<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
JOHNSTON INDUSTRIES, INC.
----------------------------------
(Name of Registrant as Specified in Its Charter)
----------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No filing fee required
[ ] 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 transactions 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 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> 2
[GRAPHIC OMITTED]
JOHNSTON INDUSTRIES, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 26, 1999
To the Stockholders of
Johnston Industries, Inc.
NOTICE IS HEREBY GIVEN that the 1999 Annual Meeting of Stockholders
(the "Meeting") of Johnston Industries, Inc., a Delaware corporation, will be
held at 10:00 a.m. (Eastern Daylight Savings Time) on May 26, 1999 at the
Executive offices of Johnston Industries, Inc., 105 Thirteenth Street, Columbus,
Georgia 31901, to consider and take action with respect to the following
actions:
(1) the election of seven (7) Directors to serve for one-year
terms; and
(2) to transact such other business as may properly come before
the Meeting or any adjournment or postponement thereof.
Only stockholders of record as of the close of business on April 6,
1999 are entitled to notice of and to vote at the Meeting or any adjournment
thereof. A list of such stockholders will be available for the inspection of any
stockholder for any purpose germane to the Meeting during the ten days prior to
the Meeting, at the offices of Johnston Industries, Inc., 105 Thirteenth Street,
Columbus, Georgia 31901.
By Order of the Board of Directors
F. Ferrell Walton
Secretary
Columbus, Georgia
April 26, 1999
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING IN ORDER
TO SECURE A QUORUM. WHETHER OR NOT YOU PLAN TO BE PRESENT AT THE MEETING AND
REGARDLESS OF THE NUMBER OF SHARES YOU HOLD, PLEASE COMPLETE AND MAIL THE
ENCLOSED PROXY IN THE ACCOMPANYING POSTAGE-PAID ENVELOPE. IF YOU RECEIVE MORE
THAN ONE PROXY BECAUSE YOUR SHARES ARE REGISTERED IN DIFFERENT NAMES OR
ADDRESSES, EACH PROXY SHOULD BE SIGNED AND RETURNED TO ASSURE THAT ALL OF YOUR
SHARES WILL BE VOTED. THE PROXY SHOULD BE SIGNED BY ALL REGISTERED HOLDERS
EXACTLY AS THE STOCK IS REGISTERED.
<PAGE> 3
JOHNSTON INDUSTRIES, INC.
105 THIRTEENTH STREET
COLUMBUS, GEORGIA 31901
PROXY STATEMENT DATED APRIL 26, 1999
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 26, 1999
INTRODUCTION
VOTE BY PROXY
The 1999 Annual Meeting of Stockholders of Johnston Industries, Inc.
(the "Company" or "Johnston") will be held at 10:00 a.m. (Eastern Daylight
Savings Time) on May 26, 1999 at the Executive Offices of Johnston Industries,
Inc., 105 Thirteenth Street, Columbus, Georgia 31901, for the purposes set forth
in the foregoing notice. The Board of Directors of the Company (the "Board of
Directors" or the "Board") solicits your proxy for use and voting at the meeting
and at any adjournment or postponement thereof (the "Meeting") and urges you to
complete and return the accompanying form of proxy promptly. This Proxy
Statement, together with the accompanying form of proxy, is first being mailed
to stockholders on or about April 26, 1999.
All properly executed proxies in the accompanying form which are
received in time for the Meeting and not revoked will be voted according to the
instructions contained thereon. If no choice is specified, proxies will be voted
FOR the election of the seven (7) Directors named herein and in accordance with
the prudent judgment of the proxy-holders as to other matters properly presented
to the meeting.
A proxy may be revoked at any time before its exercise by submitting a
later dated proxy or by giving written notice of revocation to the Secretary of
the Company. In addition, if a person executing a proxy is present at the
Meeting, he or she may elect to revoke his or her proxy by notice of such
revocation to the Secretary of the Meeting and may vote his or her shares in
person. Proxies, if in the form enclosed, duly signed and received in time for
voting, and not revoked before they are voted, will be voted at the Meeting in
accordance with the instructions specified therein. Your cooperation in promptly
returning the enclosed proxy will reduce the Company's expenses and enable the
Company's management and employees to continue their normal duties for your
benefit with minimum interruption for follow-up proxy solicitation. At the close
of business on April 6, 1999, the record date for the Meeting (the "Record
Date"), a total of 10,721,872 shares of the Company's Common Stock, $.10 par
value per share (the "Common Stock"), were issued and outstanding, with each
share of Common Stock entitled to one vote.
COST OF PROXY SOLICITATION
The cost of soliciting proxies will be borne by the Company. Proxies
may be solicited by members of the Board of Directors ("Directors"), officers
and regular employees, without separate remuneration, in person or by telephone,
facsimile transmission, telegram or mail. As is customary and in accordance with
the regulations of the Securities and Exchange Commission ("SEC") and the New
York Stock Exchange, the Company will, upon request, reimburse banks, brokerage
houses and other custodians, nominees, fiduciaries, and other record holders for
out-of-pocket expenses of forwarding soliciting material to beneficial owners of
the stock.
The Company has retained Corporate Investor Communications, Inc.
("CIC") to assist the Company in the distribution and solicitation of proxies,
primarily from brokers, nominees, fiduciaries and other custodians of the Common
Stock. The Company has agreed to pay CIC a solicitation fee in the approximate
amount of $3,500 and to reimburse CIC for all printing, postage, freight and
other delivery charges CIC incurs in connection with its activities on behalf of
the Company.
