DELTA WOODSIDE INDUSTRIES, INC.
233 N. Main Street, Hammond
Square, Suite 200
Greenville, South
Carolina 29601
Telephone (864)
232-8301
NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS TO
BE HELD
NOVEMBER 24, 1998
TO OUR SHAREHOLDERS:
Notice is hereby given that the Annual Meeting of
Shareholders of Delta Woodside Industries, Inc., a South
Carolina corporation ("Delta Woodside"), will be held at the
Hyatt Regency Hotel, 220 North Main Street, Greenville,
South Carolina, on November 24, 1998, at 10:00 a.m., local
time, for the following purposes:
1. To elect six directors to serve until the next annual
meeting of shareholders of Delta Woodside or until their
successors have been duly elected and qualified;
2. To vote on the ratification of the appointment of
KPMG Peat Marwick LLP as independent auditors for Delta
Woodside for fiscal 1999; and
3. To act on such other business as may properly come
before the Annual Meeting or any adjournment or adjournments
thereof. Delta Woodside has fixed the close of business on
September 18, 1998 as the record date for the determination
of the shareholders of Delta Woodside entitled to receive
notice of and to vote at the Annual Meeting. Only
shareholders of record of Delta Woodside at the close of
business on September 18, 1998 will be entitled to vote at
the Annual Meeting and any adjournment or adjournments
thereof.
Whether or not you expect to be present at the Annual
Meeting, please complete, date and sign the enclosed form of
proxy and return it promptly in the enclosed envelope, which
requires no additional postage if mailed in the United
States.
By Order of the Board of Directors,
/s/ Jane H. Greer
Jane H. Greer
Secretary
October 5, 1998
DELTA WOODSIDE INDUSTRIES, INC.
233 N. Main Street, Hammond Square, Suite 200
Greenville, South Carolina 29601
Telephone
(864) 232-8301
DELTA WOODSIDE INDUSTRIES, INC.
233 N. Main Street, Hammond
Square, Suite 200
Greenville, South Carolina
29601
Telephone (864) 232-8301
PROXY
STATEMENT
ANNUAL MEETING OF
SHAREHOLDERS
November 24, 1998
This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors of Delta
Woodside Industries, Inc., a South Carolina corporation (the
"Company"), to be voted at the Annual Meeting of
Shareholders (the "Annual Meeting") of the Company to be
held at the Hyatt Regency Hotel, 220 North Main Street,
Greenville, South Carolina at 10:00 a.m. on Tuesday,
November 24, 1998. The approximate date of mailing this
Proxy Statement and the accompanying proxy is October 5,
1998.
Only shareholders of record at the close of business on
September 18, 1998 are entitled to receive notice of and to
vote at the Annual Meeting. As of such date, there were
outstanding 24,657,850 shares of common stock, $.01 par
value (the only voting securities), of the Company. Each
share is entitled to one vote.
Each shareholder described above will be sent this Proxy
Statement, the accompanying Notice of Annual Meeting and a
proxy card. Any proxy given pursuant to this solicitation
may be revoked by the person giving it at any time before it
is voted. A proxy may be revoked by (i) delivery to the
Secretary of the Company, at or before the Annual Meeting,
of a written notice of revocation bearing a later date than
the proxy, (ii) duly executing a subsequent proxy relating
to the same shares and delivering it to the Secretary of the
Company at or before the Annual Meeting or (iii) attending
the Annual Meeting and giving notice of revocation to the
Secretary of the Company or in open meeting prior to the
proxy being voted (although attendance at the Annual Meeting
will not in and of itself constitute a revocation of a
proxy). Any written notice revoking a proxy should be sent
to: Delta Woodside Industries, Inc., 233 North Main Street,
Hammond Square, Suite 200, Greenville, South Carolina 29601,
Attention: Secretary.
All shares represented by valid proxies received pursuant
to the solicitation and prior to voting at the meeting and
not revoked before they are exercised will be voted, and, if
a choice is specified with respect to any matter to be acted
upon, the shares will be voted in accordance with such
specification. If no contrary instructions are indicated,
all shares represented by a proxy will be voted FOR election
to the Board of Directors of the nominees described herein,
FOR ratification of the appointment of KPMG Peat Marwick LLP
as independent auditors for the Company for fiscal year
1999, and in the discretion of the proxy holders as to all
other matters that may properly come before the Annual
Meeting.
The presence, either in person or by proxy, of the holders
of a majority of the outstanding shares of common stock at
September 18, 1998 is necessary to constitute a quorum at
the Annual Meeting. Directors will be elected by a plurality
of the votes cast at the Annual Meeting. The affirmative
vote of more shares present or represented at the Annual
Meeting voting in favor than voting against will be required
to ratify the appointment of auditors. Abstentions and
broker non- votes, which are separately tabulated, are
included in the determination of the number of shares
present for quorum purposes, but have no effect on the votes
respecting the matters to be voted upon at the meeting.
ELECTION OF DIRECTORS
The by-laws of the Company provide that the number of
Directors to be elected at any meeting of shareholders may
be determined by the Board of Directors. The Board has
determined that six Directors shall be elected at the Annual
Meeting. The shareholders' common stock may not be voted
cumulatively in the election of Directors.
The following six persons are nominees for election as
Directors at the Annual Meeting to serve until the next
annual meeting of shareholders of the Company or until their
successors are duly elected and qualified. Unless authority
to vote at the election of Directors is withheld, it is the
intention of the persons named in the enclosed form of proxy
to nominate and vote for the persons named below, all of
whom are currently Directors of the Company. Except as
otherwise noted below, the business address of each nominee
is Delta Woodside Industries, Inc., 233 North Main Street,
Hammond Square, Suite 200, Greenville, South Carolina
29601. Each such person is a citizen of the United States.
There are no family relationships among the Directors and
the executive officers of the Company.
Management of the Company believes that all of the
nominees will be available and able to serve as Directors,
but in the event any nominee is not available or able to
serve, the shares represented by the proxies will be voted
for such substitute as shall be designated by the Board of
Directors.
Name and Age Principal Occupation Director Since (1)
C. C. Guy (65) Retired Businessman 1984
Shelby, North Carolina (2)(8)(9)
Dr. James F. Kane (66) Dean Emeritus of the College of 1986
Business Administration of the
University of South Carolina
Columbia, South Carolina (3)(8)(9)
Dr. Max Lennon (58) President of Mars Hill College 1986
Mars Hill, North Carolina (4)(8)(9)
E. Erwin Maddrey, II (57) President and Chief Executive 1984
Officer of the Company (5)
Buck A. Mickel (42) President and Chief Executive 1984
Officer
of RSI Holdings, Inc. Greenville,
South Carolina (6) (9)
Bettis C. Rainsford (47) Executive Vice President, Chief 1984
Financial Officer and Treasurer
of the Company (7)
(1) Includes service as a director of the Company's
predecessor by merger, Delta Woodside Industries, Inc., a
Delaware corporation ("Old Delta Woodside"), or any
predecessor company to Old Delta Woodside.
(2) C. C. Guy served as Chairman of the Board of Old Delta
Woodside or its predecessors from the founding of Old Delta
Woodside's predecessors in 1984 until November 1989. Since
before the November 15, 1989 merger (the "RSI Merger") of
Old Delta Woodside into RSI Corporation, a South Carolina
corporation which changed its name to Delta Woodside
Industries, Inc. and is now the Company, he has been a
director of RSI Holdings, Inc., and from before the RSI
Merger until January 1995 he also served as President of RSI
Holdings, Inc. RSI Holdings, Inc. until 1992 was engaged in
the sale of outdoor power equipment, until 1994 was engaged
in the sale of turf care products and currently is engaged
in the consumer finance business. Prior to November 15,
1989, RSI Holdings, Inc. was a subsidiary of RSI
Corporation. Mr. Guy served from October 1979 until November
1989 as President, Treasurer and a director of RSI
Corporation. Prior to the RSI Merger, RSI Corporation owned
approximately 40% of the outstanding shares of common stock
of Old Delta Woodside and, among other matters, was engaged
in the office supply business, as well as the businesses of
selling outdoor power equipment and turf care products.
