SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(X ) Filed by the Registrant
( ) 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-b(e)(2))
(X ) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to (section mark)240.14a-11(c) or
(section mark)240.14a-12
Collins & Aikman Corporation
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement If Other Than Registrant)
PAYMENT OF FILING FEE (Check the appropriate box):
(X ) $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2).
( ) $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11: *
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
(Set forth the amount on which the filing fee is calculated and state how
it was determined)
( ) Fee previously paid 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:
<PAGE>
Collins & Aikman Corporation
701 McCullough Drive
PO Box 32665
Charlotte, NC 28232
(704) 547-8500
May 30, 1996
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
of Collins & Aikman Corporation to be held on Thursday, June 27, 1996, at the
St. Regis Hotel, Two East 55th Street at Fifth Avenue, New York, New York, at
11:00 a.m., Eastern Daylight Savings Time.
The formal notice of the meeting and the Proxy Statement follow, which
you are urged to read carefully. After reading them, please sign and mail the
enclosed proxy card so that your shares will be represented at the meeting. A
prepaid return envelope is provided for this purpose.
We look forward to seeing you at the meeting.
Sincerely,
/s/ Thomas E. Hannah
Thomas E. Hannah
Chief Executive Officer
<PAGE>
COLLINS & AIKMAN CORPORATION
701 McCullough Drive
Charlotte, North Carolina 28262
------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held June 27, 1996
-------------------
To the Stockholders of COLLINS & AIKMAN CORPORATION:
NOTICE IS HEREBY GIVEN that the Annual Meeting (the "Meeting") of the
holders of Common Stock, par value $0.01 per share (the "Common Stock"), of
COLLINS & AIKMAN CORPORATION, a Delaware corporation (the "Company"), will be
held on Thursday, June 27, 1996, at the St. Regis Hotel, Two East 55th Street at
Fifth Avenue, New York, New York, commencing at 11:00 a.m., Eastern Daylight
Savings Time, for the purpose of considering and voting upon the following
matters:
(I) the election of three directors to hold office until the 1999 Annual
Meeting and thereafter until their successors are elected and qualified; and
(II) such other matters as may properly come before the Meeting or any
adjournment or postponement thereof.
The Board of Directors has fixed the close of business on May 15, 1996, as
the record date for the determination of stockholders entitled to notice of and
to vote at the Meeting. Therefore, only holders of record of Common Stock at the
close of business on such date will be entitled to notice of and to vote at the
Meeting.
A complete list of stockholders entitled to notice of and to vote at the
Meeting will be available at the Company's offices at 210 Madison Avenue, 6th
Floor, New York, New York, at least ten days prior to the Meeting. The list will
also be available for inspection by stockholders at the Meeting on the day
thereof.
Stockholders are requested to sign and date the enclosed proxy and return it
promptly in the enclosed pre-addressed reply envelope, whether or not they plan
to attend the Meeting, so that their shares may be represented. Any proxy may be
revoked by filing with the Secretary of the Company in care of the First Union
National Bank of North Carolina at the address set forth in the accompanying
proxy statement either a written notice of revocation bearing a later date than
the proxy or a subsequent proxy relating to the same shares at any time prior to
the time the proxy is voted. Further, any person who has executed a proxy and is
present at the Meeting may vote in person instead of by proxy, thereby canceling
any proxy previously given.
By Order of the Board of Directors,
/s/ Elizabeth R. Philipp
Elizabeth R. Philipp
Secretary
PLEASE EXECUTE AND RETURN THE ENCLOSED PROXY CARD WHETHER OR NOT YOU INTEND TO
BE PRESENT AT THE ANNUAL MEETING.
May 30, 1996
<PAGE>
PROXY STATEMENT
----------
COLLINS & AIKMAN CORPORATION
701 McCullough Drive
Charlotte, North Carolina 28262
-----------
ANNUAL MEETING OF STOCKHOLDERS
To Be Held June 27, 1996
General Information
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Collins & Aikman Corporation, a Delaware corporation
(the "Company"), of proxies for use at the Annual Meeting of Stockholders of the
Company to be held on Thursday, June 27, 1996, at the St. Regis Hotel, Two East
55th Street at Fifth Avenue, New York, New York, commencing at 11:00 a.m.,
Eastern Daylight Savings Time, and at any adjournment or postponement thereof
(the "Meeting").
The presence, in person or by proxy, of stockholders holding a majority of
the shares entitled to vote at the Meeting is necessary to constitute a quorum
at the Meeting.