-3-
<PAGE> 4
OUTSTANDING SHARES AND VOTING RIGHTS
The Common Stock is the Company's only class of securities with general
voting rights. Each share of Common Stock is entitled to one vote on each matter
properly coming before the Meeting. Only stockholders of record as of the close
of business on the Record Date will be entitled to vote at the Meeting. Each
stockholder has one vote per share on all business to be conducted at the
meeting, and cumulation of votes is not permitted. Holders of a majority of the
outstanding shares, if present in person or represented by proxy, will
constitute a quorum at the Meeting. Abstentions and "broker non-votes" (which
occur if a broker or other nominee does not have discretionary authority and has
not received voting instructions from the beneficial owner with respect to the
particular item) are counted for purposes of determining the presence or absence
of a quorum for the transaction of business. Directors will be elected by a
plurality of the votes of the shares present in person or represented by proxy
and entitled to vote for the position on the Board of Directors which that
nominee represents. Accordingly, abstentions and broker non-votes will have no
effect on the outcome of the election of Directors. Management does not
anticipate that any other matters will be presented at the meeting.
AGENDA ITEM ONE
ELECTION OF DIRECTORS
INFORMATION REGARDING DIRECTORS
Directors serve for one-year terms ending after the Annual Meeting of
Stockholders at which their term of office expires and their successors have
been elected and qualified. In the case of a vacancy, the Board of Directors may
elect a replacement or leave the vacancy unfilled. Decisions regarding the
election of new Directors during the year are based upon such considerations as
the size of the Board and the need to obtain fresh perspectives or to replace
the particular skills or experience of former Directors. There is no formal
procedure for stockholder nominations for Directors, although the Company's
By-laws (the "By-laws") require nominating stockholders to provide advance
notice to the Company and certain specified information.
Proxies received from holders of Common Stock will be voted "FOR" the
election of the nominees named below as Directors for one-year terms expiring at
the 2000 Annual Meeting of Stockholders, unless authority to do so is withheld.
In the event any nominee is unable or declines to serve as a Director at the
time of the Meeting, the persons named as proxies therein will have
discretionary authority to vote the proxies for the election of such person or
persons as the present Board of Directors may nominate in substitution therefor.
It is not anticipated that any nominee will be unavailable for election.
GENERAL
The Company's Certificate of Incorporation provides for the number of
Directors to be fixed from time to time by or pursuant to the By-laws, provided
that the number of Directors may not be less than one. The By-laws currently fix
the number of Directors at not less than three or more than fifteen as
determined from time to time by Board resolution. Current resolutions of the
Board have fixed the number of Directors at seven. Such resolutions may be
changed by the Board to increase or decrease the number of Directors, subject to
compliance with procedures required for the removal of Directors.
Biographical information concerning the Directors is set forth below:
NOMINEES FOR REELECTION AS DIRECTORS
J. Reid Bingham, age 53, has served as a Director since 1991. Mr.
Bingham has been General Counsel of Hamilton Bancorp, Inc. and Hamilton Bank,
N.A. since October 1996. He previously was a partner from 1994 to 1996 of the
law firm of Concepcion, Sexton, Bingham & Urdaneta (formerly Bingham &
Castilla). Prior to this time, he was a partner of the law firm of Kirkpatrick &
Lockhart from 1989 to 1994.
-4-
<PAGE> 5
Allyn P. Chandler, age 46, was appointed to the Board on October 22,
1998 to fill the vacancy left by the death of her father, David L. Chandler. For
the past five years, Ms. Chandler has held senior management positions in
not-for-profit organizations. In 1996, she served as Artistic Director and
General Manager of Live Arts in Charlottesville, VA. From 1997 through August
1998, Ms. Chandler held various free-lance assignments, mainly with schools,
theatres and a film company. Ms. Chandler currently is Chairperson, President
and CEO of Redlaw Industries, Inc. and GRM Industries, Inc., a wholly-owned
subsidiary of Redlaw Industries, Inc. Ms. Chandler has been a member of the
Board of GRM Industries, Inc. since 1985 and a member of the Board of Redlaw
Industries, Inc. since 1998.
John A. Friedman, age 63, has served as a Director since 1996. For the
past five years, Mr. Friedman has been engaged in the private practice of law.
Prior to entering private practice Mr. Friedman, was a partner in the law firm
of Kaye, Scholer, Fierman, Hays and Handler for 20 years.
William J. Hart, age 57, has served as a Director since 1981. Mr. Hart
has been a partner of the law firm of Husch & Eppenberger since January 1997.
From August 1970 to January 1997 he was a partner of the law firm of Farrington
& Curtis, which was merged into the firm of Husch & Eppenberger.
Gaines R. Jeffcoat, age 77, has served as a Director since 1986. From
January 1988 until Mr. Jeffcoat's retirement on June 30, 1990, he served as Vice
President of the Company. Further, he served as Chairman of the Board of Opp and
Micolas Mills, Inc., a subsidiary of the Company ("Opp and Micolas"), from
January 1, 1988 to December 31, 1989. Mr. Jeffcoat was President of Opp and
Micolas for more than five years prior to that time.
D. Clark Ogle, age 52, has served as President and Chief Executive
Officer of the Company since March 19, 1998 and was appointed to the Board on
April 7, 1998 to fill a vacancy created by an increase in the number of
directors. From October 1996 until March 1998, Mr. Ogle served as managing
Director of National Strategic and Operational Improvement Consulting for KPMG
Peat Marwick, LLP. From April 1987 to October 1996, he served as CEO for a
number of companies including Victory Markets, Inc., Teamsports, Inc., WSR
Corporation, Consumer Markets, Inc., and Peter J. Schmitt Co., Inc. Mr. Ogle was
Executive Vice President and Chief Operating Officer, then President and Chief
Executive Officer, of Scrivner, Inc. for more than five years prior to that
time.