(3) Dr. James F. Kane is Dean Emeritus of the College of
Business Administration of the University of South Carolina,
having retired in 1993 as Dean, in which capacity he had
served since 1967. He also serves as a director of
Glassmaster Company.
(4) Dr. Max Lennon was President of Clemson University
from March 1986 until August 1994. He was President and
Chief Executive Officer of Eastern Foods, Inc., which was
engaged in the business of manufacturing and distributing
food products, from August 1994 until March 1996. He
commenced service in March 1996 as President of Mars Hill
College. He also serves as a director of Duke Power Company.
(5) E. Erwin Maddrey, II was President and Chief Executive
Officer of Old Delta Woodside or its predecessors from the
founding of Old Delta Woodside's predecessors in 1984 until
the RSI Merger and he has served in such positions with the
Company since the RSI Merger. He also serves as a director
of Kemet Corporation.
(6) Buck A. Mickel was a Vice President of Old Delta
Woodside or its predecessors from the founding of Old Delta
Woodside's predecessors until November 1989, Secretary of
Old Delta Woodside from November 1986 to March 1987, and
Assistant Secretary of Old Delta Woodside from March 1987 to
November 1988. He served as Vice President and a director
of RSI Holdings, Inc. from before the RSI Merger until
January 1995 and as Vice President of RSI Holdings, Inc.
from September 1996 until July 28, 1998 and has served as
President, Chief Executive Officer and a director of RSI
Holdings, Inc. from July 28, 1998 to the present. He served
as Vice President of RSI Corporation from October 1983 until
November 1989.
(7) Bettis C. Rainsford was Executive Vice President and
Chief Financial Officer of Old Delta Woodside or its
predecessors from the founding of Old Delta Woodside's
predecessors in 1984 until the RSI Merger and has served in
such positions with the Company since the RSI Merger. Mr.
Rainsford has served as Treasurer of Old Delta Woodside or
its predecessors or the Company from 1984 to 1986, from
August 1988 to November 1988 and from November 1990 to the
present. He is also President of The Rainsford Development
Corporation which is engaged in general business development
activities in Edgefield, South Carolina. Mr. Rainsford
serves as a director of Martin Color-Fi, Inc.
(8) Member of Audit Committee.
(9) Member of Compensation Committee.
The Company's Directors hold office until the next annual
meeting of shareholders or until their successors are duly
elected and qualified.
The Board of Directors lost a member as a result of the
death of Buck Mickel in July 1998. Mr. Mickel had served as
a director of the Company or its predecessors since 1987.
The Board of Directors of the Company met physically or
by telephone six times during the fiscal year ended June 27,
1998. The Compensation Committee of the Company met two
times and the Audit Committee of the Company met one time
during the fiscal year. Each Director attended or
participated in at least 75 percent of the meetings of the
Board and of any committee of which he was a member. The
Board does not have a standing nominating committee.
The Audit Committee makes recommendations to the Board
regarding the selection of the Company's independent public
accountants, reviews the independence of such accountants,
approves the scope of the annual audit, approves the fee
payable to the independent accountants and reviews the audit
results. The Compensation Committee (or a subcommittee
thereof) reviews and submits to the Board of Directors
suggested executive officers' salaries and bonuses and
grants awards under the Company's Incentive Stock Award
Plan, options under the Company's Stock Option Plan, and
awards under the Long Term Incentive Plan.
STOCK OWNERSHIP OF PRINCIPAL
SHAREHOLDERS AND MANAGEMENT
The following table sets forth certain information as of
September 18, 1998, regarding the beneficial ownership of
the Company's common stock by (i) persons beneficially
owning in any case more than five percent of the common
stock, (ii) the directors, (iii) the executive officers, and
(iv) all directors and executive officers as a group.Unless
otherwise noted in the notes to thetable, the Company
believes that the persons named in the table have sole
voting and investment power with respect to all shares of
common stock of the Company shown as beneficially owned by
them.
Shares
Beneficially
Beneficial Owner Owned Percentage
Reich & Tang Asset Management L. P.(1) 2,518,900
10.22%
600 Fifth Avenue
New York, New York 10020
Franklin Resources, Inc. (2) 2,400,000 9.73%
Franklin Advisory Services, Inc.
Charles B. Johnson
Rupert H. Johnson, Jr.
777 Mariners
Island Boulevard
San Mateo,California 94404
Dimensional Fund Advisors Inc. (3) 1,298,120 5.26%
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
E. Erwin Maddrey, II (4) 3,253,422 13.2%
233 North Main Street
Hammond Square, Suite 200
Greenville, SC 29601
Bettis C. Rainsford (5) 3,185,097 13.0%
108-1/2 Courthouse Square
Post Office Box 388
Edgefield, SC 29824
Buck A. Mickel (6)(7)(20) 1,568,710 6.4%
Post Office Box 6721
Greenville, SC 29606
Micco Corporation (7) 1,240,634 5.0%
Post Office Box 795
Greenville, SC 29602
Minor H. Mickel(7)(8) 1,565,238 6.3%
415 Crescent Avenue
Greenville, SC 29605
Minor M. Shaw (7)(9) 1,520,086 6.2%
Post Office Box 795
Greenville, SC 29602
Charles C. Mickel (7)(10) 1,496,944 6.1%
Post Office Box 6721
Greenville, SC 29606
C. C. Guy (11)(20) 19,368 (19)
James F. Kane (12) (20) 11,864 (19)
Max Lennon (13) (20) 9,839 (19)
Jane H. Greer (14) 44,494 (19)
Robert W. Humphreys (15) 23,983 (19)
Douglas J. Stevens (16) 18,197 (19)
Brenda L. Jones (17) 1,426 (19)
All directors and executive officers
as a group(10 Persons)(18) 8,136,400
32.9%
(1) In an amendment dated March 16, 1998, to Schedule
13G, Reich & Tang Asset Management L. P. ("Reich & Tang")
reported that it has shared voting power and shared
dispositive power with respect to all of the shares shown.
The Schedule 13G reported that the shares are held on behalf
of certain accounts for which Reich & Tang provides
investment advice on a fully discretionary basis. The
Schedule 13G reported that none of such accounts has an
interest with respect to more than 5% of the outstanding
shares of common stock.
(2) In an amendment dated January 16, 1998, to Schedule
13G, Franklin Resources, Inc. ("FRI") reported that the
shares shown in the table above are beneficially owned by
one or more investment companies or other managed accounts
that are advised by one or more direct and indirect
investment advisory subsidiaries of FRI. The Schedule 13G
reported that the investment advisory subsidiary(ies) have
investment and/or voting power over the securities owned by
their investment advisory clients. Accordingly, such
subsidiary(ies) may be deemed to be the beneficial owner of
the shares shown in the table. The Schedule 13G reported
that Charles B. Johnson and Rupert H. Johnson, Jr. (the "FRI
Principal Shareholders") (each of whom has the same business
address as FRI) each own in excess of 10% of the outstanding
common stock and are the principal shareholders of FRI and
may be deemed to be the beneficial owners of securities held
by persons and entities advised by FRI subsidiaries. The
Schedule 13G reported that one of the investment advisory
subsidiaries, Franklin Advisory Services, Inc. (whose
address is One Parker Place, Sixteenth Floor, Fort Lee, New
Jersey 07024), has sole voting and dispositive power with
respect to all of the shares shown. FRI, the FRI Principal
Shareholders and the investment advisory subsidiaries
disclaim any economic interest or beneficial ownership in
the shares shown in the table above and are of the view that
they are not acting as a "group" for purposes of Securities
Exchange Act of 1934, as amended.
(3) In a Schedule 13G filed with the Securities and
Exchange Commission in February 1998, Dimensional Fund
Advisors Inc. ("Dimensional") reported that it has sole
voting power with respect to 858,420 of the shares shown,
and sole dispositive power with respect to all of the shares
shown. The Schedule 13G reported that persons who are
officers of Dimensional also serve as officers of DFA
Investment Dimensions Group Inc. (the "Fund"), and The DFA
Investment Trust Company (the "Trust"), each an open-end
management investment company, and that in their capacities
as officers of the Fund and the Trust, these persons vote
146,100 shares owned by the Fund and 293,600 shares owned by
the Trust (which shares are included in the number of shares
shown in the table above). The Schedule 13G reports that
all shares shown are owned by advisory clients of
Dimensional, and that, to the knowledge of Dimensional, no
such client has an interest with respect to more than 5% of
the outstanding shares of common stock. Dimensional
disclaims beneficial ownership of all such shares.
