<PAGE>
Preliminary Proxy Materials.
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:
[X] Preliminary proxy statement
[_] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[_] Definitive proxy statement
[_] Definitive additional materials
[_] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
THE BIBB COMPANY
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
THE BIBB COMPANY
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
- -------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- -------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: /1/
- -------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- -------------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
- -------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- -------------------------------------------------------------------------------
(3) Filing party:
- -------------------------------------------------------------------------------
(4) Date filed:
- -------------------------------------------------------------------------------
- ------------------
/1/ Set forth the amount on which the filing fee is calculated and state how it
was determined.
<PAGE>
THE BIBB COMPANY
100 Galleria Parkway
17th Floor
Atlanta, Georgia 30339
July [__], 1997
Dear Stockholder:
It is my pleasure to invite you to the 1997 Annual Meeting of Stockholders of
The Bibb Company (the "Company"). The meeting will be held at 11:00 a.m., local
time, on Wednesday, July 30, 1997, at ____________________________ Atlanta,
Georgia _________. Admission to the meeting will begin at 10:00 a.m.
The attached Notice of Annual Meeting of Stockholders and Proxy Statement cover
the formal business of the meeting, which includes the following proposals: (i)
the election of seven directors; (ii) approval of an amendment to the
Certificate of Incorporation of the Company to increase the number of authorized
shares of Common Stock of the Company from 12,000,000 shares to _________
shares; (iii) approval of an amendment to the Certificate of Incorporation of
the Company to provide for indemnification of the directors and officers of the
Company to the extent permitted by law; (iv) ratification of the 1997 Omnibus
Stock Incentive Plan; and (v) ratification of the Nonemployee Director Stock
Plan. Also during the meeting, management will address other corporate matters
that may be of interest to you as a stockholder.
It is important that your shares be represented at this meeting, whether or not
you attend the meeting in person and regardless of the number of shares you own.
To be sure your shares are represented, we urge you to complete and mail the
enclosed proxy card as soon as possible. If you attend the meeting and wish to
vote in person, the ballot that you submit at the meeting will supersede your
proxy.
Sincerely,
Michael L. Fulbright
President and Chief Executive Officer
<PAGE>
THE BIBB COMPANY
------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
July 30, 1997
------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Meeting") of The Bibb Company, a Delaware corporation (the "Company"), will be
held on July 30, 1997 at 11:00 a.m., local time, at ________________
____________________ Atlanta, Georgia ____________, for the following purposes:
(1) To elect seven Directors, each to hold office for a one-year
term expiring at the 1998 Annual Meeting of Stockholders;
(2) To amend the Certificate of Incorporation of the Company to
increase the number of authorized shares of Common Stock of the Company
from 12,000,000 shares to _________ shares;
(3) To amend the Certificate of Incorporation of the Company to
provide for indemnification of the directors and officers of the Company
to the extent permitted by law;
(4) To ratify the 1997 Omnibus Stock Incentive Plan providing
for the granting of options to the employees of the Company; and
(5) To ratify the Nonemployee Director Stock Plan providing for
the automatic granting of options to non-employee Directors of the
Company,
all as set forth in the Proxy Statement accompanying this Notice. In addition,
the Meeting will address any other business as may properly come before the
Meeting or any postponements or adjournments thereof.
Only holders of record of the Company's Common Stock, par value $.01 per
share, as of the close of business on June 27, 1997 are entitled to notice of,
and to vote at, the Meeting and any postponement or adjournment thereof.
By Order of the Board of Directors,
A. William Ott
Secretary
Atlanta, Georgia
July [___], 1997
IMPORTANT
WHETHER OR NOT YOU PLAN TO ATTEND IN PERSON, PLEASE VOTE BY MEANS OF THE
ENCLOSED PROXY CARD THAT YOU ARE REQUESTED TO SIGN, DATE AND RETURN AS SOON AS
POSSIBLE IN THE ENCLOSED POSTAGE PREPAID ENVELOPE.
<PAGE>
THE BIBB COMPANY
100 Galleria Parkway
17th Floor
Atlanta, Georgia 30339
------------
PROXY STATEMENT
------------
This Proxy Statement and the accompanying proxy card are being furnished
to the stockholders of The Bibb Company, a Delaware corporation (the "Company"),
in connection with the solicitation of proxies by the Board of Directors of the
Company for use at the Annual Meeting of Stockholders (the "Meeting") to be held
on July 30, 1997 at 11:00 a.m., local time, at ________________________ Atlanta,
Georgia _________, or at any postponement or adjournment thereof, for the
purposes set forth in the accompanying Notice of Annual Meeting of Stockholders.
The Proxy Statement and accompanying proxy card are first being mailed or
otherwise distributed to stockholders on or about July [___], 1997.
Holders of record of outstanding shares of the Company's common stock,
par value $.01 per share (the "Common Stock"), at the close of business on June
27, 1997 (the "Record Date") are entitled to notice of and to vote at the
Meeting. Each stockholder is entitled to one vote for each share of Common Stock
held on the Record Date. On the Record Date, there were [10,061,576] shares of
Common Stock outstanding.
Shares of Common Stock cannot be voted at the Meeting unless the owner
is present or represented by proxy. A proxy may be revoked at any time before it
is voted by (1) giving written notice of revocation to the Secretary of the
Company, (2) executing and delivering to the Company at the address shown above
a new proxy bearing a later date, or (3) attending the Meeting and voting in
person. All properly executed proxies, unless previously revoked, will be voted
at the Meeting or at any postponement or adjournment thereof in accordance with
the directions given.
With respect to the election of Directors, stockholders of the Company
voting by proxy may vote in favor of the nominees, may withhold their vote for
the nominees, or may withhold their vote as to specific nominees. With respect
to the other proposals for stockholder action, stockholders of the Company
voting by proxy may vote in favor of such proposals, against such proposals or
may abstain from voting on such proposals. If no specific instructions are given
with respect to the matters to be acted upon at the Meeting, shares of Common
Stock represented by a properly executed proxy will be voted FOR (1) the
election of all nominees listed under the caption "Election of Directors," (2)
approval of an amendment of the Certificate of Incorporation of the Company to
increase the number of authorized shares of Common Stock from 12,000,000 shares
to _________ shares, (3) approval of an amendment of the Certificate of
Incorporation of the Company to provide for indemnification of the directors and
officers of the Company to the extent permitted by law, (4) ratification of the
1997 Omnibus Stock Incentive Plan and (5) ratification of the Nonemployee
Director Stock Plan. The Board of Directors does not intend to present and knows
of no others who intend to present at the Meeting any matter of business other
than those matters set forth in the accompanying Notice of Annual Meeting of
Stockholders. However, if other matters (including shareholder proposals omitted
from this proxy statement in accordance with the rules and regulations of the
Securities and Exchange Commission ("SEC")) properly come before the Meeting, it
is the intention of the persons named in the enclosed proxy to vote the proxy in
accordance with their best judgment.
<PAGE>
At the Meeting, inspectors of election will determine the presence of a
quorum and tabulate the results of the voting by stockholders. A majority of the
outstanding shares of Common Stock must be present in person or by proxy at the
Meeting in order to have the quorum necessary for the transaction of business.
Abstentions and non-votes will be counted for purposes of determining the
presence of a quorum at the Meeting. The nominees for Director will be elected
by the affirmative vote of a plurality of the shares of Common Stock present in
person or by proxy and actually voting at the Meeting. All other matters require
for their approval the favorable vote of a majority of the shares of Common
Stock voted in person or by proxy at the Meeting. Abstentions and non-votes will
have no effect on the outcome of any voting. A non-vote may occur when a nominee
holding shares of Common Stock for a beneficial owner does not vote on a
proposal because such nominee does not have discretionary voting power and has
not received instructions from the beneficial owner.
A proxy card is enclosed for your use. YOU ARE SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS TO COMPLETE, SIGN, DATE AND RETURN THE PROXY CARD IN THE
ACCOMPANYING ENVELOPE, which is postage prepaid if mailed from within the United
States.
The cost of soliciting proxies will be paid by the Company. Arrangements
will be made with brokerage houses and other custodians, nominees and
fiduciaries to send proxies and proxy materials to their principals, and the
Company will reimburse them for their expenses in so doing. Officers and other
regular employees of the Company may also request the return of proxies by
telephone, telegram, or in person.
A copy of the Registration Statement on Form 10 of the Company which
includes the financial statements of the Company for the fiscal year ended
December 28, 1996, together with the financial statements of the Company for the
three month period ended March 29, 1997, is being mailed with this Proxy
Statement to all stockholders entitled to vote at the Meeting.
Corporate History
The Company was organized as a Delaware corporation in June, 1996. The
Company (formerly known as The New Bibb Company) is the successor to the Bibb
Company, a Delaware Corporation ("Old Bibb") as a result of a merger of Old Bibb
with and into the Company on September 27, 1996 (the "Merger.") On July 3, 1996,
following receipt of approval by the requisite creditors and securityholders of
Old Bibb for a "prepackaged" bankruptcy reorganization, Old Bibb filed voluntary
petitions for relief under chapter 11 of the Bankruptcy Code with the United
Stated Bankruptcy Court for the District of Delaware (the "Reorganization"). On
September 12, 1996, the Bankruptcy Court issued an order confirming a Plan of
Reorganization. The Reorganization was consummated on September 27, 1996 (the
"Effective Date") and upon consummation of the Merger, the Company was renamed
The Bibb Company. Unless the context otherwise requires, the "Company" means The
New Bibb Company, Old Bibb (formerly known as The NTC Group, Inc.), and its
predecessor, The Bibb Company, a Georgia corporation. The Company has been
engaged in the manufacturing and marketing of textile products since 1876.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of March 1, 1997, certain information
with respect to all stockholders known by the Company to be the beneficial
owners of more than 5% of the Common Stock, the only class of voting securities
outstanding, as well as information with respect to the Common Stock owned
beneficially by each Director and Director Nominee of the Company, by each
Executive Officer named in the Summary Compensation Table on page 4 and by all
Directors, Director Nominees and Executive Officers of the Company as a group.
Certain information set forth in the table is based upon information contained
in filings made by such beneficial owners with the Securities and Exchange
Commission (the "Commission").
3
<PAGE>
<TABLE>
<CAPTION>
Amount and Nature Approximate
of Beneficial Percent of
Name of Beneficial Owner Ownership(1) Common Stock
- ------------------------ ----------------- ------------
<S> <C> <C>
Merrill Lynch & Co., Inc.(2).................... 2,404,485 23.9%
250 Vesey Street, North Tower
New York, NY 10281
Franklin Custodian Funds, Inc...................
Income Series(3) 2,097,121 20.8%
777 Mariners Island Blvd.
San Mateo, CA 94404
Buford H. Ortale and............................
Sewanee Ventures, LLC(4)
104 Woodmont Boulevard 780,793 7.8%
Suite 200
Nashville, TN 37205
Romulus Holdings, Inc. and Related Entities(5).. 707,696 7.1%
20 Rock Ridge Circle
New Rochelle, NY 10804
Michael L. Fulbright............................ 0 0
A. William Ott.................................. 0 0
Neal J. McGrail................................. 0 0
Frank X. Sheehan................................ 0 0
C. Scott Bartlett, Jr........................... 0 0
Marvin B. Crow.................................. 0 0
Stewart M. Kasen................................ 0 0
George Poole, Jr................................ 0 0
James A. Williams............................... 0 0
Irwin N. Gold................................... 0 0
Thomas C. Foley(6).............................. 487,408 4.8%
All Directors, Director Nominees and............ 487,408 4.8%
Executive Officers as a group
(11 persons) (6)
</TABLE>
- ------------------
(1) Under the Rules of the Commission, a person is deemed to be the beneficial
owner of a security if such person has or shares the power to vote or direct
the voting of such security or the power to dispose or direct the
disposition of such security. A person is also deemed to be a beneficial
owner of any securities if that person has the right to acquire beneficial
ownership within 60 days. Accordingly, more than one person may be deemed to
be a beneficial owner of the same securities. Unless otherwise indicated by
footnote, the named persons have sole voting and investment power with
respect to the shares of Common Stock beneficially owned.
(2) Includes 2,073,779 shares beneficially owned by Merrill Lynch, Pierce,
Fenner & Smith Incorporated ("MLPF&S"), a wholly owned subsidiary of Merrill
Lynch & Co., Inc. ("ML&Co.") and 330,706 shares beneficially owned by the
Merrill Lynch Phoenix Fund, Inc. ("Phoenix Fund"). Phoenix Fund is an
investment company registered under the Investment Company Act of 1940, the
investment advisor of which is a limited partnership of which the general
partner is an indirect, wholly owned subsidiary of
4
<PAGE>
ML&Co. ML&Co. disclaims beneficial ownership of the shares owned by MLPF&S
and Phoenix Fund. MLPF&S disclaims beneficial ownership of any shares of
which ML&Co. or Phoenix Fund may be deemed to be beneficial owners. Phoenix
Fund disclaims beneficial ownership of any shares of which ML&Co. or MLPF&S
may be deemed beneficial owners.
(3) Excludes 419,424 shares of Common Stock owned by Franklin ValueMark Funds,
Income Securities Fund, as to which shares Franklin Custodian Funds, Inc.,
Income Series, disclaims beneficial ownership.
(4) Includes 424,589 shares of Common Stock owned by Sewanee Partners II, L.P.
and 356,204 shares owned directly by Mr. Ortale. Sewanee Ventures, LLC, the
general partner of Sewanee Partners II, L.P., is controlled by Mr. Ortale.
(5) This information was provided to the Company pursuant to a Schedule 13D
filed with the Securities and Exchange Commission on June 11, 1997, on
behalf of Romulus Holdings, Inc., Mars/Normel, a joint venture between Mars
Associates, Inc. and Normel Construction Corporation, Brad and Beth Singer
Children's Trust, Gary and Karen Singer Children's Trust, Steven G. Singer
Children's Trust and Second Singer Trust.
(6) Thomas C. Foley served as Chief Executive Officer of The Bibb Company, a
Delaware corporation and the predecessor of the Company ("Old Bibb"), and as
a non-voting member of the Board of Directors of the Company from September
1996 until May 1997.
NOTICE PURSUANT TO SECTION 16 OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires that the Company's Directors, Executive Officers and
persons who beneficially own more than ten percent of the Company's Common Stock
file with the Commission initial reports of beneficial ownership and reports of
changes in beneficial ownership of such Common Stock. Directors, Executive
Officers and persons who beneficially own greater than ten percent of the Common
Stock are required by the Commission's rules to furnish the Company with copies
of all such reports. The Company was not subject to the reporting requirements
of the Exchange Act prior to June 2, 1997. Consequently, the Company was not
provided with reports of beneficial ownership and changes in beneficial
ownership during its most recently completed fiscal year.
5
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
Summary of Cash and Certain Other Compensation
The following table sets forth in summary form all compensation for all
services rendered in all capacities to the Company for the years ended December
28, 1996, December 30, 1995, and December 31, 1994, respectively, to (a) the
Chief Executive Officer of the Company and (b) to those executive officers of
the Company who earned in excess of $100,000 (collectively with the Chief
Executive Officer, the "Named Executive Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
----------------------------------------------- ------------
Other Securities All
Name and Annual Underlying Other
Principal Position Year Salary(1) Bonus(2) Compensation(3) Options(#) Compensation(4)
- ------------------ ---- ---------- -------- --------------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Michael L. Fulbright, 1996 $152,535(5) $125,000 $17,574 200,000 $1,763
President and Chief
Executive Officer
Thomas C. Foley, 1996 0 --- --- --- ---
President and Chief 1995 0 --- --- --- ---
Executive Officer(6) 1994 0 --- --- --- ---
A. William Ott, 1996 187,500 115,000 --- --- 1,458
Vice President, Chief 1995 161,601 --- --- --- 810
Financial Officer and 1994 130,039 10,000 --- --- 568
Secretary
Neal J. McGrail, 1996 102,500 50,000 --- --- 714
Corporate Controller 1995 90,883 --- --- --- 383
and Assistant Secretary 1994 77,252 --- --- --- 304
Frank X. Sheehan, 1996 112,500 5,000 --- --- 2,419
Vice President, 1995 110,212 --- --- --- 2,304
Industrial Relations 1994 103,002 --- --- --- 1,340
</TABLE>
- ------------------
(1) The amounts shown include compensation earned in the given fiscal year and
deferred by the named executive officer pursuant to the Company's Executive
Deferred Compensation Plan.
(2) The amounts shown represent bonuses earned in the given fiscal year pursuant
to Old Bibb's bonus plan or discretionary bonuses awarded by the Board of
Directors and, with respect to Mr. Ott and Mr. McGrail, bonuses accrued in
1996 under the Company's retention bonus plan in the amounts of $90,000 and
$30,000, respectively.
(3) The aggregate amount of personal benefits received by each named executive
officer did not exceed the lesser of $50,000 or 10% of the total annual
salary and bonus reported for each such named executive officer.
(4) The amounts shown represent life insurance premium payments by the Company.
(5) Reflects compensation for the period after Mr. Fulbright joined the Company
in August 1996. Pursuant to an Employment Agreement, Mr. Fulbright's annual
compensation consists of an initial base salary of $400,000 plus
reimbursement of certain expenses.