C. Philip Stanley, age 67, has served as President of the Greige
Fabrics Division of the Company since February 5, 1998 and was appointed to the
Board on April 7, 1998 to fill a vacancy created by an increase in the number of
directors. Mr. Stanley, who had retired in December 1996, returned from
retirement to serve as Vice Chairman of JI Alabama from May 12, 1997 through
February 5, 1998. Prior to that time, he served as President and Chief Operating
Officer of Opp & Micolas from January 1988 to December 1996 and for more than
five years prior to that, had served as Vice President and General Manager of
Opp and Micolas.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE REELECTION OF ALL OF
THE NOMINEES FOR THE BOARD OF DIRECTORS.
-5-
<PAGE> 6
COMPENSATION OF DIRECTORS
Pursuant to the Company's director compensation policy, each Director
who is not an officer or employee of or consultant to the Company is paid an
annual Director's fee of $12,000 plus $1,000 for each meeting of the Board or
any committee thereof at which such Director is in attendance.
GOVERNANCE OF THE COMPANY
In accordance with applicable Delaware state law, the business and
affairs of the Company are managed under the direction of the Board of
Directors. The Board has responsibility for establishing broad corporate
policies and for the Company's overall performance rather than day-to-day
operating details. Members of the Board of Directors are kept informed of the
Company's business by various reports and documents sent to them periodically as
well as by reports presented at meetings of the Board and its committees by
officers and employees of the Company.
The Board of Directors held eight (8) regular meetings during fiscal
1998. Each Director attended at least seventy-five percent (75%) of the total
number of meetings of the Board of Directors and any committees on which he
served.
COMMITTEES OF THE BOARD
The Board of Directors has standing Audit and Compensation Committees
but no Nominating Committee.
AUDIT COMMITTEE
The Audit Committee, whose members were Messrs. Bingham, Hart and
Jeffcoat for the period from June 11, 1997 through May 26, 1998 and whose
members were Messrs. Bingham and Hart for the remainder of fiscal 1998, met once
during fiscal 1998. The Audit Committee is comprised entirely of directors who
are not officers or employees of the Company.
The Audit Committee reviews the Company's accounting functions,
operations and management and the adequacy and effectiveness of the internal
controls and procedures of the Company. The Audit Committee recommends to the
Board the appointment of the independent public accountants for the Company. In
connection with its duties, the Audit Committee periodically meets privately
with the independent public accountants.
COMPENSATION COMMITTEE
The Compensation Committee, whose members were Messrs. Bingham,
Friedman and Hart for the period from June 11, 1997 through May 26, 1998 and
whose members were Messrs. Jeffcoat, Bingham and Friedman for the remainder of
fiscal 1998, met thirteen (13) times during fiscal 1998. The Compensation
Committee represents the Board in discharging its responsibilities relating to
executive compensation. The Compensation Committee is responsible for reviewing
and analyzing management's recommendations regarding executive compensation. In
addition, the Compensation Committee develops and enacts executive compensation
policies designed to enhance the Company's profitability by aligning the
financial interests of the Company with its executives.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Bingham, Friedman and Hart served on the Compensation Committee
of the Board of Directors (the "Compensation Committee") for the period from
June 11, 1997 through May 26, 1998 and Messrs. Jeffcoat, Bingham and Friedman
have served since May 27, 1998. None of such Directors are employees or officers
of the Company, and there were no compensation committee interlocks.
-6-
<PAGE> 7
PRINCIPAL STOCKHOLDERS
The following table sets forth as of the Record Date certain information
concerning ownership of Common Stock by: (i) each person who is known by the
Company to own beneficially more than 5% of the Common Stock, (ii) each Director
individually, (iii) the Company's Chief Executive Officer ("CEO") and each of
the Named Executive Officers (as defined herein) listed in the Summary
Compensation Table, and (iv) all directors and executive officers of the Company
as a group. The determinations of "beneficial ownership" of Common Stock are
based upon Rule 13d-3 under the Exchange Act of 1934, as amended (the "Exchange
Act"). Such rule provides that shares will be deemed "beneficially owned" where
a person has, either solely or in conjunction with others, the power to vote or
to direct the voting of shares and/or the power to dispose, or to direct the
disposition of, shares or where a person has the right to acquire any such power
within 60 days after the date such "beneficial ownership" is determined.
<TABLE>
<CAPTION>
AMOUNT OF PERCENT OF
BENEFICIAL OUTSTANDING
NAME AND ADDRESS OF BENEFICIAL OWNER OR IDENTITY OF GROUP OWNERSHIP(1) SHARES
- ------------------------------------------------------------------ ------------ -----------
<S> <C> <C>
J. Reid Bingham (2) 14,250 *
Allyn P. Chandler (3) 4,513,324 39.7%
John A. Friedman (4) 4,750 *
William J. Hart (5) 21,757 *
William I. Henry (6) 93,368 *
Gaines R. Jeffcoat (7) 30,184 *
Donald L. Massey (8) 37,850 *
James J. Murray (9) 77,150 *
D. Clark Ogle (9) 137,500 1.3%
C. Philip Stanley (10) 38,762 *
All directors and officers as a group (13 persons) (11) 5,037,537 43.3%
Redlaw Industries, Inc. (12) 3,543,704 33.1%
DePrince, Race and Zollo, Inc. (13) 905,500 8.4%
Dimensional Fund Advisors, Inc. (14) 874,324 8.2%
Ann P. Chandler (15) 4,526,698 39.9%
Estate of David L. Chandler (16) 4,511,824 39.7%
</TABLE>
- ----------------
* Less than 1%.
(1) Unless otherwise indicated, the named individual or entity has sole
voting and investment power with respect to all shares shown as
beneficially owned by such person. For each beneficial owner, the
number of shares outstanding and the percentage of stock ownership
includes the number of common and common equivalent shares (including
options and warrants exercisable within 60 days) owned by such
individual or entity.
(2) The address of Mr. Bingham is 3750 NW 87th Avenue, 6th Floor, Miami,
Florida 33178.