(4) Mr. Maddrey is the President and Chief Executive
Officer and a director of the Company. The number of shares
shown as beneficially owned by Mr. Maddrey includes
approximately 28,023 shares allocated to Mr. Maddrey's
account in the Company's Employee Stock Purchase Plan,
431,470 shares held by the E. Erwin and Nancy B. Maddrey, II
Foundation, a charitable trust, as to which shares Mr.
Maddrey holds sole voting and investment power but disclaims
beneficial ownership, and approximately 1,074 shares
allocated to the account of Mr. Maddrey in the Company's
Savings and Investment Plan (the "401(k) Plan"). Mr.
Maddrey is fully vested in the shares allocated to his
account in the 401(k) Plan. Excluded from the table are
15,000 unissued shares covered by awards that are not
exercisable within 60 days of September 18, 1998.
(5) Mr. Rainsford is the Executive Vice President,
Treasurer and Chief Financial Officer and a director of the
Company. The number of shares shown as beneficially owned
by Mr. Rainsford includes 47,945 shares held by The
Edgefield County Foundation, a charitable trust, as to which
shares Mr. Rainsford holds sole voting and investment power
but disclaims beneficial ownership, and approximately 167
shares allocated to the account of Mr. Rainsford in the
401(k) Plan. Mr. Rainsford is fully vested in the shares
allocated to his account in the 401(k) Plan. Excluded from
the table are 12,000 unissued shares covered by awards that
are not exercisable within 60 days after September 18, 1998.
(6) Buck A. Mickel is a director of the Company. The
number of shares shown as beneficially owned by Buck A.
Mickel includes 327,076 shares directly owned by him, all of
the 1,240,634 shares owned by Micco Corporation, and 1,000
shares held by him as custodian for a minor. See Note (7).
(7) The shares of common stock of Micco Corporation are
owned in equal parts by Minor H. Mickel, Buck A. Mickel (a
director of the Company), Minor M. Shaw and Charles C.
Mickel. Buck A. Mickel, Minor M. Shaw and Charles C. Mickel
are the children of Minor H. Mickel. Minor H. Mickel, Buck
A. Mickel, Minor M. Shaw and Charles C. Mickel are officers
and directors of Micco Corporation. Each of Minor H. Mickel,
Buck A. Mickel, Minor M. Shaw and Charles C. Mickel
disclaims beneficial ownership of three quarters of the
shares of the Company's common stock owned by Micco
Corporation. Minor H. Mickel directly owns 116,854 shares
of the Company's common stock and as personal representative
of her husband's estate owns 207,750 shares of the Company's
common stock. Buck A. Mickel directly or as custodian for a
minor owns 328,076 shares of the Company's common stock.
Charles C. Mickel, directly or as custodian for his
children, owns 256,210 shares of the Company's common stock.
Minor M. Shaw, directly or as custodian for her children,
owns 264,978 shares of the Company's common stock. Minor M.
Shaw's husband, through an individual retirement account and
as custodian for their children, beneficially owns
approximately 14,474 shares of the Company's common stock,
as to which shares Minor M. Shaw may also be deemed a
beneficial owner. Minor M. Shaw disclaims beneficial
ownership with respect to these shares and with respect to
the 2,748 shares of the Company's common stock held by her
as custodian for her children. The spouse of Charles C.
Mickel owns 100 shares of the Company's common stock, as to
which shares Charles C. Mickel may also be deemed a
beneficial owner. Charles C. Mickel disclaims beneficial
ownership with respect to these shares and with respect to
the 3,510 shares of the Company's common stock held by him
as custodian for his children. Micco Corporation owns
1,240,634 shares of the Company's common stock.
(8) The number of shares shown as beneficially owned by
Minor H. Mickel includes 116,854 shares directly owned by
her, 207,750 shares owned by her as personal representative
of her husband's estate and all of the 1,240,634 shares
owned by Micco Corporation. See Note (7).
(9) The number of shares shown as beneficially owned by
Minor M. Shaw includes 264,978 shares owned by her directly
or as custodian for her children, approximately 14,474
shares beneficially owned by her husband through an
individual retirement account or as custodian for their
children, and all of the 1,240,634 shares owned by Micco
Corporation. See Note (7).
(10) The number of shares shown as beneficially owned by
Charles C. Mickel includes 256,210 shares owned by him
directly or as custodian for his children, 100 shares owned
by his wife and all of the 1,240,634 shares owned by Micco
Corporation. See Note (7).
(11) C. C. Guy is a director of the Company. The number
of shares shown as beneficially owned by C. C. Guy includes
18,968 shares owned by his wife, as to which shares Mr. Guy
disclaims beneficial ownership.
(12) Dr. Kane is a director of the Company. The shares
shown as beneficially owned by him are held in a Keogh
account or an IRA account.
(13) Dr. Lennon is a director of the Company.
(14) Ms. Greer is Vice President and Secretary of the
Company. The number of shares shown as beneficially owned
by Ms. Greer includes approximately 1,214 shares allocated
to her account in the 401(k) Plan. Ms. Greer is fully
vested in the shares allocated to her account in the 401(k)
Plan. Also included are 11,250 unissued shares that can be
acquired by the exercise of options exercisable within 60
days of September 18, 1998, but excluded from the table are
28,875 unissued shares covered by options and awards that
are not exercisable within 60 days after September 18, 1998.
(15) Mr. Humphreys is Vice President-Finance and
Assistant Secretary of the Company. The number of shares
shown as beneficially owned by Mr. Humphreys includes
approximately 1,138 shares allocated to his account in the
401(k) Plan. Mr. Humphreys is fully vested in the shares
allocated to his account. Also included are approximately
1,596 shares allocated to Mr. Humphreys' account in the
Company's Employee Stock Purchase Plan and 11,250 unissued
shares that can be acquired by the exercise of options
exercisable within 60 days of September 18, 1998, but
excluded from the table are 20,250 unissued shares covered
by options and awards that are not exercisable within 60
days after September 18, 1998.
(16) Mr. Stevens is Vice PresidentInternational of the
Company. The number of shares shown as beneficially owned
by Mr. Stevens includes approximately 323 shares allocated
to his account in the 401(k) Plan. Mr. Stevens is fully
vested in the shares allocated to his account in the 401(k)
Plan. Also included are 4,750 unissued shares that can be
acquired by the exercise of options exercisable within 60
days of September 18, 1998, but excluded are 24,000 unissued
shares covered by options and awards that are not
exercisable within 60 days after September 18, 1998.
(17) Ms. Jones is Assistant Secretary of the Company. The
number of shares shown as beneficially owned by Ms. Jones
includes approximately 201 shares allocated to her account
in the 401(k) Plan. Ms. Jones is fully vested in the shares
allocated to her account in the 401(k) Plan. Excluded from
the table are 1,975 unissued shares covered by options and
awards that are not exercisable within 60 days after
September 18, 1998.
(18) Includes all shares deemed to be beneficially owned
by any director or executive officer. Includes 4,116 shares
of the Company's common stock held for the executive
officers on the September 18, 1998 record date for the
Annual Meeting by the 401(k) Plan. Each participant in the
401(k) Plan has the right to direct the manner in which the
trustee of the Plan votes the shares held by the 401(k) Plan
that are allocated to such participant's account. Except
for shares as to which such a direction is made, the shares
held by the 401(k) Plan will not be voted. The number of
shares shown in the table includes an aggregate of 27,250
non-issued shares subject to employee stock options held by
executive officers that are exercisable within 60 days or
less, but excludes 54,600 non- issued shares subject to
employee stock options and awards held by executive officers
that are not exercisable within 60 days.
(19) Less than one percent.
(20) The number of shares shown in the table excludes the
shares with approximate value of $10,000 per person acquired
on September 30, 1998, as described in "Management
CompensationDirector Compensation."
EXECUTIVE OFFICERS
The following provides certain information regarding the
executive officers of the Company.