(6) Effective in August 1996, Mr. Foley resigned as Chairman and Chief Executive
Officer, and Michael L. Fulbright was appointed as President and Chief
Executive Officer.
6
<PAGE>
Stock Options
The following table contains information concerning the grant of stock
options to the Named Executive Officers during the year ended December 28, 1996:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Individual Grants
------------------------------------------------------------
Percent of
Total Potential Realizable
Number of Options Value of Assumed
Securities Granted to Exercise Annual Rates of Stock
Underlying Employees or Base Price Appreciation for
Options in Fiscal Price Expiration Option Term
Name Granted (#) Year ($/Share) Date 5% 10%
- ---------------------- ----------- ---------- --------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Michael L. Fulbright 200,000 100% 7.10 9/26/01 $392,320 $866,924
</TABLE>
Option Exercises and Holdings
The following table sets forth information with respect to stock options
exercised during the last fiscal year by the Named Executive Officers, the
aggregate number of unexercised options to purchase Common Stock granted in all
years to the Named Executive Officers and held by them as of December 28, 1996,
and the value of unexercised in-the-money options (i.e., options that had a
positive spread between the exercise price and the fair market value of the
Common Stock) as of December 28, 1996:
AGGREGATED OPTION EXERCISES IN LAST
FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Value of
Number of Unexercised
Unexercised In-the-Money
Options Options
at Year-End at Year-End
(#) ($)
Shares Value ------------- -------------
Acquired on Realized Exercisable/ Exercisable/
Name Exercise (#) ($) Unexercisable Unexercisable
- ------------------------------- ------------ -------- ------------- -------------
<S> <C> <C> <C> <C>
Michael L. Fulbright ___ ___ [0/200,000] 0/(1)
</TABLE>
__________________
(1) None of such options were in-the-money at December 28, 1996.
Deferred Compensation Plan
Since January 1, 1983, the Company has provided to eligible executives
the opportunity of deferring compensation pursuant to the terms of an Executive
Deferred Compensation Plan. As of December 28, 1996, the Company owed
approximately $2,814,000 to participants under such Plan.
7
<PAGE>
Employment Agreements; Termination Provisions
The Company entered into an employment agreement with Michael L.
Fulbright in August, 1996, (as subsequently modified, the "Employment
Agreement"), pursuant to which he was appointed President and Chief Executive
Officer. The Employment Agreement provides for an initial base salary of
$400,000 and reimbursement of certain expenses. His base salary will be
increased to $425,000 after the first year and $450,000 after the second. Mr.
Fulbright is also entitled to an annual bonus of between 50% and 100% of his
base salary, based upon specified performance, with a guaranteed cash bonus of
at least 33% of his base salary in the first year, and certain stock options. In
addition, Mr. Fulbright is entitled to a $125,000 signing bonus, the purchase by
the Company of his Greensboro, North Carolina residence, and certain additional
relocation expenses. The Employment Agreement is for an initial term of three
years, with automatic one year renewals thereafter unless otherwise terminated.
Upon a termination of employment by the Company without "Cause" and not
as a result of Mr. Fulbright's death or "Disability," or by Mr. Fulbright for
"Good Reason," (as each such term is defined in the Employment Agreement), Mr.
Fulbright is entitled to specified severance compensation. If the termination
occurs within the first two years of the Employment Agreement, Mr. Fulbright is
entitled to a payment equal to twice his base salary and the continuation of
certain fringe benefits for the remainder of the initial three year employment
period. If the termination occurs after two years of employment under the
Employment Agreement, Mr. Fulbright is entitled to a payment equal to his base
salary and the continuation of certain enumerated benefits. If a "Change in
Control" occurs between the second and third anniversary of the date of the
Employment Agreement and termination as described occurs after such "Change in
Control," Mr. Fulbright is entitled to a payment equal to twice his base salary
and the continuation of certain enumerated benefits. "Change in Control" is
defined in the Employment Agreement as (i) any sale of all or substantially all
of the Company's assets to any person or entity, or (ii) any sale or series of
related sales which, in the aggregate, transfer 50% or more of the voting shares
of the Company to any person or entity or group of persons or entities (as the
term "group" is defined in Section 13(d)(3) of the Exchange Act or (iii) any
merger of the Company with any other person or entity following which the
Company is not the surviving entity; it being understood and agreed that "Change
in Control" shall not include (x) any sale, merger or consolidation with or to
any person or entity in which the shareholders of the Company immediately prior
to such sale, merger or consolidation own or obtain controlling voting power of
such person or entity immediately following such transaction or (y) the Merger.
Pursuant to the terms of the Employment Agreement, the Company agreed to
grant to Mr. Fulbright options (the "Options") to acquire the Company's shares
of Common Stock as follows: (A) the Options would apply to an amount of shares
of Common Stock equal to 2% of the Company's Common Stock as of the date of
grant calculated on a fully-diluted basis; (B) the exercise price of the Options
would be based upon a $100 million aggregate valuation on all of the Company's
shares of Common Stock calculated on a fully-diluted basis; (C) shares of Common
Stock subject to the Options would vest ratably on the first, second and third
anniversary of the date of grant during the employment period, provided that in
the event of a "Change in Control" or in the event of a termination of the
Employment Period (other than by the Company for "Cause" or by Mr. Fulbright,
without "Good Reason"), all shares of Common Stock subject to the Option would
vest immediately; and (D) the Options would be exercisable commencing
immediately upon vesting and ending on the fifth year after the grant of the
Options. Options were subsequently granted for an aggregate of 200,000 shares of
Common Stock, vesting in three annual increments, at an exercise price of $7.10
per share.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
All decisions relating to executive compensation since the Company's
emergence from bankruptcy on September 27, 1996, were made by the Compensation
Committee of the Board of Directors, which consisted of Stewart M. Kasen
(Chairman), Irwin N. Gold and George A. Poole, Jr.
8
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The following paragraphs constitute the report of the Compensation
Committee of the Board of Directors (the "Committee") on executive compensation
policies for decisions relating to executive compensation made since September
27, 1996. In accordance with Securities and Exchange Commission rules, this
report shall not be deemed to be incorporated by reference into any statements
or reports filed by the Company with the Commission that do not specifically
incorporate this report by reference, notwithstanding the incorporation of this
Proxy Statement into any such report.
The Committee administers the compensation program for operating
officers of the Company and bases its decisions on both individual performance
and the financial results achieved by the Company. While the Committee consults
with the Chief Executive Officer on certain matters, all compensation decisions
are made by the Committee without such officers' participation.
The principal elements of the compensation program for executive
officers are base salary, performance-based annual bonuses and stock options.
The goals of the program are to give the executive officers incentives to work
toward the improved financial performance of the Company and to reward them for
their contributions to the Company's success. The salary is based on factors
such as the individual executive officer's level of responsibility, and
comparison to similar positions in the Company and in comparable companies. The
annual cash bonuses are based on the Company's performance measured against
attainment of financial and other objectives established annually by the Board,
and on individual performance. Stock option awards are intended to align the
executive officer's interests with those of the stockholders in promoting the
long-term growth of the Company, and are determined based on the executive
officer's level of responsibility, number of options previously granted, and
contributions toward achieving the objectives of the Company. Further
information on each of these compensation elements follows. For a summary of
1996 compensation, see the Summary Compensation Table under the heading
"Compensation of Executive Officers" above.
Salaries. Base salaries are adjusted annually, following a review by the
Chief Executive Officer. In the course of the review, performance of the
individual with respect to specific objectives is evaluated, as are any
increases in responsibility, and salaries for similar positions. The specific
objectives for each executive officer are set by the individual's manager or the
Chief Executive Officer, and will vary for each executive position and for each
year. Since this is a base salary review, performance of the Company does not
weigh heavily in the result. When all reviews are completed, the Chief Executive
Officer makes a recommendation to the Committee for their review and final
approval.
With respect to the Chief Executive Officer, the Company entered into an
Employment Agreement in the course of hiring Mr. Fulbright, and determined,
based on market conditions, the base salary, bonus and equity compensation
elements needed to attract a suitable candidate for the position. In the future,
the Committee will review and fix the Chief Executive Officer's base salary
primarily on its assessment of his performance and its expectations as to his
future contributions. The Committee's review takes place annually.
Bonuses. In February 1996, the Company adopted a retention bonus plan
covering key employees, pursuant to which covered employees of the Company on
the date of the consummation of the of the Plan of Reorganization of Old Bibb on
September 27, 1996 (the "Effective Date"), are entitled to receive specific
amounts (aggregating a maximum of $828,000 for all covered employees) during the
first year following the Effective Date. The only executive officers of the
Company covered under such plan are A. William Ott and Neal J. McGrail.
Stock Options. The Committee views stock options as its primary long
term compensation vehicle for the Company's executive officers. In 1996, the
Committee granted an aggregate of 200,000 options to Mr. Fulbright.
Summary. The Committee will continually review the Company's
compensation programs to ensure the overall package is competitive, balanced,
and that proper incentives and rewards are provided. The Committee
9
<PAGE>
has not formulated a policy on qualifying executive officer compensation under
new Section 162 (m) of the Code (adopted under the Omnibus Budget and
Reconciliation Act of 1993).
By the Members of the Compensation Committee:
Stewart M. Kasen Irwin N. Gold George A. Poole, Jr.
10
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Restructuring Agreement
The Restructuring Agreement, dated February 1, 1996, entered into
between Old Bibb and each of the specified holders of the Old Subordinated Notes
of the Company and NTC Group, Inc. (the "Restructuring Agreement") includes the
following provisions and covenants:
Co-Sale
Each of Franklin Custodian Fund, Income Series, and Franklin Value Mark
Funds, Income Securities Fund (collectively referred to as the "Franklin
Holder") agreed that, in the event any such Franklin Holder grants to any other
member of the Steering Committee (which would include Merrill Lynch, Pierce,
Fenner & Smith Inc., Showa Leasing (U.S.A.) Inc. and Romulus Holdings, Inc. and
certain of its affiliates) any "co-sale," "tag-along" or other similar right or
other opportunity to sell such other member of the Steering Committee's equity
securities of the Company (or any securities or other property exchanged
therefor) on substantially the same terms and conditions as any Franklin Holder
may sell, each such Franklin Holder shall grant the same right or other
opportunity to each former holder of Old Common Stock as of February 1, 1996,
with respect to equity securities of the Company (or any securities or other
property exchanged therefor).
Non-Voting Director
For a period through and including one year after the effective date of
the Merger, the Company and the members of the Steering Committee have agreed as
follows: (i) Thomas C. Foley shall be a member of the board of directors of the
Company with full opportunity to attend, participate in and be heard at all
meetings of the board of directors, whether regular, special, telephonic or
otherwise; provided, however, that Mr. Foley shall have no vote as a member of
the board of directors, nor shall he receive any fee for his service on the
board of directors; (ii) the Company shall provide Mr. Foley with as much
advance notice of all meetings as is provided to any other director; (iii) the
Company shall provide Mr. Foley with all other information with respect to such
meetings as is provided to members of the board of directors at the same time as
so provided to such persons; and (iv) the Company shall provide Mr. Foley with
advance notice of, and an opportunity to be heard with respect to, any action
contemplated to be taken by written consent of its board of directors in lieu of
a meeting thereof and, as soon as reasonably practicable thereafter, shall
notify Mr. Foley of any action so taken. Mr. Foley resigned his position as a
non-voting member of the Board of Directors in May 1997.
Management Services Agreement
Pursuant to the Management Services Agreement, dated as of April 1,
1989, the Company retained NTC (an entity affiliated with Mr. Foley) to provide
general management, financial and other corporate advisory services. Pursuant to
such agreement, NTC received aggregate fees of approximately $4,000,000,
$4,000,000 and $3,368,000 in fiscal years 1993, 1994 and 1995, respectively.
Pursuant to the Restructuring Agreement, the fee arrangements were modified to
provide that during the period between February 1, 1996 and the Effective Date,
NTC was entitled to receive management fees under the Management Services
Agreement equal to $141,633 per month. Pursuant to those arrangements, during
the period from February 1, 1996 through September 27, 1996, the Company paid
NTC an aggregate of approximately $1,125,000. In accordance with the provisions
of the Restructuring Agreement, the Management Services Agreement was terminated
at the effective time of the Merger.
Woods Note
On April 2, 1993, Woods, a subsidiary of a corporation of which Mr.
Foley is a director and a principal stockholder, acquired new product lines and
completed a recapitalization. In settlement of amounts owed to the Company
pursuant to an obligation of Woods, the Company received a cash payment of
$5,560,000, two new notes and a warrant exercisable by the Company to purchase
certain shares of common stock of Woods' parent.
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The new notes received consisted of (i) a ten-year, $13,218,000 principal amount
subordinated promissory note, with interest of $576,000 accruing semi-annually,
and payments of interest commencing on the third anniversary of the date of the
note, and (ii) a ten-year, $2,000,000 principal amount non-interest bearing,
subordinated promissory note. In August 1994, the $2,000,000 principal amount
subordinated promissory note was paid in full. In February 1996, the Company
sold 375,000 shares of Common Stock of Woods' parent in an underwritten public
offering for a net purchase price of approximately $4,185,000. In July 1996, the
Company sold the $13,218,000 principal amount subordinated promissory note to
the issuer for approximately $10,700,000.
Financial Advisory Services
The Steering Committee, with the Company's consent engaged Houlihan
Lokey Howard & Zukin ("Houlihan Lokey"), at the Company's expense, to act as the
Steering Committee's financial advisor in connection with the Reorganization and
to provide certain services to the Company in connection with the
Reorganization. Pursuant to an Agreement between the Company and Houlihan Lokey,
Houlihan Lokey received $390,000 during 1995, for services performed on behalf
of the Steering Committee, plus the reimbursement of reasonable and documented
out-of-pocket expenses incurred by Houlihan Lokey in connection therewith. In
addition, the Company agreed to pay Houlihan Lokey a fee, payable in shares of
Common Stock, equal to seventy-five basis points (0.75%) of the aggregate value
of the Common Stock issued to the holders of the Old Subordinated Notes pursuant
to the Plan, based upon a specified calculated value of the Company. The number
of shares of Common Stock to be issued was to be based on the average closing
scuffing price of the Common Stock for the 20 days prior to October 15, 1996. On
December 31, 1996, the Company issued an aggregate of 75,163 shares of Common
Stock, calculated on the basis of $7.10 per share, to Houlihan Lokey in full
payment of such fee. Irwin N. Gold, who was appointed a Director of the Company
in September 1996 and is Director nominee, is a Managing Director of Houlihan
Lokey.
Legal Services
Barton J. Winokur, who served as a director of Old Bibb until the
Effective Date is a partner in the law firm of Dechert Price & Rhoads, which was
counsel for the Company and provided legal services to Old Bibb and the Company
in 1995 and 1996.
OPERATIONS OF THE BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors will be elected to a one-year term. The By-laws
of the Company provide that the number of Directors shall be fixed by resolution
of the Board of Directors or by the stockholders at the annual meeting or a
special meeting. The size of the Board of Directors is presently set at seven
members.
The Board of Directors holds regular meetings as determined by the Board
of Directors and holds special meetings at the call of the Chairman of the
Board, the President or by written request of a majority of the Directors. In
1996, the Board of Directors held ____ meetings. Presently, the Board has
standing Audit and Compensation Committees, which assist in the discharge of the
Board's responsibilities. Members of such Committees serve at the pleasure of
the Board of Directors.
The Audit Committee consists of three Directors. The Audit Committee
reports to the Board of Directors with regard to auditing and accounting
matters, including the selection of independent auditors. The members of the
Audit Committee currently are C. Scott Bartlett, Jr. (Chairman), Marvin B. Crow,
and James A. Williams. The Audit Committee met ____ time[s] during 1996.
The Compensation Committee consists of three Directors who are
"disinterested persons" within the meaning of Rule 16b-3 under the Exchange Act.
This Committee will administer the proposed 1997 Omnibus Stock Incentive Plan
and the proposed Nonemployee Director Stock Plan, and is responsible for
establishing compensation programs for the Company's executive officers. The
members of this Committee currently are
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Stewart M. Kasen (Chairman), Irwin N. Gold, and George A. Poole, Jr. The
Compensation Committee met _____ time[s] during 1996.
Each director who is not an employee of the Company is paid $24,000
annually for his services as a director, and $1,000 for attendance at each
committee meeting which does not occur in conjunction with a directors meeting
and is reimbursed for reasonable travel expenses for each such meeting he
attends. Pursuant to the proposed Nonemployee Director Stock Plan, each director
has the option to receive Common Stock of the Company in lieu of a cash payment.
See "Ratification of Nonemployee Director Stock Plan, (Proposal No. 5)."
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Stock Performance Graph
Registration of the Company's Common Stock under Section 12(g) of the
Exchange Act took effect on June 2, 1997, a date which was subsequent to the end
of the Company's most recently completed fiscal year. As of June 20, 1997, the
Company's Common Stock has not commenced trading on the Nasdaq Stock Market or
on any other national securities exchange in the United States. Accordingly, the
Company has omitted the Performance Graph from this Proxy Statement.
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ELECTION OF DIRECTORS
(Proposal No. 1)
General
Stockholders will vote on the election of seven Directors, all of whom
will be elected to serve a one-year term, until their successors have been
elected and qualified.