All shares of the Common Stock, par value $0.01 per share (the "Common
Stock"), of the Company which are entitled to vote and are represented at the
Meeting by properly executed proxies received prior to or at the Meeting, and
not revoked, will be voted at the Meeting in accordance with the instructions
indicated on such proxies. If no instructions are indicated, such proxies will
be voted to elect the three nominees for director named below (or if any nominee
becomes unavailable, such other person as the Nominating Committee of the Board
of Directors or the Company selects) and in accordance with the Board of
Directors' recommendations with respect to any other matter that may properly
come before the Meeting.
The Board of Directors has fixed the close of business on May 15, 1996, as
the record date (the "Record Date") for the determination of stockholders
entitled to notice of and to vote at the Meeting. Therefore, only holders of
record of Common Stock at the close of business on the Record Date will be
entitled to notice of and to vote at the Meeting.
Any proxy may be revoked by the person giving it at any time before it is
voted. A proxy may be revoked by filing, with the Secretary of the Company (in
care of the First Union National Bank of North Carolina, 230 South Tryon Street,
Charlotte, North Carolina, 28288-1153, Attention: Harriett Smith) at any time
prior to the time the proxy is voted, either a written notice of revocation
bearing a later date than the proxy or a subsequent proxy relating to the same
shares, or by attending the Meeting and voting in person (although attendance at
the Meeting will not in and of itself constitute revocation of a proxy).
All expenses of this solicitation, including the cost of preparing and
mailing this Proxy Statement, will be borne by the Company. In addition to
solicitation by use of the mails, proxies may be solicited by directors,
officers and employees of the Company in person or by telephone, telegram or
other means of communication. Such directors, officers and employees will not be
additionally compensated, but may be reimbursed for out-of-pocket expenses in
connection with such solicitation. Arrangements will also be made with
custodians, nominees and fiduciaries for forwarding of proxy solicitation
materials to beneficial owners of shares of Common Stock held of record by such
custodians, nominees and fiduciaries, and the Company may reimburse such
custodians, nominees and fiduciaries for reasonable expenses incurred in
connection therewith. In addition, the Company has retained Georgeson & Company
Inc. to distribute proxy soliciting materials to brokers, banks and
institutional holders for a fee of approximately $1,000, plus reasonable
expenses.
This Proxy Statement and the accompanying proxy are being mailed to
stockholders commencing on or about May 30, 1996.
1
<PAGE>
Voting Securities and Principal Stockholders
On the Record Date, 69,073,963 shares of Common Stock were outstanding.
Only holders of Common Stock of record on the close of business on the Record
Date are entitled to notice of and to vote at the Meeting. Each stockholder of
record is entitled to one vote for each share of Common Stock held on all
matters to come before the Meeting.
Set forth in the table below is certain information as of May 1, 1996,
regarding the beneficial ownership of voting securities of the Company by
persons who are known to the Company to own beneficially more than 5% of the
Company's voting stock.
<TABLE>
<CAPTION>
Amount and
Nature of Percent
Name and Address Beneficial of
Title of Class of Beneficial Owner Ownership Class
<S> <C> <C> <C>
Common Stock Blackstone Capital Partners L.P. 26,131,107 (1) 37.8%
118 North Bedford Road, Suite 300
Mount Kisco, New York 10549
Wasserstein/C&A 27,629,573 (2) 40%
Holdings, L.L.C.
31 West 52nd Street
New York, New York 10019
J.P. Morgan & Co. 5,678,550 (3) 8.2%
Incorporated
60 Wall Street
New York, New York 10260
</TABLE>
(1) Of these shares (i) 20,571,403 shares are held directly by Blackstone
Capital Partners L.P., a Delaware limited partnership ("Blackstone
Partners"), the sole general partner of which is Blackstone Management
Associates L.P. ("Blackstone Associates"), (ii) 1,061,413 shares are held
directly by Blackstone Family Investment Partnership I L.P., a Delaware
limited partnership ("BFIP"), the sole general partner of which is
Blackstone Associates, (iii) 93,291 shares are held directly by Blackstone
Advisory Directors Partnership L.P., a Delaware limited partnership
("BADP"), the sole general partner of which is Blackstone Associates, and
(iv) 4,405,000 shares are held directly by Blackstone Capital Company II,
L.L.C., a Delaware limited liability company, all the ownership interest of
which is owned directly and indirectly by Blackstone Partners, BFIP and
BADP.