Name and Age Position
E. Erwin Maddrey, II (57) President and Chief Executive
Officer (1)
Bettis C. Rainsford (47) Executive Vice
President,
Chief Financial
Officer and
Treasurer (1)
Jane H. Greer (60) Vice President and
Secretary(2)
Robert W. Humphreys (41) Vice President-
Finance and
Assistant Secretary(3)
Douglas J. Stevens (65) Vice President-
International(4)
Brenda L. Jones (53) Assistant Secretary (5)
(1) See information under "Election of Directors."
(2) Jane H. Greer became associated with Old Delta
Woodside's predecessors in July 1986, and was elected a Vice
President of Old Delta Woodside in November 1986, in charge
of human resources and other related areas, Assistant
Secretary of Old Delta Woodside in November 1987 and
Secretary of Old Delta Woodside in August 1988. She became
Vice President and Secretary of the Company on November 15,
1989.
(3) Robert W. Humphreys was elected Vice PresidentFinance
and Assistant Secretary of the Company in May 1998. From
January 1987 to May 1998, Mr. Humphreys was President of
Stevcoknit Fabrics Company, a division of a subsidiary of
the Company.
(4) Douglas J. Stevens was elected Vice
PresidentInternational of the Company in May 1998. Mr.
Stevens was Controller and Assistant Secretary of the
Company effective August and September 1992 until May 1998.
From February 1991 to August 1992, Mr. Stevens was Vice
President of Finance and Administration for Duck Head
Apparel Company, a division of a subsidiary of the Company.
(5) Brenda L. Jones was elected Assistant Secretary of
Old Delta Woodside in November 1988. She became Assistant
Secretary of the Company on November 15, 1989. Since July
1987, she has been Vice President and Chief Financial
Officer of The Rainsford Development Corporation, a
corporation wholly owned by Bettis C. Rainsford which is
engaged in general business development activities.
The Company's executive officers are appointed by the Board
of Directors and serve at the pleasure of the Board.
MANAGEMENT COMPENSATION
Summary Compensation Table
The following table sets forth certain information
respecting the compensation earned by the Chief Executive
Officer, the Chief Financial Officer, and the other three
executive officers who earned salary and bonus in fiscal
1998 in excess of $100,000 (the "Named Executives") for the
fiscal years ended June 27, 1998, June 28, 1997 and June 29,
1996.
<TABLE>
SUMMARY COMPENSATION TABLE <CAPTION>
Long-Term
Annual Compensation Compensation
Other Awards All
Annual Securities Other
Name and Salary Bonus sation Options sation
Pincipal Position Year ($)(a) ($)(a)(b) ($)(c) (#)(d) ($)
<S> <C> <C> <C> <C> <C> <C>
E.Erwin Maddrey,II, 1998 500,000 108,243 20,127 20,000 (g) 36,563 (k)(p)(q)
President & Chief 1997 500,000 0 0 0 36,905
Executive Officer 1996 500,000 0 0 0 47,571
Bettis C. Rainsford, 1998 450,000 (f) 86,579 16,102 16,000 (h) 16,012 (l)(p)(q)
Executive VP, CFO, 1997 450,000 (f) 0 0 0 15,621
& Treasurer 1996 450,000 (f) 0 0 0 15,074
Jane H. Greer, 1998 173,500 64,915 10,538 0 1,893 (m)(q)
Vice President 1997 144,308 63,000 11,080 15,000 (i) 1,313
& Secretary 1996 138,769 18,000 7,567 22,500 (i) 878
Robert Humphreys 1998 192,116 16,231 10,538 0 52,616 (n)(q)
VP-Finance &
Asst. Secretary (e)
Douglas J. Stevens, 1998 143,904 64,915 10,538 21,000 (j) 3,184 (o)(q)
Vice President- 1997 134,000 63,000 11,080 19,000 (j) 1,008
International 1996 126,923 18,000 6,229 7,500 (j ) 1,723
</TABLE>
(a) The amounts shown in the column include sums the receipt of
which has been deferred pursuant to the 401(k) Plan or the Company's
deferred compensation plan.
(b) Amounts in this column are cash bonuses paid to reward
performance as described in the Compensation Committee's Report below.
(c) The amounts in this column were paid by the Company in
connection with the vesting of awards under the Company's Incentive
Stock Award Plan and were in each case approximately sufficient,
after the payment of all applicable income taxes, to pay the
participant's federal and state income taxes attributable to the
vesting of the award.
(d) For purposes of this table, awards under the
Company's Incentive Stock Award Plan are treated as options.
(e) Mr. Humphreys was elected Vice President-Finance and
Assistant Secretary of the Company in May 1998. The information
in the
table includes Mr. Humphreys' compensation for all of fiscal
1998.
(f) Of this amount $150,000 was paid to The Rainsford
Development Corporation, a company wholly owned by Mr. Rainsford.
(g) During fiscal 1998, Mr. Maddrey was granted an award
covering 20,000 shares under the Company's Incentive Stock Award
Plan.
(h) During fiscal 1998, Mr. Rainsford was granted an
award covering 16,000 shares under the Company's Incentive Stock
Award Plan.
(i) During fiscal 1997, Ms. Greer was granted an award
covering 15,000 shares under the Company's Incentive Stock Award
Plan. During
fiscal 1996, Ms. Greer was granted an option covering 22,500
shares
under the Company's Stock Option Plan.
(j) During fiscal 1998, Mr. Stevens was granted
options covering 21,000 shares under the Company's Stock Option
Plan. During fiscal
1997, Mr. Stevens was granted an award covering 15,000 shares
under the Company's Incentive Stock Award Plan and was granted
an option covering 4,000 shares under the Company's Stock
Option Plan. During fiscal 1996, Mr. Stevens was granted an
option covering 7,500 shares under the Company's Stock Option
Plan.
(k) The fiscal 1998 amount represents $33,825 premium
paid by the Company for $10 million of life insurance on the
life of Mr. Maddrey, $793 allocated to Mr. Maddrey's account
in the 401(k) Plan, $1,686 contributed by the Company to the
Company's deferred compensation plan
as payment for the amount of Company contributions to the
401(k) Plan for fiscal year 1997 that were not made for Mr.
Maddrey because of Internal Revenue Code contribution
limitations, and $259 earned on Mr. Maddrey's deferred
compensation at a rate in excess of 120% of the Federal mid-
term rate.
(l) The fiscal 1998 amount represents $14,525 premium
paid by the Company for $10 million of life insurance on the
life of Mr. Rainsford, $793 allocated to Mr. Rainsford's
account in the 401(k) Plan and $694 contributed by the Company
to the Company's deferred compensation plan
as payment for the amount of Company contributions to the
401(k) Plan
for fiscal year 1997 that were not made for Mr. Rainsford
because of Internal Revenue Code contribution limitations.
(m) Of the fiscal 1998 amount, $793 was allocated to
Ms. Greer's account in the 401(k) Plan, $11 was contributed by
the Company to the Company's deferred compensation plan as
payment for the amount of
Company contributions to the 401(k) Plan for fiscal year 1997
that were not made for Ms. Greer because of Internal Revenue
Code contribution limitations, $1,026 was contributed by the
Company to the 401(k) Plan for Ms. Greer with respect to her
compensation deferred under the 401(k) Plan, and $63 was
earned on Ms. Greer's deferred compensation at a rate in
excess of 120% of the Federal mid-term rate.
(n) The fiscal 1998 amount represents $793 allocated
to Mr. Humphreys' account in the 401(k) Plan, $230
contributed by the Company to the Company's deferred
compensation plan as payment for the amount of Company
contributions to the 401(k) Plan for fiscal year 1997 that
were not made for Mr. Humphreys because of Internal Revenue
Code contribution limitations, $828 contributed by the
Company to the 401(k) Plan for Mr. Humphreys with respect to
his compensation deferred under the 401(k) Plan, $50,000
received as a bonus relating to a special project while
President of Stevcoknit, and $765 earned on Mr. Humphreys'
deferred
compensation at a rate in excess of 120% of the Federal mid-
term rate.
