<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the registrant [X]
Filed by a party other than the registrant [_]
Check the appropriate box:
[_] Preliminary proxy statement
[_] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] 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
August 22, 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 9:00 a.m.,
local time, on Tuesday, September 30, 1997, at The Georgian Club, 100 Galleria
Parkway, 17th Floor, Atlanta, Georgia 30339. Admission to the meeting will
begin at 8:00 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
25,000,000 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 fullest extent permitted by law; (iv)
approval of the 1997 Omnibus Stock Incentive Plan; and (v) approval 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
SEPTEMBER 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 September 30, 1997 at 9:00 a.m., local time, at The Georgian Club,
100 Galleria Parkway, 17th Floor, Atlanta, Georgia 30339, 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 25,000,000 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
fullest extent permitted by law;
(4) To approve the 1997 Omnibus Stock Incentive Plan providing for the
granting of options to the employees of the Company; and
(5) To approve 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 August 8, 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
August 22, 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 September 30, 1997 at 9:00 a.m., local time, at The Georgian Club,
100 Galleria Parkway, 17th Floor, Atlanta, Georgia 30339, 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 August 22, 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 August
8, 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 25,000,000 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 fullest extent permitted by
law, (4) approval of the 1997 Omnibus Stock Incentive Plan and (5) approval 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
stockholder proposals omitted from this proxy statement in accordance with the
rules and regulations of the Securities and Exchange Commission (the
"Commisson")) 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.
1
<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 Company's annual report, 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 and the six month period ended June 28, 1997, is
being mailed with this Proxy Statement to all stockholders entitled to notice
of and 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 for a "prepackaged" bankruptcy
reorganization by the requisite creditors and securityholders of Old Bibb, Old
Bibb filed voluntary petitions for relief under chapter 11 of the Bankruptcy
Code with the United States 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 and the Merger were
consummated on September 27, 1996 (the "Effective Date") and upon consummation
thereof, 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.
2
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of July 9, 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 5 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 Commission.
<TABLE>
<CAPTION>
AMOUNT AND APPROXIMATE
NATURE OF PERCENT OF
BENEFICIAL COMMON
NAME OF BENEFICIAL OWNER OWNERSHIP(1) STOCK
------------------------ ------------ -----------
<S> <C> <C>
Franklin Advisers, Inc. and Franklin Advisory
Services, Inc.(2).................................... 2,588,546 25.7%
777 Mariners Island Blvd.
San Mateo, CA 94404
Merrill Lynch Pierce, Fenner & Smith Incorporated(3).. 2,073,779 20.6%
250 Vesey Street, North Tower
New York, NY 10281
Buford H. Ortale and Sewanee Ventures, LLC(4)......... 780,793 7.8%
104 Woodmont Boulevard
Suite 200
Nashville, TN 37205
Romulus Holdings, Inc. and Related Entities(5)........ 707,696 7.0%
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(6)................................... 0 0
C. Scott Bartlett, Jr................................. 0 0
Marvin B. Crow........................................ 0 0
Stewart M. Kasen...................................... 0 0
George A. Poole, Jr................................... 0 0
James A. Williams..................................... 0 0
Irwin N. Gold(7)...................................... 20,264 *
Thomas C. Foley(8).................................... 487,408 4.8%
All Directors, Director Nominees, and Executive
Officers as a group (11 persons)(8).................. 507,672 5.0%
</TABLE>
- --------
* Less than 1%
(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
3
<PAGE>
named persons have sole voting and investment power with respect to the
shares of Common Stock beneficially owned.
(2) Represents 2,516,546 shares of Common Stock owned by Franklin Advisers,
Inc. and 72,000 shares of Common Stock that may be deemed to be
beneficially owned by Franklin Advisory Services, Inc. The shares of
Common Stock are owned by one or more open or closed-end investment
companies or other managed accounts which are advised by direct and
indirect investment advisory subsidiaries of Franklin Resources, Inc. This
information is based upon information contained in a Schedule 13G filed
with the Commission on July 9, 1997.
(3) Represents 2,073,779 shares beneficially owned by Merrill Lynch, Pierce,
Fenner & Smith Incorporated, a wholly owned subsidiary of Merrill Lynch &
Co., Inc. This information is based upon information contained in a
Schedule 13G filed with the Commission on July 1, 1997.
(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. This information is based upon information provided to the Company
by such stockholders.
(5) This information was provided to the Company pursuant to a Schedule 13D
filed with the 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) Frank X. Sheehan served as Vice President, Industrial Relations until July
1997.
