<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
(xx) Filed by the Registrant
( ) Filed by a Party other than the Registrant
Check the appropriate box:
( ) Preliminary Proxy Statement
(xx) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to (section mark)240.14a-11(c) or
(section mark)240.14a-12
Guilford Mills, Inc.
(Name of Registrant as Specified In Its Charter)
Guilford Mills, Inc.
(Name of Person(s) Filing Proxy Statement)
PAYMENT OF FILING FEE (Check the appropriate box):
(xx) $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(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:
* Set forth the amount on which the filing fee is calculated and state how
it was determined.
( ) 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:
( ) Filing Fee of $ was previously paid on , 199 ,
the date the Preliminary Proxy Statement was filed.
<PAGE>
GUILFORD MILLS, INC.
4925 West Market Street
Greensboro, North Carolina 27407
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held On February 2, 1995
The Annual Meeting of Stockholders of Guilford Mills, Inc.,
a Delaware corporation (the "Company"), will be held at the
Joseph S. Koury Convention Center, 3121 High Point Road,
Greensboro, North Carolina, on Thursday, February 2, 1995 at
10:00 A.M. for the following purposes:
1. To elect four directors for three-year terms;
2. To ratify the selection of Arthur Andersen LLP as
independent auditors for the fiscal year ending October
1, 1995; and
3. To transact such other business as properly may come
before the meeting or any adjournment or adjournments
thereof.
The Board of Directors has fixed the close of business on
December 23, 1994 as the record date for the determination of
stockholders entitled to notice of and to vote at the meeting and
at any adjournment or adjournments thereof.
Whether or not you plan to attend the meeting, please sign,
date and return the enclosed proxy which is being solicited by
and on behalf of the Board of Directors.
By Order of the Board of
Directors
(Signature of Sherry R. Jacobs appears here)
Sherry R. Jacobs
Secretary
Greensboro, North Carolina
January 5, 1995
<PAGE>
GUILFORD MILLS, INC.
__________
PROXY STATEMENT
__________
ANNUAL MEETING OF STOCKHOLDERS
To Be Held On February 2, 1995
This Proxy Statement is furnished to the stockholders of
Guilford Mills, Inc. (the "Company") in connection with the
solicitation of proxies by the Board of Directors (the
"Board") of the Company to be voted at the Annual Meeting of
Stockholders of the Company to be held at the Joseph S. Koury
Convention Center, 3121 High Point Road, Greensboro, North
Carolina, on Thursday, February 2, 1995 at 10:00 a.m. (the
"Annual Meeting"). Stockholders of record at the close of
business on December 23, 1994 will be entitled to notice of
and to vote at the Annual Meeting and at all adjournments
thereof.
The entire cost of soliciting proxies for the Annual
Meeting will be borne by the Company. In addition to
solicitation by mail, proxies may be solicited through
personal calls upon, or telephone or facsimile communications
with, stockholders or their representatives by officers and
other employees of the Company, who will receive no
additional compensation therefor.
Any stockholder giving a proxy has the power to revoke it
at any time before it is voted by giving written notice of
such revocation to the Secretary of the Company, by attending
the Annual Meeting and voting in person or by submitting a
subsequently dated proxy. When a proxy is received, properly
executed, prior to the Annual Meeting, the shares represented
thereby will be voted at the Annual Meeting. If the
accompanying form of proxy is signed but no specification is
made thereon, the shares represented thereby will be voted
for (i) the nominees for director designated by the Board and
(ii) the ratification of the selection of Arthur Andersen LLP
as independent auditors for the fiscal year ending October 1,
1995. If a specification has been made on the form of proxy,
the shares will be voted in accordance with the
specification. Other than the election of directors, which
requires a plurality of the votes cast, each matter to be
submitted to the stockholders requires the affirmative vote
of a majority of the shares present at the Annual Meeting in
person or by proxy and entitled to be cast. Abstentions and
broker non-votes are not included in the tabulation of the
voting results on the election of directors. For issues
requiring approval of a majority of the shares present and
entitled to be cast, abstentions have the effect of votes in
opposition and broker non-votes are not included in the
tabulation of the voting results. A broker non-vote
typically occurs when a nominee holding shares for a
beneficial owner does not vote on a particular proposal
because the nominee does not have discretionary voting power
with respect to that item and has not received instructions
from the beneficial owner. Shares as to which a stockholder
abstains or broker non-votes are included for purposes of
determining whether a quorum of shares is present at the
Annual Meeting.
The complete mailing address of the Company's principal
executive offices is P. O. Box 26969, Greensboro, North
Carolina 27419-6969. The approximate date on which this
Proxy Statement and the form of proxy were first sent or
given to the stockholders of the Company was January 5, 1995.
The Annual Report of the Company for the fiscal year ended
October 2, 1994, including audited financial statements, has
been sent to each stockholder.
<PAGE>
VOTING SECURITIES
On December 23, 1994, there were outstanding and entitled
to vote 14,012,412 shares of the Company's common stock, par
value $.02 per share (the "Common Stock"), which constitutes
the only class of capital stock outstanding. Stockholders
are entitled to one vote, exercisable in person or by proxy,
for each share of Common Stock owned on the record date of
December 23, 1994. The holders of a majority of the
outstanding shares of the Common Stock represented at the
Annual Meeting will constitute a quorum.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
Under the proxy rules, a beneficial owner of a security
includes any person who directly or indirectly has or shares
voting power and/or investment power with respect to such
security or has the right to obtain such voting power and/or
investment power within 60 days. Except as otherwise noted,
each designated beneficial owner in this Proxy Statement has
sole voting power and investment power with respect to the
shares beneficially owned by such person.
The following table sets forth information as of December
23, 1994 with respect to each person who is known by the
management of the Company to be the beneficial owner of more
than 5% of the Common Stock:
<TABLE>
<CAPTION>
Name and Address Amount and Nature
of Beneficial Owner of Beneficial Ownership Percent of Class
<S> <C> <C>
Victor Posner 1,987,275 (1) 14.18
6917 Collins Avenue
Miami Beach, FL 33141
Charles A. Hayes 1,268,144 (2)(3)(4) 9.05
c/o Guilford Mills, Inc.
4925 West Market Street
Greensboro, NC 27407
Mitchell Hutchins Institutional 850,900 (5) 6.07
Investors, Inc.
1285 Avenue of the Americas
New York, NY 10019
</TABLE>
(1) Such information is based upon a copy of the report on
Schedule 13D, dated January 10, 1994, filed with the
Securities and Exchange Commission and furnished to the
Company by the beneficial owner.
(2) Mr. Hayes, Maurice Fishman, a director of the Company,
and George Greenberg, a director of the Company, have entered
into certain agreements relating to the disposition of their
shares of Common Stock. See "Stockholders' Agreements"
below.
(3) Includes 13,750 shares of Common Stock subject to
options granted to Mr. Hayes under the Company's 1991 Stock
Option Plan.
(4) Of the shares beneficially owned by Mr. Hayes,
1,249,500 shares are held of record by a South Carolina
limited liability general partnership in which Mr. Hayes is a
general partner (the "Partnership"); Mr. Hayes retains sole
voting and dispositive power over such shares.
(5) Such information is based upon a copy of the report on
Schedule 13G, dated February 7, 1994, filed with the
Securities and Exchange Commission and furnished to the
Company by the beneficial owner.
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<PAGE>
The following table sets forth certain information, as of
December 23, 1994, with respect to Common Stock beneficially
owned by each director of the Company, each person nominated
or chosen to become a director, each of the executive
officers named in the Summary Compensation Table under the
heading "Executive Compensation" below and all directors and
executive officers as a group:
Amount and Nature of Percent
Name of Beneficial Owner Beneficial Ownership of Class
Directors and Director Nominees (1)
Charles A. Hayes 1,268,144 (2) 9.05
George Greenberg 518,259 (2)(3) 3.70
Maurice Fishman 443,953 (2)(4) 3.17
Paul R. McGarr 79,937 (12)
Terrence E. Geremski 20,260 (5) (12)
Sherry R. Jacobs 16,562 (12)
Donald B. Dixon 15,700 (12)
Stephen C. Hassenfelt 14,875 (6) (12)
Tomokazu Adachi 11,500 (12)
Dr. Jacobo Zaidenweber 11,000 (12)
Stig A. Kry 0 (12)
Paul G. Gillease 0 (12)
(12)
Non-Director Executive Officers (7)(8)
Alfred A. Greenblatt 59,877 (12)
John A. Emrich 21,257 (12)
Richard S. Roberts 14,974 (12)
All directors, director
nominees and executive
officers as a group
(consisting of 18
persons) 2,609,104 (9)(10)(11) 18.62
(1) The amount of shares beneficially owned by Ms. Jacobs
and Messrs. Hayes, Greenberg, Fishman, McGarr, Dixon and
Hassenfelt includes 13,750 shares of Common Stock, and the
amount of shares beneficially owned by Mr. Adachi includes
7,500 shares of Common Stock, subject to options granted to
each such director under the Company's 1991 Stock Option
Plan. See "Election of Directors -Additional Information"
below.