(o) Of the fiscal 1998 amount, $690 was allocated to
Mr. Stevens' account in the 401(k) Plan, $65 was contributed by
the Company to the Company's deferred compensation plan as
payment for the amount of
Company contributions to the 401(k) Plan for fiscal year 1997
that were not made for Mr. Stevens because of Internal Revenue
Code contribution limitations, $603 was contributed by the
Company to the Company's 401(k) Plan for Mr. Stevens with
respect to his compensation deferred under the 401(k) Plan, and
$1,826 was earned on Mr. Stevens' deferred compensation at a
rate in excess of 120% of the Federal mid-term rate.
(p) The Company pays the premiums due for life
insurance policies that total $10 million on each of the life
of Mr. Maddrey and the life
of Mr. Rainsford. The proceeds of these policies are payable
to the beneficiary or beneficiaries chosen by Mr. Maddrey or
Mr. Rainsford, as the case may be. These life insurance
policies were established in connection with the First
Refusal Agreements described in this Proxy Statement under
the heading "Related Party Transactions."
(q) The 401(k) Plan allocation shown for the fiscal
year was allocated to the participant's account during that
fiscal year, although all or part of the allocation may have
been determined in whole or in part on the basis of the
participant's compensation during the prior fiscal year.
The amounts shown in the table above do not include
reimbursement by the Company or its subsidiaries for certain
automobile expenses, club memberships and other items. The non-
business personal benefit to any
Named Executive of these amounts does not exceed 10% of the Named
Executive's total salary and bonus.
Option Grants in the Last Fiscal Year
The following table provides certain information
respecting the grant to any Named Executive during fiscal 1998 of
awards under the Company's Incentive Stock Award Plan or options
under the Company's Stock Option
Plan. For purposes of this table, awards under the Company's Incentive
Stock Award Plan are treated as options.
<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
<CAPTION>
Potential Realizable
Individual Grants Value at Assumed
Number of Annual Rates
Securities % of Total Market of Stock Price
Underlying Options Exercise Price on Appreciation
Options Granted To or Base Date of for Option Term (c)
Granted Employees in Price Grant Expiration 0% 5% 10%
Name (#) Fiscal Year ($/Sh) ($/Sh) Date ($) ($) ($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
E. Erwin
Maddrey, II 20,000 (a) 9.00 0.01 4.875 9/30/99 (a) 97,300 103,455 109,731
Bettis C.
Rainsford 16,000 (a) 7.20 0.01 4.875 9/30/99 (a) 77,840 82,764 87,785
Douglas J.
Stevens 11,000 (b) 4.95 2.59375 5.1875 12/12/02 (b) 28,531 44,297 63,368
10,000 (b) 4.50 2.93750 5.8750 4/14/03 (b) 29,375 45,607 65,242
</TABLE>
(a) These represent shares covered by an award granted during fiscal
1998 under the Company's Incentive Stock Award Plan, pursuant to
which a participant can acquire shares of the Company's common
stock for $0.01 cash per share upon the vesting of the award
respecting such shares. Each grant of an award under the plan
sets forth the circumstances under which all or part of the
award will vest. These circumstances may include (i) the
participant being an employee of the Company or any subsidiary
on one or more specified dates and (ii) such additional
circumstances (which may include, in the case of certain shares
covered by an award, the Company or a division of the Company
having met certain performance criteria) as may be set forth in
the award. The vesting circumstances may vary among the shares
covered by an award. The part, if any, of an award that does
not vest is forfeited. In connection with the vesting of any
award, the Company pays the participant cash in an amount
approximately sufficient, after the payment of all applicable
income taxes, to pay the participant's federal and state income
taxes attributable to the vesting of the award. The expiration
date set forth in the table is the last award vesting date for
any portion of the award, because in certain circumstances all
or part of the award, if not vested, would have been forfeited
by or on that date. As to any vested portion, the award does
not technically have any expiration date.
On June 27, 1998, a portion of each award covering
5,000 shares to Mr. Maddrey and 4,000 shares to Mr. Rainsford
vested by reason of
the participant being in the Company's employ at that
date. Each award provides that a portion of the award
covering 5,000 shares and 4,000 shares, respectively,
will vest on July 3, 1999, providing that the
participant is an employee of the Company on that date.
The portion of each award covering the remaining 10,000
shares and 8,000 shares, respectively, will vest on or
about September 30, 1999, providing that the
participant is an employee of the Company on that date
and the Company has achieved a specified level of
cumulative operating earnings through July 3, 1999. A
portion of these awards will vest if the participant's
employment terminates early by reason of death,
retirement or permanent disability.
(b) These represent shares covered by an option
granted during fiscal 1998 under the Company's Stock
Option Plan, pursuant to which a participant is granted
the right to acquire shares of the Company's Common
Stock for an exercise price per share which will be not
less than one-half of the fair market value on the date
of the grant. Each option granted under the plan sets
forth the circumstances under which all or part of the
option can be exercised. The expiration date set forth
in the table is the termination date for the option.
The option granted to Mr. Stevens on December
12, 1997 will become exercisable with respect to 25% of
the shares covered by the
option on December 12, 1998, and with respect to an
additional 25% of the shares covered by the option on
each anniversary of December 12, 1998, and the option
granted to Mr. Stevens on April 14, 1998 will become
exercisable with respect to 25% of the shares
covered by the option on April 14, 1999, and with
respect to an additional 25% of the shares covered by
the option on each anniversary of April 14, 1999,
provided that he is an employee of the Company on each
of the relevant dates. Additional terms and conditions
are set forth in the option relating to the exercise of
options if Mr. Stevens' employment terminates early by
reason of death, retirement or permanent disability.
(c) Based on annual compounding of assumed appreciation
rate until termination date.
Aggregated Option Exercises in Last Fiscal Year and
Fiscal
Year-End Option Values
The following table provides certain information
respecting the exercise by any Named Executive during fiscal
1998 of awards granted under the Company's Incentive Stock
Award Plan and options granted under the Company's Stock
Option Plan. For purposes of this table, awards under the
Company's Incentive Stock Award Plan are treated as options.
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST
FISCAL YEAR AND FY-END OPTION VALUES
<CAPTION>
Number of Securities Value of Unexercised
Shares Underlying Unexercised In-the-Money Options
Acquired Value Options at FY-End at FY-End
on Exercise Realized (#) ($)(a)
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
<S>
E. Erwin <C> <C> <C> <C> <C> <C>
Maddrey,II 5,000 24,325 0 15,00 0 0 72,975
Bettis C.
Rainsford 4,000 19,460 0 12,000 0 58,380
Jane H.
Greer 3,000 14,595 11,250 20,250 16,875 60,660
Robert W.
Humphreys 3,000 14,595 11,250 20,250 16,875 60,660
Douglas J.
Stevens 3,000 14,595 4,750 36,750 7,250 98,754
</TABLE>
(a) Based on the closing sales price of $4.875 per share on June 26, 1998.
Director Compensation
The Company pays each director who is not an officer of the Company a
fee of $20,000 per year, plus provides approximately $10,000 annually
for each such director with which shares of the Company's common
stock are purchased. These shares may be newly issued or
acquired in the open market for such purpose. Each director is
also reimbursed for his reasonable travel expenses in attending
each meeting. Commencing in October 1997, each non-officer
director is paid $500 ($750 for the committee chair) for each
committee meeting attended and $250
for each telephonic committee meeting in which the director
participates.
Beginning in fiscal 1998, the non-employee directors of
the Company are eligible to participate in the Long Term
Incentive Plan.
Participants are selected by the Long Term Plan Committee, which
includes those members of the Company's Compensation Committee
who are "outside directors" (as that term is defined for purposes
of Section 162(m) of the Internal Revenue Code or any successor
provision). The Long Term Plan Committee has the discretion to
grant awards under the plan that, based on a performance period
of at least three years, translate into options for the Company's
common stock. No grants were made under the Long Term Incentive
Plan in fiscal 1998 to the nonemployee directors.
The Company has established the Directors' Charitable
Giving Program covering each director of the Company. Under the
program, after the
death of a director, the Company will make an aggregate
donation of $500,000, to be paid in 10 annual installments
commencing no later than six months after the director's
death, to one or more charitable organizations selected by
such director. With respect to Max Lennon, E. Erwin Maddrey,
II and Bettis C. Rainsford, the program will be funded by
life insurance policies owned and to be paid for by the
Company on the lives of such directors.
