<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [x]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[x] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
FORSTMANN & COMPANY, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
FORSTMANN & COMPANY, INC.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[x] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
(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:
Notes:
<PAGE>
FORSTMANN
FORSTMANN & COMPANY, INC.
1185 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10036
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 4, 1995
The Annual Meeting of Shareholders of Forstmann & Company, Inc. (the
"Company") will be held at The 60 East Club, 60 East 42nd Street, New York, New
York, at 10:00 a.m., on Tuesday, April 4, 1995, for the following purposes:
1. To elect six directors for a term of one year and until their respective
successors are elected and qualified;
2. To vote on the ratification of the selection of Deloitte & Touche LLP as
the Company's independent auditors for the fiscal year ending October
29, 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 February 10, 1995
as the record date for determining shareholders entitled to receive notice of
the Annual Meeting and to vote at such meeting or any adjournment or
adjournments thereof.
The Board of Directors appreciates and welcomes shareholder participation in
the Company's affairs. Whether or not you plan to attend the Annual Meeting,
please vote by completing, signing and dating the enclosed proxy and returning
it promptly to the Company in the enclosed self-addressed, postage prepaid
envelope. If you attend the meeting, you may revoke your proxy and vote your
shares in person.
By Order of the Board of Directors,
Jane S. Pollack
Secretary
February 23, 1995
<PAGE>
FORSTMANN & COMPANY, INC.
1185 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10036
----------------
PROXY STATEMENT
----------------
1995 ANNUAL MEETING OF SHAREHOLDERS
GENERAL INFORMATION
This Proxy Statement is furnished to shareholders of Forstmann & Company,
Inc., a Georgia corporation (the "Company"), in connection with the
solicitation of proxies by the Board of Directors of the Company (the "Board of
Directors") for use at the Annual Meeting of Shareholders of the Company to be
held at 10:00 a.m. on Tuesday, April 4, 1995 at The 60 East Club, 60 East 42nd
Street, New York, New York, and any adjournment or adjournments thereof (the
"Annual Meeting"), for the purposes set forth in the accompanying Notice of
Annual Meeting. This Proxy Statement, the attached Notice of Annual Meeting,
the accompanying form of proxy and the Annual Report to Shareholders of the
Company for the fiscal year ended October 30, 1994 ("Fiscal 1994") are first
being mailed to shareholders of the Company on or about February 23, 1995.
The record date for shareholders of the Company entitled to notice of, and to
vote at, the Annual Meeting is the close of business on February 10, 1995 (the
"Record Date"). As of the Record Date, 5,618,800 shares of the Company's common
stock, par value $.001 per share (the "Common Stock"), were issued and
outstanding. All of such shares are of one class, with equal voting rights, and
each holder thereof is entitled to one vote on all matters voted on at the
Annual Meeting for each share registered in such holder's name. A quorum
consists of a majority of the total number of issued and outstanding shares of
Common Stock. Assuming a quorum is present, directors are elected by a
plurality of the votes cast. Approval of each other matter which is submitted
to a vote of the shareholders at the Annual Meeting, including the ratification
of the selection of Deloitte & Touche LLP as the Company's independent auditors
for the current fiscal year will require that the votes cast in favor of each
such matter exceed the votes cast in opposition to such matter. Abstentions and
broker non-votes will be included in the computation of the number of shares
that are present for the purpose of determining the presence of a quorum, but
will not be counted in the total number of votes cast and, therefore, will have
no effect on the outcome of the vote.
A proxy in the accompanying form which is properly executed, duly returned to
the Company and not revoked will be voted in accordance with the instructions
contained thereon. If no specific instructions are indicated on the proxy, the
shares represented thereby will be voted FOR (i) the election of the six
persons nominated herein by the current Board of Directors as directors, and
(ii) the ratification of the selection of Deloitte & Touche LLP as the
Company's independent auditors for the current fiscal year; and, in the
discretion of the persons named in the proxy, on any other matter that may
properly come before the Annual Meeting.
Each proxy granted may be revoked by the person granting it at any time (i)
by giving written notice to such effect to the Secretary of the Company, (ii)
by execution and delivery of a proxy bearing a later date, or (iii) by
attendance and voting in person at the Annual Meeting, except as to any matter
upon which, prior to such revocation, a vote shall have been cast at the Annual
Meeting pursuant to the authority conferred by such proxy. The mere presence at
the Annual Meeting of a person appointing a proxy does not revoke the
appointment.
<PAGE>
OWNERSHIP OF EQUITY SECURITIES
The following table sets forth the aggregate number of shares of Common Stock
of the only persons or groups known to the Company as of February 15, 1995 to
own beneficially 5% or more of the outstanding shares of Common Stock.
<TABLE>
<CAPTION>
NAME AND
ADDRESS OF
BENEFICIAL AMOUNT AND NATURE OF PERCENT
OWNER BENEFICIAL OWNERSHIP OF CLASS
---------- -------------------- --------
<S> <C> <C>
Odyssey Partners, L.P.(1)..................... 2,832,713 shares 50.41%
31 West 52nd Street
New York, New York 10019
Harris Associates L.P.
Harris Associates, Inc.(2)................... 403,000 shares 7.17%
2 North LaSalle Street, Suite 500
Chicago, Illinois 60602
David L. Babson & Company, Inc.(4)............ 637,700 shares 11.35%
One Memorial Drive
Cambridge, Massachusetts 02142-1300
</TABLE>
- --------
(1) Leon Levy, Jack Nash, Stephen Berger, Joshua Nash and Jeffrey Gendell, by
virtue of being general partners of Odyssey Partners, share voting and
dispositive power with respect to the Common Stock owned by Odyssey
Partners and, accordingly, may each be deemed to own beneficially the
Common Stock owned by Odyssey Partners. Each of the aforesaid persons has
expressly disclaimed any such beneficial ownership (within the meaning of
Rule 13d-3(d)(1) under the Securities Exchange Act of 1934, as amended)
which exceeds the proportionate interest in the Common Stock which he may
be deemed to own as a general partner of Odyssey Partners. The Company has
been advised that no other person exercises (or may be deemed to exercise)
any voting or investment control over the Common Stock owned by Odyssey
Partners. Odyssey Partners is a private investment firm with substantial
equity capital invested in marketable securities and closely-held
businesses. Steven M. Friedman, a director of the Company, was, until
December 31, 1993, a general partner of Odyssey Partners.