(2) See footnotes to previous table.
(3) Does not include 50,000 shares held by Mr. Greenberg's
wife, as to which beneficial ownership is disclaimed.
(4) Does not include 45,675 shares held by Mr. Fishman's
wife, as to which beneficial ownership is disclaimed.
(5) Includes 16,000 shares of restricted Common Stock
awarded to Mr. Geremski under the Company's 1989 Restricted
Stock Plan. Mr. Geremski has sole voting power with respect
to such shares. See "Executive Compensation - Summary
Compensation Table" below.
(6) Does not include 375 shares held by Mr. Hassenfelt's
wife, as to which beneficial ownership is disclaimed.
(7) The amount of shares beneficially owned by Messrs.
Greenblatt, Emrich and Roberts includes 2,083, 2,666 and 333
shares of Common Stock, respectively, subject to options
granted to such persons pursuant to the Company's stock
option plans.
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<PAGE>
(8) Includes 48,000, 15,000 and 9,600 shares of restricted
Common Stock awarded to Messrs. Greenblatt, Emrich and
Roberts, respectively, under the Company's 1989 Restricted
Stock Plan. Such persons have sole voting power with respect
to such shares. See "Executive Compensation - Summary
Compensation Table" below.
(9) Includes 97,166 shares of Common Stock subject to
options granted pursuant to the Company's stock option plans.
(10) Excludes 129,128 shares owned by relatives of
officers and directors of the Company, as to which beneficial
ownership is disclaimed by such officers and directors.
(11) Includes 148,600 shares of restricted Common Stock
awarded to officers under the Company's 1989 Restricted Stock
Plan. Such persons have sole voting power with respect to
such shares.
(12) Less than one percent.
Stockholders' Agreements
Messrs. Fishman, Greenberg and Hayes have entered into a
Stockholders' Agreement dated as of June 22, 1990 relating to
the disposition of their shares of Common Stock. Until the
fifth anniversary of the Stockholders' Agreement (or its
earlier termination as otherwise provided therein), none of
Messrs. Fishman, Greenberg and Hayes may transfer or
otherwise dispose of, except by gift, any or all of the
shares of Common Stock beneficially owned by any such
stockholder, including the shares beneficially owned by Mr.
Hayes but held of record by the Partnership, until such
shares are offered first to the Company at the same price and
upon the same terms and conditions as those offered by a bona
fide purchaser or purchasers. The terms and provisions of
the Stockholders' Agreement apply to any shares of Common
Stock owned by the stockholders on the date of the
Stockholders' Agreement or acquired thereafter and are
binding upon the heirs, successors and assigns of the
stockholders.
Messrs. Fishman and Hayes have entered into a Stockholders'
Agreement with the Company dated as of April 30, 1991, as
amended, relating to the acquisition by the Company of
certain of their shares of Common Stock. Until June 22,
1995 (or the earlier termination of the 1991 Stockholders'
Agreement as provided therein), the Company will, upon the
death of either Mr. Fishman or Mr. Hayes, purchase such
number of shares of Common Stock beneficially owned by each
such person, including the shares beneficially owned by Mr.
Hayes but held of record by the Partnership, as equal
$4,000,000 and $5,000,000, respectively. The purchase price
for each share of Common Stock will equal the average of the
closing price for such shares on the New York Stock Exchange
for the 20 trading days preceding the date of death.
ELECTION OF DIRECTORS
Directors and Nominees
The Board is divided into three classes, with the term of
office of one class expiring each year. At the last annual
meeting of stockholders held on November 4, 1993, Ms. Jacobs
and Messrs. Adachi, Kry and McGarr were elected as directors
of the Company, each to serve for a three-year term until the
first annual meeting of stockholders held following the end
of the Company's 1996 fiscal year and until her or his
successor is elected and qualified. At the annual meeting of
stockholders held on November 5, 1992, Messrs. Fishman,
Hassenfelt and Hayes were elected as directors of the
Company, each to serve for a three-year term until the first
annual meeting of stockholders held following the
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<PAGE>
end of the
Company's 1995 fiscal year and until his successor is elected
and qualified. At the 1993 annual meeting of stockholders,
Mr Gillease was elected to serve as a director of the Company
for a two-year term until the first annual meeting of
stockholders held following the end of the Company's 1995
fiscal year and until his successor is elected and qualified.
At the annual meeting of stockholders held on November 7,
1991, Messrs. Dixon and Greenberg were elected as directors
of the Company, each to serve for a three-year term until the
first annual meeting of stockholders held following the end
of the Company's 1994 fiscal year and until his successor is
elected and qualified. At its meeting on April 29, 1993, the
Board of Directors elected Mr. Geremski, Vice President/Chief
Financial Officer and Treasurer of the Company, to serve on
the Board until the 1994 annual meeting of stockholders and
until his successor is elected and qualified.
The Board has nominated Messrs. Dixon, Geremski, Greenberg
and Zaidenweber for election as directors of the Company,
each to serve for a three-year term until the first annual
meeting of stockholders held following the end of the
Company's 1997 fiscal year and until his successor is elected
and qualified. Unless a contrary specification is indicated,
it is intended that the accompanying form of proxy will be
voted for the election of Messrs. Dixon, Geremski, Greenberg
and Zaidenweber. The Board does not contemplate that any of
such persons will be unable, or will decline, to serve;
however, if any of such persons is unable or declines to
for another person, or persons, in their discretion.
The following table sets forth certain information with
respect to each director and each person nominated or chosen
to become a director. Except as otherwise indicated, each
such person has held his or her present principal occupation
for the past five years:
<TABLE>
<CAPTION>
Name Age (1)
Principal Occupation or Occupations Director Since
<S> <C> <C> <C>
Director Nominees
Nominees for a Three-Year
Term Expiring at
Annual Meeting After
1997 Fiscal Year
Donald B. Dixon 66 Retired since 1984; for more 1987
than five years prior
thereto, a partner at Arthur Andersen LLP
Terrence E. Geremski 47 Vice President/Chief Financial 1993
Officer and Treasurer
(since 1992); Vice President and
Controller of Varity
Corporation (1989 to 1991); for more
than five years prior
thereto, the holder of various
executive and administrative
positions with Dayton Walther Corp.
George Greenberg (2) 72 Vice Chairman of the Board (since 1989); 1968
retired since
1989; for more than five years prior
thereto, the President
and Chief Operating Officer of the
Company
Dr. Jacobo Zaidenweber 65 Chairman of the Board of Grupo Ambar, S.A. (3)
de C.V. (since
1965) , a subsidiary of the Company;
Chairman of the Board of
Encajes Mexicano , S.A. de C.V. (since
1992), a textile manufacturer
Continuing Directors
Class of Directors Whose Term
Expires at Annual Meeting After
1996 Fiscal Year
Sherry R. Jacobs 51 Principal, Jonal, couturier (since 1989); 1983
Secretary and acting General Counsel of
the Company (since 1994);
Vice President/ Administration and
General Counsel of
the Company (from 1986 to 1989); and
Secretary of the Company (from 1987 to 1989)
Tomokazu Adachi 53 President of Japan Tech, Inc., an 1990
importer of textile machinery and equipment
Paul R. McGarr 60 Retired since July, 1991; Senior Vice 1974
President/Finance of the Company
(from 1989 to 1991); for more
than five years prior thereto, the Vice
President/Finance of the Company
Stig A. Kry (4) 65 Chairman Emeritus, Kurt Salmon Associates, 1993
Inc., a management consulting firm
</TABLE>
-5-
<PAGE>
<TABLE>
Class of Directors Whose Term
Expires at Annual Meeting After
1995 Fiscal Year
<S> <C> <C>
Maurice Fishman 71 Vice Chairman of the Board (since 1976); 1963
retired since 1989; for more than five
years prior thereto, a Senior Vice
President of the Company
Paul G. Gillease (5) 62 Consultant to the Company (since 1993);Vice 1993
President and General Manager, DuPont Nylon, a
division of E. I. du Pont de Nemours
and Company, Inc. (1992 to 1993); for
more than five years prior thereto,
Vice President and General Manager of
DuPont Textiles, a division of E. I. du
Pont Nemours and Company, Inc.