(7) Irwin N. Gold may be deemed to be the beneficial owner of 17,791 shares of
Common Stock held of record by Houlihan Lokey Howard & Zukin ("Houlihan
Lokey") with respect to which Mr. Gold has been granted an undivided
interest. Mr Gold is a managing director of Houlihan Lokey and may be
deemed to be the beneficial owner of an additional 2,473 shares of Common
Stock held of record by Houlihan Lokey to the extent of Mr. Gold's
pecuniary interest therein. Houlihan Lokey retains sole voting and
dispositive power with respect to all such shares of Common Stock
beneficially owned by Mr. Gold.
(8) Thomas C. Foley served as Chief Executive Officer prior to the
Reorganization, 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.
4
<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) all persons who served as Chief Executive Officer of the Company during
1996 and (b) those executive officers of the Company who earned in excess of
$100,000 during 1996 (collectively with the Chief Executive Officer, the
"Named Executive Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
------------------------------------- ------------
SECURITIES
NAME AND PRINCIPAL OTHER ANNUAL UNDERLYING ALL OTHER
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
President, Home 1995 161,601 -- -- -- 810
Fashions Division and 1994 130,039 10,000 -- -- 568
Secretary
Neal J. McGrail, 1996 102,500 50,000 -- -- 714
Vice President, 1995 90,883 -- -- -- 383
Corporate Controller 1994 77,252 -- -- -- 304
and Assistant Secretary
Frank X. Sheehan, 1996 112,500 5,000 -- -- 2,419
Vice President, 1995 110,212 -- -- -- 2,304
Industrial Relations(7) 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
$400,000 plus reimbursement of certain expenses.
(6) Effective in August 1996, Mr. Foley resigned as Chairman and Chief
Executive Officer, and Michael L. Fulbright was appointed as President and
Chief Executive Officer.
(7) Mr. Sheehan left the Company in July 1997.
5
<PAGE>
STOCK OPTIONS
The following table contains information concerning the grant of stock
options to the Named Executive Officers during the year ended December 28,
1996:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------
POTENTIAL
PERCENT REALIZABLE VALUE
OF TOTAL OF ASSUMED ANNUAL
OPTIONS RATES OF STOCK
NUMBER OF GRANTED PRICE
SECURITIES TO EXERCISE APPRECIATION FOR
UNDERLYING EMPLOYEES OR BASE OPTION TERM
OPTIONS IN FISCAL PRICE EXPIRATION -----------------
NAME GRANTED (#) YEAR ($/SHARE) DATE 5% 10%
---- ----------- --------- --------- ---------- -- --------
<S> <C> <C> <C> <C> <C> <C>
Michael L. Fulbright.... 200,000 100% 7.10 9/26/01 $392,320 $866,924
</TABLE>
OPTION EXERCISES AND HOLDINGS
The following table sets forth information with respect to stock options
exercised during the last fiscal year by the Named Executive Officers, the
aggregate number of unexercised options to purchase Common Stock granted in
all years to the Named Executive Officers and held by them as of December 28,
1996, and the value of unexercised in-the-money options (i.e., options that
had a positive spread between the exercise price and the fair market value of
the Common Stock) as of December 28, 1996:
AGGREGATED OPTION EXERCISES IN LAST
FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
YEAR-END (#) YEAR-END ($)
SHARES ------------- -------------
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE (#) REALIZED ($) 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.
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.
6
<PAGE>
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 consists of Stewart M. Kasen
(Chairman), Irwin N. Gold and George A. Poole, Jr.
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 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 officer's participation.
7
<PAGE>
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 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. In June
1997, the Committee granted an aggregate of 100,000 additional options to Mr.
Fulbright, an aggregate of 30,000 options to A. William Ott and an aggregate
of 10,000 options to Neal McGrail under the 1997 Omnibus Stock Incentive Plan.
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 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.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
RESTRUCTURING AGREEMENT
The Restructuring Agreement, dated February 1, 1996, entered into by Old
Bibb in connection with the Reorganization (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 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 The NTC Group, Inc. ("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, TB Woods Incorporated ("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
corporation.
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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,
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 of
Reorganization of Old Bibb 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 trading 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 a 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 served as
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. Between
the Effective Date and the end of the Company's fiscal year on December 28,
1996, the Board of Directors held two 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 did not meet between the Effective Date
and the end of the Company's fiscal year on December 28, 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
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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 Stewart M. Kasen
(Chairman), Irwin N. Gold, and George A. Poole, Jr. The Compensation Committee
did not meet between the Effective Date and the end of the Company's fiscal
year on December 28, 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)."