(2) These shares are held directly by Wasserstein/C&A Holdings, L.L.C. (the
"Wasserstein L.L.C."), which is controlled by Wasserstein Perella Partners,
L.P. ("WP Partners"), the sole general partner of which is Wasserstein
Perella Management Partners, Inc. ("WP Management").
(3) Based on a Form 13-G filed by J.P. Morgan & Co. Incorporated ("Morgan"),
the number shown includes (i) 3,944,500 shares over which Morgan has sole
power to vote, (ii) 5,648,250 shares over which Morgan has sole power to
dispose and (iii) 30,300 shares over which Morgan has shared power to
dispose.
2
<PAGE>
Executive officers and directors of the Company as a group (15 persons)
beneficially own 1,731,929 shares of Common Stock as of May 1, 1996. For further
information regarding the securities ownership of the directors of the Company,
see "Information as to Nominees and Other Directors - Directors' Ownership of
Securities" below.
The executive officers of the Company named in the Summary Compensation
Table set forth in this Proxy Statement (and referred to herein as the "Named
Executive Officers") beneficially own the following securities of the Company as
of May 1, 1996:
<TABLE>
<CAPTION>
Amount and Nature of
Title of Class Name of Beneficial Owner Beneficial Ownership Percent of Class
<S> <C> <C> <C>
Common Stock Thomas E. Hannah 987,435 (1) 1.41%
John D. Moose 197,129 (2) *
Harry F. Schoen, III 164,005 (3) *
Elizabeth R. Philipp 92,853 (4) *
J. Michael Stepp 15,000 (5) *
</TABLE>
* Less than one percent of shares of Common Stock outstanding.
(1) 490,717 represent shares underlying options granted under the Company's
1993 Employee Stock Option Plan (the "1993 Plan") which are vested and
490,718 represent shares underlying options granted under the 1993 Plan
which vest June 1, 1996. 6000 shares are held directly.
(2) 78,651 represent shares underlying options granted under the 1993 Plan
which are vested and 117,978 represent shares underlying options granted
under the 1993 Plan which vest June 1, 1996. 500 represent shares held in a
trust for the benefit of Mr. Moose's spouse. Mr. Moose is not the trustee
and does not exercise or share investment control over the trust.
(3) 65,601 represent shares underlying options granted under the 1993 Plan
which are vested and 98,404 represent shares underlying options granted
under the 1993 Plan which vest June 1, 1996.
(4) 36,741 represent shares underlying options granted under the 1993 Plan
which are vested and 55,112 represent shares underlying options granted
under the 1993 Plan which vest June 1, 1996. 1000 shares are held directly.
(5) All shares are held directly.
3
<PAGE>
Voting. As of May 1, 1996, Blackstone Partners and its affiliates and the
Wasserstein L.L.C., which is controlled by WP Partners, (collectively, the
"Partners") beneficially own or have the right to vote in the aggregate
approximately 78% of the outstanding Common Stock. See "Information as to
Nominees and other Directors - Certain Relationships". The Partners have advised
the Company that they intend to vote all such shares in favor of PROPOSAL I.
Accordingly, the presence of a quorum at the Meeting and the approval and
adoption of PROPOSAL I are assured.
PROPOSAL I
ELECTION OF DIRECTORS
The Restated Certificate of Incorporation provides that the Board of
Directors of the Company is divided into three classes serving staggered
three-year terms. Three directors will be elected at the Meeting, each to hold
office until his term expires at the 1999 Annual Meeting and until his successor
is elected and qualified, subject, however, to prior death, resignation,
retirement, disqualification or removal from office. All of the nominees are
presently directors of the Company. Proxies will be voted for the election of
the nominees listed below and identified as Nominees for Election at the
Meeting, unless contrary instructions are set forth on the proxy card. If any
nominee shall be unavailable to serve as a director, proxies will be voted for
the election of such other person or persons as the Nominating Committee of the
Board of Directors or the Company may select. The Company is not aware of any
circumstances likely to render any nominee unavailable. According to the By-laws
of the Company, directors shall be elected by a plurality of the votes cast.
Therefore, the three persons receiving the greatest number of votes cast at the
Meeting for the election of directors shall be elected as directors and
abstentions and broker non-votes will not affect the outcome of the election.
Information as to Nominees and Other Directors
Set forth below, as of May 1, 1996, are the name, age and principal
occupation or employment during the last five years of each nominee for election
to the Board of Directors and all other directors whose terms have not expired.
