other salaried employees of the Corporation.
To protect certain key executives (including the Named Executives) from the
loss of benefits resulting from these limitations imposed by ERISA, the Company
sponsors a non-qualified plan, the Fieldcrest Cannon, Inc. Excess Benefit Plan
(the "Excess Benefit Plan"). Should benefits under the Retirement Plan otherwise
payable to participating executives be reduced to comply with these limitations,
the Excess Benefit Plan will pay to such executives the difference between the
benefits actually paid under the Retirement Plan and the benefits which would
have been paid thereunder if the limitations had not been in effect. Payments
are made to participants in the Excess Benefit Plan in the same manner and at
the same time or times as under the Retirement Plan. Participants in the Excess
Benefit Plan are key executives of the Company who are designated as
participants by the Retirement Review Committee of the Board of Directors.
At December 31, 1993, the credited service for pension calculations for the
Named Executives was as follows: J. M. Fitzgibbons -- 2 years; C. G. Horn -- 30
years; K. W. Fraser, Jr. -- 30 years; C. L. Kametches -- 33 years; and R. E.
Dellinger -- 8 years.
Credited compensation covered by either the plan or the Excess Benefit Plan
for 1993 for the Named Executives listed in the summary compensation table was
as follows: J. M. Fitzgibbons -- $715,000; C. G. Horn -- $715,000; K. W. Fraser,
Jr. -- $371,293; C. L. Kametches -- $333,476; and R. E. Dellinger -- $333,476.
Directors who are not employees are not eligible to participate in the plan.
10
<PAGE>
The benefit amounts in the table shown above are not subject to deduction
for Social Security benefits or other offset amounts.
PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly percentage change in
the cumulative total stockholder return on the Company's Common Stock with the
cumulative total return of the Standard & Poor's 500 Stock Index and a peer
group, constructed by the Company, consisting of four corporations (Fieldcrest
Cannon, Inc., Crown Crafts, Inc., Springs Industries, Inc., and Thomaston Mills,
Inc.) that are engaged principally in the manufacture and sale of home
furnishing textile products. Although included in 1992, the 1993 peer group
index excludes West Point-Pepperell, Inc., because it was acquired by another
entity in 1993.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG FIELDCREST CANNON INC., S&P 500 INDEX & PEER GROUP
(Comparison Graph appears here--see appendix for plot points)
REPORT OF THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
This report of the Compensation Committee of the Board of Directors of the
Company sets forth the Committee's compensation policies applicable to the Named
Executives and the other executive officers of the Company, including the
specific relationship of corporate performance to executive compensation, with
respect to compensation reported in this proxy statement for 1993.
EXECUTIVE COMPENSATION POLICIES
Decisions on compensation of the Company's executive officers are made by
the Compensation Committee of the Board which consists of non-employee
directors. The Committee's executive compensation policies are to motivate key
senior executives to achieve short-term and long-term goals, while providing
competitive levels of compensation that will assist the Company in attracting
and retaining qualified executives. As discussed below, these policies are
implemented through annual bonuses paid under short-term incentive compensation
criteria
11
<PAGE>
established each year by the Committee (the "Annual Bonus" or "Annual Bonuses"),
awards of stock under the Long-Term Incentive Plan (the "Long-Term Plan"),
deferred compensation paid pursuant to the Executive Capital Accumulation Plan
(the "Capital Accumulation Plan") and the payment of base salaries at a level
that is consistent with the incentive-based aspects of the Committee's policies.
RELATIONSHIP OF CORPORATE PERFORMANCE TO EXECUTIVE COMPENSATION
The key mechanism of the Committee's incentive-based compensation policies
are the Annual Bonuses, which are paid to the Company's executive officers if
the Company achieves a minimum return on equity ("ROE") for the year. The
Committee believes that ROE usually provides a reasonably accurate comparison of
corporate performance with that of the Company's peers. The criteria for Annual
bonuses for 1993 provided that each of the Company's executive officers could
earn a bonus equal to certain specified percentages of his base salary,
depending on the Company's ROE for the year. Based on the ROE achieved by the
Company for 1993, the Named Executives received bonuses equalling 34% of their
base salaries.
The Committee believes that stock ownership is an important tool to improve
the Company's long-term performance and enhance stockholder value and has used
awards of stock under the Long-Term Plan to help achieve this goal. Share awards
under the Long-Term Plan vest after four years of continued employment (or
earlier in the event of death, disability or normal retirement). Accordingly,
executives who receive awards of shares are motivated to improve corporate
performance and increase stockholder value on a long-term basis. By this means,
the interests of such executives are further aligned with those of the Company's
stockholders. In determining the amount of shares of stock to be awarded, the
Committee considers, in addition to the incentive based purpose of the plan, the
recent performance of the Company and such factors as whether actions during the
year that promote long-term goals of the Company may have been at the expense of
short-term performance, thereby reducing ROE and the amount of the Annual
Bonuses. (Two executives of the Company also are directors and, accordingly,
participate in the Company's Director Stock Option Plan. Under this plan, each
director is automatically awarded an annual option to purchase 1,000 shares,
which may be exercised during a term of seven years. This plan also is designed
to promote a closer identification of the interests of the directors with those
of the stockholders and stimulate efforts to enhance stockholder value.)