Stephen C. Hassenfelt 44 Chairman and Chief Executive Officer of 1989
North Carolina Trust Company
Charles A. Hayes 60 Chairman of the Board and Chief Executive 1963
Officer of the Company (since 1976);
President and Chief Operating Officer
of the Company (since April, 1991)
</TABLE>
(1) As of December 23, 1994.
(2) Mr. Greenberg is a director of Nautica Enterprises,
Inc., which has a class of securities registered pursuant to
Section 12 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act").
(3) Dr. Zaidenweber will stand as a director nominee of the
Company for the first time at the Annual Meeting.
(4) Mr. Kry is a director of Paul Harris Stores, Inc. and
Dominion Textiles, Inc., each of which has a class of
securities registered pursuant to Section 12 of the Exchange
Act.
(5) Mr. Gillease is a director of Pillowtex Corp. and Galey
& Lord, Inc., each of which has a class of securities
registered pursuant to Section 12 of the Exchange Act.
Additional Information
During the last fiscal year and the transition period from
June 28, 1993 to September 26, 1993, resulting from the
change in the Company's fiscal year end from the Sunday
nearest June 30 to the Sunday nearest September 30 (the
"Transition Period"), the Board's Audit Committee, consisting
of Messrs. Dixon and Hassenfelt, held five meetings. The
Audit Committee's responsibilities include reviewing the
Company's financial statements and the accounting principles
utilized by the Company, evaluating the services of the
Company's independent auditors and making recommendations
with respect to the retention of independent auditors,
evaluating the adequacy of the Company's system of internal
controls and confirming the Company's full cooperation with
the independent auditors' annual examination of the Company's
financial statements.
In addition, during the last fiscal year and the Transition
Period, the Board's Compensation Committee, consisting of Ms.
Jacobs and Messrs. Dixon and Hassenfelt, held six meetings.
The functions of the Compensation Committee include making
recommendations to the Board regarding compensation for
certain executive officers of the Company and administering
certain of the Company's benefit plans. See "Executive
Compensation - Report of the Compensation Committee of the
Board of Directors" below.
The Board's Nominating Committee, comprised of Ms. Jacobs
and Messrs. Dixon and Hayes, held one meeting during the last
fiscal year and the Transition Period. The duties of the
Nominating Committee include identifying and interviewing
candidates to serve on the Board, making recommendations to
the entire Board regarding whether a candidate should be
nominated to the Board and making recommendations to the
entire Board concerning compensation and other benefits to be
paid to directors.
-6-
<PAGE>
Non-employee directors receive a quarterly retainer of
$3,500 and $1,000 for each Board meeting attended (other than
telephonic Board meetings). Committee chairmen are paid
$1,000, and each other member of a committee (who is not an
employee of the Company) is paid $750, for each committee
meeting attended. During the last fiscal year and the
Transition Period, the Board had a total of ten meetings,
five of which were held in person and five of which were held
by means of a telephonic conference call. All directors then
in office attended at least 75% of the total number of
meetings of the Board and the committees on which they served
during the last fiscal year and the Transition Period.
Ms. Jacobs is serving as Secretary and acting General
Counsel of the Company on an interim basis. Ms. Jacobs
received approximately $75,146 during the 1994 fiscal year
and the Transition Period for such service. Effective
October 1, 1993, Mr. Gillease entered into a two year
consulting agreement with the Company pursuant to which he
advises the Company on certain strategic planning matters.
The Company pays Mr. Gillease $250,000 per year under the
consulting agreement.
The Company affords each director the opportunity to defer
his or her quarterly retainer. Pursuant to such arrangement,
the quarterly retainer a director would otherwise receive is
credited to a separate account which accrues interest. Upon
his or her termination of service on the Board, the director
will be entitled to receive the amounts credited to his or
her deferred compensation account, together with interest
accrued thereon. Currently, Mr. Dixon is the only director
who participates in the retainer deferral arrangement.
The Company's 1991 Stock Option Plan (the "Option Plan")
provides for the automatic grant of options not meeting the
requirements of incentive stock options ("Non-Qualified
Options"), within the meaning of Section 422 of the Internal
Revenue Code of 1986 (the "Code"), to directors who have
served as such for a designated period of time.
Specifically, each person who has served as a director of the
Company for two or more consecutive years on the date of
grant will automatically be granted (i) upon the first date
of grant after the completion of two consecutive years of
service as a director, an option to purchase 7,500 shares of
Common Stock and (ii) upon each of the second, third, fourth
and fifth date of grant after the completion of such service,
an option to purchase 3,750 shares of Common Stock. For each
year, the date of grant will be the third trading date
following the later of (i) the date of the annual
stockholders' meeting or (ii) the date on which the Company's
earnings for the fiscal quarter just prior to such meeting
date are released to the public. The purchase price of the
shares of Common Stock covered by the options granted to
directors will be the fair market value of the shares as of
the date of grant. Options granted to directors, which have
a five year term, will be exercisable with respect to 33-1/3%
of the aggregate number of shares initially subject to the
option during each of the first, second and third years of
the option. Any exercisable portion of an option that is not
exercised will be carried forward through the term of the
grant. Notwithstanding the foregoing, in the event of a
"change in control" of the Company, as such term is defined
in the Option Plan, all then outstanding options will
immediately become exercisable. In addition to the automatic
grant of options to directors according to the above formula,
the Option Plan also provides for the award, in the
discretion of the Compensation Committee, of options to
salaried key employees of the Company. Any director who
receives an option award under the formula provision,
however, is ineligible to receive discretionary grants as a
key employee.
There are no family relationships among any of the
directors and officers of the Company.
Mr. Hayes may be deemed a "control" person of the Company,
as that term is defined in Rule 12b-2 under the Exchange Act.
EXECUTIVE COMPENSATION
Report of the Compensation Committee of the Board of Directors
The Compensation Committee of the Board administers the
Company's compensation program for executive officers.
Specifically, the Committee serves as the administrator of
the Company's 1989 Restricted Stock Plan (the "Restricted
Plan"), the Option Plan and the Incentive Stock Option
Plan-1981 (the "1981 Plan"). In addition, the Committee
makes recommendations to the entire Board regarding the base
salary levels of the Chief Executive Officer, Chief Operating
Officer and Chief Financial Officer ("CEO", "COO" and "CFO",
respectively). The Committee is also responsible for
periodically reviewing, for adequacy and continued
-7-
<PAGE>
appropriateness, the entire compensation package of executive
officers and recommending to the Board any changes to such
package. Further, the Committee is required to approve any
proposed employment, severance, consulting or retirement
agreement with any executive officer.
In performing its duties, the Committee seeks to insure
that the Company's compensation program for executive
officers attracts and retains qualified, talented and highly
motivated personnel, links executive compensation to
corporate performance and is administered in a fair and
equitable fashion. The Company's executive officer
compensation program consists of two major elements: (i) a
short-term component, consisting of base salary and a
potential annual cash bonus, intended to reward executives
for current and past performance and (ii) a long-term
component, consisting of restricted (or phantom) stock and
stock options, designed to align further the interests of
executives with those of stockholders in general. In
addition, in order to offer a competitive compensation
program, the Company maintains certain retirement plans such
as a Qualified Profit-Sharing Plan and an Employee Stock
Ownership Plan and offers other benefits such as a split-
dollar insurance program.
Short Term Component - Base Salary and Annual Bonus. The
Committee evaluates the base salary of each of the CEO, COO
and CFO on a biennial basis, or more frequently if
appropriate, and recommends to the entire Board any changes
in such base salary levels. In making such evaluations and
recommendations, the Committee considers the historical pay
practices of the Company, the officer's leadership and
advancement of the Company's long-term strategic plans and
objectives, and the salary levels of executives holding
similar positions in certain other textile companies. The
Committee generally recommends salaries for the Company's
CEO, COO and CFO at levels exceeding the average salary level
of executives holding the same positions in such other
companies. Not all of the textile companies which the
Company considers for comparative compensation purposes are
included in the peer group index described in the
"Performance Graph" below because the Committee believes that
the Company's most direct competitors for executive talent
are not necessarily the same companies that would be included
in a peer group established to compare stockholder returns.