(2) Based on Schedule 13G, dated February 14, 1995, filed with the Securities
and Exchange Commission. Such shares are beneficially owned by The Oakmark
Fund, a series of the Harris Associates Investment Trust, with which Harris
Associates L.P., an Investment Adviser registered under the Investment
Advisers Act of 1940 (of which Harris Associates, Inc. is the general
partner), shares voting and dispositive power.
(3) Based on Schedule 13G, dated February 10, 1995, filed with the Securities
and Exchange Commission. David L. Babson & Company, Inc., a registered
investment adviser under the Investment Advisers Act of 1940, is the
beneficial owner of 637,700 shares of Common Stock with sole dispositive
power over such shares. It has sole voting power with respect to 452,900 of
such shares and shared voting power with respect to the remaining 184,800
of such shares.
2
<PAGE>
Set forth below is information, as of February 15, 1995, with respect to the
beneficial ownership of the Common Stock by (a) the six nominees of the Board
of Directors for election as directors of the Company (which consists of all
current directors), (b) the Company's Chief Executive Officer and the four
other most highly compensated executive officers of the Company during Fiscal
1994, and (c) all current directors and executive officers of the Company, as a
group (12 persons).
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT
NAME BENEFICIAL OWNERSHIP(1) OF CLASS
---- ----------------------- --------
<S> <C> <C>
Stephen Berger............................. 2,832,713(2) 50.41%
Cameron Clark, Jr.......................... 1,500 *
F. Peter Libassi........................... 1,000(3) *
Steven M. Friedman......................... 0(4) --
Fred D. Matheson........................... 19,166(5) *
Alain Oberrotman........................... 0 --
Richard Pactor............................. 19,166(5) *
Peter Roaman............................... 19,866(6) *
Christopher L. Schaller.................... 78,166(7) 1.37%
William B. Towne........................... 22,166(8) *
All directors and executive officers as a
group...................................... 2,999,575(9) 53.38%
</TABLE>
- --------
* Less than 1%.
(1) Each individual listed below has sole investment and voting power except as
otherwise indicated.
(2) Consists of the shares owned by Odyssey Partners. As reflected in footnote
(1) to the preceding table, Mr. Berger is a general partner of Odyssey
Partners and may be deemed to own beneficially the shares owned by Odyssey
Partners. Mr. Berger has disclaimed beneficial ownership in such shares to
the extent that such beneficial ownership exceeds the proportionate
interest in such shares that he may be deemed to own as a general partner
of Odyssey Partners.
(3)Mr. Libassi shares investment and voting power with his wife.
(4) Mr. Friedman has an indirect financial interest in a portion of the shares
owned by Odyssey Partners which are listed above for Mr. Berger; however,
Mr. Friedman does not have any voting or dispositive power over any shares
owned by Odyssey Partners.
(5) Represents shares issuable upon exercise of currently exercisable options
under the Company's Common Stock Incentive Plan.
(6) Includes 19,166 shares issuable upon exercise of currently exercisable
options under the Company's Common Stock Incentive Plan.
(7) Includes 71,666 shares issuable upon exercise of currently exercisable
options under the Company's Common Stock Incentive Plan.
(8) Consists of (a) 19,166 shares issuable upon exercise of currently
exercisable options under the Company's Common Stock Incentive Plan, (b)
500 shares held in an individual retirement account, (c) 1,000 shares in
which Mr. Towne and his wife share voting and investment power, and (d)
1,500 shares held by a trust of which Mr. Towne and his wife are co-
trustees and their children are the beneficiaries, as to which shares Mr.
Towne has disclaimed beneficial ownership.
(9) Includes shares issuable upon exercise of currently exercisable options
under the Company's Common Stock Incentive Plan.
Based upon a review of information received by the Company, none of the
persons referred to above failed to file timely with the Securities and
Exchange Commission any report required to be filed during Fiscal 1994 pursuant
to Section 16(a) of the Exchange Act.
3
<PAGE>
ELECTION OF DIRECTORS
(ITEM 1 ON THE PROXY CARD)
The Company's By-Laws provide that the Board of Directors is to consist of
six members. At least two directors must be neither officers nor employees of
the Company or of any person directly or indirectly controlling the Company
("Independent Directors"). Cameron Clark, Jr. and F. Peter Libassi, each of
whom currently serves as a director, have been nominated to serve as
Independent Directors of the Company.
NOMINEES OF THE BOARD OF DIRECTORS
The persons named in the accompanying form of proxy, unless otherwise
instructed, intend to vote the shares of Common Stock represented by valid
proxies FOR the election of the six persons named in the following table, who
have been designated by the Board of Directors. In the event that any of the
nominees of the Board of Directors is unable to continue to be available for
election, the persons named in the accompanying form of proxy will have
discretionary power to vote for a substitute and will have discretionary power
to vote or withhold their vote for any additional nominees named by
shareholders. There are no circumstances presently known to the Board of
Directors which would render any of the following persons unavailable to serve
as a director, if elected.
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE PRINCIPAL OCCUPATION SINCE
---- --- -------------------- -------------
<S> <C> <C> <C>
Stephen Berger........ 55 General Partner of Odyssey March 1994
Partners
Cameron Clark, Jr..... 72 President and Chief Executive December 1991
Officer of Production Sharing
International, Ltd.
Steven M. Friedman.... 40 General Partner of Eos Partners, December 1988
L.P.
F. Peter Libassi...... 64 Dean of the Barney School of February 1994
Business and Public
Administration of the University
of Hartford
Alain Oberrotman...... 43 Principal of Odyssey Partners December 1994
Christopher L.
Schaller.............. 53 Chairman of the Board, President April 1990
and Chief Executive Officer of
</TABLE> the Company
The business experience during the past five years, and the current
directorships in reporting companies under the Exchange Act, of each of the
foregoing persons is as follows:
Stephen Berger has been a general partner of Odyssey Partners since July 1,
1993. From July 1990 to July 1993, Mr. Berger was employed by General Electric
Capital Corporation, most recently as Executive Vice President and as Chairman
and Chief Executive Officer of its subsidiary, Financial Guaranty Insurance
Corporation. Immediately prior thereto, Mr. Berger served as the Executive
Director of the New York and New Jersey Port Authority. Mr. Berger is a
director of the following reporting companies: Hugoton Energy Corporation (a
natural gas exploration and production company), MICOM Communications Corp. (a
manufacturer of data communications products), Black Box Corporation (a direct
marketer of data communications products), Scotsman Holdings, Inc. (a holding
company) and The Scotsman Group, Inc. (a lessor of mobile office units).