Notwithstanding any statement in any of the Company's
previous filings under the Securities Act of 1933, as
amended, or the Securities Exchange Act of 1934, as amended,
incorporating future filings, including this Proxy Statement,
in whole or in part, the following Performance Graph and the
Compensation Committee Report below shall not be incorporated
by reference into any such filing.
PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly
change in the cumulative total stockholder return, assuming
dividend reinvestment, on the Company's common stock with the
cumulative total return, assuming dividend reinvestment, on
the Standard & Poor's 500 Stock Index and a
peer group, constructed by the Company, consisting of eight
corporations (not including the Company) that are engaged in
the manufacture and sale of textile products and apparel.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG DELTA WOODSIDE INDUSTRIES, INC.,
S&P 500 STOCK INDEX & PEER GROUP
Cumulative Total Return
6/93 6/94 6/95 6/96 6/97 6/98
Delta Woodside Industries, Inc. 100 107 72 51 67 52
Peer Group 100 99 100 101 117 107
S&P 500 100 101 128 16 1 217 282
This Performance Graph assumes that $100 was invested in the
common stock of Delta Woodside Industries, Inc. and
comparison groups on June 30, 1993 and that all dividends
have been reinvested.
The Peer Group is composed of the following companies:
Galey & Lord, Inc. Russell Corp. Texfi Industries, Inc.
Guilford Mills, Inc. Salant Corp. Tultex Corp.
Haggar Corp. Springs Industries, Inc.
REPORT OF THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
This report of the Compensation Committee (the
"Committee") of the Board of Directors of the Company sets
forth the Committee's policies
with regard to compensation of the executive officers of the
Company, including the relationship of corporate performance
to executive compensation.
Executive Compensation Policies
Decisions regarding certain aspects of the
compensation of the Company's executive officers are made by
the four member Compensation Committee of the Board, each of
whom is a non-employee director. The Committee believes that
its compensation practices are designed to attract, retain,
and motivate key Company executives to achieve short-, medium-
, and long-term goals which the Committee believes will
enhance the value of the shareholders' investment in the
Company. These objectives are implemented through:
A. Cash bonuses to reward the achievement of specific
performance
goals,
B. Grants of stock awards under the Incentive Stock
Award Plan,
C. Grants of stock options under the Stock Option Plan,
D. Grants of awards and stock options under the Long
Term Incentive
Plan, and
E. Payment of base salaries at levels that are competitive
with those
paid by the peer group of companies shown on the Performance
Graph
above. The peer group companies are certain textile and
apparel companies currently listed on the New York Stock
Exchange.
Compensation of Executive Officers Other than Chief
Executive Officer and Chief Financial Officer
The Company's executive officers other than the
Chief Executive Officer and the Chief Financial Officer (the
"Other Officers") received compensation for fiscal 1998 that
included both fixed and performancebased components. The
Other Officers' compensation consisted of the following
elements: base salary, cash bonuses, the vesting of awards
under the Incentive Stock Award Plan, and the granting or
vesting of options under the Stock Option Plan.
Cash bonuses to the Other Officers are made based on a
percentage of the total cash bonuses earned by the Company's
operating divisions. The operating division cash bonuses are
based on operating earnings in
excess of specified returns on capital employed and other
performance criteria. For fiscal 1998, the total cash bonuses
awarded to the Other Officers named in the Summary
Compensation Table above amount to 29% of their total
salaries.
Each Other Officer participates in the Incentive Stock
Award Plan which was approved by the shareholders of the Company in
November 1990 and amended by approval of the shareholders in
November 1995 and in November 1997. Awards made under this
plan to the Other Officers have been structured so that sixty
percent of each individual's award will vest by remaining in
service with the Company through predetermined anniversary
dates and up to forty percent of each individual's award will
vest if the Company meets specified performance targets
respecting cumulative operating profits. While the number of
shares covered by any award to an Other Officer is not
determined by specific, non-subjective criteria, the
determination of such number takes into account the level and
responsibility of the executive's position, the executive's
performance, the executive's compensation, the assessed
potential of the executive, and any other factors that are
deemed relevant to the accomplishment of the purposes of the
plan. The Committee believes that this plan is an important
tool to the achievement of medium-term goals.
Each Other Officer also participates in the Stock
Option Plan which was approved by the shareholders of the
Company in November 1990 and amended by approval of the
shareholders in November 1995 and in November 1997. The
purpose of this plan is to promote the growth and
profitability of the Company over a longer term by enabling
the Company to attract and retain key and middle level
managers of outstanding competence and by increasing the
personal participation of its executives in the Company's
performance by providing these executives with an additional
equity ownership opportunity in the Company. In making
option grants to the Other Officers, no specific, non-
subjective criteria are used, but the factors taken into
account include the level and responsibility of the
executive's position, the executive's performance, the
executive's compensation, the assessed potential of the
executive, and any other factors that are deemed relevant to
the accomplishment of the purposes of the plan. Each option
granted under the plan to an Other Officer has provided that
the option becomes exercisable in stages over a period of
four years.
Each Other Officer also is expected to participate in
the Long Term Incentive Plan which was approved by the
shareholders of the Company in November 1997. The purpose of
this plan is to reward the key executives
of the Company and the non-employee directors of the Company
for increasing shareholder value through the growth of the
Company's stock price, profitability and/or return on capital
employed. The plan is intended to reward the achievement of
projected and better than projected stock price increases
and/or financial results. It is also intended to assist in
the attraction and retention of key executives and to provide
them with a significant retirement vehicle. Participation in
the plan will be limited to the key executives of the Company
who, in the opinion of the Long Term Plan Committee, have the
greatest impact on the Company's long term performance and
are selected by such committee and those non-employee
directors of the Company who are selected by such committee.
Each award granted under the Long Term Incentive Plan will
have an associated performance period of at least three
years. Each award will set forth potential bonus values.
The actual bonus value earned will depend on the achievement
of goals over the performance period. The Company's results
over the applicable performance period will be compared to
the established measurement goals. The measurements (the
"Performance Criteria") will include (a) average annual stock
price performance as compared to the peer group of publicly
traded companies used for purposes of the most recent
performance graph contained in a proxy statement of the
Company, (b) average annual increase in net income per share
and (c) average annual increase in return on capital
employed, except that the Performance Criterion described in
clause (a) shall be the only Performance Criterion applicable to the
plan participants who are the senior executive officers
(including the Named Executives) or non-employee directors of
the Company. At the end of the applicable performance
period, results with respect to the Performance Criteria will
be calculated, and these results will determine the number of
shares covered by options then granted under the plan. Each
such option will have an exercise price equal to 50% of the
fair market value of the Company's common stock. In making
awards, no specific, nonsubjective criteria are used, but the
Long Term Plan Committee believes that the factors taken into
account will include factors similar to those described above
as relevant to the grant of options under the Stock Option
Plan.
Section 162(m) of the Internal Revenue Code ("Section
162(m)") imposes limits on the ability of the Company to
claim income tax deductions for compensation paid to the
Named Executives. Section 162(m) generally denies a
corporate income tax deduction for annual compensation in
excess of $1,000,000 paid to any of the Named Executives.
Certain types of compensation, including performance-based
compensation, are generally excluded from this deduction
limit. The Company believes that compensation payable
pursuant to the Long Term Incentive Plan will be deductible
for Federal income tax purposes under most circumstances as
performance-based compensation. Under certain circumstances
such as death, disability or retirement, however,
compensation not deductible by the Company pursuant to
Section 162(m) may be payable pursuant to the plan. Although
neither the Incentive Stock Award Plan nor the Stock Option
Plan satisfies all the requirements of Section 162(m), the
Compensation Committee anticipates that all compensation
payable pursuant to either plan to any Named Executive will
be deductible by the Company because no Named Executive is
expected to receive in any fiscal year aggregate compensation
not qualifying as performance-based compensation under
Section 162(m) that exceeds $1,000,000.
Compensation Paid to the Chief Executive Officer and the
Chief Financial Officer
The compensation of each of the Chief Executive Officer
and the Chief Financial Officer includes both fixed and
performance-based components.