Mr. Hayes' annual salary as CEO was increased approximately
8% during the 1994 fiscal year, the first increase since
July, 1991. Since the end of the Company's 1991 fiscal year,
Mr. Hayes has assumed the additional interim responsibilities
of the COO and the Committee believes that while Mr. Hayes
performs such additional duties, he should receive a
supplemental salary of $150,000 per year.
The Company maintains for its executive officers and other
key employees a Short-Term Incentive Compensation Plan (the
"Bonus Plan"), which allows participants to earn annual cash
bonuses based upon the Company's achievement of an earnings
per share target, established by the Board at the beginning
of each fiscal year. Upon the attainment of such target, a
participant is eligible to receive a cash bonus (the
"Bonus") equal to the product of a percentage, as the same
may be adjusted as described below (the "Multiplier"), and
such participant's compensation for the prior year. The
Multiplier, which is established by the Committee for the
CEO, COO and CFO, and by the CEO for the other executive
officers, varies from participant to participant according to
the nature and degree of each participant's level of
responsibility. The Multiplier for the Company's executive
officers ranges from 33% to 75%. If the Company's actual
earnings per share for a given year do not equal the Bonus
Plan's target earnings per share, but fall within a
designated range of such target (either more or less), the
Multiplier for each participant, including the CEO, COO and
CFO, will be adjusted upward or downward accordingly. If the
Company's actual earnings per share fall within the
established range of the target, each participant, other than
the CEO, COO and CFO, will receive one-half of his Bonus,
with the remainder of the Bonus being pooled into certain
groups and allocated, in the discretion of the head of each
group, among all group participants according to each
participant's relative contribution to the success of the
Company. The amount of the discretionary bonus for the head
of each such group is determined by the CEO. Depending upon
such allocation, a participant's Multiplier may be adjusted
further upward or downward resulting in a greater or lesser
Bonus, as the case may be, than the participant otherwise
would have received. The Bonus, if any, paid to the CEO, COO
and CFO is not subject to such discretionary allocation.
Achievement of an earnings per share level within the
prescribed range will entitle such persons to their full
Bonus payments.
Long-Term Component - Restricted Stock, Phantom Stock and Stock
Options. In addition to the short-term elements of the
Company's executive compensation program described above, the
Company maintains certain equity based plans described below,
the benefits of which are linked to the Company's long-term
performance. The Committee believes that compensation in the
form of Common Stock serves to align further
-8-
<PAGE>
the interests of
executives with the interests of stockholders. Moreover,
compensation which is "at risk," in that its amount, or the
timing of its receipt, is dependent upon the Company's
performance, provides a strong incentive for individuals to
achieve superior performance. Finally, long-term
compensation helps balance the Company's overall executive
compensation program by encouraging executives to focus on
the Company's long term objectives and goals as well as the
Company's quarter to quarter results.
Restricted Stock. In its capacity as the administrator of
the Restricted Plan, which was approved by stockholders at
their 1989 Annual Meeting, the Committee determines, among
other things, which key employees will participate in the
Restricted Plan, any individual or corporate performance
goals applicable to a participant, the date on which awards
will be made, the number of shares to be awarded and the
restrictions to be applicable to such shares. In determining
the number of shares of restricted stock to be awarded to a
particular executive (as well as the number of shares of
phantom stock awarded to Mr. Hayes), the Committee has not
followed any specific guideline or formula, but rather has
considered more subjective factors such as the executive's
level of responsibility and past performance. All currently
outstanding stock awards under the Restricted Plan are
subject to identical restrictions. As described more fully
in Footnote 4 to the "Summary Compensation Table" below, the
vesting of 20% of each award (the "Service-Based Restricted
Stock") was contingent upon a participant being employed at
the end of the 1994 fiscal year. The timing of the vesting
of the remaining 80% of each restricted stock award (the
"Performance-Based Restricted Stock") was contingent upon
achieving a designated three-year cumulative earnings per
share target (the "Performance Target"), established by the
Board upon the recommendation of the Committee. Pursuant to
its authority under the Restricted Plan, the Committee in
fiscal year 1994 recommended, and the Board approved, certain
adjustments to the Performance Target. As of the end of the
1994 fiscal year, the Performance Target had been met and, as
a result, each participant's Performance-Based Restricted
Stock will vest over a three year period, commencing in
January 1995.
Phantom Stock. The Committee determined that, in light of
Mr. Hayes' already substantial equity interest in the
Company, it was not appropriate for him to participate in the
Restricted Plan. Mr. Hayes instead participates in a phantom
stock arrangement with the Company. Upon the vesting of such
phantom shares, Mr. Hayes is entitled to a cash payment equal
to the fair market value of the Common Stock at vesting, plus
dividends and interest, rather than actual shares of Common
Stock. During the 1994 fiscal year, Mr. Hayes vested in 20%
of his aggregate phantom stock award, or 21,000 shares of
phantom stock (the "Service-Based Phantom Stock"). The
vesting of that portion of his award, like the vesting of the
Service-Based Restricted Stock, was contingent upon being
employed at the end of the 1994 fiscal year. Until the 1994
fiscal year, the vesting of the remaining 80% of Mr. Hayes'
phantom stock award, or 84,000 shares of phantom stock (the
"Performance-Based Phantom Stock"), had been subject to the
same schedule applicable to the Performance-Based Restricted
Stock. During the 1994 fiscal year, the Company amended the
terms of Mr. Hayes' Performance-Based Phantom Stock in
response to the 1993 adoption of Section 162(m) of the Code.
Section 162(m), which first became applicable to the
Company for its fiscal year commencing October 3, 1994,
denies a public company a deduction, except in limited
circumstances, for compensation paid to covered employees, of
whom Mr. Hayes is one, to the extent such compensation
exceeds $1,000,000.
As a result, the Board, upon the recommendation of the
Committee, approved an amendment to Mr. Hayes' phantom stock
agreement, accelerating the vesting of Mr. Hayes'
Performance-Based Phantom Stock into the Company's 1994
fiscal year (before the effective date of Section 162(m)),
provided the Performance Target was met. See Footnote 4 to
the "Summary Compensation Table" below. In addition, the
Company granted, subject to the Performance Target being met,
certain rights to Mr. Hayes entitling him to a cash payout
equal to the appreciation in the value of Common Stock he
would otherwise forego by accelerating the vesting of the
Performance-Based Phantom Stock. Such rights, together with
certain dividend equivalents granted Mr. Hayes, will not vest
until after Mr. Hayes' retirement as CEO. See Footnote 3 to
the "Summary Compensation Table", and "Long-Term Incentive
Plan" below. The Committee retains the discretion to
authorize the payment of compensation, to Mr. Hayes or other
persons who would subject the Company to the deduction
limitation of Section 162(m), that does not qualify for
income tax deductibility under Section 162(m).
-9-
<PAGE>
Stock Options. As the administrator of the Option Plan,
which was approved by stockholders at their 1991 Annual
Meeting, the Committee determines, among other things, the
employees who are to receive options, the date of grant of
options, and (subject to the terms of the Option Plan) the
purchase price of each share subject to such options. The
Option Plan permits the granting of incentive stock options
("Incentive Options"), within the meaning of Section 422 of
the Code, Non-Qualified Options and stock appreciation rights
("SARs"). (There are currently no outstanding SARs under the
Option Plan and the only outstanding Non-Qualified Options
represent grants to eligible directors pursuant to a formula
provision in the Option Plan.) The 1981 Plan permits the
granting of only Incentive Options. The 1981 Plan expired in
accordance with its terms on September 14, 1991 and no
further options may be granted thereunder. Certain options
granted under the 1981 Plan prior to September 14, 1991
extend beyond such date and remain exercisable. All
outstanding Incentive Options have a five year term and are
not exercisable during the first two years after the date of
grant. The exercise price of an Incentive Option is not
less than 100% of the fair market value of a share of Common
Stock on the date the Incentive Option was granted. As a
result, a grantee only benefits from such an option if the
price of the Common Stock increases (in which case all
stockholders will benefit). In determining the amount of
options to be awarded to any person, the Committee considers
the recommendations of management as well as those subjective
factors used in making grants under the Restricted Plan. In
addition, the Committee generally has granted options every
18 to 24 months, with approximately two-thirds of the
aggregate amount of the options being awarded to employees
below the executive officer level. The grant of Non-
Qualified Options to Mr. Hayes during the 1994 fiscal year
represents a grant, under the Option Plan's formula
provision, to him in his capacity as a director. Mr. Hayes
is not eligible to receive awards under the Option Plan as an
employee. See "Election of Directors - Additional
Information" above.