Cameron Clark, Jr. has been President and Chief Executive Officer of
Production Sharing International, Ltd., the principal business of which is
third world industrial development, since January 1979.
4
<PAGE>
Steven M. Friedman has been a General Partner of Eos Partners, L.P. (a
private investment firm) since January 1, 1994. For more than the five years
prior thereto, he was a General Partner of Odyssey Partners. Mr. Friedman was
Chairman of the Board of the Company from October 1990 to March 1992, and a
Vice President of the Company from December 1988 to March 1992. Mr. Friedman is
a director of the following reporting companies: The Leslie Fay Companies, Inc.
(a womenswear designer and manufacturer), which is a customer of the Company,
The Caldor Corporation (a chain of discount retail stores), Eagle Food Centers,
Inc. (a chain of grocery stores), Gundle Environmental Systems, Inc. (a
manufacturer of liners for waste disposal sites), JPS Textile Group, Inc. (a
textile manufacturer), MICOM Communications Corp., Rickel Home Centers, Inc. (a
home center retailer) and Black Box Corporation.
F. Peter Libassi has been Dean of the Barney School of Business and Public
Administration of the University of Hartford since February 1993. From 1982 to
February 1993, he was Senior Vice President for Corporate Communications of
Travelers Corporation (an insurance company). Since January 1993, Mr. Libassi
also has been Of Counsel to the Washington, D.C. law firm of Verner, Liipfert,
Bernhard, McPherson and Hand.
Alain Oberrotman has been a Principal of Odyssey Partners since October 1992.
From September 1990 until joining Odyssey Partners, he was a Principal of
Hambro International Equity Partners, a venture capital firm. From September
1982 to September 1990, he was President of TVI Group, Inc., a business
development, consulting and finance firm. Mr. Oberrotman is a director of JPS
Textile Group, Inc.
Christopher L. Schaller joined the Company in April 1990 as President and
Chief Operating Officer, at which time he also was elected a director. Mr.
Schaller became Chief Executive Officer in October 1990 and Chairman of the
Board of Directors in March 1992. Immediately prior to joining the Company, Mr.
Schaller was President of the Apparel Fabrics Division of WestPoint Stevens,
Inc. (a textile manufacturer).
THE BOARD OF DIRECTORS AND COMMITTEES THEREOF
Directors of the Company are elected annually to serve until the next annual
meeting of shareholders and until their successors have been duly elected and
qualified. During Fiscal 1994, there were eleven meetings of the Board of
Directors and two actions by unanimous written consent , and each director
attended all of the meetings of the Board of Directors and of the Committees
thereof, if any, on which he served.
The Company's Board of Directors has an Audit Committee and a Compensation
Committee. The Board of Directors does not have a Nominating Committee;
nominations for directorships are made by vote of the Board of Directors. The
members of each committee are appointed by the Board of Directors for a term
beginning after the first regular meeting of the Board of Directors following
the Annual Meeting of Shareholders and until their respective successors are
elected and qualified.
Audit Committee. The Audit Committee recommends to the Board of Directors the
auditing firm to be selected each year as independent auditors of the Company's
financial statements. The Audit Committee also has responsibility for (i)
reviewing the proposed scope and results of the audit, (ii) reviewing the
Company's financial condition and results of operations, (iii) considering the
adequacy of the Company's internal accounting and control procedures, and (iv)
reviewing any non-audit services and special engagements to be performed by the
independent auditors, and ensuring that the performance of such tasks will not
impair the auditors' independence. The Audit Committee also reviews, at least
annually, the terms of all material transactions and arrangements between the
Company and its affiliates. Members of the Audit Committee may not be employees
of the Company, and not more than one member may be affiliated with or
represent the interest of a shareholder of the Company beneficially owning 20%
or more of the outstanding Common Stock. The current members of the Audit
Committee are Messrs. Clark, Libassi, and Oberrotman, with Mr. Clark serving as
Chairman. During Fiscal 1994, the Audit Committee held five meetings.
5
<PAGE>
Compensation Committee. The Compensation Committee determines, subject to the
approval of the Board of Directors, the compensation paid to the Company's
executive officers, the award of stock options under the Company's Common Stock
Incentive Plan and the implementation of the management incentive compensation
plans. The current members of the Compensation Committee are Messrs. Clark,
Friedman and Libassi, with Mr. Libassi serving as Chairman. During Fiscal 1994,
the Compensation Committee held three meetings.
EXECUTIVE COMPENSATION
Summary of Compensation in Fiscal 1994, Fiscal 1993 and Fiscal 1992
The following summary compensation table sets forth information concerning
compensation for services in all capacities awarded to, earned by or paid to
the Chief Executive Officer and the four other most highly compensated
executive officers of the Company during Fiscal 1994 and the fiscal years ended
October 31, 1993 ("Fiscal 1993") and November 1, 1992 ("Fiscal 1992").
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
---------------------------- ------------
SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND FISCAL SALARY BONUS COMPENSATION OPTIONS COMPENSATION
PRINCIPAL POSITION YEAR ($ )($) (1) ($) (2) (#) (3) ($) (4)
------------------ ------ ------- ------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Christopher L. Schaller 1994 387,500 0 27,478 0 2,376
President and Chief 1993 360,833 114,141 5,198 10,000 3,991
Executive Officer..... 1992 340,000 65,960 5,198 65,000 2,287
Fred D. Matheson
Executive Vice 1994 234,025 0 32,366 0 572
President-- 1993 220,000 69,592 73,132 10,000 1,376
Manufacturing......... 1992 200,000 38,800 10,149 12,500 0
Richard Pactor
Executive Vice 1994 243,750 0 10,623 0 3,693
President-- 1993 232,292 73,480 6,398 10,000 6,351
Product Development... 1992 220,833 42,842 5,905 12,500 41,339
Peter Roaman
Executive Vice 1994 232,000 0 12,074 0 0
President-- Marketing 1993 216,667 68,537 7,190 10,000 0
and Styling........... 1992 197,917 38,396 6,350 12,500 62,943
William B. Towne
Executive Vice
President and 1994 234,025 0 12,138 0 1,604
Chief Financial 1993 218,333 69,065 7,204 10,000 911
Officer............... 1992 200,000 38,800 6,417 12,500 357
</TABLE>
- --------
(1) The amount of any bonus earned for a fiscal year, although included in the
fiscal year earned, is actually determined and paid after the end of the
fiscal year.