None of the nominees or other directors is related to any executive officer or
other director of the Company by blood, marriage or adoption. The affiliations
between the Company and WP Management, WP Group, WP & Co., Blackstone and BGH
(as such terms are defined below) are set forth under "Voting Securities and
Principal Stockholders" and "Information as to Nominees and other Directors -
Certain Relationships".
Management recommends that stockholders vote FOR the election of each of Messrs.
Mossman, Rudman and Ziebold.
Nominees for Election at the Meeting - Class II Directors
James J. Mossman, 37, has been a director of the Company since January
1995. Mr. Mossman has been a Member of Blackstone Group Holdings L.L.C. ("BGH"),
which is under common control with Blackstone Partners, since March 1996
pursuant to a reorganization of Blackstone Group Holdings L.P. ("Blackstone
Group"), and has been a Senior Managing Director of The Blackstone Group L.P.
("Blackstone") (or has served in this capacity) since 1990. Mr. Mossman was a
general partner of Blackstone Group from 1990 to February 1996. Mr. Mossman is
also a director of Great Lakes Dredge & Dock Corporation and Transtar, Inc.
Warren B. Rudman, 66, has been a director of the Company since June 1995.
Mr. Rudman has been a partner in the law firm of Paul, Weiss, Rifkind, Wharton &
Garrison since January 1993. Mr. Rudman served as a United States Senator from
New Hampshire from 1980 through 1992 and as Attorney General of New Hampshire
from 1970 until 1976. Mr. Rudman is also a director of the Chubb Corporation and
the Raytheon Company and an independent trustee of seventeen mutual funds of the
Dreyfus Corporation.
W. Townsend Ziebold, Jr., 34, has been a director of the Company since
December 1992. Mr. Ziebold has been a Managing Director of Wasserstein Perella &
Co., Inc. ("WP & Co.") since December 1994 and was a Director of WP & Co. from
December 1993 to December 1994. Mr. Ziebold was Vice-President of WP & Co. from
December 1991 to December 1993 and an Associate of WP & Co. prior to that.
4
<PAGE>
Directors Whose Terms Expire at the 1997 Annual Meeting - Class III Directors
Robert C. Clark, 52, has been a director of the Company since October 1994.
Mr. Clark is Dean of the Harvard Law School and Royall Professor of Law. Mr.
Clark joined Harvard Law School in 1979 after four years at Yale Law School,
where he was a tenured professor, and became Dean in 1989. Mr. Clark is a
corporate law specialist and author of numerous texts and legal articles. Prior
to his association with academia, he was in private practice with Ropes & Gray.
David A. Stockman, 49, has been a director of the Company since October
1988 and has been Co-Chairman of the Board of the Company since July 1993. Mr.
Stockman has been a Member of BGH since March 1996 pursuant to a reorganization
of Blackstone Group and has been a Senior Managing Director of Blackstone (or
served in this capacity) since 1988. Mr. Stockman was a general partner of
Blackstone Group from 1988 to February 1996. Prior to joining Blackstone Group,
Mr. Stockman was a Managing Director of Salomon Brothers Inc. Mr. Stockman
served as the Director of the Office of Management and Budget in the Reagan
Administration from 1981 to 1985. Prior to that, Mr. Stockman represented
Southern Michigan in the U.S. House of Representatives. Mr. Stockman is also a
director of LaSalle Re Holdings Ltd.
Randall J. Weisenburger, 37, has been a director of the Company since
August 1989 and has been Co-Chairman of the Board of the Company since June
1995. Mr. Weisenburger was Vice Chairman of the Company from April 1994 to June
1995, Deputy Chairman of the Company from July 1992 to April 1994 and Vice
President from August 1989 to July 1992. Mr. Weisenburger has been Managing
Director of WP & Co. since December 1993. Mr. Weisenburger was a Director of WP
& Co. from December 1992 to December 1993 and Vice President of WP & Co. from
December 1989 to December 1992. Mr. Weisenburger is also Chairman of Yardley of
London, Ltd.
Directors Whose Terms Expire at the 1998 Annual Meeting - Class I Directors
Thomas E. Hannah, 57, has been a director of the Company and Chief
Executive Officer of the Company since July 1994. Mr. Hannah was President and
Chief Executive Officer of Collins & Aikman Textile and Wallcoverings Group, a
division of a wholly owned subsidiary of the Company, from November 1991 until
July 1994 and was named an executive officer of the Company for purposes hereof
in April 1993. Mr. Hannah was President and Chief Executive Officer of the
Collins & Aikman Textile Group from February 1989 to November 1991 and President
of Milliken & Company's Finished Apparel Division prior to that.