(3) Includes 750 shares owned directly by Ms. Chandler, 750 shares owned by
D. L. Chandler, Jr. for which Ms. Chandler holds a Power of Attorney,
and 3,543,704 shares owned by Redlaw Industries, Inc. ("Redlaw") and
its wholly owned subsidiary GRM Industries, Inc. ("GRM") of which Ms.
Chandler may be deemed to be a beneficial owner by virtue of her
relationship with Redlaw as set forth below in footnote 12. Ms.
Chandler, is one of the personal co-representatives of the Estate of
her late father, D. L. Chandler, (the "Estate") who was the Chairman of
Johnston Industries at the time of his death on August 21, 1998. Ms.
Chandler is deemed to be a beneficial owner of 331,590 shares of
Johnston stock and options for Johnston common stock totaling 636,530
options as held by the Estate. The foregoing information is based upon
a Schedule 13D filed March 3, 1999 and amended information provided to
the Company on behalf of the Estate. The address for Ms. Chandler is
P.O. Box 1350, Hobe Sound, Florida 33475.
(4) The address of Mr. Friedman is 430 Park Avenue, 4th Floor, New York,
New York 10022.
(5) The address of Mr. Hart is 750 N. Jefferson, Springfield, Missouri
65802.
-7-
<PAGE> 8
(6) The address of Mr. Henry is 300 General Colin Powell Parkway, Phenix
City, Alabama 36867.
(7) The address of Mr. Jeffcoat is 819 Brookside Drive, Opp, Alabama 36467.
(8) The address of Mr. Massey is 3503 Lakewood Drive, Phenix City, Alabama
36867.
(9) The address of Messrs. Murray and Ogle is 105 Thirteenth Street,
Columbus, Georgia 31901.
(10) The address of Mr. Stanley is 307 Sellars Drive, Opp, Alabama 36467.
(11) Includes an aggregate of 901,530 shares issuable pursuant to stock
options which are currently exercisable or exercisable within 60 days.
(12) Redlaw Industries, Inc. ("Redlaw") reports its address as 3968 Wainman
Line, Seven Township, R.R. #2, Orillia, Ontario, Canada L3V 6H2. These
shares are owned by GRM Industries, Inc., a Tennessee corporation and
wholly owned subsidiary of Redlaw. Redlaw is a holding company
incorporated in Ontario, Canada with stock traded on the OTC Bulletin
Board. Ms. Allyn Chandler is Chairperson of the Board, President, and
Chief Executive Officer of both Redlaw and GRM. She is also a
co-representative of the Estate, which owns 67.7% of the outstanding
stock of Redlaw and may be deemed to be the beneficial owner of the
Johnston shares owned by Redlaw. The foregoing information is based
upon a Schedule 13D filed March 3, 1999 and amended information
provided to the Company on behalf of the Estate.
(13) DePrince, Race and Zollo, Inc. ("DePrince") reports its address as 201
S. Orange Avenue, Suite 850, Orlando, Florida 32801. DePrince reports
sole voting and dispositive power with respect to all shares. The
foregoing information is based on a Schedule 13G dated February 8,
1999.
(14) Dimensional Fund Advisors, Inc. ("Dimensional") reports its address as
1299 Ocean Avenue, 11th Floor, Santa Monica, California 90401.
Dimensional reports sole voting and dispositive power with respect to
all shares. The foregoing is based on a Schedule 13G dated February 11,
1999.
(15) Mrs. Ann P. Chandler is the widow of the late D. L. Chandler, who was
Chairman of Johnston Industries, Inc. and, Chairman, President and
Chief Executive Officer of Redlaw and GRM at the time of his death.
Mrs. Chandler is co-representative of the Estate and therefore is
deemed to be the beneficial owner of shares owned by Redlaw, and the
shares and options directly part of the Estate. The foregoing
information is based upon a Schedule 13D filed March 3, 1999 and
amended information provided to the Company on behalf of the Estate.
(16) Mrs. Ann P. Chandler and Ms. Allyn P. Chandler are co-representatives
of the Estate, which reports sole voting and dispositive power with
respect to all shares shown. The foregoing information is based upon a
Schedule 13D filed March 3, 1999 and amended information provided to
the Company on behalf of the Estate.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Company's executive
officers and directors, and persons who beneficially own more than ten percent
of the Company's Common Stock, to file initial reports of ownership and reports
of changes in ownership with the SEC. Persons subject to these reporting
requirements are also required by SEC regulations to furnish the Company with
copies of all Section 16(a) forms they file. Based solely on a review of copies
of the SEC reporting forms furnished to the Company and written representations
from the Company's executive officers and directors, the Company believes that
all required Section 16(a) reports were timely filed during fiscal 1998 with the
exception of Directors Bingham, Friedman, Hart and Jeffcoat who filed Section
16(a) reports on Form 5 for options granted during the prior fiscal year.