The shares represented by the proxies solicited hereby will be voted in
favor of the election of the persons named below unless authorization to do so
is withheld by proxy. In the event that any of the nominees should be unable to
serve as Director, an event which the Company does not presently anticipate, it
is the intention of the persons named in the proxies to cast the votes
represented by the proxies for the election of such other person or persons as
the Board of Directors may nominate.
The nominees for reelection at the Meeting are as follows: Michael L.
Fulbright, C. Scott Bartlett, Jr., Marvin B. Crow, Stewart M. Kasen, George A.
Poole, Jr., James A. Williams and Irwin N. Gold.
Based upon information received from the respective Directors, set forth
below is information with respect to each of the nominees for the Board of
Directors.
Directors to be Elected to Serve Until 1998
Michael L. Fulbright, age 47, has been the President and Chief Executive
Officer of the Company since August 1996, and a Director since September 1996.
Prior to coming to the Company, Mr. Fulbright was the President of the Denim
Division of Cone Mills, Inc. from December 1994 until August 1996. From August
1992 through November 1994, Mr. Fulbright was President of the Greige
Manufacturing Division of Springs Industries, Inc., where he also served as the
President of Wamsutta/Pacific Home Products Division from January 1990 through
August 1992.
C. Scott Bartlett, Jr., age 64, has been a Director since September
1996. Since 1990 Mr. Bartlett has been a self-employed consultant specializing
in advising financial institutions in the areas of credit policy, loan approval
and loan workout. Mr. Bartlett is also a director of Harvard Industries, Inc.,
NVR Incorporated, The Western Transmedia Company, Inc., Darling International,
Inc., Triangle Wire & Cable, Inc. and Janus Industries, Inc.
Marvin B. Crow, age 64, has been a Director since September 1996. Since
1989 Mr. Crow has served as President of KBO Enterprises, Inc. Mr. Crow is also
a management consultant and serves as a director of Dyersburg Corporation and
National Spinning Company, Inc.
Stewart M. Kasen, age 57, has been a Director since September 1996. Mr.
Kasen was the Chief Executive Officer of Best Products Co., Inc., which filed
for federal bankruptcy protection in September 1996, from June 1991 to May 1996.
Mr. Kasen also served as Chairman, President and Chief Operating Officer while
at Best. Mr. Kasen is also a director of Markel Corporation, Spreckels
Industries, Inc. and O'Sullivan Industries Holdings, Inc.
George A. Poole, Jr., age 65, has been a Director since September 1996.
Mr. Poole has been a private investor for more than five years and also serves
as a director of Anacomp, Inc. and U.S. Home Corporation.
James A. Williams, age 54, has been a Director since September 1996. Mr.
Williams has been the President and Chief Executive Officer of Great American
Knitting Mills, Inc., a division of Biderman Industries, U.S.A., both of which
filed for federal bankruptcy protection in July 1995, since 1991. Mr. Williams
is also a director of the National Association of Hosiery Manufacturers, The
Fashion Association and the American Apparel Manufacturers Association.
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Irwin N. Gold, age 40, has been a Director since September 1996. Mr.
Gold has been the Managing Director and Co-Head of the Financial Restructuring
Group of Houlihan Lokey Howard & Zukin, Inc. for more than five years. Mr. Gold
is also a director of Cole National Corporation.
Recommendation
The Board of Directors recommends a vote FOR all of the foregoing
nominees for Director.
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PROPOSAL TO AMEND THE COMPANY'S CERTIFICATE OF INCORPORATION
TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
(Proposal No. 2)
On ___________, 1997, the Board of Directors unanimously approved and
recommends that the shareholders adopt amendments to the Company's Certificate
of Incorporation to (i) increase the number of authorized shares of Common Stock
from 12,000,000 to _______ (the "Authorized Stock Amendment") and (ii) include a
new Article 10 to provide for indemnification of the Company's directors and
officers to the extent permitted by law (the "Indemnification Amendment"). The
full text of the Authorized Stock Amendment and the Indemnification Amendment
are included as Annex A to this Proxy Statement.
Authorized Stock Amendment
Background
The Board of Directors believes that it is in the Company's best
interests to increase the number of authorized shares of Common Stock in order
to have additional authorized but unissued shares available for issuance to meet
business needs as they arise. The Board of Directors believes that the
availability of such additional shares will provide the Company with greater
flexibility in considering potential future actions involving the issuance of
stock identified by the Board of Directors, without the possible expense and
delay of having to convene a special stockholders' meeting.
Summary of Authorized Stock Amendment
The Authorized Stock Amendment would amend Article 4 to provide for an
increase in the number of authorized shares of Common Stock from 12,000,000 to
_________. The Authorized Stock Amendment will not increase or otherwise affect
the number of authorized shares of preferred stock which may be issued by the
Company. If approved by the stockholders, the proposed amendment will become
effective upon the filing of an amendment to the Company's Certificate of
Incorporation with the Secretary of State of Delaware, which will occur as soon
as reasonably practicable.
The authorized shares of Common Stock in excess of those issued will be
available for issuance at such times and for such corporate purposes as the
Board of Directors may deem advisable, without further action by the Company's
stockholders, except as may be required by applicable law or by the rules of any
stock exchange or national securities association trading system on which the
securities may be listed or traded. Upon issuance, such shares will have the
same rights as the outstanding shares of Common Stock. Holders of Common Stock
have no preemptive rights.
Other than with respect to the reservation of Common Shares in
connection with the proposed 1997 Omnibus Stock Incentive Plan and the proposed
Nonemployee Director Stock Plan, the Company has no other plans or other
existing or proposed arrangements, agreements or understandings to issue, or
reserve for future issuance, any of the additional shares of Common Stock which
would be authorized by the Authorized Stock Amendment. The Board of Directors
does not intend to issue any Common Stock except on terms which the Board deems
to be in the best interests of the Company and its then existing stockholders.
Any future issuance of Common Stock will be subject to the rights of holders of
outstanding shares of any preferred stock which the Company may issue in the
future.
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Vote Required to Approve the Authorized Stock Amendment and the Indemnification
Amendment
The affirmative vote of the holders of a majority of the outstanding
shares of Common Stock present in person or represented by proxy at the Meeting
is required to approve the Authorized Stock Amendment and the Indemnification
Amendment.
Recommendation
The Board of Directors unanimously recommends a vote FOR the Authorized
Stock Amendment.
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PROPOSAL TO AMEND THE COMPANY'S CERTIFICATE OF INCORPORATION
TO PROVIDE FOR THE INDEMNIFICATION OF DIRECTORS AND OFFICERS
(Proposal No. 3)
Indemnification Amendment
Background
The Board of Directors considers it to be in the best interests of the
Company and its shareholders to indemnify the directors and officers of the
Company to the fullest extent permitted by applicable law. The Board of
Directors believes that the Indemnification Amendment is desirable so that the
Company can continue to attract and retain responsible individuals to serve as
its directors and officers in light of the present difficult environment in
which such persons must serve. In recent years, investigations, claims, actions,
suits or proceedings (including stockholder derivative actions) ("Proceedings")
seeking to impose liability on, or involving as witnesses, directors and
officers of publicly held corporations have become the subject of much public
discussion. Such Proceedings are typically extremely expensive whatever their
eventual outcome. Even in Proceedings in which a director or officer is not
named as a defendant, such individual may incur substantial expenses or
attorneys' fees if he or she is called as a witness or becomes involved in the
Proceeding in any other way. As a result, an individual may conclude that
potential exposure to the costs and risks of Proceedings in which he or she may
become involved exceeds any benefit to him or her from serving as a director or
officer of a publicly held corporation.
Summary of Indemnification Amendment
The Indemnification Amendment would add a new Article 10 to the
Certificate of Incorporation which would state that each person who is or was or
has agreed to become a director or officer of the Company (or was serving or had
agreed to serve at the request of the Board of directors or an officer of the
Company as an employee or agent of the Company or as a director, officer,
employee, or agent of another corporation, partnership, joint venture, trust or
other entity, whether for profit or not for profit, including the heirs,
executors, administrators, or estate of such person) will be indemnified by the
Corporation to the fullest extent permitted by the Delaware General Corporation
Law or any other applicable law as currently or hereafter in effect and will be
entitled to advancement of expenses in connection therewith. The right of
indemnification and of advancement of expenses will not be exclusive of any
other rights to which any person seeking indemnification or advancement of
expenses may otherwise be entitled, including without limitation pursuant to any
contract approved by a majority of the Board of directors (whether or not the
directors approving such contract are or are to be parties to such contract or
similar contracts), and (ii) will be applicable to matters otherwise within its
scope whether or not such matters arose or arise before or after the adoption of
the Indemnification Amendment. The Indemnification Amendment also provides that
without limiting the generality or the effect of the foregoing, the Corporation
may adopt By-laws, or enter into one or more agreements with any person, which
provides for indemnification and/or advancement of expenses greater or different
than that provided in the Indemnification Amendment or the Delaware General
Corporation Law. Any amendment or repeal of, or adoption of any provision
inconsistent with, the Indemnification Amendment will not adversely affect any
right or protection existing hereunder, or arising out of facts occurring, prior
to such amendment, repeal, or adoption and no such amendment, repeal, or
adoption, will affect the legality, validity, or enforceability of any contract
entered into or right granted prior to the effective date of such amendment,
repeal, or adoption.
Recommendation
The Board of Directors unanimously recommends a vote FOR the
Indemnification Amendment.
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RATIFICATION OF 1997 OMNIBUS STOCK INCENTIVE PLAN
(Proposal No. 4)
General
On ___________, 1997, the Board of Directors of the Company unanimously
adopted and recommends that the shareholders ratify the 1997 Omnibus Stock
Incentive Plan (the "1997 Omnibus Stock Incentive Plan"). The Board of Directors
believes that providing officers and key employees of the Company with the
ability to acquire a proprietary interest in the Company (i) is a significant
value to the Company in its efforts to recruit and retain officers and key
employees, (ii) instills loyalty and (iii) encourages the generation of long-
term value for the Company's shareholders by aligning management and shareholder
interests, and has therefore concluded that adoption of the 1997 Omnibus Stock
Incentive Plan is in the best interests of the Company and its shareholders.
The provisions of the 1997 Omnibus Stock Incentive Plan are summarized
below. Such summaries do not purport to be complete, and are qualified in their
entirety by references to the full text of the 1997 Omnibus Stock Incentive
Plan, a copy of which is attached to this Proxy Statement as Annex B.
Awards
The purpose of the 1997 Omnibus Stock Incentive Plan is to enable the Company to
attract and retain officers and key employees of the Company and its
subsidiaries and to provide to such persons appropriate incentives and rewards
for superior performance. The 1997 Omnibus Stock Incentive Plan authorizes
awards of the following types:
Option Rights. Option rights ("Option Rights") provide the right to
purchase shares of the Company's Common Stock at a predetermined price. The
option price is determined by the Committee (as defined below under
"Administration") and may not be less than fair market value on the date of
grant. The option price is payable in cash, nonforfeitable, unrestricted shares
of Common Stock already owned by the optionee, any other legal consideration
that the Committee deems appropriate, or any combination of these methods.
Except with respect to Incentive Stock Options, the Committee may also provide
that payment may be made in the form of Restricted Shares, Deferred Shares,
Performance Shares or Units, or other option rights; if the rights being
exchanged are still forfeitable, their forfeiture provisions will transfer to
the shares being acquired, as provided in the plan. Any grant of Option Rights
may provide for the deferred payment of the option price from the proceeds of
the sale of some or all of the shares obtained from the exercise. Any grant may
provide for the automatic grant of additional Option Rights to an optionee upon
the exercise of Option Rights using Common Stock or other noncash consideration
as payment. Except in the case of grants of ISO's, the Committee may provide for
the payment to the optionee of dividend equivalents in the form of cash or
Common Stock paid on a current, deferred or contingent basis, or may provide
that the equivalents be credited against the option price. No Option Rights may
be exercised more than ten years from the date of grant. Each grant must specify
the period of continuous employment that is necessary before the Option Rights
become exercisable and may provide for the earlier exercise of the Option Rights
in the event of a change in control of the Company, retirement, death or
disability of the Optionee, or similar event.
Appreciation Rights. Appreciation rights ("Appreciation Rights")
represent the right to receive from the Company an amount, determined by the
Committee and expressed as a percentage not exceeding 100 percent, of the
difference between the base price established for such Rights and the market
value of the Common Stock on the date the Rights are exercised. Appreciation
Rights can be tandem (i.e., granted with Option Rights) or free-standing. Tandem
Appreciation Rights may only be exercised at a time when the related Option
Right is exercisable and the spread is positive, and requires that the related
Option Right be surrendered for cancellation. Free-standing Appreciation Rights
must have a base price per Right that is not less than the fair market value of
the Common Stock on the date of grant, must specify the period of continuous
employment that is necessary before such Appreciation Rights become exercisable
(except that they may provide for the earlier exercise of the Appreciation
Rights in the event of change in control of the Company retirement, death or
disability of the
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Optionee, or similar event), and may not be exercisable more than ten years from
the date of grant. Any grant of Appreciation Rights may specify that the amount
payable by the Company on exercise of any Appreciation Right may be paid in
cash, in Common Stock or in any combination thereof, and may either grant to the
recipient or retain in the Committee the right to elect among those
alternatives.
Restricted Shares. An award of restricted shares ("Restricted Shares")
constitutes an immediate transfer of ownership to the recipient in consideration
of the performance of services. Awards of Restricted Shares may be made for no
additional consideration or for consideration of a payment by the participant
that is less than current market value. The participant has dividend and voting
rights on the shares but is subject to a "substantial risk of forfeiture" of the
shares, within the meaning of Section 83 of the Internal Revenue Code (the
"Code"). In order to enforce these forfeiture provisions, the transferability of
Restricted Shares will be prohibited or restricted in the manner prescribed by
the Committee on the date of the grant. The Committee may provide for the
earlier termination of the forfeiture provisions in the event of a change in
control of the Company, retirement, death or disability of the recipient, or
other similar event.
Deferred Shares. An award of deferred shares ("Deferred Shares")
constitutes an agreement to issue shares to the recipient in the future in
consideration of the performance of services, but subject to the fulfillment of
such conditions as the Committee may specify. The participant has no right to
transfer any rights under his or her award and no right to vote them. The
Committee may authorize the payment of dividend equivalents on the Deferred
Shares, in cash or Common Stock, on a current, deferred or contingent basis.
Awards of Deferred Shares may be made for no additional consideration or for
consideration of a payment by the participant that is less than current market
value. The Committee shall fix a deferral period at the time of the grant, and
may provide for the earlier termination of the deferral period in the event of a
change in control of the Company or other similar event.
Performance Shares and Performance Units. A Performance Share is the
equivalent of one share of Common Stock, and a Performance Unit is the
equivalent of $1.00. A participant may be granted any number of Performance
Shares or Performance Units. Such participant will be given one or more
management objectives ("Management Objectives") to meet within a specified
period ("Performance Period"). The specified Performance Period may be subject
to earlier termination in the event of a change in control of the Company or
other similar transaction or event. A minimum level of acceptable achievement
will also be established by the Committee. If by the end of the Performance
Period the participant has achieved the specified Management Objectives, he or
she will be deemed to have fully earned the Performance Shares or Performance
Units. If the participant has not achieved the Management Objectives, but has
attained or exceeded the predetermined minimum, he or she will be deemed to have
partly earned the Performance Shares and/or Performance Units (such part to be
determined in accordance with a formula). To the extent earned, the Performance
Shares and/or Performance Units will be paid to the participant at the time and
in the manner determined by the Committee in cash, shares of Common Stock or in
any combination thereof.
Management Objectives may be described either in terms of Company-wide
objectives or objectives that are related to performance of the individual
participant or the division, subsidiary, department or function within the
Company or a subsidiary in which the participant is employed. The Committee may
adjust any Management Objectives and the related minimum if, in the sole
judgment of the Committee, events or transactions have occurred after the date
of grant that are unrelated to the participant's performance and that result in
distortion of the Management Objectives or the minimum, except where such an
adjustment would result in the loss of the otherwise available exemption of the
award under Section 162(m) of the code.
Other Stock-Based Awards. In addition to the specified types of awards
described above, the Committee may issue other awards which are valued in whole
or in part by reference to, or are otherwise based on, the Company's Common
Stock. Examples of these types of awards are other performance shares,
convertible preferred stock or debentures (if authorized by the Company's
articles of incorporation), exchangeable securities and awards, and Common
Shares valued by reference to book value or subsidiary performance, and they may
be granted with or in addition to other awards specified above.
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The conditions of Other Stock-Based Awards may be determined by the Committee,
and may differ with respect to different participants. Provisions may include
restrictions on transferability, dividend equivalents, and vesting and
forfeiture provisions. If stock is issued on a bonus basis under this type of
award, no cash consideration will necessarily be required, but if issued under a
purchase right, it shall be priced at least at 50% of the Fair Market Value of
the Common Shares on the date of grant.
Shares Available Under the 1997 Omnibus Stock Incentive Plan.