George L. Majoros, Jr., 34, has been a director of the Company since June
1995. Mr. Majoros has been a Director of WP & Co. since December 1994. Mr.
Majoros was a Vice President of WP & Co. from February 1993 until December 1994.
Prior to that, Mr. Majoros was an attorney in the law firm of Jones, Day, Reavis
& Pogue. Mr. Majoros is also Vice Chairman and a director of Yardley of London,
Ltd.
Stephen A. Schwarzman, 49, has been a director of the Company since October
1988 and was President of the Company from October 1988 to July 1994. Mr.
Schwarzman has been a Co-Founding Member of BGH since March 1996 pursuant to a
reorganization of Blackstone Group and has been President and Chief Executive
Officer of Blackstone since 1985. Mr. Schwarzman was a Co-Founding Partner of
Blackstone Group from 1985 to February 1996. Mr. Schwarzman is also a director
of Great Lakes Dredge & Dock Corporation, Transtar, Inc. and UCAR International
Inc.
Certain Relationships. Blackstone Partners is a Delaware limited
partnership formed in 1987 for the purpose of, among other things, (i)
committing capital to facilitate corporate restructurings, leveraged buyouts,
bridge financings and other investments and (ii) capitalizing affiliates that
will engage in investment and merchant banking activities. The sole general
partner of Blackstone Partners is Blackstone Associates, a Delaware limited
partnership, whose general partners include Messrs. Mossman, Schwarzman and
Stockman. At present, the business of Blackstone Associates consists of
performing the function of, and serving as, the general partner of certain
limited partnerships, including Blackstone Partners. Messrs. Mossman, Schwarzman
and Stockman are also Members of Blackstone Management Partners L.L.C., which is
the general partner of Blackstone Management Partners L.P. ("Blackstone
Management").
WP Partners is a Delaware limited partnership, the general partner of which
is WP Management. WP Partners was formed by Wasserstein Perella Group, Inc. ("WP
Group") for the purpose of participating in merchant banking activities,
including committing capital to the organization and consummation of leveraged
buyout transactions. WP Management and WP Group are both Delaware corporations.
WP Management serves as general partner of WP Partners and as such is engaged in
managing WP Partners. WP Group is an international private advisory and merchant
banking firm. The principal
5
<PAGE>
subsidiary of WP Group is WP & Co., an international investment banking firm.
Mr. Weisenburger and Mr. Ziebold are Managing Directors of WP & Co. and Mr.
Majoros is a Director of WP & Co. Messrs. Weisenburger and Ziebold are also
officers of WP Management and Mr. Majoros is an employee of WP Management.
Blackstone Partners and its affiliates and the Wasserstein L.L.C., which is
controlled by WP Partners, as of May 1, 1996 beneficially own approximately
37.8% and 40%, respectively, of the outstanding Common Stock and are in a
position to jointly control the Company.
Directors' Ownership of Securities. No director of the Company beneficially
owns any shares of Common Stock other than (i) 987,435 shares owned by Mr.
Hannah (consisting of 6,000 shares owned directly and 981,435 shares underlying
options granted to Mr. Hannah under the 1993 Plan), (ii) 2,000 shares owned by
Mr. Majoros, (iii) 2,000 shares owned by Mr. Weisenburger, (iv) 3,000 shares
owned by Mr. Ziebold, (v) 20,000 shares underlying options granted to Mr. Clark
pursuant to the 1994 Directors Stock Option Plan (the "Directors Plan"), and
(vi) 10,000 shares underlying options granted to Mr. Rudman pursuant to the
Directors Plan. See "Voting Securities and Principal Stockholders". Messrs.
Mossman, Schwarzman and Stockman, in their capacities as general partners of
Blackstone Associates, collectively share with all general partners of
Blackstone Associates the power to vote and to dispose of 26,131,107 shares of
Common Stock which are held directly by partnerships, including Blackstone
Partners, of which Blackstone Associates is the sole general partner, and a
limited liability company, all the limited liability company interest of which
is owned directly and indirectly by partnerships of which Blackstone Associates
is the sole general partner. See "Voting Securities and Principal Stockholders".
For purposes of this filing under the Securities Exchange Act of 1934, as
amended, Messrs. Mossman, Schwarzman and Stockman may be deemed to be beneficial
owners, respectively, of such securities; however, each of Messrs. Mossman,
Schwarzman and Stockman expressly disclaims such beneficial ownership of any
equity securities of the Company. Messrs. Weisenburger and Ziebold are officers
of, and Mr. Majoros is an employee of, WP Management, which is the general
partner of WP Partners, which controls the Wasserstein L.L.C. The Wasserstein
L.L.C. holds 27,629,573 shares of Common Stock directly. See "Voting Securities
and Principal Stockholders". However, Mr. Majoros, Mr. Weisenburger and Mr.