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 August 1,
1997, the Company's Common Stock had 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. Mr. Fulbright is also a director of JPS Textile Group
Inc.
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, Bucyrus International Inc. and Janus Industries, Inc.
Marvin B. Crow, age 65, 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,
National Spinning Company, Inc., Ithaca Industries Inc., and Ameritex Corp.
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, O'Sullivan
Industries Holdings, Inc., K2 Inc., and Factory Card Outlet Corp., where he
also serves as chairman.
George A. Poole, Jr., age 66, 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 Ithaca Industries Inc.
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 July 30, 1997, the Board of Directors unanimously approved, and
recommends that the stockholders 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 25,000,000 (the "Authorized Stock
Amendment") and (ii) include a new Article 10 to provide for indemnification
of the Company's directors and officers to the fullest extent permitted by law
(the "Indemnification Amendment"). The full text of the Authorized Stock
Amendment is included in 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
25,000,000. 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 following such approval.
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.
VOTE REQUIRED TO APPROVE THE AUTHORIZED STOCK 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.
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 stockholders 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. The full text
of the Indemnification Amendment is included in Annex A to this Proxy
Statement.
Indemnification under the Delaware General Corporation Law
Under the Delaware General Corporation Law (the "DGCL"), a Delaware
corporation (i) must indemnify its directors, officers, employees or agents
for expenses (including attorneys' fees) actually and reasonably incurred with
respect to litigation to which they are parties or are threatened to be made
parties by reason of their service to or on behalf of the corporation when
they are successful on the merits or otherwise (ii) may indemnify such persons
for the expenses, judgments, fines and amounts paid in settlement of such
litigation (other than stockholders' derivative suits) even if they are not
successful on the merits, if they acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interests of the
corporation (and, in the case of criminal proceedings, had no reason to
believe their conduct was unlawful) and (iii) may indemnify such persons for
the expenses of a suit by or in the right of the corporation (e.g. a
stockholders' derivative suit) even if they are not successful on the merits,
if they acted in good faith and in a manner they reasonably believed to be in
or not opposed to the best interests of the corporation, provided that no such
indemnification may be made on behalf of a person adjudged liable to the
corporation, unless a court determines that, despite such adjudication but in
view of all the circumstances, such person is fairly and reasonably entitled
to indemnification. In the cases described in clauses (ii) and (iii) of the
preceding sentence, indemnification may be made only as authorized in the
specific case upon a determination of (a) a majority vote of the directors who
are not parties to the action, suit or proceeding, even though less than a
quorum, or (b) if there are no such directors, or if such directors so direct,
by independent legal counsel in a written opinion, or (c) by the stockholders
of the corporation, that indemnification is proper because the applicable
standard of conduct has been met. The advancement of litigation expenses to a
director or officer also is authorized under the DGCL upon receipt by the
Board of Directors of an undertaking to repay amounts so advanced if it
ultimately is determined that such person is not entitled to be indemnified
for such expenses.
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,
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administrators, or estate of such person), will be indemnified by the Company
to the fullest extent permitted by the DGCL 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 (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 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 Company
may adopt By-laws, or enter into one or more agreements with any person, which
provide for indemnification and/or advancement of expenses greater or
different than that provided in the Indemnification Amendment or the DGCL. 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.
Purposes of Indemnification Amendment
The purpose of the Indemnification Amendment is to make indemnification
available to the fullest extent permitted by applicable law and to make
indemnification mandatory under circumstances in which indemnification under
the DGCL is discretionary. The DGCL includes provisions setting forth the
circumstances under which a corporation may indemnify its directors, officers,
employees and agents and persons serving as directors, officers, employees or
agents of other entities at the request of such corporation for liability and
other expenses incurred by such persons in respect of litigation and other
legal proceedings to which such persons are made parties as a result of their
actions in those capacities. The Indemnification Amendment provides that the
Company's obligations (subject to the limitations specified in the
Indemnification Amendment) to indemnify a person who is serving as a director,
officer, employee or agent of the Company, or of another entity at the request
of the Company, shall be mandatory to the fullest extent permitted by
applicable law. The Indemnification Amendment also provides that the
indemnification extended to directors and officers of the Company extends to
the fullest extent permitted under the DGCL or any other applicable law.