(2) Represents tax liability reimbursed by the Company arising from (a)
contributions made by the executive officer and for investment earnings
thereon under a Company employee savings plan, which is discussed below
under "Non-Qualified Salaried Employees' Savings, Investment and Profit
Sharing Plan" and (b) personal use of Company owned vehicles by the
executive officer. The amounts for Mr. Matheson include reimbursement of
relocation expenses of $17,115, $65,161 and $3,026 in Fiscal 1994, Fiscal
1993 and Fiscal 1992, respectively.
(3) Represents incentive stock options granted under the Company's Common Stock
Incentive Plan (a) on September 18, 1992 to purchase the stated number of
shares of Common Stock at an exercise price of $9.00 per share, exercisable
on or after November 1, 1993, and (b) on December 8, 1992 to purchase the
stated number of shares of Common Stock at an exercise price of $6.75 per
share, exercisable for one-third of such shares commencing on each of
December 8, 1993, December 8, 1994 and December 8, 1995. The options
granted on September 18, 1992, when the fair market value of the Common
Stock was $5.25 per
6
<PAGE>
share, were granted in substitution for canceled options with identical terms
granted in March 1992. The options granted on December 8, 1992 were granted
at fair market value.
(4) Represents (a) amounts paid as premiums for group life insurance, and (b)
non-recurring payments in Fiscal 1992 to Mr. Pactor and Mr. Roaman based on
a previous commitment relating to an investment made in 1989 in the former
parent of the Company. In addition, each of the named executive officers
was granted an Equity Referenced Award ("ERA") during Fiscal 1992, which is
discussed below under "Common Stock Incentive Plan and ERAs." Although the
Company is accruing the expense relating to the ERAs, the dollar value of
amounts earned by each executive officer on his ERA during Fiscal 1994
cannot be calculated since an ERA is not vested unless the executive
officer remains in the Company's employ until March 1995 (or until his
earlier death, disability or termination without cause or after a change in
control of the Company), and cannot be exercised unless the Common Stock
maintains a market price of at least $9.00 per share for a period of 30
consecutive days after vesting. Upon exercise of their respective ERAs, Mr.
Schaller would receive $585,000 and each of the other named executive
officers would receive $112,500.
STOCK OPTIONS HELD AT THE END OF FISCAL 1994
The following table indicates the total number of exercisable and
unexercisable stock options granted under the Company's Common Stock Incentive
Plan held by each executive officer named below on October 30, 1994, the last
day of Fiscal 1994. No options to purchase Common Stock were exercised during
Fiscal 1994 and no stock appreciation rights were outstanding during Fiscal
1994. On October 28, 1994, the last trading day in Fiscal 1994, the last sales
price of the Common Stock on the Nasdaq National Market System was $6.56 per
share.
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS AT
AT FISCAL YEAR END(#) FISCAL YEAR END($)
--------------------------- -------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Christopher L. Schaller. 68,333 shares 6,667 shares 0 0
Fred D. Matheson........ 15,833 shares 6,667 shares 0 0
Richard Pactor.......... 15,833 shares 6,667 shares 0 0
Peter Roaman............ 15,833 shares 6,667 shares 0 0
William B. Towne........ 15,833 shares 6,667 shares 0 0
</TABLE>
RETIREMENT PENSION PLAN
The Company maintains a Retirement Pension Plan (the "Pension Plan") for its
salaried employees. The Pension Plan is a defined benefit pension plan
providing a formula benefit, upon vesting, for employees 21 years of age or
older who have completed one year of service with the Company. The Pension Plan
generally takes into account credited service and annual compensation earned
under the pension plan of a predecessor of the Company (the "Predecessor
Plan"), but the benefit payable from the Pension Plan, depending on the
circumstances, may be reduced by any benefit payable under the Predecessor
Plan.
7
<PAGE>
The following table shows the estimated annual benefits upon retirement to
participants in the Pension Plan in specified annual compensation and years of
credited service classifications. The amounts shown are subject to the maximum
benefit limitations set forth in Section 415 of the Internal Revenue Code of
1986 (the "Code") and are subject to reduction for amounts payable under the
Predecessor Plan. The pension benefits shown are based upon retirement at age
65 and the payment of a single-life annuity to the participants. The pension
benefits in the table do not reflect the limitation under Section 401(a)(17) of
the Code on the maximum amount of annual compensation ($150,000 effective
February 1, 1994 (the "Code Limitation")), that can be utilized for determining
benefits.
<TABLE>
<CAPTION>
YEARS OF CREDITED SERVICE AT RETIREMENT
------------------------------------------------------------
HIGHEST FIVE
YEAR AVERAGE
ANNUAL
COMPENSATION(1) 5 10 15 20 25 30 35
--------------- ------- ------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
$100,000 $ 6,892 $13,784 $ 20,677 $ 27,569 $ 34,461 $ 41,353 $ 48,245
150,000 10,642 21,284 31,927 42,569 53,211 63,853 74,495
200,000 14,392 28,784 43,177 57,569 71,961 86,353 100,745
250,000 18,142 36,284 54,427 72,569 90,711 108,853 126,995
300,000 21,892 43,784 65,677 87,569 109,461 131,353 153,245
350,000 25,642 51,284 76,927 102,569 128,211 153,853 179,495
400,000 29,392 58,784 88,177 117,569 146,961 176,353 205,745
450,000 33,142 66,284 99,427 132,569 165,711 198,853 231,995
500,000 36,892 73,784 110,677 147,569 184,461 221,353 258,245
550,000 40,642 81,284 121,927 162,569 203,211 243,853 284,495
600,000 44,392 88,784 133,177 177,569 221,961 266,353 310,745
650,000 48,142 96,284 144,426 192,569 240,711 288,853 336,995
</TABLE>
- --------
(1) Annual compensation is the amount reportable on a participant's Form W-2
for federal income tax purposes, and consists of the amounts reported in
the table included under "Summary of Compensation in Fiscal 1994, Fiscal
1993 and Fiscal 1992" as salary, bonus, other annual compensation and all
other compensation.