The Capital Accumulation Plan also is designed to motivate the Company's
executives to improve corporate performance. The plan provides for the Company
to credit to the executives' deferred compensation accounts, as of each December
31, an aggregate amount as determined with respect to each Plan Year in the
discretion of the Committee. This aggregate amount is allocated among the
several executives' accounts pro rata based on their relative compensation.
Amounts credited to the accounts of the Named Executives for 1993 and 1992 are
set forth in the Summary Compensation Table. No amounts were credited for 1991.
The base salaries of the Company's executives are generally set at levels
that will attract and retain qualified executives, taking into account the
Compensation Committee's desire to link a significant percentage of an
executive's compensation to corporate performance. The salaries of two of the
Named Executives are determined in part by employment agreements, which provide
for minimum salary levels. Year-to-year adjustments are made on a subjective
basis each year based on a number of factors, including the Company's
performance and company-wide salary adjustments. Salary increases for executives
in the past three years have been relatively modest, in keeping with the
Committee's view of the level of improvement in corporate performance. In 1993,
the Company implemented a wage increase for its non-exempt employees, and the
salaries of the Company's executives were in general adjusted accordingly.
COMPENSATION PAID TO THE CHIEF EXECUTIVE OFFICER
1993 compensation paid to J. M. Fitzgibbons, the Company's Chief Executive
Officer, was based on the factors generally applicable to compensation paid to
executives of the Company as described above. The Annual Bonus of $174,998 paid
to Mr. Fitzgibbons for 1993 was based on the criteria established by the
Committee in late 1991 and applied generally to all recipients of Annual
Bonuses.
The Committee awarded Mr. Fitzgibbons 3,274 shares of common stock in March
1994, under the Long-Term Plan with respect to 1993. This award, which will vest
in 1997, was based on moderate improvement in corporate performance for 1993.
The amount credited to Mr. Fitzgibbons' deferred compensation account for 1993
was set by the terms of the Capital Accumulation Plan.
12
<PAGE>
The foregoing report is submitted by the members of the Compensation
Committee.*
<TABLE>
<S> <C>
Tom H. Barrett
John C. Harned
W. Duke Kimbrell
</TABLE>
* Noah T. Herndon, C. Edward Midgley and John M. Rudel, who retired from the
Board of Directors during 1993, were members of the Compensation Committee
during 1993 and took part in certain decisions with respect to executive
compensation during 1993. John C. Harned and W. Duke Kimbrell were appointed
to the Compensation Committee on March 2, 1994 but took no part in any
decisions made with respect to executive compensation paid during 1993.
II. RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors of the Company, upon the recommendation of its Audit
Review Committee, has selected the firm of Ernst & Young as independent auditors
for the Company and its subsidiaries for the year 1994, subject to ratification
by the stockholders. This firm has audited the accounts of the Company since its
organization and has advised the Company that it does not have, and has not had,
any direct or indirect financial interest in the Company or its subsidiaries in
any capacity other than that of independent auditors. Ernst & Young
representatives are expected to attend the Annual Meeting of Stockholders. They
will have an opportunity to make a statement if they desire to do so, and will
also be available to respond to appropriate questions. The proposal to ratify
the selection of Ernst & Young as independent accountants for 1994 will be
approved if it receives the affirmative vote of the majority of shares present
in person or represented by proxy at the meeting and entitled to vote.
Abstentions will be counted for purposes of determining the existence of a
quorum for the meeting, but shares held of record by a broker, as nominee, that
are not voted on any matter will not be counted as present for such purposes.
Abstentions will be counted as shares present and entitled to vote for such
proposal and, therefore, will have the same legal affect as a vote against the
proposal to ratify the selection of Ernst & Young as independent auditors for
1994.
The Board of Directors recommends a vote "FOR" ratification.
STOCKHOLDER PROPOSALS
Stockholders having proposals which they desire to present at next year's
annual meeting should, if they desire that such proposals be included in the
Board of Directors' proxy and proxy statement relating to such meeting, submit
such proposals in time to be received by the Company at its principal executive
office in Eden, North Carolina, not later than December 8, 1994. To be so
included, all such submissions must comply with the requirements of Rule 14a-8
under the Securities Exchange Act of 1934, as amended, and the Board of
Directors directs the close attention of interested stockholders to that Rule.