Ziebold do not hold or share the power to vote or to dispose of the shares of
Common Stock held directly by the Wasserstein L.L.C.
Certain Agreements. Blackstone Partners, WP Partners and the Company have
entered into an Amended and Restated Stockholders Agreement (the "Stockholders
Agreement") relating to the governance and management of the Company, and WP
Partners and Blackstone Partners have entered into a Voting Agreement (the
"Voting Agreement") relating to voting for nominees affiliated with each other.
Pursuant to the Voting Agreement, each Partner will be obligated to vote for
nominees to the Board of Directors that are affiliated with the other Partner
(and in certain circumstances, a transferee of the other Partner). Pursuant to
the Stockholders Agreement, each of WP Partners, Blackstone Partners and the
Company has a right of first refusal with regard to sales of Common Stock by
each Partner (with certain exceptions). Each Partner also has the right to sell
along with the other (with certain exceptions). Under certain circumstances,
such as resignation of a director, the Company is required to replace the
director with an individual affiliated with the same Partner as the former
director. The affiliates of Blackstone Partners who hold shares of Common Stock
directly and the Wasserstein L.L.C. are successors under the Stockholders
Agreement to Blackstone Partners and WP Partners, respectively, with respect to
the shares of Common Stock such entities hold directly and as such are bound by
the obligations of and entitled to the rights of their affiliated Partner under
the Stockholders Agreement.
The shares of Common Stock beneficially owned by Blackstone Partners and
their affiliates and the Wasserstein L.L.C. have, in each case, been pledged to
Chemical Bank in connection with the financing of the purchase of a portion of
those shares under a credit facility with Chemical Bank and to secure the
obligations of the pledgors under such credit facility. Each credit facility
with Chemical Bank contains events of default typical for facilities of this
type (with customary qualifications and exceptions), including nonpayment of
principal or interest; violation of covenants; material breaches of
representations and warranties; bankruptcy; material undischarged judgments;
invalidity of security documents; Change in Control (as defined therein); and
insufficiency of Collateral Value of the Stock Collateral (as defined therein).
6
<PAGE>
Meetings and Committees of the Board of Directors.
Meetings and Attendance. In fiscal 1995, the Board of Directors held a
total of four meetings. All incumbent directors attended at least 75% of the
aggregate of the total number of meetings held by the Board and the total number
of meetings held by the Committees on which he served during the period for
which he has been a director.
Committees of the Board. The Board of Directors has designated the Audit
Committee, which consists of Mr. Clark and Mr. Rudman, and the Compensation
Committee, which consists of Mr. Stockman and Mr. Weisenburger. In addition, the
Company's Restated Certificate of Incorporation provides for the Nominating
Committee, which consists of Messrs. Clark, Majoros, Mossman, Rudman,
Schwarzman, Stockman, Weisenburger and Ziebold.
The Audit Committee held three meetings in fiscal 1995. The Audit
Committee's function is to meet with the Company's independent public
accountants and with management to make inquiries regarding the manner in which
responsibilities of each are being discharged. The Audit Committee reviews the
scope of audit and non-audit assignments and related fees, the Company's
accounting principles, and the adequacy of internal controls.
The Compensation Committee held one formal meeting in fiscal 1995. The
Compensation Committee's function is to determine compensation for executive
officers of the Company other than members of the Compensation Committee (who do
not receive compensation for serving as executive officers of the Company) and
deciding matters and policies with respect to the compensation of such executive
officers, including entering into employment agreements and granting awards
under and administering the option plans. The Compensation Committee is not
entitled to award or authorize any compensation to be paid to any executive
officer of the Company who is also a partner or employee of Blackstone Partners,
WP Partners or their affiliates. See "COMPENSATION COMMITTEE REPORT ON EXECUTIVE
COMPENSATION".
The Nominating Committee held two meetings in fiscal 1995. The Nominating
Committee's function is to nominate, by a majority vote thereof, persons for
election to the Board of Directors at any annual meeting of stockholders or at
any special meeting of stockholders called for the purpose of electing
directors. Stockholders wishing to recommend director candidates for
consideration by the Nominating Committee may do so by writing to the Secretary
of the Company, giving the recommended candidate's name, biographical data and
qualifications, not later than the date by which stockholder proposals for
action must be submitted. See "STOCKHOLDER PROPOSALS". Pursuant to the Restated
Certificate of Incorporation of the Company, the Nominating Committee consists
of all directors serving on the Board of Directors, excluding directors that are
salaried employees of the Company.