Credited years of service for benefit accrual under the Pension Plan, as of
January 31, 1995, for the following executive officers are:
<TABLE>
<S> <C>
Christopher L. Schaller.......... 4 years
Fred D. Matheson................. 4 years
Richard Pactor................... 6 years
Peter Roaman..................... 5 years
William B. Towne................. 4 years
</TABLE>
A participant's annual pension payable as of his or her normal retirement
date at age 65 will be equal to 1% of that portion of the participant's "final
average compensation" (as defined in the Pension Plan) which is equal to the
"social security integration level" (as defined in the Pension Plan) in effect
for the year in which the participant retires, plus 1 1/2% of that portion of
the participant's final average compensation in excess of the social security
integration level, multiplied by the number of years of credited service not to
exceed 35 years. A reduced pension benefit is payable upon (i) early retirement
at or after age 55, (ii) death, under certain circumstances, and (iii)
disability if the participant has completed at least five years of vesting
service. A reduced pension benefit is also payable, at the election of a
participant who terminates employment after completing at least five years of
vesting service, at any time at or after age 55. Generally, the payment of
benefits will be in the form of a straight life annuity for participants who
are not married and a joint and survivor annuity for those who are married.
8
<PAGE>
SUPPLEMENTAL RETIREMENT PLANS
In response to the Code Limitation, which substantially reduces the amount of
annual compensation that can be considered under the Pension Plan, the Company,
in Fiscal 1994, approved an auxiliary nonqualified retirement plan (the
"Supplemental Plan") applicable to all employees whose annual compensation
exceeds the Code Limitation. The Supplemental Plan will become effective during
Fiscal 1995 and will provide a retirement benefit, payable only if and when the
participant or the participant's beneficiary commences receiving a benefit
under the Pension Plan, equal to the difference between the benefit the
participant or the participant's beneficiary would have received had the Code
Limitation not existed and the amount of the benefit being received under the
Pension Plan.
Executive officers of the Company having a position of Executive Vice
President or higher, upon attaining age 50, are eligible to participate in the
Company's Supplemental Retirement Benefit Plan (the "SERP"). Messrs. Schaller,
Pactor and Towne are currently the only participants in the SERP. The Company's
contributions to the SERP are paid to a trust for the benefit of participants.
A participant who retires at or after age 62 who does not elect an optional
form of payment will receive until death (i) monthly amounts equal to the
greater of (a) the annuity benefit that would be payable to him for such month
under the Pension Plan after application of the Code Limitation, or (b) the
annuity benefit that, as of the date he became a participant, was expected to
be payable to him, as aforesaid, for such month under the Pension Plan, and
(ii) continued welfare benefits (such as medical insurance) for himself, his
spouse and his eligible dependents. Based on such provisions, the annual
benefit payable under the SERP at age 62 for Messrs. Schaller, Pactor and Towne
would be $62,094, $37,792 and $46,487, respectively. Alternatively, a
participant may elect to have his supplemental income benefit paid in a lump
sum, in five equal annual installments, or as a joint and survivor annuity. A
participant who voluntarily resigns before age 62 will receive, on his 62nd
birthday, the following: (i) if he was employed by the Company for at least
two-thirds of his anticipated service period (the period commencing on the date
he became a participant and ending on his 62nd birthday), a lump sum payment
that is the actuarial equivalent of two-thirds of the normal form of payment he
would have received had he continued in the Company's employ until age 62 and
(ii) if he was employed by the Company for at least one-third (but less than
two-thirds) of his anticipated service period, a lump sum payment that is the
actuarial equivalent of one-third of the normal form of payment he would have
received had he continued in the Company's employ until age 62. If a
participant dies while employed, his beneficiary will receive a lump sum
payment that is the actuarial equivalent of the normal form of payment the
participant would have received had he continued in the Company's employ until
age 62. If a participant is terminated from employment without cause or after a
change in control, he will receive the same supplemental income benefit
(actuarially reduced for payment prior to age 62) and the same welfare benefits
he would have received had he continued in the Company's employ until age 62.
No payment may be made under the SERP to a participant whose employment is
terminated for cause.
NON-QUALIFIED SALARIED EMPLOYEES' SAVINGS, INVESTMENT AND PROFIT SHARING PLAN
The Company maintains a Non-Qualified Salaried Employees' Savings, Investment
and Profit Sharing Plan (the "Savings Plan") for its "highly compensated
employees" (as defined in Section 414(q) of the Code) who are 21 years of age
or older and who have completed one year of service. A participant may make
contributions of 2% through 6% of base pay on an after-tax basis. The Company
may "gross-up" or reimburse the participants for their tax liability relating
to the amount contributed by them to the Savings Plan, and did so for their
contributions during Fiscal 1994. The Company may match each participant's
contributions at a percentage determined in the Company's sole discretion. In
addition, if the consolidated net income per share of Common Stock ("Net
Earnings") for any fiscal year exceeds the average Net Earnings for the three
immediately preceding fiscal years, the Company may, in its sole discretion,
make a contribution with respect to each active participant equal to such
participant's contributions for the fiscal year multiplied by the profit
improvement percentage (but not more than 50%), which is such excess divided by
the average Net Earnings. No matching or profit improvement contributions were
made by the Company during Fiscal 1994.
9
<PAGE>
Accounts are maintained for each participant and the contributions of each
participant and any Company contributions (and net earnings thereon) are
allocated to these accounts. Assets of the Savings Plan are invested in various
investment funds and a participant may designate the manner in which assets
allocated to the participant's account may be apportioned among the funds. A
participant is always 100% vested with respect to the participant's own
contributions (and net earnings). Other amounts generally vest at a rate of 20%
for each year of service with the Company, except that a participant will be
100% vested in the event of the participant's death while employed, retirement
at or after age 55, termination of employment because of lay-off or
involuntarily without cause, or the termination of the Savings Plan. Upon the
occurrence of any such event, the value of the participant's accounts will be
paid to the participant or the participant's beneficiary in cash, either in a
single payment or in quarterly installments. If installments are chosen, the
unpaid balance will continue to share in the income, gains or losses of the
Savings Plan.
COMMON STOCK INCENTIVE PLAN AND ERAS
In January 1992, the Board of Directors adopted a stock option plan for all
key employees of the Company pursuant to which incentive stock options, within
the meaning of Section 422 of the Code ("ISOs") were granted in March 1992 to
each of Messrs. Schaller, Matheson, Pactor, Roaman and Towne to purchase an
aggregate of 115,000 shares of Common Stock at $9.00 per share. Simultaneously,
each executive received equity referenced deferred incentive awards ("ERAs")
covering the same number of shares of Common Stock as the ISOs granted to him
on such date. The ERAs generally vest three years after the date of grant and
are exercisable only if, after vesting, the Common Stock maintains a market
price of at least $9.00 per share for a continuous period of 30 days. Upon
exercise, the ERAs have a value of $9.00 multiplied by the number of shares
which were covered by such executive's March 1992 ISOs, and which would have
permitted each executive to be reimbursed, on a pre-tax basis, for the exercise
price of such ISOs. The ERAs are independent of the ISOs and may be exercised
by the executive irrespective of whether the ISOs are exercised.