-8-
<PAGE> 9
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following table sets forth the compensation paid by the Company for the
periods indicated to each individual serving as the Company's Chief Executive
Officer ("CEO") during fiscal 1998 and to the four most highly compensated
executive officers (other than the CEO) who were serving as executive officers
at January 2, 1999 and who earned more than $100,000 during fiscal 1998 (the
"Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION (1) AWARDS
----------------------------------------------- ------------
OTHER SECURITIES
ANNUAL UNDERLYING ALL OTHER
SALARY BONUS COMPEN- OPTIONS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) SATION($) (#) ($) (2)
- --------------------------------- -------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
David L. Chandler, 1998 260,000 50,000 --- 25,000(4) 80,693
Former Chairman of the Board, 1997 390,000 180,000 --- --- 135,496
President and CEO (3) 1996 470,792 22,061 58,731(5) 537,330(6) 88,431
D. Clark Ogle, 1998 351,346 100,000 --- 300,000 ---
President and CEO (7) 1997 --- --- --- --- ---
1996 --- --- --- --- ---
C. Philip Stanley 1998 225,000 53,000 --- 15,000 ---
President-Greige Fabrics 1997 123,817 25,878 --- --- ---
Division (8) 1996 190,000 --- --- --- 2,527
Donald L. Massey, 1998 215,000 --- --- 2,000 15,158
President-Johnston Composite 1997 203,750 41,250 --- --- 11,840
Reinforcements 1996 187,917 --- --- 18,000 6,024
James J. Murray 1998 192,609 20,000 --- 50,000 84,621
Executive Vice President and 1997 49,500 --- --- --- 6,907
Chief Financial Officer (9) 1996 --- --- --- --- ---
William I. Henry 1998 192,500 --- --- 12,000 36,015
President-Finished Fabrics 1997 183,125 34,750 --- --- 27,671
Division 1996 173,750 --- --- 18,000 18,245
</TABLE>
- --------------------
(1) The amounts shown do not include perquisites and other personal
benefits, the value of which for each executive officer did not exceed
the lesser of $50,000 or 10% of the aggregate compensation for such
officer.
(2) Except as described herein, all payments relate to the Company's
executive stock purchase plan. "All Other Compensation" for each year
presented also includes amounts representing a partial payment of
premiums under a "split dollar" life insurance program for Messrs.
Chandler and Henry, and reimbursement of relocation expenses for Mr.
Murray.
(3) Mr. Chandler served as Chairman, President and CEO until March 20, 1998
and served as Chairman from March 20, 1998 until his death on August
21, 1998.
(4) Stock options granted on July 2, 1998 for Mr. Chandler were terminated
and returned to the plan as they had not vested at his death on August
21, 1999.
(5) Present value of consulting payments provided under an employment
agreement effective from January 1, 1990 until December 31, 1996. The
payments shown in 1996 represent $23,486 for the period July 1,
1995-December 31, 1995 that was not paid until August 26, 1996 in the
Company's discretion. The balance of $35,245 is payment for January 1,
1996-September 30, 1996.
-9-
<PAGE> 10
(6) Includes 510,330 ten-year options granted to Mr. Chandler in exchange
for options previously held by Mr. Chandler representing the right to
purchase shares of stock of Jupiter National, Inc. ("Jupiter"). At
issuance, these options were equivalent in value to Mr. Chandler's
Jupiter options. Such options were granted in lieu of cash in
conjunction with the Company's acquisition of Jupiter (the "Jupiter
Acquisition") on March 28, 1996.
(7) Mr. Ogle became an Executive Officer of the Company effective March 19,
1998. Accordingly, compensation information is reported only for the
1998 fiscal year.
(8) Mr. Stanley, who retired from the Company in December 1996, as
President and Chief Operating Officer of Opp and Micolas Mills,
returned on May 12, 1997 as President of the Greige Fabrics Division.
(9) Mr. Murray became an Executive Officer of the Company effective
September 22, 1997. Accordingly, compensation information is reported
only for the 1997 and 1998 fiscal years.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
NUMBER OF % OF TOTAL POTENTIAL REALIZED VALUE AT ASSUMED
SECURITIES OPTIONS/SARS ANNUAL RATES OF STOCK APPRECIATION
UNDERLYING GRANTED TO EXERCISE OR FOR OPTION TERM
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION ---------------
NAME GRANTED FISCAL YEAR ($/SH) DATE 5% ($) 10% ($)
- --------------------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
David L. Chandler 25,000(1) 5.4% 4.625 08/21/98 0 0
D. Clark Ogle 300,000 64.2% 5.875 03/19/08 88,125 176,250
C. Philip Stanley 15,000 3.2% 4.625 07/01/08 3,469 6,938
Donald L. Massey 2,000 0.4% 4.625 07/01/08 463 925
James J. Murray 25,000 5.4% 4.563 01/05/08 5,705 11,408
25,000 5.4% 4.625 07/01/09 5,781 11,563
William I. Henry 12,000 2.6% 4.625 07/01/08 2,775 5,550
</TABLE>
- ---------------------
(1) Stock options granted on July 2, 1998 for Mr. Chandler were terminated
and returned to the plan as they had not vested at his death on August
21, 1998.
The following table provides information concerning options exercised
and year-end option values for fiscal 1998 with respect to the Company's CEO and
the Named Executive Officers.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE ($) OF UNEXERCISED IN-
SHARES OPTIONS/SARS AT THE-MONEY OPTIONS/SARS AT
ACQUIRED ON VALUE YEAR-END EXERCISABLE/ YEAR-END EXERCISABLE/
NAME EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE (1)
- ---------------------- ------------- --------------- --------------------- ------------------
<S> <C> <C> <C> <C>
David L. Chandler --- --- 636,530/--- 299,103/---
D. Clark Ogle --- --- 100,000/200,000 ---/---
C. Philip Stanley --- --- 15,000/--- ---/---
Donald L. Massey --- --- 20,000/--- ---/---
James J. Murray --- --- 50,000/--- ---/---
William I. Henry --- --- 30,000/--- ---/---
</TABLE>
- ---------------
(1) Based on the closing sales price for the Common Stock on the New York
Stock Exchange on December 31, 1998 of $3.125 per share.