7
<PAGE>
COMPENSATION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
The Company's executive compensation program is administered by the Compensation
Committee of the Board of Directors. The Committee is responsible for the
design, administration and oversight of all senior management compensation and
benefit policies, plans, programs and agreements.
EXECUTIVE OFFICER COMPENSATION
The Company's compensation programs for its executive officers are intended to
recognize individual performance in conjunction with overall corporate
performance and to link a significant portion of the compensation paid to
executives with the Company's current and long-term performance. The
Compensation Committee believes that this goal is best implemented by providing
a compensation package consisting of three major components: base salary,
short-term incentive compensation and long-term incentive compensation.
The Compensation Committee is not empowered to award or authorize any
compensation to be paid to any executive officer of the Company who is also a
partner or employee of Blackstone Partners, WP Partners, Blackstone Group, WP
Management or WP & Co.
BASE SALARY
When determining base salaries for the executive officers, the Compensation
Committee considers the Company's retention needs, individual experience,
performance and responsibilities. No relative weights are assigned to any
factor. In addition, the Compensation Committee considers survey-based
compensation data for companies of similar size with jobs similar to those of
the Company in magnitude, complexity and scope of responsibility. While some of
the companies identified in the peer group performance graph participate in
these surveys, the Compensation Committee believes its competitors for executive
talent are broader than this group due to the varied businesses in which its
divisions compete for executive talent. As a matter of policy, base salaries are
generally targeted at the 50th percentile of this broader group of textile and
general industry companies.
Salaries of executive officers are reviewed periodically by the Compensation
Committee, generally on a 12 to 18 month cycle. Salary adjustments are
determined by evaluating performance of the executive and performance of the
Company.
In the opinion of the Compensation Committee, competitive base salaries
contribute to the Company's overall performance by attracting and retaining high
quality management.
SHORT-TERM INCENTIVE COMPENSATION
The second major component of the executive compensation program is the
Company's Executive Incentive Compensation Plan (the "Bonus Plan") adopted each
year. The objectives of this plan are to:
o Motivate key employees to achieve and exceed the Company's financial goals
o Maintain management's focus on the importance of earnings
o Encourage management to balance the longer-term needs of the business
with shorter-term requirements
o Attract and retain the quality of key employees required to successfully
manage the Company's businesses.
8
<PAGE>
Under the Bonus Plan, the Company's executive officers and other key employees
who are in a position to have an impact on the attainment of the goals of the
Company and its operating divisions have the opportunity to earn annual
performance bonuses. While the number of persons participating in the Bonus Plan
varies from year to year, approximately 300 persons have participated each year.
The bonuses are based primarily on Earnings Before Interest and Taxes (EBIT). At
the beginning of the year, EBIT goals are established for Threshold (lowest),
Target (expected) and Maximum performance for each operating division; such EBIT
goals correspond generally with Threshold, Target and Maximum bonus levels
established for each participant. The amount of bonus actually paid to
participants is based primarily on the extent to which unit performance meets or
exceeds the predetermined goals, thereby linking pay and unit performance and
can range from 50% (for Threshold) to 200% (for Maximum) of the target award.
Two of the Named Executive Officers, as well as Mr. Hannah (whose bonus is
discussed separately below), received bonuses for fiscal 1995 under the Bonus
Plan. For such two Named Executive Officers, the target bonuses assigned
equalled 40% of base salary and bonuses actually awarded were approximately
19.9% of base salary and 33.4% of base salary, respectively. The latter award
was based on special performance considerations and exceeded the amount which
would have been awarded pursuant to the formula under the Bonus Plan. The bonus
awarded to the Chief Financial Officer was not pursuant to the Bonus Plan, but
pursuant to his employment agreement, which guaranteed his bonus for his first
year of employment because, at the time his employment agreement was negotiated,
such guarantee was deemed necessary to obtain such individual's services. See
"Employment Agreements".
LONG-TERM INCENTIVE
The third major component of the Company's executive compensation program is its
long-term incentive compensation plans. Through the 1993 Employee Stock Option
Plan and the 1994 Employee Stock Option Plan, the Company seeks to align the
interests of key employees more closely with those of the Company's
stockholders, and to motivate and reward actions which lead to long-term value
creation for stockholders. Stock option grants provide a direct link between any
rewards executives may receive and the results achieved for stockholders. Stock
options are intended to serve as compensation over a period of several years and
are therefore generally not granted every year.