In setting base salary levels for the Chief Executive
Officer and the Chief Financial Officer, the Committee considers
the possible bonus
awards and attempts to set base salary levels so that total
compensation, including bonuses, will be near to that of the
median of Chief Executive Officers and Chief Financial Officers
of the peer group of companies. The Compensation Committee
determined effective August 31, 1998 to reduce the salary of the
Chief Executive Officer to $450,000 and the Chief Financial
Officer to $350,000 in order to cause more of the compensation
package received by each such individual to be affected by the
performance of the Company.
Cash bonuses to the Chief Executive Officer and the
Chief Financial Officer are made based on a percentage of the
total cash bonuses earned
by the Company's operating divisions. The operating division cash
bonuses are based on operating earnings in excess of specified
returns on capital employed and other performance criteria. For
fiscal year 1998, the total cash bonuses awarded to the Chief
Executive Officer and the Chief Financial Officer amount to 21% of
their total salaries.
The Committee decided, effective in fiscal year 1998, to
increase the proportions of the Chief Executive Officer's and the Chief
Financial Officer's respective compensations that are
affected by performance criteria. To achieve this objective,
beginning in fiscal year 1998 the Chief Executive Officer and
the Chief Financial Officer participate in the performance-
based cash bonus plan described above and in the Incentive
Stock Award Plan. The number of shares covered by the awards
granted in fiscal year 1998 under the Incentive Stock Award
Plan to each such individual was based in part on the
recommendation of an outside compensation consultant and on
the awards that have been made to other executive officers.
Portions of these awards vest by remaining in service with
the Company through predetermined dates, with the remaining
portion to vest if the Company meets specified performance
targets respecting cumulative operating profits. The Chief
Executive Officer and the Chief Financial Officer are also
eligible to participate in the Long Term Incentive Plan;
however no grants were made to them under this plan in fiscal
year 1998.
Compensation Committee
Dr. James F. Kane, Chair Dr. Max Lennon
C.C. Guy Buck A. Mickel
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
The following directors served on the Compensation
Committee of the Company's Board of Directors during fiscal
1998: C.C. Guy, Dr. James F. Kane, Dr. Max Lennon and Buck A.
Mickel. Until his death in July 1998, Buck Mickel, a director
of the Company, served as Chairman of the Compensation
Committee.
C.C. Guy served as Chairman of the Board of Old
Delta Woodside or its predecessors from the founding of
Old Delta Woodside's predecessors in
1984 until November 1989. Buck A. Mickel was a Vice
President of Old Delta Woodside or its predecessors from
the founding of Old Delta Woodside's predecessors until
November 1989, Secretary of Old Delta Woodside from
November 1986 to March 1987, and Assistant Secretary of
Old Delta Woodside from March 1987 to November 1988.
RELATED PARTY TRANSACTIONS
The Company leases its principal corporate office
space, space for its benefits department, purchasing
department and financial accounting department, and space for
its printing operation, from a corporation (Hammond Square,
Ltd.), one-half of the stock of which is owned by each
of E. Erwin Maddrey, II (President, Chief Executive Officer
and a director of the Company) and Jane H. Greer (Vice
President and Secretary of the Company). Mr. Maddrey and Ms.
Greer are also the directors and executive officers of Hammond
Square, Ltd. The lease of the Company's principal office
space and space for its benefits department, purchasing
department and financial accounting department was for a term
of approximately ten years with an original expiration date of
December 1997, but was continued on a month to month basis
until August 31, 1998. This lease covered approximately
11,666 square feet and involved rental payments of $8.50 per
square foot per year (plus certain other expenses such as
regime fees, cleaning fees, real estate taxes, utilities and
parking). A new lease has been executed effective September
1, 1998, covering approximately 9,662 square feet at a rental
rate of $13.00 per square foot per year (plus certain other
expenses such as regime fees, cleaning fees, real estate
taxes, utilities and parking) with an expiration date of
August 2003. The Company is subleasing part of this space to
other parties until it needs such subleased space. The lease
of the Company's printing operation space is for a term of
approximately five years expiring in November 1998, with an
option to renew, covers approximately 4,159 square feet and
involves rental payments of $12.60 per square foot per year
(plus certain other expenses such as regime fees, real estate
taxes, utilities and parking). The Company paid an aggregate
of approximately $192,079 in rent and other expenses under
these leases during fiscal 1998.
The Company currently leases office space in
Edgefield, South Carolina from The Rainsford Development
Corporation, a corporation wholly owned by Bettis C.
Rainsford (Executive Vice President, Chief Financial Officer,
Treasurer and a director of the Company). Pursuant to this
lease in fiscal 1998 the Company made lease payments in the
amount of $33,299. Mr. Rainsford is a director and executive
officer and Brenda L. Jones (Assistant Secretary of the
Company) is an executive officer of The Rainsford Development
Corporation. Duck Head Retail Operations, a division of a
subsidiary of the Company, leases a building in Edgefield,
South Carolina from Mr. Rainsford pursuant to an agreement
involving rental payments equal to 3% of gross sales of the
Edgefield store, plus 1% of gross sales of the store for
utilities. Under this lease agreement, $11,076 was paid to
Mr. Rainsford during fiscal 1998. As described above under
the heading "Management Compensation," part of Mr.
Rainsford's cash compensation with respect to fiscal 1998 was
paid to The Rainsford Development Corporation for Mr.
Rainsford's services. The Company expects that a portion of
Mr. Rainsford's cash compensation with respect to fiscal 1999
will be paid to the same entity for Mr. Rainsford's services.
In addition, the Company reimburses The Rainsford Development
Corporation for certain travel, secretarial and other
expenses incurred on behalf of the Company. Such
reimbursement amounted to $73,735 in fiscal 1998. The amount
of Mr. Rainsford's total cash compensation is not affected by
the fact that part of it is paid to The Rainsford Development
Corporation.
The Company reimburses Maddrey & Associates, a sole
proprietorship of Mr. Maddrey, for certain travel and other
expenses incurred on behalf of
the Company. Such reimbursement amounted to $38,632 in fiscal
1998.
In February 1991, each of Mr. Maddrey and Mr. Rainsford
entered into a stock transfer restrictions and right of first
refusal agreement (a
"First Refusal Agreement") with the Company. Pursuant to each
such
First Refusal Agreement, Mr. Maddrey or Mr. Rainsford, as the
case may be, granted the Company a specified right of first
refusal with respect to any sale of such individual's shares
of the Company's common stock owned at death for five years
after such individual's death. In connection with the First
Refusal Agreements, life insurance policies were established
on the lives of Mr. Maddrey and Mr. Rainsford. Under the life
insurance policies on the life of each such individual, $30
million is payable to the Company and $10 million is payable
to the beneficiary or beneficiaries chosen by the individual.
Nothing in either First Refusal Agreement restricts the
freedom of Mr. Maddrey or Mr. Rainsford to sell or otherwise
dispose of any or all of his shares of the Company's common
stock at any time prior to his death or prevents the Company
from canceling the life insurance policies payable to it for
$30 million on either Mr. Maddrey's or Mr. Rainsford's life.
A First Refusal Agreement shall terminate if the life insurance
policies payable to the applicable individual's beneficiaries
for $10 million are cancelled by reason of the Company's
failure to pay the premiums with respect thereto.
Any transaction entered into between the Company and
any officer, director, principal shareholder or any of their
affiliates has been and will be on terms which the Company
then believes comparable to those which would be available to
the Company at such time from non-
affiliated persons and will be in the future subject to the
approval at
the time of a majority of the Company's disinterested directors.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Pursuant to Section 16(a) of the Securities Exchange Act
of 1934, as amended, E. Erwin Maddrey, II filed a form to report
one transaction
that should have been reported on an earlier form, Bettis
C. Rainsford filed a form to report one transaction that
should have been reported earlier on a form that was not
filed, Brenda L. Jones filed one late report with respect
to two transactions, and Robert W. Humphreys filed late a
form reporting his initial ownership of Company common
stock at the time he became subject to Section 16(a).
RATIFICATION OF SELECTION OF AUDITORS
The Board of Directors recommends the ratification of the
appointment of KPMG Peat Marwick LLP, independent certified
public accountants, as auditors for the Company and its
subsidiaries for fiscal year 1999 and
to audit and report to the shareholders upon the financial
statements of
the Company as of and for the period ending July 3, 1999.