Retirement Plans and Other Benefits. In addition to the
foregoing components of the executive compensation program,
the Company maintains certain other plans in which executives
participate, including a Qualified Profit-Sharing Plan (the
"Profit-Sharing Plan"), an Employee Stock Ownership Plan (the
"ESOP"), and an excess benefit plan (which is designed to
supplement certain of the Company's other benefit plans).
For the Transition Period and the 1994 fiscal year, the
Company contributed to the Profit-Sharing Plan 6% of the
aggregate compensation of all participants in such plan.
Contributions to the ESOP are made in the form of Common
Stock or cash used to purchase Common Stock and the amount of
such contributions is dependent upon the Company meeting the
same earnings per share target established under the Bonus
Plan. If the Company's actual earnings per share fall within
a range of the target earnings per share (either more or
less), then the Company will adjust its ESOP contribution,
upward or downward, accordingly. For the Transition Period
and for the 1994 fiscal year, the Company contributed Common
Stock to the ESOP in the amount of 4% and 2.1%, respectively,
of the compensation of the eligible employees for such
periods. The Company also maintains for almost all of its
executive officers a split-dollar insurance program and a
supplemental executive retirement plan, which are described,
respectively, in footnote (5) to the "Summary Compensation
Table" and in "Other Benefit Plans" below. The Company also
offers to its executives a plan pursuant to which they may be
reimbursed, up to a designated amount, for personal tax and
financial planning expenses.
Stephen C. Hassenfelt (Chairman)
Donald B. Dixon
Sherry R. Jacobs
Performance Graph
Set forth below is a line graph comparing the five-year
cumulative total stockholder return on the Common Stock with
the cumulative return of the Standard & Poor's 500 Stock
Index and with a peer group index, assuming the reinvestment
of dividends. The peer group index represents the cumulative
total return on the common stock of the following
textile companies: Burlington Industries Equity I, Cone
Mills Corp., Delta Woodside Industries, Inc., Dixie Yarns,
Inc., Dyersburg Corp., Fab Industries, Inc., Johnston
Industries, Inc., Lida, Inc., Springs Industries, Inc., Texfi
Industries, Inc., Tultex Corp., Unifi, Inc., United
Merchants and Manufacturers, Inc., Wellman, Inc., and West
Point Stevens, Inc. (formerly West Point-Pepperell, Inc.).
Belding Heminway, which was included in the Company's peer
group for purposes of last year's proxy statement performance
graph, is not included in the graph below because such
company's common stock is no
-10-
<PAGE>
longer publicly traded. The
return of each company included in the peer group index has
been weighted according to its respective stock market
capitalization.
COMPARISON OF FIVE YEAR STOCKHOLDER RETURN
AMONG GUILFORD MILLS,INC.,S&P 500 AND PEER GROUP
(Performance Chart Graphic)
<TABLE>
<CAPTION>
June 30, 1990 June 30, 1991 June 30, 1992 June 30, 1993 September 30, 1994
<S> <C> <C> <C> <C> <C>
GUILFORD $100.00 $ 69.87 $ 68.29 $127.93 $116.52 $117.24
S&P 500 100.00 109.53 124.99 141.69 160.92 171.20
Peer Group100.00 83.50 99.39 117.33 132.72 119.05
</TABLE>
(Assumes $100.00 invested on June 30, 1989, in Guilford
Mills, the S&P 500, and the companies that comprise the peer
group with all dividends reinvested.)
Summary of Cash and Certain Other Compensation
The following table shows for the fiscal years ended
October 2, 1994, June 27, 1993, June 28, 1992, June 30, 1991
and July 1, 1990, as well as for the Transition Period, the
cash compensation paid by the Company, as well as certain
other compensation paid or accrued for those periods, to the
Company's CEO and to the Company's four most highly
compensated executive officers (other than the CEO).
-11-
<PAGE>
SUMMARY COMPENSATION TABLE
<PAGE>
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION ALL
ANNUAL COMPENSATION RESTRICTED OTHER
NAME AND OTHER ANNUAL STOCK COMPEN-
PRINCIPAL FISCAL SALARY BONUS COMPENSATION AWARDS OPTIONS SATION
POSITION YEAR OR PERIOD ($) ($) ($)(3) ($)(4) (#) ($)(5)
<S> <C> <C> <C> <C> <C> <C> <C>
Charles A. Hayes, Chairman, 1994 720,000 (1) 222,300 (2) 61,511 0 3,750 213,229
Chief Executive Officer, Transition Period 168,750 (1) 40,566 29,300 0 0 55,229
President and Chief 1993 675,000 (1) 324,450 -- 0 3,750 261,953
Operating Officer.......... 1992 675,000 (1) 478,800 -- 0 7,500 --
1991 480,000 0 -- 1,470,000 0 --
1990 480,000 0 -- 0 0 --
Alfred A. Greenblatt, Senior 1994 350,004 91,001 -- 0 0 38,902
Vice President, Transition Period 87,501 18,025 -- 0 0 11,370
President/Apparel & Home 1993 350,000 124,200 -- 0 0 46,991
Fashions Business Unit..... 1992 296,000 176,320 -- 0 1,000 --
1991 280,000 0 -- 841,000 5,250 --
1990 280,000 0 -- 0 0 --
John A. Emrich, Senior Vice 1994 250,008 111,394 -- 0 0 38,725
President, President/ Transition Period 62,502 10,688 -- 0 0 9,569
Automative Business 1993 191,670 105,000 -- 174,656 0 32,169
Unit (6).......... 1992 150,000 90,288 -- 277,500 5,000 --
1991 31,923 0 -- 0 0 --
1990 116,000 0 -- 0 0 --
Richard S. Roberts, Senior 1994 250,008 65,002 -- 0 0 26,580
Vice President, President/ Transition Period 62,502 12,875 -- 0 0 7,855
Fibers Business Unit..... 1993 250,000 88,000 -- 0 0 32,547
1992 283,774 119,030 -- 0 1,000 --
1991 156,540 0 -- 168,000 3,000 --
1990 139,857 15,000 -- 0 0 --
Terrence E. Geremski, Vice
President/Chief Financial 1994 212,505 55,251 -- 0 0 25,081
Officer and Treasurer Transition Period 50,001 10,300 -- 0 0 6,878
(7)........................ 1993 160,008 65,920 -- 497,500 0 --
</TABLE>
(1) Mr. Hayes' salary for the 1994, 1993 and 1992 fiscal
years includes a special supplement of $150,000, and his salary
for the Transition Period includes a special supplement of
$37,500, for assuming interim responsibilities
as President and COO. Mr. Hayes' bonus award, if any, is
based solely on his salary as Chairman and CEO.
(2) Such amount does not include the value, which is not
determinable as of the date hereof, of certain rights, which
entitle Mr. Hayes to a cash payment equal to the product of
28,000 and the excess, if any, of the market value of Common
Stock on January 2, 1995 over $20.90 (the average closing
price of Common Stock during the last ten trading days of the
Company's 1994 fiscal year). Such rights, which were granted
in connection with the amendment of Mr. Hayes' phantom stock
agreement, are subject to the same terms as those rights
described in "Long-Term Incentive Plan" below.
(3) The amount in this column for the 1994 fiscal year
represents (i) $39,800 paid to Mr. Hayes in reimbursement for
tax and financial planning expenses, and (ii) $21,711 in
additional health insurance benefits. The figure in this
column for the Transition Period represents amounts paid to
Mr. Hayes in reimbursement for tax and financial planning
expenses.
(4) The amounts shown in this column reflect the market
value of the phantom stock granted to Mr. Hayes and the
market value of the restricted stock granted, under the terms
of the Restricted Plan, to Messrs. Greenblatt, Emrich,
Roberts and Geremski. (The market value is given as of the
date of grant of the restricted or phantom stock.)
-12-
<PAGE>
The restricted stock awarded to an executive officer is
held by an escrow agent, appointed by the Company, until such
officer vests in his award. Similarly, the dividends paid on
each share of restricted stock (which are paid to the same
extent as dividends on the Common Stock generally) are held
by the escrow agent until the executive vests in his
restricted stock, at which time the executive will also be
entitled to receive the interest credited by the Company on
such dividends. Each of the named executive officers vested
in his Service-Based Restricted Stock, if any, on October 1,
1994. The Performance-Based Restricted Stock will vest over
a three year period, commencing on January 2, 1995.