In September 1992, the Board of Directors terminated the January 1992 stock
option plan and the ISOs issued thereunder were canceled. Such action did not
affect the granted ERAs. Simultaneously with such termination, the Board of
Directors adopted a new Common Stock incentive plan (the "Common Stock
Incentive Plan") and the Compensation Committee issued new ISOs thereunder to
the same five executive officers at the same exercise price, having identical
terms, and covering the same number of shares of Common Stock as the canceled
ISOs.
The Common Stock Incentive Plan was approved by the Company's shareholders in
March 1993. The number of shares of Common Stock that may be issued under the
Common Stock Incentive Plan is 700,000.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL
ARRANGEMENTS
In December 1992, the Company entered into a change in control agreement (the
"CIC Agreement") with Mr. Schaller and each of the Company's four Executive
Vice Presidents which provides that upon a change in control of the Company,
followed by a termination of employment of the executive without appropriate
cause (or an event which is deemed to be tantamount to a termination) within 18
months of such change in control, the executive will be entitled to a severance
payment equal to the aggregate of two years' base compensation plus an amount
equal to his previous year's bonus, if any. The severance payment is subject to
reduction if it results in the imposition of an excise tax under the Code. A
"change in control," as defined in the CIC Agreement, will be deemed to have
occurred if, among other things, the Company's Board of Directors becomes
controlled by a shareholder or group of affiliated shareholders, other than
Odyssey Partners, beneficially owning more than 20% of the Common Stock, or if
any person or entity, including Odyssey Partners, causes a majority of the
Board of Directors to consist of individuals affiliated with, or nominated by,
such person or entity. No severance is payable under a CIC Agreement if the
executive officer is terminated prior to a change of control, regardless of the
reason for such termination. A CIC Agreement may be terminated by the Company
for any reason upon four years' prior notice.
10
<PAGE>
The Company is party to an employment agreement with Mr. Schaller and with
each of the Company's four Executive Vice Presidents. Each of these agreements
is for a two-year term and is automatically extended so that the unexpired term
thereof remains two years, until either the Company or the executive gives two
years' advance notice of non-renewal. During the term of their respective
agreements, each executive is to receive an annual base salary of not less than
the executive's base salary at the time his employment agreement was executed,
as follows: Mr. Schaller--$365,000; Mr. Pactor--$237,500; Mr. Matheson--
$220,000; Mr. Towne--$220,000; and Mr. Roaman--$220,000. Each agreement
provides that, upon the executive's termination for any reason other than for
cause (as defined), disability, death or voluntary resignation and other than
under the circumstances covered by his CIC Agreement, the executive will (i)
receive a lump sum payment equal to (a) two times the executive's then-current
base salary, plus (b) the executive's most recent bonus reduced proportionately
to the extent that the current year's adjusted pre-tax earnings are less than
such amount in the immediately preceding year, (ii) continue to receive life
and health insurance benefits for a two-year period on the same contributory
basis that would have been in effect had the executive remained employed by the
Company, unless substantially similar coverage is obtained prior thereto at no
greater expense to the executive, (iii) become vested in all unvested stock
options and ERAs previously granted to the executive, and (iv) be entitled to
outplacement consultant services. In addition, Mr. Schaller's agreement
provides that, under such circumstances, if he is not fully vested in the
Pension Plan or the SERP, he will be granted retirement benefits equal to those
which he would have received had his employment not terminated until his
vesting dates thereunder.
The SERP provides that if a participant thereunder is terminated from
employment without cause or after a change in control, the participant will
receive the same supplemental income benefit (actuarially reduced for payment
prior to age 62) and the same welfare benefit he would have received if he
continued in the Company's employ until age 62. Messrs. Schaller, Pactor and
Towne are the only participants in the SERP at the present time, due to the age
eligibility requirement for the SERP.
The ISOs granted in September 1992 to Mr. Schaller and each of the Company's
four Executive Vice Presidents provide that if their respective employment is
terminated after a change in control of the Company, the options vest
immediately and may be exercised at any time until expiration on October 31,
1999. ISOs which are not exercised within three months after termination of
employment will be treated as non-qualified stock options under the Code.
The ERAs granted to Mr. Schaller and each of the Company's four Executive
Vice Presidents vest in March 1995, subject to acceleration in the event of
termination of the executive's employment without cause or a change in control
of the Company. Each ERA terminates if, prior to vesting, the executive's
employment terminates voluntarily or for cause.
The Company is party to an indemnity agreement (the "Indemnity Agreement")
with each of its directors and certain of its executive officers which provides
that the indemnitee will be entitled to receive indemnification, which may
include advancement of expenses, to the full extent permitted by law for all
expenses, judgments, fines, penalties and settlement payments incurred by the
indemnitee in actions brought against the indemnitee in connection with any act
taken in the indemnitee's capacity, and within the indemnitee's scope of
authority, as a director or executive officer of the Company. The Indemnity
Agreement provides for the appointment of independent legal counsel to
determine whether a director or executive officer is entitled to indemnity
after a change in control. It also requires the Company to maintain its current
level of directors' and officers' liability insurance for so long as the
indemnitee may be subject to any possible, threatened or pending action, unless
the cost of such insurance is more than 150% of the annualized cost thereof in
Fiscal 1994.
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<PAGE>
COMPENSATION OF DIRECTORS
Directors who are employees of the Company or an affiliate of the Company
receive no compensation for their services as directors. Other directors
receive $2,500 for attendance at each meeting of the Board of Directors or
committee thereof.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors consists of Cameron
Clark, Jr., Steven M. Friedman and F. Peter Libassi. Mr. Friedman served as a
Vice President of the Company and Chairman of the Board of Directors from
December 1988 to March 1992. Until December 31, 1993, Mr. Friedman was a
general partner of Odyssey Partners, which, directly or indirectly, has been
the principal shareholder of the Company since December 1988. See "Ownership of
Equity Securities." In connection with the Company's March 1992 initial public
offering, Odyssey Partners purchased from the Company an aggregate of 1,215,000
unregistered shares of Common Stock for $9.00 per share and the Company agreed
to grant registration rights to Odyssey Partners with respect thereto. These
registration rights have not yet been documented or exercised.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Forstmann & Company, Inc., strives to provide its executive officers and
other salaried employees with the opportunity to earn compensation that is
fair, reasonable and competitive with that paid by comparable companies to
their employees in similar positions. In accordance with this philosophy, the
Company is guided by four goals as it considers the compensation of its
salaried employees.