KPMG Peat Marwick LLP was engaged by the Company on
August 19, 1994, pursuant to approval by the Board of Directors
and subsequent
ratification by the shareholders, as principal accountants
for the Company's 1995 fiscal year.
Representatives of KPMG Peat Marwick LLP will be
present at the Annual Meeting and such representatives will
have the opportunity to make a statement if they desire to do
so and will be available to respond to appropriate questions
which the shareholders may have. Neither the firm nor any of
its members has any relation with the Company except in the
firm's capacity as auditors or as advisors.
The appointment of auditors is approved annually by
the Board of Directors and subsequently submitted to the
shareholders for ratification. The decision of the Board is
based on the recommendation of the Audit Committee.
OTHER BUSINESS
As of the date of this Proxy Statement, the Board of
Directors was not aware that any business not described
above would be presented for consideration at the Annual
Meeting. If any other business properly
comes before the meeting, it is intended that the shares
represented by proxies will be voted with respect thereto in
accordance with the judgment of the person or persons voting
them.
SOLICITATION OF PROXIES
The Company will pay the cost of soliciting proxies in the
accompanying form. In addition to solicitation by mail,
proxies may be solicited by directors, officers and other
regular employees of the Company by telephone, telecopy or
personal interview for no additional compensation.
Arrangements will be made with brokerage houses and other
custodians, nominees and fiduciaries to forward solicitation
material to beneficial owners of the stock held of record by
such persons and the Company will reimburse such persons for
reasonable out-of-pocket expenses incurred by them in so
doing. The Company has engaged Corporate Investor
Communications to assist in these contacts with brokerage
houses, custodians, nominees and fiduciaries for an estimated
fee of $1,100 plus reasonable out-of-pocket expenses.
PROPOSALS OF SECURITY HOLDERS
Any shareholder of the Company who desires to present
a proposal at the 1999 Annual Meeting of Shareholders for
inclusion in the Company's proxy statement and form of proxy
relating to that meeting must submit
such proposal to the Company at its principal executive
offices on or before June 7, 1999. If a shareholder of the
Company desires to present a proposal at the 1999 Annual
Meeting of Shareholders that will not be included in the
Company's proxy statement and form of proxy relating to that
meeting, such proposal must be submitted to the Company at
its principal executive offices no later than August 23, 1999
for the proposal to be considered timely.
FINANCIAL INFORMATION
The Company's fiscal 1998 Annual Report is being mailed to
shareholders on or about October 5, 1998. The Company will
provide without charge to any shareholder of record as of
September 18, 1998, and to each person to whom this Proxy
Statement is delivered in connection with the Annual Meeting
of Shareholders, upon written request of such shareholder or
person, a copy of such fiscal 1998 Annual Report or the
Company's fiscal 1998 annual report on Form 10-K, including
financial statements and financial statement schedules (but
excluding exhibits), filed with the Securities and Exchange
Commission. Any such request should be directed to Delta
Woodside Industries, Inc., 233 North Main Street, Hammond
Square, Suite 200, Greenville, South Carolina 29601,
Attention: Jane H. Greer, Vice President and Secretary.
* * *
The above Notice and Proxy Statement are sent by order
of the Board of Directors.
Jane H. Greer,
Secretary
Greenville, South Carolina
October 5,1998
DELTA WOODSIDE INDUSTRIES, INC.
ANNUAL MEETING, NOVEMBER 24, 1998
The undersigned shareholder of Delta Woodside Industries,
Inc., a South Carolina corporation, hereby constitutes and
appoints E. Erwin Maddrey, II, Bettis C. Rainsford and Jane H.
Greer, and each of them, attorneys and proxies on behalf of the
undersigned to act and vote at the Annual Meeting of
shareholders to be held at the Hyatt Regency Hotel, 220 North Main
Street, Greenville, South Carolina, on November 24, 1998 at
10:00 A.M., and any adjournment or adjournments thereof,
and the undersigned instructs said attorneys to vote:
1. ELECTION OF [] FOR all nominees [] WITHHOLD AUTHORITY to
DIRECTORS listed below (except vote for all nominees
as marked to the listed below
contrary below)
Messrs. C. C. Guy, J. F. Kane, M. Lennon, E. E. Maddrey, II,
B. A. Mickel, B. C. Rainsford
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR AN INDIVIDUAL
NOMINEE WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW).
2. PROPOSAL TO RATIFY SELECTION OF KPMG PEAT MARWICK LLP AS THE
INDEPENDENT AUDITORS OF SIDE AND DELTA WOODSIDE INDUSTRIES, INC. FOR
FISCAL 1995.
[] FOR [] AGAINST [] ABSTAIN
3. At their discretion upon such other matters as may properly
come before the meeting.
A majority of said attorneys and proxies who shall be present and
acting as such at the meeting or any adjournment or adjourn ments
thereof (or, if only one such attorney and proxy may be present and
acting, then that one) shall have and may exercise all the powers
hereby conferred.
PLEASE SIGN
ON REVERSE
SIDE AND
RETURN IN
THE ENCLOSED
POSTAGE-PAID
ENVELOPE
(over)
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF DELTA
WOODSIDE INDUSTRIES, INC. IF NOT OTHERWISE SPECIFIED, THIS PROXY
WILL BE DEEMED TO GRANT AUTHORITY TO VOTE, AND WILL BE VOTED, FOR ELECTION
OF THE DIRECTORS LISTED ON THE REVERSE SIDE OF THIS PROXY AND FOR
APPROVAL OF PROPOSAL 2.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting
of Shareholders dated October 5, 1998 and the Proxy Statement furnished
therewith.
Dated this day of , 1998
(Seal)
(Seal)
NOTE: Signature should agree
with name on stock certificate
as printed thereon. Executors,
administrators, trustees and
other fiduciaries should so
indicate when signing.
PLEASE DATE, SIGN AND RETURN THIS PROXY. THANK YOU.
VOTING INSTRUCTIONS
DELTA WOODSIDE INDUSTRIES, INC.
ANNUAL MEETING, NOVEMBER 24, 1998
The undersigned participant in the Savings and Investment Plan of Delta
Woodside Industries, Inc., a South Carolina corpora tion, hereby
directs Branch Banking & Trust Company, trustee of such Plan, to vote
the undersigned's proportionate share of the shares of common stock of
Delta Woodside Industries, Inc. held by such Plan at the Annual Meeting of
shareholders to be held at the Hyatt Regency Hotel, 220 North Main Street,
Greenville, South Carolina, on November 24, 1998 at 10:00 A.M., and
any adjournment or adjournments thereof, as
follows:
1. ELECTION OF [] FOR all nominees [] WITHHOLD AUTHORITY to
DIRECTORS listed below (except vote for all nominees
as marked to the listed below
contrary below)
Messrs. C. C. Guy, J. F. Kane, M. Lennon, E. E. Maddrey, II,
B. A. Mickel, B. C. Rainsford
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR AN INDIVIDUAL
NOMINEE WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW).
2. PROPOSAL TO RATIFY SELECTION OF KPMG PEAT MARWICK LLP AS THE
INDEPENDENT AUDITORS OF ON REVERSE DELTA WOODSIDE INDUSTRIES, INC. FOR
FISCAL 1995.
[] FOR [] AGAINST [] ABSTAIN
3. At such trustee's discretion upon such other matters as may
properly come before the meeting.
Please sign
on reverse
side and
return
(over)
THESE VOTING INSTRUCTIONS ARE SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS OF DELTA WOODSIDE INDUSTRIES, INC. IF NOT OTHERWISE
SPECIFIED, THESE VOTING INSTRUCTIONS WILL BE DEEMED A DIRECTION TO VOTE
FOR ELECTION OF THE DIRECTORS LISTED ON THE REVERSE SIDE OF THESE
VOTING INSTRUCTIONS AND FOR APPROVAL OF PROPOSAL 2.
The undersigned hereby acknowledges receipt of the Notice of Annual
Meeting of Shareholders dated October 3, 1994 and the Proxy Statement
furnished therewith.
Dated this day of , 1998
(Seal)
(Seal)
NOTE: Please sign exactly as name appears at left.
PLEASE DATE, SIGN AND RETURN THESE VOTING INSTRUCTIONS. THANK YOU.