Notwithstanding the foregoing, upon a "change in control" of
the Company, as such term is defined in the Restricted Plan,
the restrictions applicable to an outstanding restricted
stock award will lapse and the executive will immediately
vest in such award and in any dividends paid on such award
and then held in escrow, together with interest thereon. As
of the last day of the 1994 fiscal year, Messrs. Greenblatt,
Emrich, Roberts and Geremski held 48,000, 15,000, 9,600 and
16,000 shares of restricted stock, respectively, at an
aggregate market value of $1,026,000, $320,625, $205,200 and
$342,000, respectively (based upon a price of $21.375 per
share the closing price of the Common Stock on the last
business day of the 1994 fiscal year).
Mr. Hayes does not participate in the Restricted Plan, but
is a party to a phantom stock agreement with the Company.
Pursuant to such agreement, no shares of Common Stock have
actually been issued to Mr. Hayes (nor has Mr. Hayes had at
anytime any voting power with respect to such phantom stock).
Instead, upon the vesting of such shares of phantom stock,
Mr. Hayes is entitled to receive cash in an amount equal to
the then fair market value of an equivalent number of shares
of Common Stock, plus an amount equal to all dividends that
would have been paid if the phantom stock had been issued and
outstanding together with interest on such amount. On the
last day of the 1994 fiscal year, Mr. Hayes vested in his
Service-Based Phantom Stock and Performance-Based Phantom
Stock, the terms of the latter having been amended by the
Board in response to the adoption of Section 162(m) of the
Code. See "Report of the Compensation Committee of the Board
of Directors" above.
(5) The components of the amounts shown in this column for
the 1994 fiscal year and the Transition Period consist of the
following:
(i) For the 1994 fiscal year, contributions of $9,000
each to the accounts of Messrs. Hayes, Greenblatt, Emrich,
Roberts and Geremski, pursuant to the Profit-Sharing Plan.
For the Transition Period, contributions of $3,537 each to
the accounts of Messrs. Hayes, Greenblatt, Emrich, Roberts
and Geremski, pursuant to the Profit-Sharing Plan.
(ii) For the 1994 fiscal year, contributions of shares
of Common Stock at an aggregate market value of $3,150 under
the ESOP to the accounts of each of Messrs. Hayes,
Greenblatt, Emrich, Roberts and Geremski. For the Transition
Period, contributions of shares of Common Stock at a market
value of $2,358 under the ESOP to the accounts of Messrs.
Hayes, Greenblatt, Emrich, Roberts and Geremski.
(iii) For the 1994 fiscal year, contributions of
$64,176, $23,571, $17,123, $13,365 and $9,538 to the accounts
of Messrs. Hayes, Greenblatt, Emrich, Roberts and Geremski,
respectively, pursuant to the Company's excess benefit plan
which is designed to supplement the Profit-Sharing Plan and
the ESOP. For the Transition Period, contributions of
$15,035, $4,656, $1,423, $1,641 and $134 to the accounts of
Messrs. Hayes, Greenblatt, Emrich, Roberts and Geremski,
respectively, pursuant to the Company's excess benefit plan.
(iv) With respect to Messrs. Greenblatt, Emrich and
Geremski, the value of benefits under the Company's Senior
Managers' Life Insurance Plan, a split dollar plan, and with
respect to Mr. Hayes, the value of benefits under a separate
split dollar arrangement with the Company. During the 1994
fiscal year and the Transition Period, each of Messrs.
Greenblatt, Emrich and Geremski paid the amount of the
premium associated with the term life component of his split
dollar life insurance coverage. With respect to Mr. Hayes,
the Company paid, during the 1994 fiscal year, $11,480 and
paid, during the Transition Period, $2,670 in premiums for
the term portion of his coverage, and paid the remainder of
the premium associated with the whole life component of the
coverage. For each named executive officer having a split
dollar arrangement, the Company expects to recover the
premiums it pays. The following amounts reflect the value of
the benefits accrued during the 1994 fiscal year, calculated
on an actuarial basis, ascribed to life insurance policies
purchased on the lives of
-13-
<PAGE>
the named executives who have split
dollar coverage: Mr. Hayes - $119,918; Mr. Greenblatt - $2,700;
Mr. Emrich
-
$4,802; and Mr.
Geremski - $3,394. The following
amounts reflect the value
of the benefits accrued during the
Transition Period, calculated on an actuarial basis, ascribed to
such policies: Mr. Hayes - $29,980; Mr. Greenblatt - $675; Mr.
Emrich - $1,201; and Mr. Geremski - $849.
(v) For the 1994 fiscal year, that portion of
interest earned (that the Securities and Exchange Commission
(the "SEC") considers to be at above market rates) on the
deferred compensation accounts of Messrs. Hayes, Greenblatt
and Roberts in the amount of $5,505, $481 and $1,065,
respectively. For the Transition Period, above market
interest earned on the deferred compensation accounts of
Messrs. Hayes, Greenblatt and Roberts in the amount of
$1,649, $144 and $319, respectively.
(vi) For the 1994 fiscal year and the Transition
Period, imputed interest income to Mr. Emrich of $4,650 and
$1,050, respectively, in connection with an interest free
loan made by the Company to such officer. See "Certain
Transactions" below.
(6) Mr. Emrich rejoined the Company as Vice
President/Planning in April, 1991 after having last been
employed by the Company in January, 1990. (Mr. Emrich
assumed the positions of President/Automotive Business Unit
in January, 1993 and Senior Vice President in April, 1993.)
Therefore, the amounts shown in the salary column for the
1990 and 1991 fiscal years reflect salary paid to Mr. Emrich
for only a portion of such years.
(7) Mr. Geremski joined the Company at the beginning of
the Company's 1993 fiscal year and, therefore, no
compensation information is provided for Mr. Geremski for the
1990, 1991, and 1992 fiscal years.
Stock Option Grants
The table below shows, among other things, hypothetical
potential gains from stock options granted during the
Company's 1994 fiscal year and the Transition Period. Such
hypothetical gains are based entirely on assumed annual
growth rates of 5% and 10% in the price of Common Stock over
the five year life of the stock options (which would equal a
total increase in stock price of approximately 28% and 61%,
respectively) and represent the spread between the option
exercise price and the assumed market value of the underlying
Common Stock. The assumed rates of growth were selected by
the SEC for illustrative purposes only and are not intended
to predict future stock prices which will depend upon, among
other things, market conditions and the Company's future
performance.
OPTION GRANTS IN TRANSITION PERIOD AND LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE
VALUE
AT
ASSUMED
ANNUAL
RATES
OF
INDIVIDUAL GRANTS STOCK
NUMBER OF PRICE
SECURITIES PERCENT OF TOTAL APPRECIATION
UNDERLYING OPTIONS GRANTED TO FOR
OPTIONS EMPLOYEES IN EXERCISE OPTION
GRANTED TRANSITION PERIOD OR BASE EXPIRATION TERM
NAME (#) AND FISCAL YEAR (%) PRICE ($) DATE 5% ($) 10% ($)
<S> <C> <C> <C> <C> <C> <C>
Charles A. Hayes (1)......................... 3,750 65 20.19 11/9/98 20,925 46,237
</TABLE>
(1) The grant of options to Mr. Hayes reflects an
automatic grant, pursuant to the formula provision for
eligible director participants, of Non-Qualified Options
under the Option Plan. As a result of the grant to Mr. Hayes
under such provision, he is not eligible, in accordance with
the terms of the Option Plan, to receive discretionary awards
as a key employee. See "Election of Directors - Additional
Information" above.
<PAGE>
Stock Option Exercises
The table below shows option exercises by the five most
highly compensated executive officers during the Transition
Period and 1994 fiscal year as well as the value of the
options held by such persons at the end of the 1994 fiscal
year.
AGGREGATED OPTION EXERCISES IN TRANSITION PERIOD AND LAST
FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Shares Value Underlying Unexercised In-the-Money
Acquired on Realized Options at Options at
Name Exercise (#) ($)(1) Fiscal Year-End (#) Fiscal Year-End ($)(2)
Exercisable/Unexercisable Exercisable/Unexercisable
<S> <C> <C> <C> <C>
Charles A. Hayes --
-- 11,250/3,750 21,768/2,962
Alfred A. Greenblatt 1,750 21,516 2,083/667 21,078/0
John A. Emrich --
-- 2,666/2,334 15,430/7,715
Richard S. Roberts 1,000 10,670 1,333/667 12,045/0
Terrence E. Geremski -- -- 0 --
</TABLE>
(1) The values in this column represent the product of the
number of options exercised and the excess of the market
value of the underlying Common Stock on the date of exercise
over the option exercise price.