Subject to certain adjustments as provided in the 1997 Omnibus Stock Incentive
Plan, the number of shares that may be issued or transferred under the 1997
Omnibus Stock Incentive Plan shall not exceed in the aggregate 1,000,000 shares
of Common Stock. Shares to be issued may be of original issuance, or shares held
in treasury or a combination of the two. For the purpose of determining the
shares available under the 1997 Omnibus Stock Incentive Plan, Restricted Shares
and Deferred Shares are considered to be issued or transferred only at the
earlier of the time when they are actually issued or transferred (and, in the
case of Restricted Shares, they cease to be subject to a substantial risk of
forfeiture), or the time when dividends or dividend equivalents are paid to the
holder of the award. The 1997 Omnibus Stock Incentive Plan does not limit the
aggregate amount of cash that may be paid by the Company in satisfaction of
Appreciation Rights.
The maximum number of shares that may be issued and transferred under the 1997
Omnibus Stock Incentive Plan, the number of shares covered by outstanding Option
Rights, Appreciation Rights, Deferred Shares, Performance Shares and other
Stock-Based Awards and the prices per share applicable thereto, are subject to
adjustment in the event of stock dividends, stock splits, combinations of
shares, recapitalization, mergers, consolidations, spin-offs, reorganizations,
liquidations, issuances of rights or liquidations, issuances of rights or
warrants, and similar events. In the event of any such transaction or event, the
Committee, in its discretion, may provide in substitution for any or all
outstanding awards under the 1997 Omnibus Stock Incentive Plan such alternative
consideration as it, in good faith, may determine to be equitable in the
circumstances and may require the surrender of all awards so replaced. The
Committee may also make or provide for such adjustments in the numbers of shares
specified in Section 3 of the 1997 Omnibus Stock Incentive Plan and as the
Committee may determine appropriate to reflect any transaction or event
described in Section 11 of the 1997 Omnibus Stock Incentive Plan.
Administration
The Compensation Committee (the "Committee") of the Board of Directors (as
constituted from time to time), administers and interprets the 1997 Omnibus
Stock Incentive Plan. Each member of the Committee is a "disinterested person"
within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934.
Where the Committee has established conditions to the exercisability or
retention of certain awards, Section 13 of the 1997 Omnibus Stock Incentive Plan
allows the Committee to take action in its sole discretion subsequently to
equitably adjust such conditions in certain circumstances, including in the case
of death, disability or retirement.
The Committee may, with the concurrence of the affected optionee, cancel any
agreement evidencing Option Rights or any other award granted under the 1997
Omnibus Stock Incentive Plan. In the event of such cancellation, the Committee
may authorize the granting of new Option Rights or other awards under the 1997
Omnibus Stock Incentive Plan (which may or may not cover the same number of
shares of Common Stock that had been subject to the prior award) in such manner,
at such option price and subject to such other terms as would have been
applicable under the 1997 Omnibus Stock Incentive Plan had the canceled Option
Rights or other award not been granted.
Eligibility
Officers and key employees of the Company and its subsidiaries (approximately
_____ at ________, 1997), as determined by the Committee, may be selected to
receive benefits under the 1997 Omnibus Stock Incentive Plan.
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Transferability
No Option Right or other derivative security awarded under the plan shall be
transferable by a participant other than by will or the laws of descent and
distribution. Option Rights and Appreciation Rights shall be exercisable during
a participant's lifetime only by the participant or, in the event of the
participant's legal incapacity, by his or her guardian or legal representative
acting in a fiduciary capacity on behalf of the participant. Any award made
under the 1997 Omnibus Stock Incentive Plan may provide that any Common Shares
issued or transferred as a result of the award be subject to further
restrictions upon transfer.
Amendments
The 1997 Omnibus Stock Incentive Plan may be amended by the Committee, but
without further approval of the shareholders of the Company no such amendment
shall increase the maximum number of shares specified in Section 3 of the 1997
Omnibus Stock Incentive Plan (except as expressly authorized by the 1997 Omnibus
Stock Incentive Plan) or cause Rule 16b-3 to become inapplicable to the 1997
Omnibus Stock Incentive Plan.
Plan Benefits
The table below shows the Options Rights that will be granted to each of
the following persons or groups under the Plan.
<TABLE>
<CAPTION>
Plan Benefits Previously Granted
Name Dollar Value Option Rights
<S> <C> <C>
Michael L. Fulbright,
President and Chief
Executive Officer ________ ________
A. William Ott,
Vice President, Chief Financial
Officer and Secretary ________ ________
Neal J. McGrail,
Corporate Controller and
Assistant Secretary ________ ________
Frank X. Sheehan,
Vice President,
Industrial Relations ________ ________
Executive Officer Group ________ ________
Non-Executive Director
Group ________ ________
Non-Executive Officer
Employee Group ________ ________
</TABLE>
The types of awards and amounts thereof that may be granted under the
1997 Omnibus Stock Incentive Plan to the above-named individuals and groups in
the future are not determinable at this time.
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<PAGE>
Federal Income Tax Aspects
The following is a brief summary of certain of the Federal income tax
consequences of certain transactions under the 1997 Omnibus Stock Incentive Plan
based on Federal income tax laws in effect on [January 1, 1997]. This summary is
not intended to be complete and does not describe state or local tax
consequences.
Tax Consequences to Participants
Nonqualified Stock Options. In general, (i) no income will be recognized
by an optionee at the time a Nonqualified Stock Option is granted; (ii) at
exercise, ordinary income will be recognized by the optionee in an amount equal
to the difference between the option price paid for the shares and the fair
market value of the shares, if unrestricted, on the date of exercise; and (iii)
at sale, appreciation (or depreciation) after the date of exercise will be
treated as either short-term or long-term capital gain (or loss) depending on
how long the shares have been held.
Incentive Stock Option. No income generally will be recognized by an
optionee upon the grant or exercise of an ISO. If shares of Common Stock are
issued to the optionee pursuant to the exercise of an ISO, and if no
disqualifying disposition of such shares is made by such optionee within 2 years
after the date of grant or within 1 year after the transfer of such shares to
the optionee, then upon sale of such shares, any amount realized in excess of
the option price will be taxed to the optionee as a long-term capital gain and
any loss sustained will be a long-term capital loss.
If shares of Common Stock acquired upon the exercise of an ISO are disposed of
prior to the expiration of either holding period described above, the optionee
generally will recognize ordinary income in the year of disposition in an amount
equal to the excess (if any) of the fair market value of such shares at the time
of exercise (or, if less, the amount realized on the disposition of such shares
if a sale or exchange) over the option price paid for such shares. Any further
gain (or loss) realized by the participant generally will be taxed as short-term
or long-term capital gain (or loss) depending on the holding period.
Appreciation Rights. No income will be recognized by a participant in
connection with the grant of a Tandem Appreciation Right or a Free-Standing
Appreciation Right. When the Appreciation Right is exercised, the participant
normally will be required to include as taxable ordinary income in the year of
exercise an amount equal to the amount of cash received and the fair market
value of any unrestricted shares of Common Stock received on the exercise.
Restricted Shares. The Recipient of Restricted Shares generally will be
subject to tax at ordinary income rates on the fair market value of the
Restricted Shares reduced by any amount paid by the participant at such time as
the shares are no longer subject to forfeiture or restrictions or transfer for
purposes of Section 83 of the Code ("restrictions"). However, a recipient who so
elects under Section 83(b) of the Code within 30 days of the date of transfer of
the shares will have taxable ordinary income on the date of transfer of the
shares equal to the excess of the fair market value of such shares (determined
without regard to the restrictions) over the purchase price, if any, of such
Restricted Shares. If a Section 83(b) election has not been made, any dividends
received with respect to Restricted Shares subject to restrictions generally
will be treated as compensation that is taxable as ordinary income to the
participant.
Deferred Shares. No income generally will be recognized upon the award
of Deferred Shares. The recipient of a Deferred Share award generally will be
subject to tax at ordinary income rates on the fair market value of unrestricted
shares of Common Stock on the date that such shares are transferred to the
participant under the award reduced by any amount paid by the participant, and
the capital gains/loss holding period for such shares will also commence on such
date.
Performance Shares and Performance Units. No income generally will be
recognized upon the grant of Performance Shares or Performance Units. Upon
payment in respect of the earn-out of Performance Shares or Performance Units,
the recipient generally will be required to include as taxable ordinary income
in the year of receipt an amount equal to the amount of cash received and the
fair market value of any unrestricted shares of Common Stock received.
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<PAGE>
Special Rules Applicable to Officers and Directors. In limited
circumstances where the sale of stock received as a result of a grant or award
could subject an officer or director to suit under Section 16(b) of the Exchange
Act, the tax consequences to the officer or director may differ from the tax
consequences described above. In these circumstances, unless an election under
Section 83(b) of the Code has been made, the principal difference (in cases
where the officer or director would otherwise be currently taxed upon his
receipt of the stock) usually will be to postpone valuation and taxation of the
stock received so long as the sale of the stock received could subject the
officer or director to suit under Section 16(b) of the Exchange Act, but no
longer than six months.
Tax Consequences to the Employer
To the extent that a participant recognized ordinary income in the circumstances
described above, the participant's employer will be entitled to a corresponding
deduction, provided, among other things, that such income meets the test of
reasonableness, is an ordinary and necessary business expense, is not an "excess
parachute payment" within the meaning of Section 280G of the Code, and is not
disallowed by the $1 million limitation on certain executive compensation.
Vote Required for Approval
The affirmative vote of the holders of a majority of the outstanding
shares of Common Stock present in person or represented by proxy at the Meeting
is required to approve the 1997 Omnibus Stock Incentive Plan.
Recommendation
The Board of Directors recommends that the stockholders vote FOR
ratification of the 1997 Omnibus Stock Incentive Plan.
25
<PAGE>
RATIFICATION OF NONEMPLOYEE DIRECTOR STOCK PLAN
(Proposal No. 5)
On May 21, 1997, the Board of Directors of the Company adopted the
Nonemployee Director Stock Plan (the "Director Plan"). The Director Plan
provides for the automatic granting of options to nonemployee directors of the
Company, and also permits those directors to elect to defer all or a part of
their directors' fees and have those fees invested in common stock. The Board
believes that providing directors with the ability to acquire a proprietary
interest in the Company helps to instill loyalty and encourage the generation of
long-term value for the Company's shareholders by aligning directors' interests
with those of the shareholders, and has, therefore, concluded that adoption of
the Director Plan is in the best interests of the Company and its shareholders.
The provisions of the Director Plan are summarized below. Such summary
does not purport to be complete and is qualified in its entirety by reference to
the full text of the Director Plan, which is attached to this Proxy Statement as
Annex C.
Purpose
The purpose of the Director Plan is to promote the achievement of long-
term objectives of the Company by linking the personal interests of Nonemployee
Directors to those of the Company's shareholders and to attract and retain
Nonemployee Directors of outstanding competence.
Duration
The Director Plan shall commence on the Effective Date and shall remain
in effect subject to the right of the Board of Directors to terminate the
Director Plan at any time pursuant to Article 9. However, in no event may an
Award be granted under the Director Plan on or after July 1, 2007. The maximum
number of Shares paid out under the Director Plan shall be 250,000 (as adjusted
pursuant to Section 3.4) unless otherwise determined by the Board of Directors.
Administration
The Director Plan shall be administered by the Compensation Committee of
the Board of Directors of the Company, subject to the restrictions set forth in
the Director Plan. The Committee shall have the full power, discretion, and
authority to interpret and administer the Director Plan in a manner which is
consistent with the Director Plan's provisions. However, in no event shall the
Committee have the power to determine Director Plan eligibility, or to determine
the number, the value, the vesting period, or the timing of Awards to be made
under the Director Plan (all such determinations being automatic pursuant to the
provisions of the Director Plan). All determinations and decisions made by the
Committee pursuant to the Director Plan, and all related orders or resolutions
of the Committee shall be final, conclusive, and binding on all persons,
including the Company, its shareholders, Employees, Participants, and their
estates and beneficiaries.
The Board shall make or provide for such adjustments in the number and
kind of Shares in each Director's Deferred Stock Unit Account or subject to
outstanding options as the Board, in its sole discretion, exercised in good
faith, shall determine is equitably required to prevent dilution or enlargement
of the rights of the Nonemployee Directors that would otherwise result from (a)
any stock dividend, stock split, combination of shares, recapitalization or any
other change in the capital structure of the Company, (b) any merger,
consolidation, spin-off, split-off, spin-out, split-up, reorganization, partial
or complete liquidation or other distribution of assets, issuance of rights or
warrants to purchase securities, or (c) any other corporate transaction or event
having an effect similar to any of the foregoing.
26
<PAGE>
Eligibility.
Persons eligible to participate in the Director Plan are limited to
Nonemployee Directors who are serving on the Board on the date of each scheduled
Award under the Director Plan.
All Nonemployee Directors are eligible to participate as follows:
(a) All Existing Nonemployee Directors shall receive Awards
of Options pursuant to Article 5;
(b) All New Nonemployee Directors herein shall receive
Awards of Options pursuant to Article 6; and
(c) All Nonemployee Directors shall be eligible to acquire
Deferred Stock Units in connection with deferrals
pursuant to Article 7.
Awards for Existing Nonemployee Directors
Grant of Options. On the later of the Effective Date or the date
which is three business days after the Company's stock is first listed for
trading on The Nasdaq Stock Market or on a national securities exchange in The
United States, each Existing Nonemployee Director shall receive a one-time Award
of options for Twenty Thousand (20,000) shares. The initial grant of Options to
Existing Nonemployee Directors shall become vested at the rate of Six Thousand
Six Hundred and Sixty-Six (6,666) Shares per year for each year of service on
the Board subsequent to the Effective Date (six thousand six hundred and sixty-
eight (6,668) for the third year); provided, however, that upon death or
Disability or in the event of a Change in Control of the company, all of a
Participant's outstanding options shall vest immediately. Any options not vested
at the time of payout set forth in Section 8.4 shall be forfeited.
Awards for New Nonemployee Directors
Initial Grant of Options. Each individual who is a New
Nonemployee Director, shall receive an Award of options for Ten Thousand
(10,000) shares on the date of his or her original election to the Board. Said
award shall vest as to Five Thousand (5,000) shares on the first anniversary of
said election and as to the remaining Five Thousand (5,000) on the second
anniversary thereof; provided, however, that upon death or disability or in the
event of a Change in Control of the company, said Nonemployee Director's options
shall vest immediately.
Annual Awards
Each Nonemployee Director shall receive options for Five
Thousand (5,000) shares, effective as of the day following each annual
shareholders' meeting, commencing with the meeting held in the year 2000 for
existing Nonemployee Directors and with the second annual meeting following his
or her initial election as to new Nonemployee Directors.
Vesting of Annual Options. All Annual Options awarded under
Section 6.2 shall vest one hundred percent (100%) upon the first anniversary of
said award, or upon a Change in Control, if earlier, and shall vest
proportionally during said year if the Nonemployee Director's service terminates
because of death or Disability.
Deferral of Retainers, Committee Fees, and Meeting Fees
Deferral of Retainers, Committee Fees, and Meeting Fees. During
the term of the Director Plan, any Nonemployee Director may elect to receive
all, none or fifty percent (50%) of the cash portion of his
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<PAGE>
or her annual retainer, committee fees, and meeting fees in the form of Deferred
Stock Units. Such election to receive Deferred Stock Units shall be subject to
the provisions of Article 7 of the Director Plan.
Election. Any election to receive all or fifty percent (50%) of
a Nonemployee Director's annual retainer, committee fees, and meeting fees in
the form of Deferred Stock Units shall be made before the first day of the year
for which such compensation would otherwise be paid, or before July 1, 1997, as
to amounts otherwise payable in 1997. New Nonemployee Directors, however, may
make such election with respect to their initial retainer upon their original
election to the Board. Each such election may pertain to subsequent scheduled
fees and retainer payments and will continue in effect as to subsequent years
unless changed in writing prior to January 1.
Number of Deferred Stock Units. The number of Deferred Stock
Units to be granted in connection with an election pursuant to Section 7.2 shall
equal the cash portion of the retainer and fees being deferred into Deferred
Stock Units, divided by the Fair Market Value of a Share on the date of the
scheduled payment of the amount deferred.
Vesting of Deferred Stock Units. Subject to the terms of the
Director Plan, all Deferred Stock Units acquired under Article 7 of the Director
Plan shall vest one hundred percent (100%) upon the acquisition of such Deferred
Stock Units.
Deferred Stock Units
Deferred Stock Unit Account. A Deferred Stock Unit Account (the
"Account") shall be established and maintained by the Company for each
Participant who elects a deferral pursuant to Article 7 under the Director Plan.
Each Account shall be the record of the Deferred Stock Units acquired by the
Participant under Article 7 of the Director Plan on each applicable grant date,
shall be maintained solely for accounting purposes, and shall not require a
segregation of any Company assets.
Dividend Equivalents. Dividend equivalents shall be earned on
Deferred Stock Units provided under the Director Plan. Such dividend equivalents
shall be converted into equivalent amounts of Deferred Stock Units based on the
Fair Market Value of a Share on the day on which the dividend would be paid and
added to Participant's Accounts. Deferred Stock Units resulting from dividend
equivalents shall be fully vested.