The Board of Directors believes that the provisions of the Indemnification
Amendment are advisable because, by making such indemnification mandatory,
rather than optional, and to the fullest extent permitted by applicable law,
it will enhance the ability of the Board of Directors to continue to attract
and retain well-qualified directors, officers and employees and to encourage
employees and agents (including directors and officers) of the Company to
serve at the Company's request as a director, officer, member, partner,
employee or agent of another entity. Furthermore, because the Indemnification
Amendment provides that the indemnification extended to directors and officers
of the Company is to the fullest extent permitted under the DGCL or any other
applicable law as currently or hereafter in effect, adoption of the
Indemnification Amendment will avoid the necessity of a stockholder vote each
time the indemnification provisions of the DGCL or any other applicable law
are amended. Therefore, to the extent the DGCL or any other applicable law is
amended to increase the indemnification afforded thereunder, the
Indemnification Amendment would extend such increased indemnification to the
Company's directors and officers without stockholder vote and would eliminate
the need for future amendments to conform the indemnification rights afforded
by the Certificate of Incorporation of the Company to those provided by the
DGCL or any other applicable law.
The Indemnification Amendment would apply retroactively and would provide
indemnification, to the fullest extent permitted under the DGCL or any other
applicable law, to the directors and officers of the Company for liabilities
and expenses arising out of acts and omissions occurring at any time since
they became directors or officers of the Company in conjunction with the
effectiveness of the Reorganization. The Company believes that it is
appropriate to clarify and ensure that its directors and officers are entitled
to indemnification to the
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fullest extent permitted under law in order to (i) enhance the ability of the
Company to retain its current directors, officers and employees and (ii)
conform with the general understanding with respect to the type of
indemnification that was contemplated would be available following the
Reorganization. When the directors and officers of the Company were selected
and accepted their positions in connection with the Reorganization, those
directors and officers agreed to serve with the understanding that the Company
would provide indemnification to them to the fullest extent permitted under
the DGCL or any other applicable law, as is typical of and consistent with the
level of indemnification generally provided to the directors and officers of
public companies incorporated under Delaware law. The Company is permitted
under the statutory indemnification rights under the DGCL to provide
indemnification to its directors and officers for liabilities and expenses
arising out of acts and omissions occurring at any time after such directors
or officers assumed office and the effective date of the Indemnification
Amendment. The Company believes, however, that making the mandatory
indemnification provisions of the Indemnification Amendment retroactive, and
providing indemnification to the fullest extent permitted under the DGCL or
any other applicable law, commencing as of the date such individuals assumed
their offices, conforms with the understanding among all participants in the
Reorganization that the Company would provide indemnification to its directors
and officers to the fullest extent permitted under the DGCL or any other
applicable law.
In addition, the Indemnification Amendment would authorize the Company to
adopt By-laws or to enter into one or more indemnification agreements which
provide for indemnification greater or different than that provided by the
DGCL.
There has not been in the past and there is not presently pending any
litigation or proceeding involving a director or officer of the Company in
which indemnification would have been or would be required or permitted by the
Indemnification Amendment. In addition, the Board of Directors is not
currently aware of any threatened litigation or proceeding which could result
in a claim for indemnification by any director or officer of the Company.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers or persons controlling the
Company pursuant to the Indemnification Amendment, the Company has been
informed that in the opinion of the Commission such indemnification is against
public policy as expressed in the Securities Act of 1933 and is therefore
unenforceable.
The present Board of Directors may have a personal interest in the adoption
of the Indemnification Amendment. The Board believes, however, that the
Indemnification Amendment is in the best interests of the Company and its
stockholders.
VOTE REQUIRED TO APPROVE 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 Indemnification Amendment.
RECOMMENDATION
The Board of Directors unanimously recommends a vote FOR the Indemnification
Amendment.
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APPROVAL OF 1997 OMNIBUS STOCK INCENTIVE PLAN
(PROPOSAL NO. 4)
GENERAL
On May 21, 1997, the Board of Directors of the Company unanimously adopted
the 1997 Omnibus Stock Incentive Plan (the "1997 Omnibus Stock Incentive
Plan"), subject to the approval of the Company's stockholders, and recommends
said approval. 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 stockholders
by aligning management and stockholders interests, and has therefore concluded
that adoption of the 1997 Omnibus Stock Incentive Plan is in the best
interests of the Company and its stockholders.
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 1997 Omnibus Stock Incentive
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
17
<PAGE>
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.