(2) The values in this column represent the product of the
number of options and the excess, if any, of $21.375, the
market value of the underlying Common Stock on September 30,
1994 (the last business day of the 1994 fiscal year), over
the option exercise price.
Long-Term Incentive Plan
The table below shows the number of certain rights, and the
performance period for such rights, granted to Mr. Hayes
pursuant to his phantom stock agreement with the Company.
The rights are designed to compensate Mr. Hayes for the
appreciation in the value of Common Stock, if any, Mr. Hayes
would otherwise forego by accelerating the vesting of the
phantom stock. See "Executive Compensation - Report of the
Compensation Committee of the Board of Directors" above.
Such rights entitle Mr. Hayes to a cash payment equal to the
excess, if any, of the market value of Common Stock on each
of January 2, 1996 and 1997 (each such date, a "Measurement
Date") over $20.90 (the average closing price of Common Stock
during the last ten trading days of the Company's 1994 fiscal
year), multiplied in each instance by 28,000 (one-half of the
aggregate 56,000 right grant). Mr. Hayes will vest in, and
be entitled to receive, such cash payments 30 days after the
date (the "Vesting Date") he is no longer a "covered
employee" within the meaning of Section 162(m) of the Code.
The rights will earn interest from their respective
Measurement Date to the Vesting Date. If the price of the
Common Stock on any Measurement Date is equal to or less than
$20.90 per share, then the rights to be valued on such date
will expire and Mr. Hayes will not receive any payment with
respect to such rights.
Long-Term Incentive Plans - Awards
In Transition Period and Last Fiscal Year
<TABLE>
<CAPTION>
Number of Shares, Units, Performance or Other Period
Name or Other Rights (#) Until Maturation or Payout
<S> <C> <C>
Charles A. Hayes 56,000 1/96 - 1/97
</TABLE>
Other Benefit Plans
Supplemental Retirement Plan. In 1992, the Company adopted
the Senior Managers' Supplemental Retirement Plan ("SERP")
which provides for retirement and death benefits to a select
group of senior
-15-
<PAGE>
managers. The SERP provides that upon
retirement from the Company after attaining age 65, and after
at least 60 months of service with the Company, participants
will be entitled to receive a specified dollar amount for a
period of ten years following retirement ("Ten Year
Payments"). If the officer dies prior to the termination of
his or her employment or during the period while the Ten Year
Payments are being made, the full amount of the Ten Year
Payments or the unpaid portion thereof, as the case may be,
will be paid according to the installment schedule to the
officer's designated beneficiary.
The SERP also provides that if the officer's employment
with the Company is terminated for any reason other than his
or her death or disability (prior to the officer attaining
age 65) and the officer has been employed by the Company for
at least 60 months, the officer will be entitled to a reduced
retirement benefit commencing at age 65. Such reduced
benefit will be based upon the officer's total months of
employment with the Company as compared with the total months
of employment the officer would have had with the Company if
he or she had remained in the employ of the Company until age
65. If, at the time of his or her termination of employment
with the Company for any reason other than death or
disability, the officer has been employed by the Company for
less than 60 months following the effective date of the
agreement, he or she will not be entitled to any retirement
benefits and his or her beneficiaries will not be entitled to
any death benefits. If an officer becomes disabled prior to
attaining age 65 and such disability continues until age 65,
the officer will be entitled to receive the full amount of
the Ten Year Payments commencing at age 65, regardless of
whether he or she has completed 60 months of service with the
Company.
The Company has purchased life insurance policies on the
lives of all executive officers participating in the SERP in
amounts which are designed to enable the Company ultimately
to recover all sums paid pursuant to the SERP. Such life
insurance policies are held in trust for the benefit of such
officers.
The following table sets forth the Ten Year Payments for
each of the executive officers named in the "Summary
Compensation Table" above.
Name of Individual (1) Ten Year Payments (Per Annum)
Charles A. Hayes $345,000
Alfred A. Greenblatt 125,000
John A. Emrich 125,000
Terrence E. Geremski 125,000
(1) Mr. Roberts has entered into a retirement agreement
with the Company pursuant to which he will receive, in lieu
of payments under the SERP, payments over a ten year period
in accordance with the terms of the Executive Retirement and
Death Benefit Agreement and Pension and Death Benefit
Agreement. See "Severance Agreements" below.
Severance Agreements. The Company has entered into
severance agreements with each of the executive officers
named in the "Summary Compensation Table" above. The
severance agreements, which expire on August 31, 1999 (unless
extended by the Board), provide for the payment of specified
compensation and benefits to such employees upon certain
terminations of their employment within two years after a
change in control of the Company. These severance agreements
are intended to assure that management will continue to act
in the interest of the stockholders rather than be affected
by personal uncertainties during any attempts to effect a
change in control of the Company, and to enhance the
Company's ability to attract and to retain executives.
The compensation and benefits which may be awarded under
the severance agreements include, among other specified items
of compensation and other benefits, a lump sum payment equal
to three times an employee's highest annual salary during the
year preceding the change in control (including any bonuses
and contributions made on the employee's behalf to the
Company's non-qualified profit-sharing plan), and also
include continuation of participation in the Company's life,
health, accident and disability and insurance plans for a
period of three years (or until the employee commences full-
time substantially equivalent employment with a new
employer). If the total payments made to any particular
employee under a severance agreement would not be tax
deductible by the Company or would cause an "excess parachute
payment" to exist within the
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<PAGE>
meaning of Section 280G of the
Code, such payments will be reduced until no portion of such
payments would fail to be deductible by reason of being an
excess parachute payment. The severance agreements further
provide that in order for an employee to receive the benefits
contemplated by the severance agreement, if any person or
organization takes steps designed to effect a change in
control of the Company, the employee will not voluntarily
terminate his or her employment and will continue to perform
his or her regular duties, until such person or organization
has abandoned or terminated such effort to effect a change in
control.
Had a "change in control" taken place during the fiscal
year ended October 2, 1994, Messrs. Hayes, Greenblatt,
Emrich, Roberts and Geremski would have received, had their
employment ceased on that date, lump sum payments in the
approximate amounts of $3,238,667, $1,436,037, $1,025,746,
$1,025,746 and $970,590, respectively.
Mr. Roberts has entered into a retirement agreement with
the Company. Pursuant to such agreement, Mr. Roberts will
receive, upon his retirement, an aggregate of $92,000 per
year for ten years pursuant to the Company's Executive
Retirement and Death Benefit Agreement and Pension and Death
Benefit Agreement. The Company has also increased Mr.
Roberts' pre-retirement life insurance coverage from $600,000
to $1,000,000.
Compensation Committee Interlocks and Insider Participation
Ms. Jacobs, a member of the Company's Compensation
Committee, served as Vice President/Administration and
General Counsel of the Company from 1986 to 1989 and as
Secretary of the Company from 1987 to 1989. From time to
time since 1989 and, more recently, since the third quarter
of the 1994 fiscal year, Ms. Jacobs has served as acting
General Counsel and Secretary of the Company on an interim
basis. See "Election of Directors - Additional Information"
above.
Mr. Hassenfelt, Chairman of the Company's Compensation
Committee, serves as Chairman and Chief Executive Officer of
North Carolina Trust Company. Mr. Hayes is a member of the
Board of Directors of North Carolina Trust Company, but does
not serve on the Compensation Committee of such Board.
CERTAIN TRANSACTIONS
During the 1994 fiscal year and the Transition Period, the
Company paid $190,000 in consulting fees to Japan Tech, Inc.,
of which Mr. Adachi, a director of the Company, is the
President and controlling stockholder. In addition, in the
ordinary course of its business and through a series of
arm's-length transactions, the Company purchased machinery
and equipment from Japan Tech, Inc. during the 1994 fiscal
year and the Transition Period totaling $3,881,583.
In the ordinary course of business and through a series of
arm's-length transactions, during the 1994 fiscal year and
the Transition Period, the Company paid $463,522 for
forklifts and forklift repairs to Western Carolina Forklift,
Inc., which is controlled by David Hayes, the son of Charles
A. Hayes, the Chairman and Chief Executive Officer of the
Company. Charles A. Hayes serves on the Board of Directors
of Western Carolina Forklift, Inc. with Mr. Adachi.
