<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------------
SCHEDULE 14D-9
(RULE 14D-101)
SOLICITATION/RECOMMENDATION STATEMENT UNDER
SECTION 14(D)(4) OF THE SECURITIES AND EXCHANGE ACT OF 1934
(AMENDMENT NO. 1)
---------------------------------
JOHNSTON INDUSTRIES, INC.
(Name of Subject Company)
JOHNSTON INDUSTRIES, INC.
(Name of Person(s) Filing Statement)
COMMON STOCK, $.10 PAR VALUE PER SHARE
(Title or Class of Securities)
479368102
(CUSIP Number of Class of Securities)
---------------------------------
MR. JAMES J. MURRAY
EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
JOHNSTON INDUSTRIES, INC.
EXECUTIVE OFFICES
105 THIRTEENTH STREET
COLUMBUS, GEORGIA 31901
(706) 641-3140
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of the Person(s) Filing
Statement)
---------------------------------
With Copies to:
ELIZABETH H. NOE, ESQ.
JAMES W. MAXON, ESQ.
PAUL, HASTINGS, JANOFSKY & WALKER LLP
SUITE 2400
600 PEACHTREE STREET, N.E.
ATLANTA, GEORGIA 30308-2222
[ ] Check the Box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
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<PAGE> 2
ITEM 8. ADDITIONAL INFORMATION.
Pursuant to the terms of the Purchase Agreement dated March 30, 2000, by
and among CGW Southeast Partners IV, L.P., JI Acquisition Corp., and Johnston
Industries, Inc. ("Johnston"), Johnston hereby files, in conformance with and
pursuant to the requirements of Rule 14f-1, this Information Statement.
ITEM 9. EXHIBITS.
Exhibit No.
1. Information Statement.
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Johnston Industries, Inc.
By: /s/ JAMES J. MURRAY
------------------------------------
James J. Murray
Executive Vice President and Chief
Financial Officer
Date: April 19, 2000
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JOHNSTON INDUSTRIES, INC.
105 THIRTEENTH STREET
COLUMBUS, GEORGIA 31901
APRIL 19, 2000
INFORMATION STATEMENT PURSUANT TO
SECTION 14(F) OF THE SECURITIES
EXCHANGE ACT OF 1934
This Information Statement is being mailed on or about April 21, 2000 to
the holders of record of shares of common stock, par value $.10 per share (the
"Shares"), of Johnston Industries, Inc. ("Johnston"). It is being furnished in
connection with the Purchase Agreement dated as of March 30, 2000, by and among
CGW Southeast Partners IV, L.P., a Delaware limited partnership ("CGW"), JI
Acquisition Corp., a Delaware corporation and a subsidiary of CGW ("Purchaser"),
and Johnston (the "Purchase Agreement") in accordance with the terms and subject
to the conditions of which (i) Purchaser, on behalf of CGW, will commence a
tender offer (the "Offer") to purchase all outstanding Shares at a price of
$3.00 per Share in cash (the "Offer Price"), (ii) Purchaser will purchase
9,000,000 shares of Johnston's capital stock directly from Johnston (the "Stock
Purchase"), and (iii) following consummation of the Offer, a wholly owned
subsidiary of Purchaser will likely be merged with and into Johnston with
Johnston as the surviving entity (the "Merger"). As a result of the Offer, the
Stock Purchase and the Merger, Johnston will become a subsidiary of CGW.
The Purchase Agreement provides that, upon the consummation of the Offer,
Johnston shall cause CGW's designees to be elected to the Board of Directors of
Johnston (the "Johnston Board") under the circumstances described in the
Purchase Agreement. See "CGW Designees." As a result of this agreement, this
Information Statement is required by Section 14(f) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and Rule l4f-1 thereunder.
You are urged to read this Information Statement carefully. You are not,
however, required to take any action.
Purchaser commenced the Offer on April 7, 2000. The Offer is scheduled to
expire at 12:00 midnight, New York City time, on Friday, May 5, 2000, unless the
Offer is extended.
The information contained in this Information Statement concerning
Purchaser and CGW has been furnished to Johnston by Purchaser and CGW, and
Johnston assumes no responsibility for the accuracy or completeness of such
information.