-10-
<PAGE> 11
The following table sets forth for certain executives the estimated annual
normal retirement benefits payable under the Salaried Employees' Pension Plan
and Executive Supplemental Retirement Plan based on 1998 plan limits upon
retirement at age 65 (assuming Social Security Average wages of $45,000 per
year) for various combinations of preretirement remuneration and years of
benefit service:
<TABLE>
<CAPTION> PENSION PLAN TABLE
AVERAGE ANNUAL SALARY YEARS OF BENEFIT SERVICE
LAST 10 YEARS ----------------------------------------------------------------------------------------
OR LESS WHERE
APPLICABLE) 5 10 15 20 25 30 35
- ---------------------- --------- --------- --------- --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
125,000 9,250 18,500 27,750 39,063 50,375 61,688 73,000
150,000 11,438 22,875 34,313 48,225 62,138 76,050 89,963
160,000 12,313 24,625 36,938 51,890 66,843 81,795 96,748
175,000 13,625 27,250 40,875 57,388 73,900 90,413 106,925
200,000 15,813 31,625 47,438 66,550 85,663 104,775 123,888
225,000 18,000 36,000 54,000 75,713 97,425 119,138 130,000
250,000 20,188 40,375 60,563 84,875 109,188 130,000 130,000
300,000 22,099 44,197 66,296 92,879 119,463 130,000 130,000
400,000 22,099 44,197 66,296 92,879 119,463 130,000 130,000
500,000 22,099 44,197 66,296 92,879 119,463 130,000 130,000
750,000 22,099 44,197 66,296 92,879 119,463 130,000 130,000
</TABLE>
- -------------
The years of benefit service under the Pension Plan as of January 3, 1998
for Messrs. Henry, Massey, Murray, Ogle and Stanley were 27, 6, 1, 0, and 31,
respectively.
The Pension Plan provides that if an employee's employment terminates prior
to normal retirement date, payments at normal retirement date will be reduced to
reflect the early termination of employment; if employment terminates later than
normal retirement date, payments will be adjusted to provide benefits
actuarially equivalent to the benefits otherwise payable at the normal
retirement date, but not less than the accrued benefit determined at date of
retirement; and if the employee elects a method of distribution of benefits
other than a single life annuity, payments will be adjusted to provide benefits
actuarially equivalent to the benefits to which he would be entitled if he had
elected the single life annuity method.
EMPLOYMENT AGREEMENTS
Mr. Chandler's employment agreement, which commenced on January 1, 1987,
entitled him to receive a base salary of not less than $390,000, as well as any
bonuses and additional compensation amounts as determined by the Compensation
Committee of the Board of Directors. The agreement terminated upon Mr.
Chandler's death on August 21, 1998.
Mr. Ogle's employment agreement is effective for a three year period
commencing on March 19, 1998 and provides for a base salary of $450,000, a
onetime signing bonus of $100,000, a bonus of $225,000 payable following the
first year of employment and bonus or other additional compensation as approved
by the Compensation Committee of the Board of Directors over the term of the
agreement. In accordance with and upon execution of the agreement, the Company
granted Mr. Ogle options to purchase 300,000 shares of the Company's Common
Stock which vest in equal amounts over a three year period as governed by the
Company's Stock Incentive Plan. The agreement contains a non-competition clause
plus a non-solicitation clause (each as defined in the agreement) which are
effective for a one-year period following the termination of the employment
agreement. Under terms of the agreement, Mr. Ogle would be entitled to
continuation of salary and benefits but not bonus for a period of one year in
the event of termination by the Company "without cause" (as defined in the
agreement). In the event Mr. Ogle should terminate the agreement other than as a
result of a material breach by the Company not
-11-
<PAGE> 12
cured within thirty days or in the event the Company may terminate the agreement
"with cause" (as defined in the agreement), Mr. Ogle would be entitled to all
salary and benefits accrued though date of termination.
Mr. Murray's employment agreement is effective for a three year period
commencing on September 22, 1997 and provides for a base salary of $180,000, a
onetime deferred bonus of $20,000 payable on January 15, 1998, and bonus or
other additional compensation as approved by the Compensation Committee of the
Board of Directors over the term of the agreement. The agreement contains a
non-competition clause which is effective during the term of the contract plus a
non-solicitation clause (each as defined in the agreement) which is effective
for a one-year period following the termination of the employment agreement.
Under terms of the agreement, Mr. Murray would be entitled to continuation of
salary and benefits but not bonus for the remainder of the unexpired term in the
event of termination by the Company "without cause" (as defined in the
agreement). In the event that Mr. Murray should voluntarily terminate the
agreement prior to expiration of the effective term of the agreement, he would
forfeit all salary and benefits for the remainder of the unexpired term. In the
event that the Company employs a new Chief Executive Officer who desires to make
his own selection of a Chief Financial Officer, the agreement provides that
within the following 30 day period, Mr. Murray may give notice of termination
and upon conclusion of a transition period, the Company will pay salary and
benefits for a period of one year following the date of termination.
COMPENSATION COMMITTEE REPORT
During fiscal 1998, the compensation paid to the Company's executive
officers was approved by the Compensation Committee, which is responsible for
reviewing and analyzing management's recommendations regarding executive
compensation and developing and enacting executive compensation policies. Under
the Compensation Committee's direction, the Company has developed and
implemented executive compensation policies and programs designed to enhance the
Company's profitability, and thus stockholder value, by aligning the financial
interests of the Company with those of its executives.
The Company's executive compensation system has three components: (i) a
monthly base salary; (ii) incentive-based compensation consisting of year-end
bonuses based on performance criteria; and (iii) an incentive-based stock option
program.
Base Pay. For each fiscal year, the Compensation Committee approves the
base pay component of each executive's compensation. Such review may include a
review and analysis of historical and current market data regarding compensation
paid to executives in comparable positions at similarly-sized companies that are
involved in similar manufacturing operations. The Compensation Committee then
considers each of the Company's executives, taking into account the particular
requirements and circumstances of each position and other relevant factors. Each
executive's prior performance is then evaluated, and his potential future
contributions are considered. After consideration of all of the above, the
Compensation Committee approves the base pay level for each executive for the
coming fiscal year with actual awards based primarily on the Committee's
discretionary assessment of Company or business unit performance and individual
performance.
Year-End Compensation. Year-end compensation payments, other than to Mr. D.