Amount of Payout. Except as provided otherwise in the Director
Plan, the total amount payable to a Participant shall be one Share for each
Deferred Stock Unit, if any, in said Participant's Accounts at the date of
payout as determined in accordance with Section 8.4.
Timing and Method of Payout. Except as otherwise provided
herein, vested Deferred Stock Units shall be paid to Participants, in Shares,
within thirty (30) days following each Participant's termination of service on
the Board. Payout of a Participant's Account shall be made in one of the
following forms as elected by the Participant:
(a) By payment in Shares in a single distribution;
(b) By payment in Shares in not greater than ten annual
installments; or
(c) A combination of (a) and (b) above. The Participant
shall designate the percentage payable under each
option.
Fractional Shares shall be rounded down to the nearest whole Share, and such
fractional amount shall be paid in cash.
The Participant's election of the form of payout shall be made by
written notice filed with the Committee at least one year prior to the
Participant's voluntary termination as a Director. Any such election
28
<PAGE>
may be changed by the Participant at any time or from time to time; provided
that any election made less than one year prior to the Director's voluntary
termination as a Director shall not be valid, and in such case payment shall be
made in accordance with the Participant's prior election, except that the
Participant's initial election shall nonetheless be effective during the first
year following. Absent an election from the Participant, the payment shall be
made in Shares in a single distribution. In the event of a Director's death, the
balance of his or her Account shall be distributed to his or her beneficiary in
shares in a single distribution, even if the Participant had elected
distribution in installments. Each Participant shall have the right to require
the Company to retain so much of any distribution as may be necessary to provide
for the payment of applicable taxes, which shall be converted into cash based on
the Fair Market Value of the Shares on the date five (5) days prior to the
distribution, and the Company will cause the amount so retained to be paid or
deposited on behalf of the Participant.
Funding Mechanism for Deferred Stock Units. The Company shall be
entitled, but not obligated, to establish a grantor trust or similar funding
mechanism to fund the Company's obligations under the Director Plan; provided,
however, that any funds contained therein shall remain subject to the claims of
the Company's general creditors. The funding mechanism shall constitute an
unfunded arrangement. This mechanism may be funded through the acquisition of
Shares and in that event, Participants shall be given the right to direct the
exercise of voting rights with respect to their respective interests in those
Shares.
Amendment, Modification, and Termination
Subject to the terms set forth in Article 9 of the Director Plan, the
Board may terminate, amend, or modify the Director Plan at any time and from
time to time. Unless required by law, no termination, amendment, or modification
of the Director Plan shall in any material manner adversely affect any Award
previously provided under the Director Plan, without the written consent of the
Participant holding the Award.
Shares Available.
Shares delivered by the Company under the Director Plan shall be
treasury shares, or Shares which have been or may be reacquired by the Company.
Any funding mechanism as described in Section 8.5 of the Director Plan may
acquire treasury shares from the Company or purchase Shares on the open market.
Effective Date of the Director Plan
The Director Plan will, subject to the approval of the stockholders,
become effective as of July 1, 1997 (the "Effective Date"), and shall remain in
effect as provided in Section 1.3 of the Director Plan.
Plan Benefits
The table below illustrates options that have been granted to all non-
employee directors (who are the only persons eligible to receive grants under
the Plan) as of the date hereof:
Plan Benefits
-------------
Dollar Value ($) Number of Shares
---------------- ----------------
All Non-Employee
Directors (6 persons) (1) [______]
- ----------
(1) Stock options are granted under the Nonemployee Director Stock Plan
at exercise prices equal to the fair market value of the Common Stock on the
date of grant. The actual value, if any, a person may
29
<PAGE>
realize will depend on the excess of the fair market value over the exercise
price on the date the option is exercised.
Vote Required for Approval
The affirmative vote of the holders of a majority of the outstanding
shares of Common Stock present in person or represented by proxy at the Meeting
is required to approve the Director Plan.
Recommendation
The Board of Directors recommends that the stockholders vote FOR
ratification of the Director Plan.
30
<PAGE>
STOCKHOLDER PROPOSALS
Any proposal by a stockholder intended to be presented at the 1998
Annual Meeting of Stockholders must be received by the Company on or before
December 1, 1997 to be included in the proxy materials of the Company relating
to such meeting.
OTHER BUSINESS
It is not anticipated that any other matters will be brought before the
Meeting for action; however, if any such other matters shall properly come
before the Meeting, it is intended that the persons authorized under the proxies
may, in the absence of instructions to the contrary, vote or act thereon in
accordance with their best judgment.
A copy of the Company's Registration Statement on Form 10, which has
been filed with the Commission pursuant to the Exchange Act, may be obtained
without charge upon written request to A. William Ott, Chief Financial Officer,
The Bibb Company, 100 Galleria Parkway, 17th Floor, Atlanta, Georgia 30339.
By Order of the Board of Directors,
A. William Ott
Secretary
Atlanta, Georgia
July ___, 1997
31
<PAGE>
ANNEX A
AMENDMENTS TO THE CERTIFICATE OF INCORPORATION
OF
THE BIBB COMPANY
AUTHORIZED STOCK AMENDMENT
Article 4 shall be amended to read in its entirety:
"4. Authorized Capital. The aggregate number of shares of stock
which the Corporation shall have authority to issue is [__________] shares,
divided into two (2) classes consisting of 5,000,000 shares of Preferred Stock,
par value $.01 per share ("Preferred Stock"), and [__________] shares of Common
Stock, par value $.01 per share ("Common Stock").
The following is a statement of the designations, preferences,
qualifications, limitations, restrictions and the special or relative rights
granted to or imposed upon the shares of each such class.
A. PREFERRED STOCK
1. Issue in Series. Preferred Stock may be issued
from time to time in one or more series, each such series to
have the terms stated herein and in the resolution of the Board
of Directors of the Corporation providing for its issue. All
shares of any one series of Preferred Stock will be identical,
but shares of different series of Preferred Stock need not be
identical or rank equally except insofar as provided by law or
herein.
2. Creation of Series. The Board of Directors will
have authority by resolution to cause to be created one or more
series of Preferred Stock, and to determine and fix with respect
to each series prior to the issuance of any shares of the series
to which such resolution relates:
(a) the distinctive designation of the series
and the number of shares which will constitute the
series, and whether or not such number may be increased
or decreased (but not below the number of shares then
outstanding) from time to time by action of the Board of
Directors;
(b) the dividend rate and the times of payment
of dividends, if any, on the shares of the series,
whether dividends will be cumulative, and if so, from
what date or dates;
(c) whether or not the shares of the series are
redeemable and, if so, the price or prices at which, and
the terms and conditions on which, the shares of the
series may be redeemed at the option of the Corporation;
(d) whether or not the shares of the series
will be entitled to the benefit of a retirement or
sinking fund to be applied to the purchase or redemption
of such shares and, if so entitled, the amount of such
fund and the terms and provisions relative to the
operation thereof;
(e) whether or not the shares of the series
will be convertible into, or exchangeable for, any other
shares of stock of the Corporation or other securities,
32
<PAGE>
and if so convertible or exchangeable, the conversion
price or prices, or the rates of exchange, and any
adjustments thereof, at which such conversion or
exchange may be made, and any other terms and conditions
of such conversion or exchange;
(f) the rights of the shares of the series in
the event of voluntary or involuntary liquidation,
dissolution or winding up of the Corporation;
(g) whether or not the shares of the series
will have priority over or be on a parity with or be
junior to the shares of any other series or class in any
respect or will be entitled to the benefit of
limitations restricting the issuance of shares of any
other series or class having priority over or being on a
parity with the shares of such series in any respect, or
restricting the payment of dividends on or the making of
other distributions in respect of shares of any other
series or class ranking junior to the shares of the
series as to dividends or assets, or restricting the
purchase or redemption of the shares of any such junior
series or class, and the terms of any such restriction;
(h) whether or not the series will have voting
rights, in addition to any voting rights provided by
law, and, if so, the terms of such voting rights; and
(i) any other preferences, qualifications,
privileges, options and other relative or special rights
and limitations of that series.
B. COMMON STOCK
1. Dividends. Holders of Common Stock will be entitled
to receive such dividends as may be declared by the Board of
Directors.
2. Voting Rights. The holders of Common Stock shall
have the general right to vote for all purposes, including the
election of Directors, as provided by law. Subject to the terms
of the Preferred Stock Designation, each holder of Common Stock
shall be entitled to one vote for each share thereof held.
The Corporation will not issue any non-voting equity securities;
provided, however, that this provision, included in this Amended and Restated
Certificate of Incorporation in compliance with section 1123(a)(6) of title 11
of the United States Code, as amended (the "Bankruptcy Code"), will have no
force and effect beyond that required by section 1123(a)(6) of the Bankruptcy
Code and will be effective only for so long as section 1123(a)(6) of the
Bankruptcy Code is in effect and applicable to the Corporation."
INDEMNIFICATION AMENDMENT
Article 10 shall be added and shall read in its entirety:
"10. Indemnification. Each person who is or was or has agreed to
become a Director or officer of the Corporation, and each such person who is or
was serving or who had agreed to serve at the request of the Board or an officer
of the Corporation as an employee or agent of the Corporation or as a director,
officer, employee, or agent of another corporation, partnership, joint venture,
trust, or other entity, whether for profit or not for profit (including the
heirs, executors, administrators, or estate of such person), will be indemnified
by the Corporation to the fullest extent permitted by the Delaware General
Corporation Law or any other applicable law as currently or hereafter in effect
and will be entitled to advancement of expenses in connection therewith. The
right of indemnification and of advancement of expenses provided in this Article
9 (i) will not be exclusive of any other rights to which any person seeking
indemnification or advancement of expenses may otherwise be entitled, including
without limitation pursuant to any contract approved by a majority of the Whole
Board (whether or not the Directors approving such contract are or are to be
parties to such contract or similar
33
<PAGE>
contracts), and (ii) will be applicable to matters otherwise within its scope
whether or not such matters arose or arise before or after the adoption of this
Article 9. Without limiting the generality or the effect of the foregoing, the
Corporation may adopt By-laws, or enter into one or more agreements with any
person, which provides for indemnification and/or advancement of expenses
greater or different than that provided in this Article 9 or the Delaware
General Corporation Law. Any amendment or repeal of, or adoption of any
provision inconsistent with, this Article 9 will not adversely affect any right
or protection existing hereunder, or arising out of facts occurring, prior to
such amendment, repeal, or adoption and no such amendment, repeal, or adoption,
will affect the legality, validity, or enforceability of any contract entered
into or right granted prior to the effective date of such amendment, repeal, or
adoption."
34
<PAGE>
ANNEX B
THE BIBB COMPANY
1997 OMNIBUS STOCK INCENTIVE PLAN
EFFECTIVE JULY 1, 1997
================================================================================
35
<PAGE>
The Bibb Company
1997 Omnibus Stock Incentive Plan
1. Purpose. The purpose of the 1997 Omnibus Stock Incentive Plan (the
"Plan") is to attract and retain officers and key employees for The Bibb Company
(the "Corporation") and its Subsidiaries and to provide to such persons
incentives and rewards for superior performance.
2. Definitions. As used in this Plan,
"Annual Meeting" means the annual meeting of shareholders of the
Corporation.
"Appreciation Right" means a right granted pursuant to Section 5
of this Plan, including a Free-Standing Appreciation Right or a Tandem
Appreciation Right.
"Base Price" means the price to be used as the basis for
determining the Spread upon the exercise of a Free-standing Appreciation Right.
"Board" means the Board of Directors of the Corporation.
"Change in Control" shall have the meaning provided in Section
12 of this Plan.
"Code" means the Internal Revenue Code of 1986, as amended from
time to time.
"Committee" means the committee (or a subcommittee) described in
Section 17 of this Plan.
"Common Shares" means shares of common stock, $.01 par value per
share, of the Corporation or any security into which such Common Shares may be
changed by reason of any transaction or event of the type referred to in Section
11 of this Plan.
"Covered Employee" means a Participant who is, or is determined
by the Committee to be likely to become, a "covered employee" within the meaning
of Section 162(m) of the Code (or any successor provision).
"Date of Grant" means the date specified by the Committee on
which a grant of Option Rights, Appreciation Rights, Performance Shares,
Performance Units, or Other Stock-Based Awards, or a grant or sale of Restricted
Shares or Deferred Shares shall become effective.
"Deferral Period" means the period of time during which Deferred
Shares are subject to deferral limitations under Section 7 of this Plan.
"Deferred Shares" means an award made pursuant to Section 7 of
this Plan of the right to receive Common Shares at the end of a specified
Deferral Period.
"Designated Subsidiary" means a Subsidiary that is (i) not a
corporation or (ii) a corporation in which at the time the Corporation owns or
controls, directly or indirectly, less than eighty (80) percent of the total
combined voting power represented by all classes of stock issued by such
corporation.
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<PAGE>
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder, as such law, rules and
regulations may be amended from time to time.
"Free-standing Appreciation Right" means an Appreciation Right
granted pursuant to Section 5 of this Plan that is not granted in tandem with an
Option Right or similar right.
"Incentive Stock Options" means Option Rights that are intended
to qualify as "incentive stock options" under Section 422 of the Code or any
successor provision.
"Management Objectives" means the measurable performance
objective or objectives established pursuant to this Plan for Participants who
have received grants of Performance Shares or Performance Units or, when so
determined by the Committee, Option Rights, Appreciation Rights, Restricted
Shares and dividend credits, or Other Stock-Based Awards pursuant to this Plan.
Management Objectives may be described in terms of Corporation-wide objectives
or objectives that are related to the performance of the individual Participant
or of the Subsidiary, division, department, region or function within the
Corporation or Subsidiary in which the Participant is employed. The Management
Objectives may be made relative to the performance of other corporations. The
Management Objectives applicable to any award to a Covered Employee shall be
based on specified levels of growth or improvement in one or more of the
following criteria:
1. earnings;
2. earnings per share (earnings per share will be calculated
without regard to any change in accounting standards that may
be required by the Financial Accounting Standards Board after
the goal is established);
3. share price;
4. shareholder return;
5. return on invested capital, equity, or assets;
6. operating earnings;
7. sales;
8. productivity;
9. cash flow;
10. market share;
11. profit margin;
12. customer service; and/or
13. economic value added.
If the Committee determines that a change in the business,
operations, corporate structure or capital structure of the Corporation, or the
manner in which it conducts its business, or other events or circumstances
render the Management Objectives unsuitable, the Committee may in its discretion
modify such Management Objectives or the related minimum acceptable level of
achievement, in whole or in part, as the Committee deems appropriate and
equitable, except in the case of a Covered Employee where such action would
result in the loss of the otherwise available exemption of the award under
Section 162(m) of the Code. In such case, the Committee shall not make any
modification of the Management Objectives or minimum acceptable level of
achievement.
"Market Value per Share" means, as of any particular date, the
average of the highest and lowest quoted selling prices for Common Shares on the
relevant date, or (if there were no sales on such date) the weighted average of
the means between the highest and lowest quoted selling prices on the nearest
day before and the nearest day after the relevant date.
"Optionee" means the optionee named in an agreement evidencing
an outstanding Option Right.
"Option Price" means the purchase price payable on exercise of
an Option Right.
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"Option Right" means the right to purchase Common Shares upon
exercise of an option granted pursuant to Section 4 or Section 9 of this Plan.
"Other Stock-Based Awards" means those awards referred to in
Section 9 of this Plan.
"Participant" means a person who is selected by the Committee to
receive benefits under this Plan and who is at the time an officer, or other key
employee of the Corporation or any one or more of its Subsidiaries, or who has
agreed to commence serving in any of such capacities within 90 days of the Date
of Grant.
"Performance Period" means, in respect of a Performance Share or
Performance Unit, a period of time established pursuant to Section 8 of this
Plan within which the Management Objectives relating to such Performance Share
or Performance Unit are to be achieved.
"Performance Share" means a bookkeeping entry that records the
equivalent of one Common Share awarded pursuant to Section 8 of this Plan.
"Performance Unit" means a bookkeeping entry that records a unit
equivalent to $1.00 awarded pursuant to Section 8 of this Plan.
"Reload Option Rights" means additional Option Rights granted
automatically to an Optionee upon the exercise of Option Rights pursuant to
Section 4(f) of this Plan.
"Restricted Shares" means Common Shares granted or sold pursuant
to Section 6 or Section 9 of this Plan as to which neither the substantial risk
of forfeiture nor the prohibition on transfers referred to in such Section 6 has
expired.
"Rule l6b-3" means Rule 16b-3 of the Securities and Exchange
Commission (or any successor rule to the same effect) as in effect from time to
time.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations thereunder, as such law, rules and regulations may
be amended from time to time.
"Spread" means the excess of the Market Value per Share of the
Common Shares on the date when an Appreciation Right is exercised, or on the
date when Option Rights are surrendered in payment of the Option Price of other
Option Rights, over the Option Price provided for in the related Option Right.
"Subsidiary" means a corporation, company or other entity
(i) more than 50 percent of whose outstanding shares or
securities (representing the right to vote for the election of
directors or other managing authority) are, or
(ii) which does not have outstanding shares or
securities (as may be the case in a partnership, joint venture
or unincorporated association), but more than 50 percent of
whose ownership interest representing the right generally to
make decisions for such other entity is,
now or hereafter, owned or controlled, directly or indirectly, by the
Corporation except that for purposes of determining whether any person may be a
Participant for purposes of any grant of Incentive Stock Options, "Subsidiary"
means any corporation in which at the time the Corporation owns or controls,
directly or indirectly, more than 50 percent of the total combined voting power
represented by all classes of stock issued by such corporation.