CGW DESIGNEES
Effective upon the consummation of the Offer by Purchaser, CGW will be
entitled to designate the number of directors, rounded up to the next whole
number, on the Johnston Board that equals the product of (i) the total number of
directors on the Johnston Board (giving effect to the election of any additional
directors pursuant to this provision) and (ii) the percentage that the number of
shares of Johnston's capital stock accepted for payment by CGW or Purchaser
pursuant to the Offer, when added to the 9,000,000 shares of Johnston's common
and preferred stock purchased directly from Johnston, bears to the total number
of shares of Johnston's capital stock then outstanding, and Johnston shall cause
CGW's designees to be elected or appointed to the Johnston Board, including,
without limitation, increasing the size of the Johnston Board, or securing
resignations of incumbent directors, or both.
CGW has informed Johnston that it will choose its designees to the Johnston
Board from the directors and executive officers of CGW and/or Purchaser listed
in Schedule I to the Offer to Purchase, a copy of which has been mailed to
Johnston's stockholders. CGW has informed Johnston that each of the directors
and executive officers listed in Schedule I to the Offer to Purchase has
consented to act as a director of Johnston, if so designated. The information in
the Offer to Purchase is incorporated herein by reference. The address of each
such person is set forth in such Offer to Purchase.
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CGW will also choose Graeme Mills, a representative of BancBoston Capital,
Inc., to be one of its designees to the Johnston Board. Mr. Mills, a citizen of
Australia, is a director of BancBoston Capital, Inc. ("BBC"), the private equity
unit of Fleet Boston Financial. Prior to joining BBC in 1997 Mr. Mills was a
Director in BancBoston's Emerging Markets Investment Group where for five years
he was responsible for governmental and multilateral financing for clients in
Latin America. He has been with Fleet Boston Financial/BancBoston for 16 years
and has extensive corporate finance experience including mergers and
acquisitions, debt restructurings, leveraged acquisitions, project financings
and cross border fund raising in the US and international markets. Mr. Mills is
a CPA and a Senior Associate of the Australian Society of Accountants and a
member of the Securities Institute of Australia. He holds B.Com. (1980) and
M.Com (1982) degrees from the University of New South Wales in Australia.
It is expected that CGW's designees may assume office following
consummation of the Offer, which cannot be earlier than May 6, 2000.
CERTAIN INFORMATION CONCERNING JOHNSTON
INFORMATION CONCERNING DIRECTORS AND EXECUTIVE
OFFICERS OF JOHNSTON
DIRECTORS AND EXECUTIVE OFFICERS OF JOHNSTON
The current Directors and Executive Officers of Johnston Industries, Inc.
are as follows:
J. REID BINGHAM, age 54, 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.
ALLYN P. CHANDLER, age 47, 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 64, 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 59, 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.
HAROLD HARVEY, age 59, has served as President of the Greige Fabrics
Division of Johnston since the first quarter of 1999 and assumed additional
responsibilities as President of the Finished Fabrics Division effective January
1, 2000. He was the Principal of Harvey TMC International, a textile consulting
firm, from 1994 until joining Johnston. Mr. Harvey was the Chief Executive
Officer of Carrington Viyella from 1992 until 1994 and Chief Executive Officer
of John Foster and Sons plc from 1988 until 1992. Prior to that, he had served
in various consulting and textile management positions.
WILLIAM I. HENRY, age 60, has served as Vice President of Johnston since
January 1, 2000. Prior to that time, he served as President of the Finished
Fabrics Division from February 5, 1998 to December 31, 1999, Executive Vice
President from May 12, 1997 to February 5, 1998, Vice President of Operations
from April 1996 to May 12, 1997, and Vice President of Product and Operations
Planning from January 1993 to April 1996. Prior to that, he had served as Vice
President, Operations of Southern Phenix.
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<PAGE> 5
GAINES R JEFFCOAT, age 78, 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 Johnston. Further, he served as Chairman of the Board of Opp and
Micolas Mills, Inc., a subsidiary of Johnston ("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.
DONALD L. MASSEY, age 55, has served as President of Johnston Industries
Composite Reinforcements, Inc. since February 5, 1998. Prior to that time, he
served as Executive Vice President from May 12, 1997 to February 5, 1998 and as
Vice President of Johnston and President -- Home Furnishings -- Sales and
Marketing of Johnston Industries Alabama, Inc. from April 1996 to May 12, 1997.
Mr. Massey was President and CEO of Johnston Industries Composite
Reinforcements, Inc. from March 31, 1992 until March 31, 1996. From December 1,
1990 until March 30, 1992, Mr. Massey was President and CEO of Fiber and Fabrics
Marketing, and prior to that, he served as Senior Vice President for world sales
of denim for Dominion Textiles.