Clark Ogle, the Company's President and Chief Executive Officer and, during the
first quarter of 1998, to Mr. D. L. Chandler, the Company's former Chairman and
Chief Executive Officer, are primarily based on management's recommendations,
which are reviewed and approved by the Compensation Committee. Management's
recommendations are based upon (i) the relative performance and contribution to
profitability of each operation or business unit; (ii) each executive's personal
role in and contribution to such performance; and (iii) each executive's
individual impact in promoting the long-term growth, development and enhancement
of stockholder value. The Compensation Committee reviews management's
recommended year-end payments for each executive and then sets final levels of
year-end payments for each executive. Year-end executive compensation
considerations may also include a recommendation that a grant of stock options
be made to executives who have made outstanding contributions to the Company
during the preceding year.
Effective January 1, 1997, contractual provisions with Mr. Chandler set
forth his base salary and methods of its payment, but did not require any
specific year-end compensation payments. These provisions also did not
-12-
<PAGE> 13
contemplate his acting as Chief Executive Officer, a position he assumed on an
interim basis in May 1997 upon the departure of Mr. Gerald Andrews, who had been
President and Chief Executive Officer, and in which he served through March 20,
1998. In light of the substantial responsibilities assumed by Mr. Chandler
during the period the Compensation Committee determined to award Mr. Chandler
$50,000 as a bonus for the period of time he served as President and Chief
Executive Officer in fiscal 1998.
Mr. D. Clark Ogle was appointed President and Chief Executive Officer in
March 1998. Under the provisions of an employment contract approved by the
Compensation Committee, Mr. Ogle's annual salary was set at $450,000 plus the
payment of an inducement bonus of $100,000 in March 1998. The contract also
provided for a bonus of $225,000 payable on the first anniversary of the
contract and bonuses thereafter as may be approved by the Compensation Committee
in its discretion. In addition, Mr. Ogle was granted stock options to purchase a
total of 300,000 shares of the Company's Common Stock at a purchase price of
$5.875 per share, vesting in three equal amounts on March 19, 1999, March 19,
2000 and March 19, 2001.
The Compensation Committee believes that its compensation policies
successfully direct the Company's management to long-term success and increasing
stockholder value, and that management is thus dedicated to achieving
significant improvements in long-term financial performance. The compensation
policies provide significant compensation for superior performance by an
executive and the Company.
In its review of compensation matters, the Compensation Committee considers
the anticipated tax consequences of various payments and benefits. For instance,
deductibility of certain types of compensation payments depend upon the timing
of an executive's vesting or exercise of previously granted rights. Further,
interpretations and changes in the tax laws and other factors beyond the
Compensation Committee's control may also affect the deductibility of
compensation. In 1993, Congress enacted Section 162(m) of the U.S. Internal
Revenue Code of 1986, as amended (the "Code"), effective for taxable years
commencing 1994. This legislation generally limits the Company's deduction to $1
million per year per executive for certain compensation paid to its CEO and
Named Executive Officers. The Code and current regulations issued under the Code
contain exclusions from this limitation. In general, the regulations exclude
from this limitation compensation that is calculated based on "objective"
performance criteria (as defined). The regulations do not exclude from this
limitation compensation that is calculated based on achievement of a range of
quantitative and qualitative criteria with full discretion by the Compensation
Committee to evaluate performance. Grants to covered executives under the
Company's Stock Incentive Plan and the existing stock option grants do not
currently qualify as grants pursuant to "performance-based plans" for purposes
of Section 162(m). Although the Company is reviewing its stock option plan
arrangements, the Compensation Committee will not necessarily and in all
circumstances limit executive compensation to that deductible under Section
162(m); although it usually will consider various alternatives to preserving the
deductibility of compensation payments and benefits to the extent reasonably
practicable and to the extent consistent with the Company's compensation
objectives.
The Compensation Committee
Gaines R. Jeffcoat
J. Reid Bingham
John A. Friedman
-13-
<PAGE> 14
PERFORMANCE GRAPH
The following graph compares the percentage change in the Company's
cumulative total shareholder return on Common Stock with the cumulative total
return, assuming reinvestment of dividends, of (i) the Standard & Poor's 500
Stock Index and (ii) a peer group index constructed by the Company. During
September 1995, the Company's Board of Directors approved a change in the
Company's fiscal year end from June 30 to the Saturday nearest December 31, as
reflected in the calculation dates for the following graph.
COMPARISON OF CUMULATIVE TOTAL RETURN AMONG
JOHNSTON INDUSTRIES, INC., S&P 500 INDEX AND PEER GROUP
[GRAPH]
<TABLE>
<CAPTION>
06/30/94 06/30/95 12/30/95 12/28/96 01/03/98 01/02/99
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Johnston Industries, Inc. $ 100 $ 85 $ 90 $ 84 $ 52 $ 37
S&P 500 Index $ 100 $ 126 $ 144 $ 177 $ 237 $ 304
Peer Group Index (1) $ 100 $ 94 $ 96 $ 93 $ 119 $ 85
</TABLE>
- -----------------
(1) The Company's self-constructed peer group is composed of the following
companies: Guilford Mills, Inc., Springs Industries, Inc., Thomaston
Mills, Inc., Burlington Industries, Inc., Cone Mills Corporation N.C.
and Galey and Lord, Inc. The prior years peer group included Dominion
Textiles, Inc., which was acquired and divided during 1998. A portion of
the former Dominion Textiles, Inc. was ultimately acquired by Galey and
Lord, Inc. The Peer Group Index has been weighted to account for the
respective market capitalization of the subject companies.
AVAILABILITY OF
ANNUAL REPORT TO STOCKHOLDERS AND REPORT ON FORM 10-K
Copies of the Company's Annual Report to Stockholders for fiscal 1998,
which includes certain financial information about the Company, are currently
being mailed, together with this Proxy Statement, to the Company's stockholders.