In addition, the Company's By-Laws provide that in order for business to be
brought before an annual meeting of stockholders, a stockholder must deliver
written notice of such business to the Secretary of the Company not less than 60
days nor more than 90 days prior to the meeting (or if less than 70 days' notice
or prior public disclosure of the meeting date is given by the Company, the
stockholder's written notice must be delivered by the 10th day following
announcement of the meeting date). In addition to briefly describing the
business to be brought before the meeting and the reason for conducting such
business at the meeting, the notice must identify the stockholder's name and
address as they appear on the Company's books, the class and number of shares
beneficially owned by the stockholder and the stockholder's interest in the
business to be brought before the meeting if such interest is material.
Under the Company's By-Laws, a stockholder may nominate a candidate for
election to the Board of Directors of the Company by giving written notice to
the Secretary of the Company. The notice must be delivered not less than 60 days
nor more than 90 days prior to the meeting (or if less than 70 days' notice or
prior public disclosure of the meeting date of the meeting is given by the
Company, such nomination must have been mailed or delivered to the Secretary by
the 10th day following announcement of the meeting date). Such notice must set
forth (a) as to each proposed nominee (i) the name, age, business address and,
if known, residence address of each such nominee, (ii) the principal occupation
or employment of each such nominee, (iii) the number of shares of stock of the
Company which are beneficially owned by each such nominee, and (iv) any other
information
13
<PAGE>
concerning the nominee that must be disclosed as to nominees in proxy
solicitations pursuant to Regulation 14A under the Securities Exchange Act of
1934, as amended (including such person's written consent to be named as a
nominee and to serve as a director if elected) and (b) as to the stockholder
giving the notice (i) the name and address as they appear on the Company's books
of such stockholder and (ii) the class and number of shares of the Company which
are beneficially owned by such stockholder. The Company may require any proposed
nominee to furnish such other information as may reasonably be required by the
Company to determine the eligibility of such proposed nominee to serve as a
director of the Company.
OTHER MATTERS
The shares represented by each properly executed proxy received by the
Company will be voted in accordance with the instructions, if any, given
therein. The Company does not know of any other business to be brought before
the meeting, but it is intended that, as to any such other business, the shares
will be voted pursuant to the proxy in accordance with the judgment of the
person or persons acting thereunder.
By Order of the Board of Directors,
M. KENNETH DOSS
SECRETARY
326 East Stadium Drive
Eden, North Carolina 27288
April 7, 1994
14
FIELDCREST CANNON, INC. Common Stock
326 E. Stadium Drive Proxy
Eden, North Carolina 27288
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints James M. Fitzgibbons, and
Charles G. Horn, and each of them, proxies, with
power of substitution, and all powers the undersigned would possess
if personally present to vote at the meeting of
stockholders of Fieldcrest Cannon, Inc. called to be held at the
Company's offices at One Lake Drive, Kannapolis,
North Carolina, on May 16, 1994, at 9 o'clock a.m., and any
adjournment thereof, upon the following matters, all as
more fully described in the Notice of Meeting and Proxy Statement,
receipt of which is hereby acknowledged, and in
their discretion upon other matters properly coming before the
meeting:
I. Election of Directors
FOR Tom H. Barrett, James M. Fitzgibbons,
William E. Ford, John C. Harned,
S. Roger Horchow, Charles G. Horn, W.
Duke Kimbrell, C. John Kjorlien
VOTE WITHHELD To withhold authority to vote
for any individual nominee strike
a line through the nominee's namein
the list above.
II. FOR AGAINST ABSTAIN Ratification of the Board
of Directors' selection of
Ernst & Young, independent
accountants, as
auditors for the Company.
III. In their discretion, the Proxies are authorized to vote
upon such other business an may properly come
before the meeting.
(Continued and to be signed on reverse side)
<PAGE>
THIS PROXY IS ENTITLED TO ONE VOTE PER SHARE AND, WHEN PROPERLY
EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE
UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BEVOTED FOR PROPOSALS I AND II.
Please sign exactly as name appears below. When shares
are held by joint tenants, both should sign. When
signing as attorney, as executor, administrator, trustee or
guardian, please give full title as such. If acorporation,
please sign in full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by
authorized persons.
Date 1994
Signature
Signature if held jointly
Common Stock
This Proxy is entitled to one vote
per share.
Please, Date, Sign and Mail This Proxy in the Enclosed
Envelope. No Postage is Required.
*******************************************************************************
APPPENDIX
On the notice of annual meeting page, the Fieldcrest Cannon logo appears
where indicated.
On page 11, the comparison graph appears where indicated. The plot points
are as listed below:
1988 1989 1990 1991 1992 1993
Fieldcrest Cannon 100 117 36 67 98 133
S&P 500 100 132 128 166 179 197
Peer Group 100 129 77 109 149 162