JAMES J. MURRAY, age 39, has served as Executive Vice President and Chief
Financial Officer of Johnston since September 22, 1997 and assumed additional
responsibilities as Secretary effective January 1, 2000. Prior to that time, he
was Managing Director of Corporate Transaction Services for KPMG LLP since March
1996 and had served in a variety of capacities with KPMG LLP from January 1984
to March 1996. Prior to that time, Mr. Murray was a tax accountant in private,
industry.
D. CLARK OGLE, age 53, has served as President and Chief Executive Officer
of Johnston since March 20, 1998 and was appointed to the Board on April 7,
1998. Prior to that time, Mr. Ogle served as Managing Director of National
Strategic and Operational Improvement Consulting for KPMG 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.
TOMMY B. STRENGTH, age 50, has served as President of the Fiber Products
Division of Johnston since January 28, 2000. Prior to that time, he served as
Vice-President of the Fiber Products Division from April 1996 to January 2000.
From 1992 to 1996, he served as General Manager of the Nonwoven Group of
Wellington Sears Company. From 1985 to 1992, he was General Manager of the
by-products operation of WestPoint Stevens, Inc. and for five years prior to
that time, held various management positions with WestPoint Stevens, Inc.
A. LEE TUCKER, age 44, has served as Treasurer of Johnston since January 1,
2000. Prior to that time, he served as Assistant Treasurer from June 1997 to
January 2000 and as Corporate Director of Credit from June 1993 to June 1997.
For more than five years prior to that time Mr. Tucker was Director of Credit
and Claims for WestPoint Stevens, Inc.
C. PHILIP STANLEY, age 68, was appointed to the Board on April 7, 1998. 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 prior to that, had served as Vice
President and General Manager of Opp and Micolas.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
General.
In accordance with applicable Delaware state law, the business and affairs
of Johnston are managed under the direction of the Johnston Board. The Johnston
Board has responsibility for establishing broad corporate policies and for
Johnston's overall performance rather than day-to-day operating details. Members
of the Johnston Board are kept informed of Johnston's business by various
reports and documents sent to them periodically as well as by reports presented
at meetings of the Johnston Board and its committees by officers and employees
of Johnston.
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<PAGE> 6
The Johnston Board held 11 meetings during fiscal 1999. A special committee
of the Johnston Board, formed to evaluate the Offer, held four additional
meetings. Each director attended at least seventy-five percent of the total
number of meetings of the Johnston Board and any committees on which he or she
served.
The Johnston Board has standing Audit and Compensation Committees but no
Nominating Committee.
Audit Committee.
The Audit Committee, whose members were Messrs. Bingham and Hart and for
fiscal 1999, met once during fiscal 1999. The Audit Committee is comprised
entirely of directors who are not officers or employees of Johnston.
The Audit Committee reviews Johnston's accounting functions, operations and
management and the adequacy and effectiveness of the internal controls and
procedures of Johnston. The Audit Committee recommends to the Board the
appointment of the independent public accountants for Johnston. 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. Jeffcoat, Bingham
and Friedman during fiscal 1999, met once during fiscal 1999. 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 Johnston's profitability by aligning the financial
interests of Johnston with its executives.
Other.
Johnston also has a Stock Option Committee, whose members were Messrs.
Bingham, Hart and Jeffcoat during fiscal 1999. The Stock Option Committee met
twice during fiscal 1999. This committee is responsible for the administration
of Johnston's stock option plan.
DIRECTOR COMPENSATION
Pursuant to Johnston's Director Compensation Policy, each Director who is
not an officer or employee of or consultant to Johnston 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.
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<PAGE> 7
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of March 31, 2000 certain information
concerning ownership of Shares by: (i) each person who is known by Johnston to
own beneficially more than 5% of the Shares, (ii) each director individually,
(iii) Johnston'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 Johnston as a group. The determinations
of "beneficial ownership" of Shares are based upon Rule 13d-3 under the Exchange
Act of 1934, as amended. 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. As of March 31, 2000, there were 10,712,872 Shares of
Johnston common stock issued and outstanding. Holders of these Shares are
entitled to cast one vote for each Share held by such holder on matters
submitted to the stockholders. Unless otherwise indicated, each person or entity
listed below has sole voting and investment power with respect to such Shares.