The 1997 Omnibus Stock Incentive Plan requires that the Committee establish
Management Objectives for purposes of Performance Shares and Performance
Units. When so determined by the Committee, Option Rights, Appreciation
Rights, Restricted Shares and dividend credits or Other Stock-Based Awards may
also specify Management Objectives. Management Objectives may be described in
terms of either Company-wide objectives or objectives that are related to the
performance of the individual participant or subsidiary, division, department,
region, or function within the Company or a subsidiary in which the
participant is employed. Management Objectives applicable to any award to a
participant who is a Covered Employee (within the meaning of Section 162(m) of
the Code), shall be limited to specified levels of or growth in one of more
the following categories (i) earnings; (ii) earnings per share; (iii) share
price; (iv) stockholder return; (v) return on invested capital, equity or
assets; (vi) operating earnings; (vii) sales; (viii) productivity; (ix) cash
flow; (x) market share; (xi) profit margin; (xii) customer service, and/or
economic value added. If the Committee determines that a change in the
business, operations, corporate structure or capital structure of the Company,
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
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<PAGE>
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.
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
Certificate 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. 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 aggregate number of shares actually issued or transferred by the Company
upon exercise of Incentive Stock Options shall not exceed 1,000,000 shares,
subject to adjustment as provided in the 1997 Omnibus Stock Incentive Plan.
Further, no participant shall be granted Option Rights for more than 200,000
shares during any calendar year, subject to adjustment as provided in the 1997
Omnibus Stock Incentive Plan.. In no event shall any participant in any
calendar year receive more than 200,000 Appreciation Rights or 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,
subject to adjustments as provided in the 1997 Omnibus Stock Incentive Plan..
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.
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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 70 at July 1, 1997), as determined by the Committee, may be
selected to receive benefits under the 1997 Omnibus Stock Incentive Plan.
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 Stock 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 stockholders 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 have been granted to each of
the following persons or groups under the 1997 Omnibus Stock Incentive Plan,
subject to the approval of the 1997 Omnibus Stock Incentive Plan by the
stockholders of the Company, to be effective as of September 30, 1997.
<TABLE>
<CAPTION>
PLAN BENEFITS PREVIOUSLY
GRANTED
--------------------------
NAME DOLLAR VALUE OPTION RIGHTS
---- ------------ -------------
<S> <C> <C>
Michael L. Fulbright, (1) 100,000
President and Chief
Executive Officer
A. William Ott, (1) 30,000
President, Home Fashions Division
and Secretary
Neal J. McGrail, (1) 10,000
Vice President, Corporate Controller and
Assistant Secretary
Frank X. Sheehan, -0-
Vice President,
Industrial Relations(2)
Executive Officer Group (1) 160,000
Non-Executive Director Group -0-
Non-Executive Officer Employee Group (1) 248,500
</TABLE>
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- --------
(1) Stock options are granted under the 1997 Omnibus Stock Incentive 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 realize will depend
on the excess of the fair market value over the exercise price on the date
the option is exercised.
(2) Mr. Sheehan left the Company in July 1997.
As of August 1, 1997, the Company's Common Stock had not commenced traded on
The Nasdaq Stock Market or on any other national securities exchange in the
United States. Consequently, there is no reliable source to determine the
current market value of the Common Stock.
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.
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<PAGE>
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.
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 the
approval of the 1997 Omnibus Stock Incentive Plan.
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<PAGE>
APPROVAL 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"), subject to the approval
of the Company's stockholders. 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 stockholders by aligning directors' interests with those of the
stockholders, and has, therefore, concluded that adoption of the Director Plan
is in the best interests of the Company and its stockholders.
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 stockholders 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 stockholders, 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.
23
<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. Each Existing Nonemployee Director on the date of the
Company's 1997 Stockholders Meeting 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 on July 1, 1998, six thousand six hundred
and sixty six (6,666) Shares on July 1, 1999, and six thousand six hundred and
sixty eight (6,668) on July 1, 2000 if the Director continues to serve in said
capacity as of said dates; 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 stockholders' 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 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
24
<PAGE>
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 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
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<PAGE>
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 became effective on 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 Director Plan), subject to the approval of the Director Plan by the
stockholders of the Company, to be effective as of September 30, 1997:
<TABLE>
<CAPTION>
PLAN BENEFITS
-----------------
NUMBER
DOLLAR OF
VALUE ($) SHARES
--------- -------
<S> <C> <C>
All Non-Employee Directors (6 persons).................. (1) 120,000
</TABLE>
- --------
(1) Stock options are granted under the Director 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 realize will depend on the excess of
the fair market value over the exercise price on the date the option is
exercised.