<TABLE>
<C> <S>
I. --The compensation program should be effective in attracting, motivat-
ing and retaining employees who possess the skills and experience nec-
essary to ensure the Company's success over the long term.
II. --The compensation program should recognize and reward employees on the
basis of their individual performance and on the basis of their con-
tributions to the success of the business.
III. --The compensation program should take into account the economic per-
formance of the Company and the importance of planning and controlling
the cost of compensation.
IV. --The compensation program shall be administered on a fair and nondis-
criminatory basis, without regard to race, color, religion, age, sex,
national origin, marital status, disability, veteran status or sexual
orientation.
</TABLE>
To implement this philosophy, the Company maintains a compensation program
that consists of base salary, an annual incentive plan, a stock option plan and
other competitive benefit plans. It is the belief of the Company that through
these components executive officers and other salaried employees will receive
compensation that is fair, reasonable and competitive within the industry,
while reflecting individual performance and considering the economic
performance of the Company.
The general parameters for salary adjustments are determined after the close
of fiscal year, and are normally implemented on a 12- to 16-month cycle. The
amount of increase is dependent upon the performance of the Company during the
prior fiscal year and the performance of the executive, any increased
responsibilities assumed by the executive and consideration of the competitive
marketplace.
Based on the foregoing factors, and the fact that during Fiscal 1993 sales
increased 11.7% over the prior year and operating income increased 21.8%, Mr.
Schaller's base salary was increased effective February 1994 (13 months after
the effective date of the prior increase) by 8.2% (7.6% annualized) over the
preceding amount. The increases in base salary for the four Executive Vice
Presidents of the Company became effective
12
<PAGE>
at various times during the second and third quarters of Fiscal 1994
(reflecting cycles of 14-15 months) and ranged from 6.3% to 8.5% (5.4% to 7.3%
annualized) over their respective preceding amounts. These increases
represented the Company's efforts to ensure equity between its pay scales and
those of its competitors, so as to foster the retention of executive officers.
Based on a review of management surveys conducted by two major benefits
consulting firms and an analysis of the salaries of senior executives of other
publicly-traded textile companies, the compensation packages for the Company's
executive officers generally approximate the median.
The other aspect of executive compensation which is keyed to the Company's
performance is the management incentive program. The Compensation Committee
administers the incentive program and selects the members of management
eligible to participate. The program for executive officers and executives
reporting directly to the President annually awards cash to a maximum of 50% of
the executive's base salary if specific performance targets are achieved.
Awards granted to executive officers in Fiscal 1993 and Fiscal 1992 amounted to
24.6% and 13.4% of base salary, respectively, as determined by a combination of
the achievement of Company strategic and operating goals (75%) and specifically
tailored individual goals (25%). For Fiscal 1994, incentive compensation awards
were to have been determined entirely by the Company's level of achievement of
its objectives, based on operating income after deduction of variable interest
charges ("Adjusted Operating Income"). The Company did not achieve its Adjusted
Operating Income objectives in Fiscal 1994, and thus no incentive awards were
paid for Fiscal 1994.
The Compensation Committee has been reviewing the Company's management
incentive compensation program to ensure its efficiency in the effort to
achieve appropriate goals for the Company. During Fiscal 1994, the program was
changed to focus entirely on the Company's achievement of its targeted Adjusted
Operating Income, rather than, as previously, a combination of the Company's
achievement of its target and each individual participant's achievement of
specific job-related goals. Additional changes to the incentive program
commencing in Fiscal 1996 may be made after the Compensation Committee
completes its review.
A change in the tax laws in 1994 substantially limits, to $150,000, the
annual compensation which can be considered in calculating retirement benefits
under a qualified retirement plan. The limitation on annual compensation will
have a significant impact on the retirement income of the Company's senior
management. To remedy the result of the new tax law, in Fiscal 1994 the Company
approved the implementation of an auxiliary nonqualified retirement plan (the
"Supplemental Plan"), in which all employees with annual compensation in excess
of $150,000 will participate. The effect of the plan, which will go into effect
during Fiscal 1995, in conjunction with the Company's qualified pension plan,
will be to provide retirement benefits as if the employees' full annual
compensation had been taken into account under the qualified pension plan.
The Compensation Committee welcomes written comment from the Company's
shareholders concerning these programs. Comments should be marked "personal and
confidential" and addressed to The Compensation Committee of the Board of
Directors, Forstmann & Company, Inc., 1185 Avenue of the Americas, New York,
New York 10036.
Compensation Committee of the Board of
Directors
F. Peter Libassi, Chairman
Cameron Clark, Jr.
Steven M. Friedman
COMPARATIVE PERFORMANCE BY THE COMPANY
The Securities and Exchange Commission requires the Company to present a
chart comparing the cumulative total shareholder return on its Common Stock
with the cumulative total shareholder return of (i) a broad equity market
index, and (ii) a published industry index or peer group. Although such a chart
would
13
<PAGE>
normally be for a five-year period, the Common Stock has been publicly traded
only since March 4, 1992 and, as a result, the following chart commences as of
such date. The Common Stock is compared with (i) the Nasdaq National Market
Index (the "Nasdaq Index"), and (ii) a group of public companies, each of which
manufactures fabric (the "Selected Peer Group"), and assumes an investment of
$100 on March 4, 1992 in each of the Common Stock, the securities comprising
the Nasdaq Index and the securities comprising the Selected Peer Group.
COMPARISON OF CUMULATIVE TOTAL RETURN AMONG FORSTMANN &
COMPANY, INC. COMMON STOCK, THE NASDAQ INDEX
AND THE SELECTED PEER GROUP
[INSERT CHART]
<TABLE>
<CAPTION>
SELECTED
NASDAQ PEER
FORSTMANN INDEX(1)(2) GROUP(3)
--------- ----------- --------
<S> <C> <C> <C>
data points:
March 4, 1992.............................. $100 $100 $100
April 30, 1992............................. $ 84 $ 92 $ 96
October 31, 1992........................... $ 58 $ 97 $ 89
April 30, 1993............................. $ 74 $105 $105
October 30, 1993........................... $121 $124 $ 96
April 30, 1994............................. $111 $117 $ 97
October 30, 1994........................... $ 69 $124 $ 82
</TABLE>
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<PAGE>
- --------
(1) The cumulative total return for the securities comprising the Nasdaq Index
and the Selected Peer Group assumes the reinvestment of dividends. The
total return for the Company's Common Stock does not assume the
reinvestment of dividends, since no dividends have been declared on the
Common Stock. The weighting of the securities of each issuer comprising
each index, according to their market capitalization, has been calculated
at March 4, 1992 and at the beginning of each semi-annual period.