<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............................................. 18,000 *
Allyn P. Chandler(2)........................................ 4,358,324 38.4%
John A. Friedman............................................ 8,500 *
William J. Hart............................................. 25,541 *
William I. Henry............................................ 93,368 *
Owen J. Hodges, III(3)...................................... 22,655 *
Gaines R. Jeffcoat.......................................... 42,434 *
Donald L. Massey............................................ 37,850 *
James J. Murray............................................. 82,650 *
D. Clark Ogle............................................... 243,300 2.2
C. Philip Stanley........................................... 38,762 *
All directors and officers as a group (14 persons)(4)....... 5,037,484 42.7
Redlaw Industries, Inc.(5).................................. 3,388,704 31.6
Dimensional Fund Advisors, Inc.(6).......................... 906,924 8.5
Ann P. Chandler(7).......................................... 4,371,698 38.5
Estate of David L. Chandler (8)............................. 4,350,023 38.3
Jerry Zucker(9)............................................. 1,166,900 10.9
</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) 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
3,388,704 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/A filed September 16, 1999 on behalf of the Estate
and a Schedule 13D/A filed September 17, 1999 on behalf of Redlaw and
amended information provided to
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Johnston on behalf of the Estate. The address for Ms. Chandler is P.O. Box
1350, Hobe Sound, Florida 33475.
(3) Mr. Hodges resigned from employment with Johnston on February 1, 2000.
(4) Includes an aggregate of 1,076,280 shares issuable pursuant to stock options
which are currently exercisable or exercisable within 60 days.
(5) 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/A filed September 17, 1999 and
amended information provided to Johnston on behalf of the Estate.
(6) Dimensional Fund Advisors, Inc. ("Dimensional") reports its address as 1299
Ocean Avenue, 1lth 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 3, 2000.
(7) 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 GPM 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 September 16, 1999 and amended information provided to
Johnston on behalf of the Estate.
(8) 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
September 16, 1999 and amended information provided to Johnston on behalf of
the Estate.
(9) Mr. Zucker reports his address as P.O. Box 5205, North Charleston, South
Carolina 29405. Mr. Zucker reports sole voting and dispositive power with
respect to all shares. The foregoing is based on a Schedule 13D dated
September 13, 1999.
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EXECUTIVE COMPENSATION
The following table sets forth the compensation paid by Johnston for the
periods indicated to Johnston's Chief Executive Officer ("CEO") during fiscal
1999 and to the four most highly compensated executive officers (other than the
CEO) who were serving as executive officers at January 1, 2000 and who earned
more than $100,000 during fiscal 1999 (the "Named Executive Officers") plus one
additional individual for whom disclosure would have been provided but for his
retirement during 1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION(1) COMPENSATION
------------------------------------ AWARDS
OTHER SECURITIES
ANNUAL UNDERLYING ALL OTHER
SALARY BONUS COMPEN- OPTIONS COMPEN-
NAME AND PRINCIPAL POSITION YEAR ($) ($) SATION($) (#) SATION ($)(2)
- --------------------------- ---- ------- ------- --------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
D. Clark Ogle....................... 1999 450,000 225,000 -- -- 17,730
President and CEO(3) 1998 351,346 325,000 -- 300,000 --
1997 -- -- -- -- --
James J. Murray..................... 1999 250,000 100,000 -- -- 50,000
Executive Vice President and 1998 192,609 20,000 -- 50,000 84,621
Chief Financial Officer(4) 1997 49,500 -- -- -- 6,907
C. Philip Stanley................... 1999 225,000 -- -- -- --
President -- Greige Fabrics 1998 225,000 40,436 -- 15,000 --
Division(5) 1997 123,817 53,000 -- -- --
Donald L. Massey.................... 1999 215,000 51,102 -- -- 14,609
President -- Johnston Composite 1998 215,000 57,798 -- 2,000 15,158
Reinforcements 1997 203,750 -- -- -- 11,840
William I. Henry.................... 1999 192,500 -- -- -- 28,987
President -- Finished Fabrics 1998 192,500 -- -- 12,000 36,015
Division 1997 183,125 -- -- -- 27,671
Owen J. Hodges, III................. 1999 186,000 -- -- -- 7,487
President -- Fiber Products 1998 186,000 43,375 -- -- 3,577
Division 1997 174,000 -- -- -- --
</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
$50,000 or 10% of the aggregate compensation for such officer.
(2) Except as described herein, all payments relate to Johnston's executive
stock purchase plan. "All Other Compensation" for each year presented also
includes amounts representing a housing allowance for Mr. Ogle, forgiveness
of a relocation loan for Mr. Murray, a partial payment of premiums under a
"split dollar" life insurance program for Mr. Henry, and an automobile
allowance for Mr. Hodges.