As of August 1, 1997, the Company's Common Stock had not commenced trading
on The Nasdaq Stock Market or on any other national securities exchange in the
United States. Consequently, there is no reliable source to determine the
market value of the Common Stock.
FEDERAL TAX ASPECTS
Because the options granted pursuant to the Director Plan are not subject to
the special treatment afforded by Section 422 of the Code, they are treated as
nonstatutory stock options for purposes of federal taxation. Amounts which are
properly deferred by Directors and converted into Deferred Stock Units should
not be subject to tax at the time earned, but distributions of Deferred Stock
Units, including earnings, will be taxable as ordinary income at the time paid
or otherwise made available to the Directors.
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 the
approval of the Director Plan.
26
<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, Secretary, The Bibb
Company, 100 Galleria Parkway, 17th Floor, Atlanta, Georgia 30339.
By Order of the Board of Directors,
A. William Ott
Secretary
Atlanta, Georgia
August 22, 1997
27
<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 30,000,000 shares, divided into
two (2) classes consisting of 5,000,000 shares of Preferred Stock, par value
$.01 per share ("Preferred Stock"), and 25,000,000 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, 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
A-1
<PAGE>
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 10 (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 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 10. 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 10 or the Delaware General Corporation Law. Any amendment or repeal
of, or adoption of any provision inconsistent with, this Article 10 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."
A-2
<PAGE>
ANNEX B
THE BIBB COMPANY
1997 OMNIBUS STOCK INCENTIVE PLAN
EFFECTIVE JULY 1, 1997
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<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.
"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.
B-1
<PAGE>
"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; provided, however that if
the Shares are not traded on a national securities exchange in the United
States, the Committee shall determine "Market Value per Share" in its
discretion.
"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.
"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.
B-2
<PAGE>
"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.
"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
B-3
<PAGE>
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.
(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.
B-4
<PAGE>
(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.
(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.
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<PAGE>
(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;
(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,
B-6
<PAGE>
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 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.
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(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 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
Corporation articles of incorporation), convertible debentures (if authorized
by the Corporation 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.
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(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.
(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 9.
(v) Each award under this Section 9 shall be confirmed by, and subject to
the terms of, an agreement or other instrument executed by the Corporation
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 9 may be issued for no cash consideration.
Stock (including securities convertible into Stock) purchased pursuant to a
purchase right awarded under this Section 9 shall be priced at least 50% of
the Market Value per Share 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
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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 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
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Committee may consider necessary or appropriate to accommodate 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 Other Stock-Based Awards which have not been fully earned, or who holds
Common Shares subject to any transfer restriction imposed pursuant to
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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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CONTENTS
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<TABLE>
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PAGE
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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);
(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 Delaware corporation, together
with any and all Subsidiaries, and any successor thereto as provided in
Section 10.8.
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(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; provided, however, that if the Shares are not
traded on a national securities exchange in the United States, the
Committee shall determine "Fair Market Value" in its discretion.
(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.
(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 Company.
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,
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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, conclusive, 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, 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. Each Existing Nonemployee Director on the date of the
Company's 1997 Stockholders Meeting shall receive a one-time Award of Options
for Twenty Thousand (20,000) Shares effective as of said date.
5.2. Vesting of Options. Said Options shall become vested at the rate of
6,666 Shares on July 1, 1998, 6,666 Shares on July 1, 1999, and 6,668 Shares
on July 1, 2000, if the Director continues to serve in said capacity as of
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.
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.
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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.
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, in 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.
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
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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.
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
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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.
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<PAGE>
THE BIBB COMPANY
100 GALLERIA PARKWAY
17TH FLOOR
ATLANTA, GEORGIA 30339
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. The undersigned
hereby appoints Michael L. Fulbright and 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 August 8, 1997 by the
undersigned, at the Annual Meeting of Stockholders to be held on September 30,
1997, and at all adjournments thereof. 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 Jr., Marvin B. Crow,
Stewart M. Kasen, George A. Poole Jr., James A. Williams and Irwin N.
Gold
[_] FOR all director nominees [_] WITHHOLD AUTHORITY to vote for all
listed above director nominees listed above
(except as marked to the
contrary)
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 APPROVE THE 1997 OMNIBUS STOCK INCENTIVE PLAN.
[_] FOR [_] AGAINST [_] ABSTAIN
5. PROPOSAL TO APPROVE 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.