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"Tandem Appreciation Right" means an Appreciation Right granted
pursuant to Section 5 of this Plan that is granted in tandem with an Option
Right or any similar right granted under any other plan of the Corporation.
"Voting Shares" means at any time, the then-outstanding
securities entitled to vote generally in the election of directors of the
Corporation.
3. Shares Available Under the Plan. (a) Subject to adjustment as
provided in Section 11 of this Plan, the number of Common Shares that may be
issued or transferred (i) upon the exercise of Option Rights or Appreciation
Rights, (ii) as Restricted Shares and released from substantial risks of
forfeiture thereof, (iii) as Deferred Shares, (iv) in payment of Performance
Shares or Performance Units that have been earned, (v) as Other Stock-Based
Awards, (vi) in payment of dividend equivalents paid with respect to awards made
under the Plan shall not exceed in the aggregate 1,000,000 shares plus any
shares specified in paragraph (b) of this Section 3. Such shares may be shares
of original issuance or treasury shares or a combination of the foregoing. Upon
the payment of any Option Price by the transfer to the Corporation of Common
Shares or upon satisfaction of any withholding amount by means of transfer or
relinquishment of Common Shares, there shall be deemed to have been issued or
transferred under this Plan only the net number of Common Shares actually issued
or transferred by the Corporation.
(b) Total shares available under the plan shall also include (i)
any shares relating to awards that expire or are forfeited or cancelled and (ii)
the number of shares repurchased by the Corporation after July 1, 1997 in the
open market or otherwise and having an aggregate purchase price no greater than
the amount of cash proceeds received by the Corporation from the sale of Common
Shares under the Plan.
(c) Upon payment in cash of the benefit provided by any award
granted under this Plan, any shares that were covered by that award shall again
be available for issue or transfer hereunder.
(d) Notwithstanding anything in this Section 3, or elsewhere in
this Plan, to the contrary, the aggregate number of Common Shares actually
issued or transferred by the Corporation upon the exercise of Incentive Stock
Options shall not exceed 1,000,000 shares, subject to adjustments as provided in
Section 11 of this Plan.
(e) Notwithstanding any other provision of this Plan to the
contrary, no Participant shall be granted Option Rights for more than 200,000
Common Shares during any calendar year, subject to adjustments as provided in
Section 11 of this Plan. Further, in no event shall any Participant in any
calendar year receive more than 200,000 Appreciation Rights, subject to
adjustments as provided in Section 11 of this plan.
(f) Notwithstanding any other provision of this Plan to the
contrary, in no event shall any Participant in any calendar year receive an
award of Performance Shares, Performance Units, Restricted Shares or Other
Stock-Based Awards that specify Management Objectives having an aggregate
maximum value as of their respective Dates of Grant in excess of $1,000,000.
4. Option Rights. The Committee may, from time to time and upon such
terms and conditions as it may determine, authorize the granting to Participants
of options to purchase Common Shares. Each such grant may utilize any or all of
the authorizations, and shall be subject to all of the requirements, contained
in the following provisions:
(a) Each grant shall specify the number of Common Shares to
which it pertains subject to the limitations set forth in Section 3 of this
plan.
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(b) Each grant shall specify an Option Price per share, which
shall not be less than 100 percent of the Market Value per Share on the Date of
Grant.
(c) Each grant shall specify whether the Option Price shall be
payable (i) in cash or by check acceptable to the Corporation, (ii) by the
actual or constructive transfer to the Corporation of nonforfeitable,
unrestricted Common Shares owned by the Optionee (or other consideration
authorized pursuant to subsection (d) below) having a value at the time of
exercise equal to the total Option Price, or (iii) by a combination of such
methods of payment.
(d) The Committee may determine, at or after the Date of Grant,
that payment of the Option Price of any option (other than an Incentive Stock
Option) may also be made in whole or in part in the form of Restricted Shares or
other Common Shares that are forfeitable or subject to restrictions on transfer,
Deferred Shares, Performance Shares (based, in each case, on the Market Value
per Share on the date of exercise), other Option Rights (based on the Spread on
the date of exercise) or Performance Units. Unless otherwise determined by the
Committee at or after the Date of Grant, whenever any Option Price is paid in
whole or in part by means of any of the forms of consideration specified in this
paragraph, the Common Shares received upon the exercise of the Option Rights
shall be subject to such risks of forfeiture or restrictions on transfer as may
correspond to any that apply to the consideration surrendered, but only to the
extent of (i) the number of shares or Performance Shares, (ii) the Spread of any
unexercisable portion of Option Rights, or (iii) the stated value of Performance
Units surrendered.
(e) Any grant may provide for deferred payment of the Option
Price from the proceeds of sale through a broker on a date satisfactory to the
Corporation of some or all of the shares to which such exercise relates.
(f) Any grant may, at or after the Date of Grant, provide for
the automatic grant of Reload Option Rights to an Optionee upon the exercise of
Option Rights (including Reload Option Rights) using Common Shares or other
consideration specified in paragraph (d) above. Reload Option Rights shall cover
up to the number of Common Shares, Deferred Shares, Option Rights or Performance
Shares (or the number of Common Shares having a value equal to the value of any
Performance Units) surrendered to the Corporation upon any such exercise in
payment of the Option Price or to meet any withholding obligations. Reload
Options shall specify an Option Price per share, which shall not be less than
100 percent of the Market Value per Share on the Date of Grant of the Reload
Option Right, and shall be on such other terms as may be specified by the
Committee, which may be the same as or different from those of the original
Option Rights.
(g) Successive grants may be made to the same Participant
whether or not any Option Rights previously granted to such Participant remain
unexercised.
(h) Each grant shall specify the period or periods of continuous
service by the Optionee with the Corporation or any Subsidiary which is
necessary before the Option Rights or installments thereof will become
exercisable and may provide for the earlier exercise of such Option Rights in
the event of a Change in Control, retirement, death or disability of the
Optionee or other similar transaction or event.
(i) Any grant of Option Rights may specify Management Objectives
that must be achieved as a condition to the exercise of such rights.
(j) Option Rights granted under this Plan may be (i) options,
including, without limitation, Incentive Stock Options, that are intended to
qualify under particular provisions of the Code, (ii) options that are not
intended so to qualify, or (iii) combinations of the foregoing.
(k) The Committee may, at or after the Date of Grant of any
Option Rights (other than Incentive Stock Options), provide for the payment of
dividend equivalents to the Optionee on either a current or deferred or
contingent basis or may provide that such equivalents shall be credited against
the Option Price.
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(l) The exercise of an Option Right shall result in the
cancellation on a share-for-share basis of any related Appreciation Right
authorized under Section 5 of this Plan.
(m) Each grant shall specify the term of the Option Right;
provided, however, that no Option Right shall be exercisable more than 10 years
from the Date of Grant.
(n) Each grant of Option Rights shall be evidenced by an
agreement executed on behalf of the Corporation by an officer and delivered to
the Optionee and containing such terms and provisions, consistent with this
Plan, as the Committee may approve.
5. Appreciation Rights. The Committee may also authorize grants to
Participants of Appreciation Rights. An Appreciation Right shall be a right of
the Participant to receive from the Corporation an amount, which shall be
determined by the Committee and shall be expressed as a percentage (not
exceeding 100 percent) of the Spread at the time of the exercise of such right.
Any grant of Appreciation Rights under this Plan shall be upon such terms and
conditions as the Committee may determine in accordance with the following
provisions:
(a) Any grant may specify that the amount payable on exercise of
an Appreciation Right may be paid by the Corporation in cash, in Common Shares
or in any combination thereof and may either grant to the Optionee or retain in
the Committee the right to elect among those alternatives.
(b) Any grant may specify that the amount payable on exercise of
an Appreciation Right may not exceed a maximum specified by the Committee at the
Date of Grant.
(c) Any grant may specify waiting periods before exercise and
permissible exercise dates or periods and shall provide that no Appreciation
Right may be exercised except at a time when the related Option Right is also
exercisable and at a time when the Spread is positive.
(d) Any grant may specify that such Appreciation Right may be
exercised only in the event of a Change in Control or other similar transaction
or event.
(e) Each grant of Appreciation Rights shall be evidenced by a
notification executed on behalf of the Corporation by an officer and delivered
to and accepted by the Optionee, which notification shall describe such
Appreciation Rights, identify the related Option Rights, state that such
Appreciation Rights are subject to all the terms and conditions of this Plan,
and contain such other terms and provisions, consistent with this Plan, as the
Committee may approve.
(f) Any grant of Appreciation Rights may specify Management
Objectives that must be achieved as a condition of the exercise of such rights.
(g) Regarding Tandem Appreciation Rights only: Each grant shall
provide that a Tandem Appreciation Right may be exercised only (i) at a time
when the related Option Right (or any similar right granted under any other plan
of the Corporation) is also exercisable and the Spread is positive and (ii) by
surrender of the related Option Right (or such other right) for cancellation. In
addition, a Tandem Appreciation Right awarded in relation to an Incentive Stock
Option must be granted concurrently with such Incentive Stock Option.
(h) Regarding Free-standing Appreciation Rights only:
(i) Each grant shall specify in respect of each Free-
standing Appreciation Right a Base Price per Common
Share, which shall be equal to or greater than the
Market Value per Share on the Date of Grant;
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(ii) Successive grants may be made to the same
Participant regardless of whether any Free-standing
Appreciation Rights previously granted to such
Participant remain unexercised;
(iii) Each grant shall specify the period or periods of
continuous service by the Participant with the
Corporation or any Subsidiary that is necessary
before the Free-standing Appreciation Rights or
installments thereof shall become exercisable, and
any grant may provide for the earlier exercise of
such rights in the event of a Change in Control,
retirement, death or disability of the Participant
or other similar transaction or event as approved
by the Committee; and
(iv) No Free-standing Appreciation Right granted under
this Plan may be exercised more than 10 years from
the Date of Grant.
6. Restricted Shares. The Committee may also authorize the grant or sale
to Participants of Restricted Shares. Each such grant or sale may utilize any or
all of the authorizations, and shall be subject to all of the requirements,
contained in the following provisions:
(a) Each such grant or sale shall constitute an immediate
transfer of the ownership of Common Shares to the Participant in consideration
of the performance of services, entitling such Participant to voting, dividend
and other ownership rights, but subject to the substantial risk of forfeiture
and restrictions on transfer hereinafter referred to.
(b) Each such grant or sale may be made without additional
consideration or in consideration of a payment by such Participant that is less
than Market Value per Share at the Date of Grant.
(c) Each such grant or sale shall provide that the Restricted
Shares covered by such grant or sale shall be subject to a "substantial risk of
forfeiture" within the meaning of Section 83 of the Code for a period of not
less than one (1) year to be determined by the Committee at the Date of Grant,
and any grant or sale may provide for the earlier termination of such period in
the event of a Change in Control, retirement, or death or disability of the
Optionee or other similar transaction or event as approved by the Committee.
(d) Each such grant or sale shall provide that during the period
for which such substantial risk of forfeiture is to continue, the
transferability of the Restricted Shares shall be prohibited or restricted in
the manner and to the extent prescribed by the Committee at the Date of Grant
(which restrictions may include, without limitation, rights of repurchase or
first refusal in the Corporation or provisions subjecting the Restricted Shares
to a continuing substantial risk of forfeiture in the hands of any transferee).
(e) Any grant of Restricted Shares may specify Management
Objectives which, if achieved, will result in termination or early termination
of the restrictions applicable to such shares and each grant may specify in
respect of such specified Management Objectives, a minimum acceptable level of
achievement and may set forth a formula for determining the number of Restricted
Shares on which restrictions will terminate if performance is at or above the
minimum level, but falls short of full achievement of the specified Management
Objectives.
(f) Any such grant or sale of Restricted Shares may require that
any or all dividends or other distributions paid thereon during the period of
such restrictions be automatically deferred and reinvested in additional
Restricted Shares, which may be Subject to the same restrictions as the
underlying award.
(g) Each grant or sale of Restricted Shares shall be evidenced
by an agreement executed on behalf of the Corporation by any officer and
delivered to and accepted by the Participant and shall contain such terms and
provisions, consistent with this Plan, as the Committee may approve. Unless
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otherwise directed by the Committee, all certificates representing Restricted
Shares shall be held in custody by the Corporation until all restrictions
thereon shall have lapsed, together with a stock power executed by the
Participant in whose name such certificates are registered, endorsed in blank
and covering such Shares.
7. Deferred Shares. The Committee may also authorize the granting or
sale of Deferred Shares to Participants. Each such grant or sale may utilize any
or all of the authorizations, and shall be subject to all of the requirements
contained in the following provisions:
(a) Each such grant or sale shall constitute the agreement by
the Corporation to deliver Common Shares to the Participant in the future in
consideration of the performance of services, but subject to the fulfillment of
such conditions during the Deferral Period as the Committee may specify.
(b) Each such grant or sale may be made without additional
consideration or in consideration of a payment by such Participant that is less
than the Market Value per Share at the Date of Grant.
(c) Each such grant or sale shall be subject, except (if the
Committee shall so determine) in the event of a Change in Control or other
similar transaction or event, to a Deferral Period of not less than 1 year, as
determined by the Committee at the Date of Grant.
(d) During the Deferral Period, the Participant shall have no
right to transfer any rights under his or her award and shall have no rights of
ownership in the Deferred Shares and shall have no right to vote them, but the
Committee may, at or after the Date of Grant, authorize the payment of dividend
equivalents on such Shares on either a current or deferred or contingent basis,
either in cash or in additional Common Shares.
(e) Each grant or sale of Deferred Shares shall be evidenced by
an agreement executed on behalf of the Corporation by any officer and delivered
to and accepted by the Participant and shall contain such terms and provisions,
consistent with this Plan, as the Committee may approve.
8. Performance Shares or Performance Units. The Committee may also
authorize the granting of Performance Shares or Performance Units that will
become payable to a Participant upon achievement of specified Management
Objectives. Each such grant may utilize any or all of the authorizations, and
shall be subject to all of the requirements, contained in the following
provisions:
(a) Each grant shall specify the number of Performance Shares or
Performance Units to which it pertains, which number may be subject to
adjustment to reflect changes in compensation or other factors; provided,
however, that no such adjustment shall be made in the case of a Covered Employee
where such action would result in the loss of the otherwise available exemption
of the award under Section 162(m) of the Code.
(b) The Performance Period with respect to each Performance
Share or Performance Unit shall be such period of time not less than 1 year,
(except in the event of a Change in Control or other similar transaction or
event, if the Committee shall so determine) commencing with the Date of Grant
and ending on the last date of the Performance Period (as shall be determined by
the Committee at the time of grant).
(c) Any grant of Performance Shares or Performance Units shall
specify Management Objectives which, if achieved, will result in payment or
early payment of the award, and each grant shall specify in respect of such
specified one or more Management Objectives a minimum acceptable level of
achievement and shall set forth a formula for determining the number of
Performance Shares or Performance Units that will be earned if performance is at
or above the minimum level, but falls short of full achievement of the specified
Management Objectives. The grant of Performance Shares or Performance Units
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shall specify that, before the Performance Shares or Performance Units shall be
earned and paid, the Committee must certify that the Management Objectives have
been satisfied.
(d) Each grant shall specify a minimum acceptable level of
achievement in respect of the specified Management Objectives below which no
payment will be made and shall set forth a formula for determining the amount of
payment to be made if performance is at or above such minimum but short of full
achievement of the Management Objectives.
(e) Each grant shall specify the time and manner of payment of
Performance Shares or Performance Units which have been earned. Any grant may
specify that the amount payable with respect thereto may be paid by the
Corporation in cash, in Common Shares or in any combination thereof and may
either grant to the Participant or retain in the Committee the right to elect
among those alternatives.
(f) Any grant of Performance Shares may specify that the amount
payable with respect thereto may not exceed a maximum specified by the Committee
at the Date of Grant. Any grant of Performance Units may specify that the amount
payable or the number of Common Shares issued with respect thereto may not
exceed maximums specified by the Committee at the Date of Grant.
(g) The Committee may, at or after the Date of Grant of
Performance Shares, provide for the payment of dividend equivalents to the
holder thereof on either a current or deferred or contingent basis, either in
cash or in additional Common Shares.
(h) Each grant of Performance Shares or Performance Units shall
be evidenced by a notification executed on behalf of the Corporation by any
officer and delivered to and accepted by the Participant, which notification
shall state that such Performance Shares or Performance Units are subject to all
the terms and conditions of this Plan, and contain such other terms and
provisions, consistent with this Plan, as the Committee may approve.
9. Other Stock-Based Awards. Other awards of Common Shares and other
awards that are valued in whole or in part by reference to, or are otherwise
based on, Common Shares ("Other Stock-Based Awards"), including, without
limitation, performance shares, convertible preferred stock (if authorized by
the Company's articles of incorporation), convertible debentures (if authorized
by the Company's articles of incorporation), exchangeable securities and awards,
Common Shares or options valued by reference to book value or subsidiary
performance, may be granted either along with or in addition to or in tandem
with Stock Options, Stock Appreciation Rights, Restricted Stock, Deferred Stock
or Stock Purchase Rights granted under the Plan and/or cash awards made outside
of the Plan.