(3) Mr. Ogle became an Executive Officer of Johnston effective March 19, 1998.
Accordingly, compensation information is reported only for the 1998 and 1999
fiscal years.
(4) Mr. Murray became an Executive Officer of Johnston effective September 22,
1997.
(5) Mr. Stanley, who retired from Johnston in December 1996, as President and
Chief Operating Officer of Opp and Micolas Mills, returned from retirement
to serve as President of the Greige Fabrics Division from May 12, 1997
through February 5, 1999.
OPTION GRANTS IN FISCAL 1999
During fiscal 1999, there were no grants of options to the CEO or to any of
Johnston's Named Executive Officers.
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<PAGE> 10
OPTION EXERCISES IN FISCAL 1999 AND FISCAL YEAR-END OPTION VALUES
The following table provides information related to options to purchase
Shares issued by Johnston and exercised by the Named Executive Officers during
fiscal 1999 and the number and value of options held at fiscal year end.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED
SHARES OPTIONS/SARS AT VALUE ($) OF UNEXERCISED
ACQUIRED ON VALUE YEAR-END IN-THE-MONEY
EXERCISE REALIZED EXERCISABLE/ OPTIONS/SARS AT YEAR-END
NAME (#) ($) UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ---- ----------- -------- --------------------- -------------------------
<S> <C> <C> <C> <C>
D. Clark Ogle..................... -- -- 200,000/300,000
James J. Murray................... -- -- 50,000/-- --/--
C. Philip Stanley................. -- -- 15,000/-- --/--
Donald L. Massey.................. -- -- 20,000/-- --/--
William I. Henry.................. -- -- 30,000/-- --/--
Owen J. Hodges, III............... -- -- 20,000/-- --/--
</TABLE>
RETIREMENT PLANS
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 1999 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:
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF BENEFIT SERVICE
AVERAGE ANNUAL SALARY ---------------------------------------------------------------
(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 1, 2000
for Messrs. Ogle, Murray, Stanley, Massey, Henry and Hodges were 1, 2, 32, 7,
28, and 3, 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.
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<PAGE> 11
EMPLOYMENT AGREEMENTS
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 one
time 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, Johnston granted Mr.
Ogle options to purchase 300,000 shares of Johnston's common stock which vest in
equal amounts over a three year period. The agreement contains a non-
competition clause plus a nonsolicitation 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 Johnston "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 Johnston not cured within thirty days or in
the event Johnston 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, 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 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. 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 Johnston "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 Johnston 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, Johnston will
pay salary and benefits for a period of one year following the date of
termination.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Jeffcoat, Bingham and Friedman served on the Compensation Committee
of the Board of Directors during fiscal 1999. None of such directors are
employees or officers of Johnston and there were no compensation committee
interlocks.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Allyn P. Chandler, a director of Johnston, is Chairperson, President and
CEO of Redlaw Industries, Inc. ("Redlaw") and GRM Industries, Inc. ("GRM"), a
wholly-owned subsidiary of Redlaw. Ms. Chandler is also one of the personal
co-representatives of the Estate of her late father, David L. Chandler, who was
the Chairman of Johnston Industries, Inc. at the time of his death on August 21,
1998.
David L. Chandler was a party to two "rabbi" trust agreements whereby,
during his employment, Johnston transferred assets to the trusts in accordance
with his employment agreement. During 1999, Johnston purchased demand notes
payable by Redlaw, and guaranteed by GRM, from the trusts at a substantially
discounted cost of approximately $200 thousand. The notes, which have maturities
from one to five years, can be called on demand by the payee, bear interest at
10% per annum, and are convertible, at the option of the holder, into (i) common
shares of Redlaw, or (ii) common shares of Johnston Industries, Inc. held of
record by GRM. Conversion to shares of Johnston is contingent on the release by
a secured lender of its first security interest in shares of Johnston held of
record by GRM.
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SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires Johnston's executive officers
and directors, and persons who beneficially own more than ten percent of
Johnston's common stock, to file initial reports of ownership and reports of
changes in ownership with the Securities and Exchange Commission (the "SEC").
Persons subject to these reporting requirements are also required by SEC
regulations to furnish Johnston with copies of all Section 16(a) forms they
file. Based solely on a review of copies of the SEC reporting forms furnished to
Johnston and written representations from Johnston's executive officers and
directors, Johnston believes that all required Section 16(a) reports were timely
filed during fiscal 1999.
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