(2) The Nasdaq Index tracks the aggregate price performance of equity
securities of companies traded on the Nasdaq National Market, on which the
Company's Common Stock is traded.
(3) The Selected Peer Group consists of securities of the following companies:
Burlington Industries Equity, Inc., Concord Fabrics, Inc., Delta Woodside
Industries, Inc., Dixie Yarns, Inc., Galey & Lord, Inc., Johnston
Industries, Inc., Spring Industries, Inc. and Texfi Industries, Inc. The
securities of Burlington Industries Equity, Inc. and Galey & Lord, Inc.
first commenced public trading after March 4, 1992 and are included in the
index commencing April 30, 1992.
SELECTION OF INDEPENDENT AUDITORS
(ITEM 2 ON THE PROXY CARD)
The Board of Directors, upon the recommendation of the Audit Committee, has
selected, subject to ratification by the shareholders, the firm of Deloitte &
Touche LLP as the independent auditors for the Company to audit the Company's
financial statements for the fiscal year ending October 29, 1995. Deloitte &
Touche LLP has served as the independent auditors for the Company and its
predecessor since 1985. A representative of Deloitte & Touche LLP is expected
to be present at the Annual Meeting, will have the opportunity to make a
statement if such firm desires to do so and will be available to respond to
appropriate questions.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR
RATIFICATION OF THE SELECTION OF DELOITTE & TOUCHE LLP AS THE COMPANY'S
INDEPENDENT AUDITORS.
SHAREHOLDERS' PROPOSALS FOR THE 1996 ANNUAL MEETING
A shareholder who desires to include a proposal in the proxy material
relating to the 1996 Annual Meeting of Shareholders of the Company must submit
the same in writing, to be received at the principal executive office of the
Company (to the attention of the Secretary) on or before November 2, 1995 for
the proposal to be considered for inclusion in the Company's proxy statement
for the meeting. The proposal must also meet the other requirements of the
Securities and Exchange Commission relating to shareholder proposals required
to be included in the Company's proxy statement.
15
<PAGE>
OTHER MATTERS
The Board of Directors does not know of any other business to be presented
for consideration at the Annual Meeting. If other matters properly come before
the Annual Meeting, the persons named in the accompanying form of proxy intend
to vote thereon in accordance with their best judgment.
The Company will bear the cost of the Annual Meeting of Shareholders and the
cost of soliciting proxies on behalf of the Board of Directors. In addition to
solicitation by mail, directors, officers and regular employees of the Company
(none of whom will be specifically compensated for such services), in addition
to solicitation by mail, may solicit proxies by telephone or otherwise.
Arrangements will be made with brokerage houses and other custodians, nominees
and fiduciaries to forward proxy materials to their principals, at the
Company's expense.
Upon request, the Company will furnish without charge to each person whose
proxy is being solicited a copy of its Annual Report on Form 10-K for Fiscal
1994, including the financial statements, notes to the financial statements and
the financial schedules contained therein. Copies of any exhibits thereto may
be requested upon the payment of a reasonable duplicating charge. Requests
should be directed to Investor Services, Forstmann & Company, Inc., 1185 Avenue
of the Americas, New York, New York 10036, telephone (212) 642-6914 or 6917.
By Order of the Board of Directors
Jane S. Pollack
Secretary
February 23, 1995
----------------
PLEASE DATE, SIGN AND RETURN THE ENCLOSED PROXY AT YOUR EARLIEST CONVENIENCE
IN THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED FOR MAILING IN THE UNITED
STATES.
16
<PAGE>
FORSTMANN & COMPANY, INC.
PROXY--ANNUAL MEETING OF SHAREHOLDERS--APRIL 4, 1995
(SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS)
The undersigned shareholder of Forstmann & Company, Inc. hereby constitutes
and appoints Christopher L. Schaller, Rodney J. Peckham and Jane S. Pollack,
and each and any of them, the attorneys and proxies of the undersigned, with
full power of substitution and revocation, to vote for and in the name, place
and stead of the undersigned at the Annual Meeting of Shareholders of Forstmann
& Company, Inc. to be held at The 60 East Club, 60 East 42nd Street, New York,
New York on Tuesday, April 4, 1995 at 10:00 A.M., and at any adjournments
thereof, the number of votes the undersigned would be entitled to cast if
present.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR THE ELECTION OF DIRECTORS AND FOR EACH OF THE FOLLOWING PROPOSALS.
1. Election of six directors nominated by the Board of Directors.
[_] FOR all nominees [_] WITHHOLD
listed below (except AUTHORITY to vote
as indicated to the for all nominees
contrary below)
Stephen Berger, Cameron Clark, Jr., Steven M. Friedman, F. Peter Libassi,
Alain Oberrotman, Christopher L. Schaller.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE, WRITE SUCH
NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.)
--------------------------------------------------------------------
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
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<PAGE>
2. Proposal to ratify the selection of Deloitte & Touche LLP as the
independent auditors for the fiscal year ending October 29, 1995.
[_] FOR [_] AGAINST [_] ABSTAIN
3. In their discretion, upon such other matters as may come properly before
the meeting.
Said attorneys and proxies, or their substitutes (or if only one, that one),
at said meeting, or any adjournments thereof, may exercise all of the powers
hereby given. Any proxy heretofore given is hereby revoked.
Receipt is acknowledged of the Notice of Annual Meeting of Shareholders, the
Proxy Statement accompanying such Notice and the Annual Report to Shareholders
for the fiscal year ended October 30, 1994.
Dated: , 1995
---------------------------------
Shareholder(s) signature(s)
---------------------------------
Shareholder(s) signature(s)
Note: Signature(s) of
shareholder(s) should correspond
exactly with the name(s) shown
hereon. If shares are held
jointly, both holders should
sign. Attorneys, executors,
administrators, trustees,
guardians or others signing in a
representative capacity should
give their full titles. Proxies
executed in the name of a
corporation should be signed on
behalf of the corporation by its
president or other authorized
officer.
NOTE: THIS PROXY, PROPERLY FILLED IN, DATED AND SIGNED, SHOULD BE RETURNED
PROMPTLY IN THE ENCLOSED ENVELOPE.
LOGO