(a) Subject to the provisions of the Plan, the Committee shall have
authority to determine the persons to whom and the time or times at which such
awards shall be made, the number of Common Shares to be awarded pursuant to such
awards, and all other conditions of the awards. The Committee may also provide
for the grant of Common Shares upon the completion of a specified performance
period.
The provisions of Other Stock Based Awards need not be the same with
respect to each recipient.
(b) Other Stock Based Awards made pursuant to this Section 9 shall be
subject to the following terms and conditions and to such additional conditions
as the Committee in its sole discretion may provide for in the award agreement:
(i) Subject to the provisions of this Plan and the award
agreement referred to in Section 9(b)(v) below, shares subject to awards
made under this Section 9 may not be sold, assigned, transferred,
pledged or otherwise encumbered prior to the date on which the shares
covered thereby are issued to the recipient, or, if later, the date on
which any applicable restriction, performance or deferral period lapses.
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(ii) Subject to the provisions of this Plan and the award
agreement and unless otherwise determined by the Committee on the Date
of Grant, the recipient of an award under this Section 9 shall be
entitled to receive, currently or on a deferred basis, interest or
dividends or interest or dividend equivalents with respect to the number
of shares covered by the award, as determined at the time of the award
by the Committee, in its sole discretion, and the Committee may provide
that such amounts (if any) shall be deemed to have been reinvested in
additional Stock or otherwise reinvested.
(iii) Any award under Section 9 and any Stock covered by any
such award shall vest or be forfeited to the extent so provided in the
award agreement, as determined by the Committee, in its sole discretion.
(iv) In the event of the participant's Retirement, Disability or
death, or in cases of special circumstances, the Committee may, in its
sole discretion, waive in whole or in part any or all of the remaining
limitations imposed hereunder (if any) with respect to any or all of an
award under this Section 10.
(v) Each award under this Section 10 shall be confirmed by, and
subject to the terms of, an agreement or other instrument executed by
the Company and by the participant, the form of which has been approved
by the Committee.
(vi) Stock (including securities convertible into Stock) issued
on a bonus basis under this Section 10 may be issued for no cash
consideration. Stock (including securities convertible into Stock)
purchased pursuant to a purchase right awarded under this Section 10
shall be priced at least 50% of the Fair Market Value of the Stock on
the date of grant.
10. Transferability. (a) Except as otherwise determined by the
Committee, no Option Right, Appreciation Right or other derivative security
granted under the Plan shall be transferable by an Optionee other than by will
or the laws of descent and distribution. Except as otherwise determined by the
Committee, Option Rights and Appreciation Rights shall be exercisable during the
Optionee's lifetime only by him or her or by his or her guardian or legal
representative.
(b) The Committee may specify at the Date of Grant that part or
all of the Common Shares that are (i) to be issued or transferred by the
Corporation upon the exercise of Option Rights or Appreciation Rights, upon the
termination of the Deferral Period applicable to Deferred Shares or upon payment
under any grant of Performance Shares, Performance Units or Other Stock-Based
Awards or (ii) no longer subject to the substantial risk of forfeiture and
restrictions on transfer referred to in Section 6 of this Plan, shall be subject
to further restrictions on transfer.
11. Adjustments. The Committee may make or provide for such adjustments
in the numbers of Common Shares covered by outstanding Option Rights,
Appreciation Rights, Deferred Shares, Performance Shares and Other Stock-Based
Awards granted hereunder, in the prices per share applicable to such Option
Rights and Appreciation Rights and in the kind of shares covered thereby, as the
Committee, in its sole discretion, exercised in good faith, may determine is
equitably required to prevent dilution or enlargement of the rights of
Participants or Optionees that otherwise would result from (a) any stock
dividend, stock split, combination of shares, recapitalization or other change
in the capital structure of the Corporation, or (b) any merger, consolidation,
spin-off, split-off, spin-out, split-up, reorganization, partial or complete
liquidation or other distribution of assets, issuance of rights or warrants to
purchase securities, or (c) any other corporate transaction or event having an
effect similar to any of the foregoing. Moreover, in the event of any such
transaction or event, the Committee, in its discretion, may provide in
substitution for any or all outstanding awards under this Plan such alternative
consideration as it, in good faith, may determine to be equitable in the
circumstances and may require in connection therewith the surrender of all
awards so replaced. The Committee may also make or provide for such adjustments
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in the numbers of shares specified in Section 3 of this Plan as the Committee in
its sole discretion, exercised in good faith, may determine is appropriate to
reflect any transaction or event described in this Section 11.
12. Change in Control. For purposes of this Plan, a "Change in Control"
shall mean if at any time any of the following events shall have occurred:
(a) Any sale of all or substantially all of the Corporation's
assets to any person or entity (a "Person");
(b) Any sale or series of related sales which, in the aggregate,
transfer fifty percent (50%) or more of the voting shares of the Corporation to
any Person or group of Persons (as the term "group" is defined in Section
13(d)(3) of the Securities Exchange Act of 1934, as amended); or
(c) Any merger of the Corporation with any other Person
following which the Corporation is not the surviving entity.
(d) Notwithstanding the foregoing, "Change in Control" shall not
include any sale, merger or consolidation with or to any Person in which the
shareholders of the Corporation immediately prior to such sale, merger or
consolidation own or obtain controlling voting power of such Person immediately
following such transaction.
13. Fractional Shares. The Corporation shall not be required to issue
any fractional Common Shares pursuant to this Plan. The Committee may provide
for the elimination of fractions or for the settlement of fractions in cash
based on Market Value per Share on the date of settlement.
14. Withholding Taxes. To the extent that the Corporation is required to
withhold federal, state, local or foreign taxes in connection with any payment
made or benefit realized by a Participant or other person under this Plan, and
the amounts available to the Corporation for such withholding are insufficient,
it shall be a condition to the receipt of such payment or the realization of
such benefit that the Participant or such other person make arrangements
satisfactory to the Corporation for payment of the balance of such taxes
required to be withheld, which arrangements (in the discretion of the Committee)
may include relinquishment of a portion of such benefit. The Corporation and a
Participant or such other person may also make similar arrangements with respect
to the payment of any taxes with respect to which withholding is not required.
15. Participation by Employees of Designated Subsidiaries. As a
condition to the effectiveness of any grant or award to be made hereunder to a
Participant who is an employee of a Designated Subsidiary, whether or not such
Participant is also employed by the Corporation or another Subsidiary, the
Committee may require such Designated Subsidiary to agree to transfer to such
employee (when, as and if provided for under this Plan and any applicable
agreement entered into with any such employee pursuant to this Plan) the Common
Shares that would otherwise be delivered by the Corporation, upon receipt by
such Designated Subsidiary of any consideration then otherwise payable by such
Participant to the Corporation. Any such award shall be evidenced by an
agreement between the Participant and the Designated Subsidiary, in lieu of the
Corporation, on terms consistent with this Plan and approved by the Committee
and such Designated Subsidiary. All such Common Shares so delivered by or to a
Designated Subsidiary shall be treated as if they had been delivered by or to
the Corporation for purposes of Section 3 of this Plan, and all references to
the Corporation in this Plan shall be deemed to refer to such Designated
Subsidiary, except for purposes of the definition of "Board" and except in other
cases where the context otherwise requires.
16. Foreign Employees. In order to facilitate the making of any grant or
combination of grants under this Plan, the Committee may provide for such
special terms for awards to Participants who are foreign nationals or who are
employed by the Corporation or any Subsidiary outside of the United States of
America as the Committee may consider necessary or appropriate to accommodate
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differences in local law, tax policy or custom. Moreover, the Committee may
approve such supplements to or amendments, restatements or alternative versions
of this Plan as it may consider necessary or appropriate for such purposes,
without thereby affecting the terms of this Plan as in effect for any other
purpose, and the Secretary or other appropriate officer of the Corporation may
certify any such document as having been approved and adopted in the same manner
as this Plan. No such special terms, supplements, amendments or restatements,
however, shall include any provisions that are inconsistent with the terms of
this Plan as then in effect unless this Plan could have been amended to
eliminate such inconsistency without further approval by the shareholders of the
Corporation.
17. Administration of the Plan. (a) This Plan shall be administered by a
Committee of the Board (or subcommittee thereof), consisting of not less than
three Non-Employee Directors appointed by the Board. To the extent of such
delegation, references in the Plan to the Board shall also refer to the
appropriate committee. A majority of the Committee (or subcommittee thereof)
shall constitute a quorum, and the action of the members of the Committee (or
subcommittee thereof) present at any meeting at which a quorum is present, or
acts unanimously approved in writing, shall be the acts of the committee (or
subcommittee thereof). Until subsequent action of the Board, the Committee shall
be the Compensation Committee of the Board.
(b) The interpretation and construction by the Committee of any
provision of this Plan or of any agreement, notification or document evidencing
the grant of Option Rights, Appreciation Rights, Restricted Shares, Deferred
Shares, Performance Shares or Performance Units and any determination by the
Committee pursuant to any provision of this Plan or of any such agreement,
notification or document shall be final and conclusive. No member of the
Committee shall be liable for any such action or determination made in good
faith.
18. Amendments, Etc. (a) The Committee may at any time and from time to
time amend the Plan in whole or in part; provided, however, that any amendment
which must be approved by the shareholders of the Corporation in order to comply
with applicable law or the rules of the principal national securities exchange
upon which the Common Shares are traded or quoted shall not be effective unless
and until such approval has been obtained. Presentation of this Plan or any
amendment hereof for shareholder approval shall not be construed to limit the
Corporation's authority to offer similar or dissimilar benefits under plans that
do not require shareholder approval.
(b) The Committee may, with the concurrence of affected
Optionee, cancel any agreement evidencing Option Rights or any other award
granted under this Plan. In the event of such cancellation, the Committee may
authorize the granting of new Option Rights or other awards hereunder (which may
or may not cover the same number of Common Shares which had been the subject of
the prior award) in such manner, at such option price, and subject to such other
terms, conditions and discretion as would have been applicable under this Plan
had the cancelled Option Rights or other award not been granted.
(c) The Committee also may permit Participants to elect to defer
the issuance of Common Shares or the settlement of awards in cash under the Plan
pursuant to such rules, procedures or programs as it may establish for purposes
of this Plan. The Committee also may provide that deferred settlements include
the payment or crediting of dividend equivalents or interest on the deferral
amounts.
(d) The Committee may condition the grant of any award or
combination of awards authorized under this Plan on the surrender or deferral by
the Participant of his or her right to receive a cash bonus or other
compensation otherwise payable by the Corporation or a Subsidiary to the
Participant.
(e) In case of termination of employment by reason of death,
disability or normal or early retirement, or in the case of hardship or other
special circumstances, of a Participant who holds an Option Right or
Appreciation Right not immediately exercisable in full, or any Restricted Shares
as to which the substantial risk of forfeiture or the prohibition or restriction
on transfer has not lapsed, or any Deferred Shares as to which the Deferral
Period has not been completed, or any Performance Shares or Performance Units or
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Other Stock-Based Awards which have not been fully earned, or who holds Common
Shares subject to any transfer restriction imposed pursuant to Section 10(b) of
this Plan, the Committee may, in its sole discretion, accelerate the time at
which such Option Right or Appreciation Right may be exercised or the time at
which such substantial risk of forfeiture or prohibition or restriction on
transfer will lapse or the time when such Deferral Period will end or the time
at which such Performance Shares or Performance Units will be deemed to have
been fully earned or the time when such transfer restriction will terminate or
may waive any other limitation or requirement under any such award.
(f) This Plan shall not confer upon any Participant any right
with respect to continuance of employment or other service with the Corporation
or any Subsidiary, nor shall it interfere in any way with any right the
Corporation or any Subsidiary would otherwise have to terminate such
Participant's employment or other service at any time.
(g) To the extent that any provision of this Plan would prevent
any Option Right that was intended to qualify as an Incentive Stock Option from
qualifying as such, that provision shall be null and void with respect to such
Option Right. Such provision, however, shall remain in effect for other Option
Rights and there shall be no further effect on any provision of this Plan.
19. Termination. No grant (other than an automatic grant of Reload
Option Rights) shall be made under this Plan more than 10 years after the date
on which this Plan is first approved by the shareholders of the Corporation, but
all grants made on or prior to such date shall continue in effect thereafter
subject to the terms thereof and of this Plan.
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ANNEX C
THE BIBB COMPANY
NONEMPLOYEE DIRECTOR STOCK PLAN
EFFECTIVE JULY 1, 1997
================================================================================
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<TABLE>
<CAPTION>
Contents
- --------------------------------------------------------------------------------------------------------
Page
<S> <C> <C>
Article 1. Establishment, Purpose, and Duration............................................ 1
1.1. Establishment of the Plan....................................................... 1
1.2. Purpose of the Plan............................................................. 1
1.3. Duration of the Plan............................................................ 1
Article 2. Definitions..................................................................... 1
Article 3. Administration.................................................................. 3
3.1. The Compensation Committee...................................................... 3
3.2. Administration by the Committee................................................. 3
3.3. Decisions Binding............................................................... 3
3.4. Adjustment of Awards and Accounts............................................... 4
Article 4. Eligibility and Participation................................................... 4
4.1. Eligibility..................................................................... 4
4.2. Actual Participation............................................................ 4
Article 5. Awards for Existing Nonemployee Directors....................................... 4
5.1. Grant of Options................................................................ 4
5.2. Vesting of Options.............................................................. 4
Article 6. Additional Options for Directors................................................ 4
6.1. Initial Grant of Options for New Nonemployee Directors.......................... 4
6.2. Annual Awards of Options ....................................................... 5
6.3. Vesting of Options.............................................................. 5
Article 7. Deferral of Retainers, Committee Fees, and Meeting Fees......................... 5
7.1. Deferral of Retainers, Committee Fees, and Meeting Fees......................... 5
7.2. Election........................................................................ 5
7.3. Number of Deferred Stock Units.................................................. 5
7.4. Vesting of Deferred Stock Units................................................. 5
Article 8. Deferred Stock Units............................................................ 6
8.1. Deferred Stock Unit Account..................................................... 6
8.2. Dividend Equivalents............................................................ 6
8.3. Amount of Payout................................................................ 6
8.4. Timing and Method of Payout..................................................... 6
8.5. Funding Mechanism for Deferred Stock Units...................................... 7
Article 9. Amendment, Modification, and Termination........................................ 7
9.1. Amendment, Modification, and Termination........................................ 7
9.2. Awards Previously Granted....................................................... 7
Article 10. Miscellaneous................................................................... 7
10.1. Gender and Number............................................................... 7
10.2. Severability.................................................................... 7
10.3. Beneficiary Designation......................................................... 7
10.4. Nonalienation of Interest....................................................... 7
10.5. Interest of Participant......................................................... 8
10.6. No Right of Nomination.......................................................... 8
10.7. Shares Available................................................................ 8
10.8. Successors...................................................................... 8
10.9. Requirements of Law............................................................. 8
10.10. Governing Law................................................................... 8
</TABLE>
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The Bibb Company
Nonemployee Director Stock Plan
Article 1. Establishment, Purpose, and Duration
1.1. Establishment of the Plan. The Bibb Company hereby establishes an
incentive compensation plan to be known as the "The Bibb Company Nonemployee
Director Stock Plan" (the "Plan"), as set forth in this document. The Plan
provides for the acquisition of Options and of Deferred Stock Units by
Nonemployee Directors, subject to the terms and provisions set forth herein.
Upon approval by the Board of Directors of the Company, the Plan shall
become effective as of July 1, 1997 (the "Effective Date"), and shall remain in
effect as provided in Section 1.3 herein.
1.2. Purpose of the Plan. The purpose of the Plan is to promote the
achievement of long-term objectives of the Company by linking the personal
interests of Nonemployee Directors to those of the Company's shareholders and to
attract and retain Nonemployee Directors of outstanding competence.
1.3. Duration of the Plan. The Plan shall commence on the Effective Date
and shall remain in effect subject to the right of the Board of Directors to
terminate the Plan at any time pursuant to Article 9. However, in no event may
an Award be granted under the Plan on or after July 1, 2007. The maximum number
of Shares paid out under the Plan shall be 250,000 (as adjusted pursuant to
Section 3.4) unless otherwise determined by the Board of Directors.
Article 2. Definitions
Whenever used in the Plan, the following terms shall have the meanings
set forth below when the initial letter of the word is capitalized:
(a) "Award" means, individually or collectively, an award under this
Plan of Options or of Deferred Stock Units, as indicated.
(b) "Beneficial Owner" shall have the meaning ascribed to such term in
Rule 13d-3 of the General Rules and Regulations under the Exchange
Act.
(c) "Board" or "Board or Directors" means the Board of Directors of the
Company.