ADDITIONAL COPIES OF SUCH ANNUAL REPORT ALONG WITH COPIES OF THE COMPANY'S
ANNUAL REPORT ON FORM 10-K, FOR FISCAL 1998, AS FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION (EXCLUSIVE OF EXHIBITS AND DOCUMENTS INCORPORATED BY
REFERENCE), ARE AVAILABLE TO STOCKHOLDERS WHO MAKE WRITTEN REQUEST THEREFOR
ADDRESSED TO: THE COMPANY SECRETARY, JOHNSTON INDUSTRIES, INC., 105 THIRTEENTH
STREET, COLUMBUS, GEORGIA 31901. COPIES OF THE ANNUAL REPORT ON FORM 10-K ARE
AVAILABLE WITHOUT CHARGE. COPIES OF EXHIBITS AND OTHER DOCUMENTS FILED WITH THE
ANNUAL REPORT ON FORM 10-K OR REFERENCED THEREIN WILL BE FURNISHED TO
STOCKHOLDERS UPON WRITTEN REQUEST AND PAYMENT OF THE COMPANY'S EXPENSES IN
FURNISHING SUCH DOCUMENTS.
-14-
<PAGE> 15
INDEPENDENT AUDITORS
Deloitte & Touche LLP, independent auditors, served as the Company's
auditors until May 27, 1998, whereupon the Board of Directors determined to
award the 1998 engagement to KPMG LLP. The Board of Directors has not yet
discussed the selection of the Company's auditors for fiscal 1999. A
representative of KPMG LLP is expected to be present at the Meeting, will have
an opportunity to make a statement if he or she desires to do so, and is
expected to be available to respond to appropriate questions which stockholders
might have.
STOCKHOLDER PROPOSALS
Stockholder proposals to be presented at the 2000 Annual Meeting of
Stockholders must be received by the Secretary of the Company, 105 Thirteenth
Street, Columbus, Georgia 31901, at the principal executive offices of the
Company not later than December 28, 1999 to be eligible for inclusion in the
Company's 2000 proxy material.
OTHER MATTERS
Management does not intend to present to the Meeting any business other
than the items stated in the "Notice of Meeting of Stockholders" and does not
know of any matters to be brought before the Meeting other than those referred
to above. If, however, any other matters requiring a vote of the stockholders
properly come before the Meeting or any adjournment thereof, the persons
designated as proxies will vote on each such matter in accordance with their
best judgment.
Whether or not you expect to be at the Meeting in person, please sign, date
and return promptly the enclosed proxy. No postage is necessary if the proxy is
mailed in the United States.
By Order of the Board of Directors
F. Ferrell Walton
Secretary
Columbus, Georgia
April 26, 1999
-15-
<PAGE> 16
JOHNSTON INDUSTRIES, INC.
105 THIRTEENTH STREET
COLUMBUS, GEORGIA 31901
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
JOHNSTON INDUSTRIES, INC. (THE "COMPANY") IN CONNECTION
WITH THE COMPANY'S ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 26, 1999
The undersigned hereby appoints James J. Murray and F. Ferrell Walton,
and each of them, with full power of substitution as proxies and attorneys in
fact on behalf and in the name of the undersigned to represent the undersigned,
at the 1999 Annual Meeting of Stockholders of Johnston Industries, Inc. to be
held on May 26, 1999 at 10:00 A.M., (Eastern Daylight Savings Time) at the
Executive offices of Johnston Industries, Inc. located at 105 Thirteenth Street,
Columbus, Georgia 31901, and at any adjournment thereof with respect to such
business as may properly come before the meeting or any and all adjournments
thereof and to vote all shares of stock which the undersigned would be entitled
to vote if then and there personally present.
The proxies appointed hereby are instructed to vote as indicated herein
on the following proposals as more fully described in the Company's Notice of
Meeting of Stockholders and Proxy Statement, each dated April 26, 1999, receipt
of which is hereby acknowledged, and in their discretion on any other business
which may properly come before the meeting or any adjournment thereof.
THE COMPANY'S BOARD OF DIRECTORS RECOMMENDS VOTING FOR THE NOMINEES
SPECIFIED IN AGENDA ITEM NO. 1 AND THE PROXY WILL BE SO VOTED UNLESS OTHERWISE
SPECIFIED.
This proxy when properly executed will be voted in accordance with the
specifications indicated herein or it will be voted in accordance with the
recommendations of the Board of Directors FOR the nominees specified in Agenda
Item No. 1.
1. Election of Directors
[ ] For all nominees listed below.
[ ] WITHHOLD AUTHORITY to vote for all nominees listed below.
[ ] EXCEPTIONS
Nominees: J. Reid Bingham, Allyn P. Chandler, John A. Friedman, William J. Hart,
Gaines R. Jeffcoat, D. Clark Ogle, and C. Philip Stanley as directors of the
Company to serve until the next Annual Meeting of Stockholders and until their
successors are elected and qualified;
(Instructions: To withhold authority to vote for any individual nominee, mark
the "Exceptions" box and write the nominee's name in the space provided below.)
Exception
-----------------------------------------------------------------------
If you also expect to attend the [ ] I/We plan to attend the meeting.
stockholder's meeting, the Board
of Directors request you check the
box to the right.
Please mark, then date and sign this proxy, exactly as you name(s) appear
hereon, and return this entire proxy card in the enclosed postage-paid envelope.
When shares are held by joint tenants, both should sign. When signing as an
attorney, executor, administrator, trustee, guardian or in any other fiduciary
capacity please give full title as such. If a corporation, please sign in full
corporate name by the president or other authorized officer. If a partnership,
please sign in full partnership name by authorized person.
[ ] Change of Address and or Comments Mark Here Dated:
-----------------------
Signed:
----------------------