In the fourth quarter of the 1994 fiscal year, the Company
purchased from certain stockholders of Grupo Ambar, S.A. de
C.V. ( "Grupo Ambar") an additional 55% of Grupo Ambar's
capital stock for $9,798,250, thereby increasing the
Company's ownership in Grupo Ambar to 75%. In such
transaction, Dr. Zaidenweber, a director nominee, and Jose
Zaidenweber, Dr. Zaidenweber's brother, sold to the Company a
portion of their shares of Grupo Ambar capital stock for
$889,893 and $1,424,560, respectively. Pursuant to the stock
purchase agreement entered into with the selling stockholders
of Grupo Ambar, the Company will pay additional consideration
to the sellers of up to approximately $3,700,000, provided
Grupo Ambar achieves certain earnings objectives through
1995. Dr. Zaidenweber remains the Chairman of the Board, and
a stockholder, of Grupo Ambar. See "Election of Directors -
Directors and Nominees" above.
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<PAGE>
In fiscal year 1993, in connection with its request that
Mr. Emrich, Senior Vice President of the Company and
President of the Automotive Business Unit, relocate to
Kenansville, North Carolina, the Company loaned Mr. Emrich
$100,000 to purchase a residence. The loan bears no
interest, is secured by a Deed of Trust on Mr. Emrich's new
residence and is payable on demand.
Effective October 1, 1993, Mr. Gillease, a director of the
Company, entered into a consulting arrangement with the
Company. See "Election of Directors -
Additional Information"
above.
COMPLIANCE WITH STOCK OWNERSHIP REPORTING REQUIREMENTS
Section 16(a) of the Exchange Act requires the Company's
directors and executive officers, and any persons holding
more than 10% of the Company's equity securities, to file
with the SEC and the New York Stock Exchange reports
disclosing their initial ownership of the Company's equity
securities, as well as subsequent reports disclosing changes
in such ownership. To the Company's knowledge, based solely
on a review of such reports furnished to it and written
representations by certain reporting persons that no other
reports were required, during the fiscal years ended June 27,
1993 and October 2, 1994, the Company's directors, executive
officers and greater than 10% beneficial owners complied with
all Section 16(a) filing requirements, except that George
Greenberg, a director of the Company, failed to report timely
two gifts of an aggregate of 400 shares of Common Stock he
made during the 1993 fiscal year. This omission was
corrected by Mr. Greenberg's filing of a report during the
1994 fiscal year.
RATIFICATION OF THE SELECTION OF
INDEPENDENT AUDITORS FOR THE
FISCAL YEAR ENDING OCTOBER 1, 1995
The Board has selected Arthur Andersen LLP to serve as
independent auditors to audit the financial statements of the
Company for the fiscal year ending October 1, 1995 and
recommends that stockholders vote to ratify such selection.
Representatives of Arthur Andersen LLP are expected to
attend the Annual Meeting and will be afforded an opportunity
to make a statement and to respond to appropriate questions.
MISCELLANEOUS
Stockholder Proposals
Any stockholder who wishes to present a proposal for action
at the next annual meeting and who wishes to have it set
forth in the Proxy Statement and identified in the form of
proxy prepared by the Company must notify the Company in such
manner so that such notice is received by the Company by
September 6, 1995 and in such form as is required under the
rules and regulations promulgated by the SEC.
In addition, under the Company's By-Laws, as amended
through the date hereof (the "By-Laws"), in order for
business to be properly brought before the next annual
meeting, notice of such business must be received by the
Secretary of the Company not less than 60 days and not more
than 90 days prior to such meeting (provided that if less
than 70 days notice or prior public disclosure of the date of
the meeting is given to stockholders, notice of such business
must be received by the Secretary of the Company no later
than ten days following the day on which notice of the date
of the meeting was mailed or such public disclosure was made,
whichever occurs first). Such notice must contain (i) a
brief description of the business and the reasons for
conducting it at the meeting, (ii) the name and address of
the stockholder proposing such business, (iii) a
representation that the proposing stockholder is a holder of
record and the number of shares of the Company that are
beneficially owned by such stockholder and (iv) a description
of any material interest of such stockholder in such
business.
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<PAGE>
The chairman of the meeting may disregard any
business that he or she determines was not properly brought
before the meeting in accordance with the By-Laws.
The By-Laws also provide that if a stockholder of the
Company intends to nominate at a meeting one or more persons
for election to the Board, notice of such nomination must be
received by the Secretary of the Company not less than 60
days and not more than 90 days prior to such meeting
(provided that if less than 70 days notice or prior public
disclosure of the date of the meeting is given to
stockholders, such nomination must be received by the
Secretary of the Company no later than ten days following the
day on which notice of the date of the meeting was mailed or
such public disclosure was made, whichever occurs first).
Such notice must contain (a) as to each proposed nominee, (i)
the name, age and business and residence address of such
nominee, (ii) the principal occupation of such nominee, (iii)
the number of shares, if any, of the Company that are
beneficially owned by such nominee and (iv) any other
information that must be disclosed pursuant to the proxy
rules of the SEC if such person had been nominated by the
Board and (b) as to the proposing stockholder, (i) the name
and address of such stockholder, (ii) a representation that
the proposing stockholder is a holder of record of shares of
the Company entitled to vote at the meeting and the number of
shares of the Company that are beneficially owned by such
stockholder, (iii) a representation that the proposing
stockholder intends to appear in person or by proxy at the
meeting to nominate the person or persons specified in the
notice and (iv) a description of all arrangements and
understandings between the stockholder and each nominee
pursuant to which the nominations are to be made by the
stockholder. The chairman of the meeting may disregard any
nomination that he or she determines was not made in
accordance with the foregoing procedures.
Annual Report on Form 10-K
Any stockholder of record on December 23, 1994 who desires
a copy of the Company's 1994 Annual Report on Form 10-K, as
filed with the SEC, may obtain a copy (excluding exhibits)
without charge by addressing a request to the Secretary,
Guilford Mills, Inc., P. O. Box 26969, Greensboro, North
Carolina 27419-6969. A charge equal to the reproduction cost
will be made if the exhibits are requested.
Other Matters
The Board is not aware of any matters to be presented for
action at the Annual Meeting other than those described
herein and does not intend to bring any other matters before
the Annual Meeting. However, if other matters shall come
before the Annual Meeting, it is intended that the holders of
proxies solicited hereby will vote thereon in their
discretion.
By Order of the Board of Directors
(Signature of Sherry R. Jacobs appears here)
Sherry R. Jacobs
Secretary
Dated: January 5, 1995
PROXY GUILFORD MILLS, INC.
Annual Meeting of Stockholders - February 2, 1995
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned nominates and appoints Charles A. Hayes and Terrence E.
Geremski, or either one of them, as proxies of the undersigned, with power of
substitution to each, to vote all shares of stock of GUILFORD MILLS, INC.
which the undersigned may be entitled to vote at the Annual Meeting of
Stockholders of said Corporation to be held at the Joseph S. Koury Convention
Center, 3121 High Point Road, Greensboro, North Carolina on February 2, 1995
at 10:00 A.M. and at any adjournment or adjournments thereof with authority
to vote said stock on the matters set forth on the reverse side hereof and
upon such other matters as may properly come before the meeting.
Unless otherwise specified on this proxy, the shares represented by this
proxy will be voted "FOR" Proposals 1 and 2. Discretion will be used with
respect to such other matters as may properly come before the meeting
or any adjournment or adjournments thereof.
(Continued and to be signed and dated on the reverse side)
<PAGE>
(Continued from the other side)
<TABLE>
<CAPTION>
<S> <C> <C>
1) Election of Four Directors for Three-Year Terms: [ ] FOR ALL NOMINEES listed below [ ] WITHHOLD AUTHORITY to vote
(except as marked to the contrary below). for all nominees listed below.
</TABLE>
Donald B. Dixon, Terrence E. Geremski, George Greenberg and
Dr. Jacobo Zaidenweber
INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name on the space provided.
____________________________________________________________________________
2) Ratification of the selection of Arthur Andersen LLP, as independent
auditors for the fiscal year ending October 1, 1995.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
Please sign exactly as your name
appears. When signing as attorney,
executor, administrator, trustee
or guardian, please set forth your
full title. If signer is a
corporation, please sign the full
corporate name by a duly authorized
officer. Joint owners should each
sign.
Signature:_______________Date____
Signature:_______________Date____
Note: Please sign and return promptly in the envelope provided. No postage
is required if mailed in the United States.
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APPENDIX
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On the Notice to Stockholders page the signatre of Sherry R. Jacobs
appears where indicated.
On the last page before the proxy card, the signature of Sherry R. Jacobs
appears where indicated.
There is a Performance Graph on page 11 of the document. The plot points
are listed in the table below the reference to the graphic on page 11.