(d) "Change in Control" means any of the following events:
(1) Any sale of all or substantially all of the
Company's assets to any person or entity (a
"Person");
(2) Any sale or series of related sales which, in the
aggregate, transfer fifty percent (50%) or more of the
voting shares of the Company to any Person or group
of Persons (as the term "group" is defined in Section
13(d)(3) of the Securities Exchange Act of 1934, as
amended);
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(3) Any merger of the Company with any other Person
following which the Company is not the surviving
entity; or
(4) Notwithstanding the foregoing, "Change in Control" shall
not include any sale, merger or consolidation with or to
any Person in which the shareholders of the Company
immediately prior to such sale, merger or consolidation
own or obtain controlling voting power of such Person
immediately following such transaction.
(e) "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
(f) "Committee" means the Compensation Committee of the Board of
Directors of the Company.
(g) "Company" means The Bibb Company, a Georgia corporation, together
with any and all Subsidiaries, and any successor thereto as
provided in Section 10.8.
(h) "Director" means any individual who is a member of the Board of
Directors of the Company.
(i) "Disability" means a permanent and total disability, within the
meaning of Code Section 22(e)(3).
(j) "Employee" means any full-time, nonunion, salaried employee of the
Company or of the Company's Subsidiaries. For purposes of the Plan,
an individual whose only employment relationship with the Company
is as a Director, shall not be deemed to be an Employee.
(k) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor Act thereto.
(l) "Existing Nonemployee Director" means a Nonemployee Director whose
original election to the Board occurred prior to the Effective
Date.
(m) "Fair Market Value" shall mean the average of the highest and
lowest quoted selling prices for Shares on the relevant date, or
(if there were no sales on such date) the weighted average of the
means between the highest and lowest quoted selling prices on the
nearest day before and the nearest day after the relevant date.
(n) "New Nonemployee Director" means a Nonemployee Director whose
original election to the Board occurred after the Effective Date.
(o) "Nonemployee Director" means any individual who is a member of the
Board of Directors of the Company, but who is neither a current nor
a retired Employee of the Company.
(p) "Option" means a right to acquire Shares for consideration and upon
terms stated therein.
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(q) "Participant" means a Nonemployee Director of the Company who has
an outstanding Award granted under the Plan.
(r) "Person" shall have the meaning ascribed to such term in Section
3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d)
thereof, including a "group" as defined in Section 13(d).
(s) "Retirement" means any termination of services on the Board at a
time when the Director has served on the Board for at least five
(5) years.
(t) "Shares" means the Common Shares of the Company, $0.01 par value,
or such other securities as may have been substituted for such
Shares pursuant to any adjustment of Accounts under Section 3.4 of
the Plan.
(u) "Subsidiary" means a corporation, company or other entity
(i) more than 50 percent of whose outstanding shares or
securities (representing the right to vote for the election of
directors or other managing authority) are, or
(ii) which does not have outstanding shares or
securities (as may be the case in a partnership, joint venture
or unincorporated association), but more than 50 percent of
whose ownership interest representing the right generally to
make decisions for such other entity is,
now or hereafter, owned or controlled, directly or indirectly, by the
Corporation.
Article 3. Administration
3.1. The Compensation Committee. The Plan shall be administered by the
Compensation Committee of the Board of Directors of the Company, subject to the
restrictions set forth in the Plan.
3.2. Administration by the Committee. The Committee shall have the full
power, discretion, and authority to interpret and administer the Plan in a
manner which is consistent with the Plan's provisions. However, in no event
shall the Committee have the power to determine Plan eligibility, or to
determine the number, the value, the vesting period, or the timing of Awards to
be made under the Plan (all such determinations being automatic pursuant to the
provisions of the Plan).
3.3. Decisions Binding. All determinations and decisions made by the
Committee pursuant to the Plan, and all related orders or resolutions of the
Committee shall be final, con-clusive, and binding on all persons, including the
Company, its shareholders, Employees, Participants, and their estates and
beneficiaries.
3.4. Adjustment of Awards and Accounts.
The Board shall make or provide for such adjustments in the number and
kind of Shares in each Director's Deferred Stock Unit Account or subject to
outstanding Options as the Board, in its sole discretion, exercised in good
faith, shall determine is equitably required to prevent dilution or enlargement
of the rights of the Nonemployee Directors that would otherwise result from (a)
any stock dividend, stock split, combination of shares, recapitalization or any
other change in the capital structure of the Company, (b) any merger,
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consolidation, spin-off, split-off, spin-out, split-up, reorganization, partial
or complete liquidation or other distribution of assets, issuance of rights or
warrants to purchase securities, or (c) any other corporate transaction or event
having an effect similar to any of the foregoing.
Article 4. Eligibility and Participation
4.1. Eligibility. Persons eligible to participate in the Plan are
limited to Nonemployee Directors who are serving on the Board on the date of
each scheduled Award under the Plan.
4.2. Actual Participation. All Nonemployee Directors are eligible to
participate as follows:
(a) All Existing Nonemployee Directors shall receive Awards
of Options pursuant to Article 5 and Section 6.2;
(b) All New Nonemployee Directors herein shall receive
Awards of Options pursuant to Article 6; and
(c) All Nonemployee Directors shall be eligible to acquire
Deferred Stock Units in connection with deferrals
pursuant to Article 7.
Article 5. Awards for Existing Nonemployee Directors
5.1. Grant of Options. On the later of the Effective Date or the date
which is three (3) business days after which the Company's stock is first listed
on The Nasdaq Stock Market or on a national securities exchange in the United
States, each Existing Nonemployee Director shall receive a one-time Award of
Options for Twenty Thousand (20,000) Shares.
5.2. Vesting of Options. Said Options shall become vested at the rate of
6,666 Shares per year for each year of service on the Board, subsequent to the
Effective Date, with the number which become vested on the third anniversary
being 6,668; provided, however, that upon death, Disability, or a Change in
Control, all of a Participant's outstanding Options shall vest immediately. Any
Options not vested at the time of termination of service as a Director shall be
forfeited.
Article 6. Additional Options for Directors
6.1. Initial Grant of Options for New Nonemployee Directors. Each
individual who is a New Nonemployee Director, shall receive an Award of Options
for Ten Thousand (10,000) Shares on the date of his or her original election to
the Board. The said Award shall vest as to the first 5,000 Shares on the first
anniversary thereof and as to the remaining 5,000 Shares on the second
anniversary thereof, if the Director continues to serve in said capacity on said
dates; provided, however, that upon death, Disability, or a Change in Control,
all of a Participant's outstanding Options shall vest immediately. Any Options
not vested at the time of termination of service as a Director shall be
forfeited.
6.2. Annual Awards of Options. Each Nonemployee Director shall receive
Options for Five Thousand (5,000) Shares, effective as of the day following each
annual shareholders' meeting; as to Existing Nonemployee Directors, the first
such annual Award shall occur as of the annual Shareholders' meeting in 2000,
and as to each New Nonemployee Director, the first such annual Award shall occur
as of the second annual Shareholders' meeting after his initial election as a
Director.
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6.3. Vesting of Options. All Options awarded under Section 6.2 shall
vest one hundred percent (100%) upon the first anniversary of the award of such
Option, or if earlier, upon a Change in Control. If a Director ceases to serve
prior to said first anniversary (other than for death or Disability, on which
event said Options shall become fully vested), he or she shall be entitled, upon
said anniversary to exercise the Option with respect to a percentage of the
Shares subject to said Option equal to the number of days since the grant in
which he did serve as a Director divided by 365, and shall forfeit the Option
with respect to the remaining number of Shares.
Article 7. Deferral of Retainers, Committee Fees, and Meeting Fees
7.1. Deferral of Retainers, Committee Fees, and Meeting Fees. During the
term of this Plan, any Nonemployee Director may elect to receive all, none or
fifty percent (50%) of the cash portion of his or her annual retainer, committee
fees, and meeting fees in the form of Deferred Stock Units. Such election to
receive Deferred Stock Units shall be subject to the provisions of this Article
7.
7.2. Election. Any election to receive all or fifty percent (50%) of a
Nonemployee Director's annual retainer, committee fees, and meeting fees in the
form of Deferred Stock Units shall be made before the first day of the calendar
year for which such compensation would otherwise be paid, or before July 1,
1997, as to amounts otherwise payable in 1997. New Nonemployee Directors,
however, may make such election with respect to their retainer payable during
the first calendar year of their service upon their original election to the
Board. Each such election may pertain to subsequent scheduled fees and retainer
payments, and will continue in effect as to subsequent years unless changed in
writing prior to any January 1.
7.3. Number of Deferred Stock Units. The number of Deferred Stock Units
to be granted in connection with an election pursuant to Section 7.2 shall equal
the cash portion of the retainer and fees being deferred into Deferred Stock
Units, divided by the Fair Market Value of a Share on the date of the scheduled
payment of the amount deferred.
7.4. Vesting of Deferred Stock Units. Subject to the terms of this Plan,
all Deferred Stock Units acquired under this Article 7 shall vest one hundred
percent (100%) upon the acquisition of such Deferred Stock Units.
Article 8. Deferred Stock Units
8.1. Deferred Stock Unit Account. A Deferred Stock Unit Account (the
"Account") shall be established and maintained by the Company for each
Participant who elects a Deferral pursuant to Article 7 under the Plan. Each
Account shall be the record of the Deferred Stock Units acquired by the
Participant under Article 7 of the Plan on each applicable date, shall be
maintained solely for accounting purposes, and shall not require a segregation
of any Company assets.
8.2. Dividend Equivalents. Dividend equivalents shall be earned on
Deferred Stock Units provided under this Plan. Such dividend equivalents shall
be converted into equivalent amounts of Deferred Stock Units based on the Fair
Market Value of a Share on the day on which the dividend would be paid and added
to a Participant's Accounts. Deferred Stock Units resulting from dividend
equivalents shall be fully vested.
8.3. Amount of Payout. Except as provided otherwise in this Plan, the
total amount payable to a Participant shall be one Share for each Deferred Stock
Unit, if any, in said Participant's Accounts at the date of payout as determined
in accordance with Section 8.4.
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8.4. Timing and Method of Payout. Except as otherwise provided herein,
vested Deferred Stock Units shall be paid to Participants, in Shares, within
thirty (30) days following each Participant's termination of service on the
Board. Payout of a Participant's Account shall be made in one of the following
forms as elected by the Participant:
(a) By payment in Shares in a single distribution;
(b) By payment in Shares in not greater than ten annual
installments; or
(c) A combination of (a) and (b) above. The Participant
shall designate the percentage payable under each
option.
Fractional Shares shall be rounded down to the nearest whole Share, and such
fractional amount shall be paid in cash.
The Participant's election of the form of payout shall be made by
written notice filed with the Committee at least one year prior to the
Participant's voluntary termination as a Director. Any such election may be
changed by the Participant at any time or from time to time; provided that any
election made less than one year prior to the Director's voluntary termination
as a Director shall not be valid, and in such case payment shall be made in
accordance with the Participant's prior election, except that the Participant's
initial election shall nonetheless be effective during the first year following.
Absent an election from the Participant, the payment shall be made in Shares in
a single distribution. In the event of a Director's death, the balance of his or
her Account shall be distributed to his or her beneficiary in shares in a single
distribution, even if the Participant had elected distribution in installments.
Each Participant shall have the right to require the Company to retain
so much of any distribution as may be necessary to provide for the payment of
applicable taxes, which shall be converted into cash based on the Fair Market
Value of the Shares on the date five (5) days prior to the distribution, and the
Company will cause the amount so retained to be paid or deposited on behalf of
the Participant.
8.5. Funding Mechanism for Deferred Stock Units. The Company shall be
entitled, but not obligated, to establish a grantor trust or similar funding
mechanism to fund the Company's obligations under this Plan; provided, however,
that any funds contained therein shall remain subject to the claims of the
Company's general creditors. The funding mechanism shall constitute an unfunded
arrangement. This mechanism may be funded through the acquisition of Shares and
in that event, Participants shall be given the right to direct the exercise of
voting rights with respect to their respective interests in those Shares.
Article 9. Amendment, Modification, and Termination
9.1. Amendment, Modification, and Termination. Subject to the terms set
forth in this Article 9, the Board may terminate, amend, or modify the Plan at
any time and from time to time.
9.2. Awards Previously Granted. Unless required by law, no termination,
amendment, or modification of the Plan shall in any material manner adversely
affect any Award previously provided under the Plan, without the written consent
of the Participant holding the Award.
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Article 10. Miscellaneous
10.1. Gender and Number. Except where otherwise indicated by the
context, any masculine term used herein also shall include the feminine; the
plural shall include the singular and the singular shall include the plural.
10.2. Severability. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.
10.3. Beneficiary Designation. Each Participant under the Plan may, from
time to time, name any beneficiary or beneficiaries (who may be named
contingently or successively) to whom any benefit under the Plan is to be paid
in the event of his or her death. Each designation will revoke all prior
designations by the same Participant, shall be in a form prescribed by the
Board, and will be effective only when filed by the Participant in writing with
the Board during his or her lifetime. In the absence of any such designation or
if no designated beneficiary survives the Participant, benefits remaining unpaid
at the Participant's death shall be paid to the Participant's estate in Shares
in a single distribution.
10.4. Nonalienation of Interest. Except as permitted by this Plan, no
right or interest under this Plan of any Participant or beneficiary shall,
without the written consent of the Company, be (i) assignable or transferable in
any manner, (ii) subject to alienation, anticipation, sale, pledge, encumbrance,
attachment, garnishment, or other legal process, or (iii) in any manner liable
for or subject to the debts or liabilities of the Participant or beneficiary.
10.5. Interest of Participant. The obligation of the Company under the
Plan to make payment under this Plan merely constitutes the unsecured promise of
the Company to make payments in the form of its Shares, as provided herein, and
no Participant or beneficiary shall have any interest in, or lien or prior claim
upon, any property of the Company. It is the intention of the Company that the
Plan be unfunded for tax purposes.
10.6. No Right of Nomination. Nothing in the Plan shall be deemed to
create any obligation on the part of the Board to nominate any Director for
reelection by the Company's shareholders.
10.7. Shares Available. Shares delivered by the Company under the Plan
shall be treasury shares, or Shares which have been or may be reacquired by the
Company. Any funding mechanism as described in Section 8.5 of this Plan may
acquire treasury shares from the Company or purchase Shares on the open market.
10.8. Successors. All obligations of the Company under the Plan with
respect to Awards granted hereunder shall be binding on any successor to the
Company, whether the existence of such successor is the result of a direct or
indirect purchase, merger, consolidation, or otherwise, of all or substantially
all of the business and/or assets of the Company.
10.9. Requirements of Law. The granting of Awards under the Plan shall
be subject to all applicable laws, rules, and regulations, and to such approvals
by any governmental agencies or national securities exchanges as may be
required.
10.10. Governing Law. The Plan, and all agreements hereunder, shall be
construed in accordance with and governed by the internal, substantive laws of
the State of Georgia.
1. Set forth the amount on which the filing fee is calculated and state
how it was determined.
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THE BIBB COMPANY THIS PROXY IS SOLICITED ON BEHALF OF THE
100 GALLERIA PARKWAY BOARD OF DIRECTORS. The undersigned
17TH FLOOR hereby appoints Michael L. Fulbright and
ATLANTA, GEORGIA 30339 A. William Ott and each of them with
power of substitution in each, proxies to
appear and vote, as designated below, all
Common Stock of The Bibb Company held of
record on June 27, 1997 by the
undersigned, at the Annual Meeting of
Stockholders to be held on July 30, 1997,
and at all adjournments thereof.
Proxy Management recommends a vote in favor of
all nominees listed in Item 1 and in
favor of Proposals 2, 3, 4 and 5.
- ----------------------------------
1. ELECTION OF DIRECTORS
Director Nominees: Michael L. Fulbright, C. Scott Bartlett, Marvin
B. Crow, Stewart M. Kasen, George A. Poole,
James A. Williams and Irwin N. Gold
[ ] FOR all director nominees listed above [ ] WITHHOLD AUTHORITY
(except as marked to the contrary) to vote for all
director nominees
listed above
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THAT NOMINEE'S NAME IN THE LIST
ABOVE.
2. PROPOSAL TO AMEND THE CERTIFICATE OF INCORPORATION OF THE BIBB COMPANY TO
INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. PROPOSAL TO AMEND THE CERTIFICATE OF INCORPORATION OF THE BIBB COMPANY TO
PROVIDE FOR INDEMNIFICATION OF THE DIRECTORS AND OFFICERS.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. PROPOSAL TO RATIFY THE 1997 OMNIBUS STOCK INCENTIVE PLAN.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. PROPOSAL TO RATIFY THE NONEMPLOYEE DIRECTOR STOCK PLAN.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
6. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
<PAGE>
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE INSTRUCTIONS INDICATED. IF NO
INDICATION IS MADE, IT WILL BE VOTED IN FAVOR OF ALL DIRECTOR-NOMINEES AND IN
FAVOR OF PROPOSALS 2, 3, 4 and 5.
Dated:_____________________________________, 1997
_________________________________________________
_________________________________________________
Signature(s)
(Please sign as name appears on proxy. When shares
are held by joint tenants, both should sign. When
signing in a fiduciary or representative capacity,
give full title as such.)
PLEASE MARK, DATE, AND SIGN THIS PROXY, INDICATING ANY CHANGE OF ADDRESS, AND
RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. THE ENCLOSED ENVELOPE ALREADY IS
ADDRESSED AND NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