The Chief Executive Officer and three of the other four executive officers named
in the Summary Compensation Table received grants in fiscal 1993 under the 1993
Employee Stock Option Plan, which vested 50% in June 1995 and will vest 50% in
June 1996 for the Chief Executive Officer and vested 40% in June 1995 with the
remainder to vest in June 1996 for such three other Named Executive Officers. In
light of these grants in 1993, there were no stock option grants in 1994 or 1995
to the Chief Executive Officer and such three other executive officers named in
the Summary Compensation Table. The Chief Financial Officer, who joined the
Company in April 1995, received a grant of stock options under the 1994 Employee
Stock Option Plan, which vest 100% in April 1998.
Stock option grants are made based on an evaluation of the duties and
responsibilities of the individual and his or her present and potential
contributions to the long-term growth and success of the Company. Stock options
granted to the Named Executive Officers during the last fiscal year and year-end
option values are reflected in the tables provided below.
TERMINATION BENEFITS
The Company generally determines termination benefits of executive officers
based on the executive officer's employment agreement (if applicable), the
Company's general severance policies for "exempt employees" (if applicable) or
agreement with the departing executive officer at the time of separation.
CHIEF EXECUTIVE OFFICER COMPENSATION
The compensation of the Company's Chief Executive Officer is consistent with the
compensation philosophy of the Company described above. In July 1992, a
subsidiary of the Company entered into an employment agreement with Mr. Hannah.
The agreement was amended in February 1994 to increase his base salary to
$525,000. This increase was based on Mr. Hannah's increased level of
responsibility in the Company and his individual performance. These factors were
considered relative to comparable base salaries of the chief executive officers
in industries in which the Company competes. The terms of Mr. Hannah's
employment agreement are described under "Employment Agreements" elsewhere in
this Proxy Statement.
9
<PAGE>
In addition to his base salary, Mr. Hannah is eligible to receive annual
incentive compensation under the Bonus Plan. Mr. Hannah's target bonus
opportunity equals 75 percent of current annual base salary, with a maximum
opportunity of 150 percent of current annual base salary. EBIT goals are
established by the Compensation Committee at the beginning of each fiscal year;
award calculations are based on the same factors as are bonuses for all
executive officers. In 1995, the Company's financial performance did not meet
the targets set by the Compensation Committee, but exceeded threshhold amounts.
Mr. Hannah's annual bonus award for the most recent fiscal year was $275,625.
The Compensation Committee, at its sole discretion, determines the amount of any
stock options to be granted to Mr. Hannah. During the most recent fiscal year,
no stock options were granted to Mr. Hannah in view of grants made previously
under the 1993 Employee Stock Option Plan.
The Compensation Committee believes the total compensation program for Mr.
Hannah is competitive with that provided by comparable companies, matches the
responsibilities of his office and reflects his personal contributions to the
Company's performance.
DEDUCTIBILITY OF COMPENSATION IN EXCESS OF $1 MILLION A YEAR
In 1993, Congress enacted Section 162(m) of the U.S. Internal Revenue Code of
1986, effective for tax years beginning in 1994. This legislation precludes a
public corporation from taking a federal income tax deduction for compensation
in excess of $1 million per year for its chief executive officer and any of its
four other highest paid executive officers (with exceptions for certain
performance based compensation), although "grandfather" provisions may apply to
certain compensation arrangements that were entered into by a corporation before
it was publicly held. In view of the grandfather provisions regarding going
public in an initial public offering, the Company expects that this legislation
will not limit the Company's tax deductions for executive compensation for
fiscal 1995 or under the Company's current compensation plans.
The Compensation Committee's policy is to qualify compensation paid to its
executive officers for deductibility for federal income tax purposes to the
extent feasible. However, to retain highly skilled managers and remain
competitive with other employers, the Compensation Committee retains the
authority to authorize other payments, including salary and bonuses, that would
not be deductible.
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS OF COLLINS & AIKMAN
CORPORATION:
DAVID A. STOCKMAN
RANDALL J. WEISENBURGER
10
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth certain information concerning the
compensation for services rendered to the Company and its subsidiaries by (i)
the Company's Chief Executive Officer and (ii) the Company's four most highly
compensated executive officers (other than the Chief Executive Officer) whose
total annual salary and bonus exceeded $100,000 and who were serving as
executive officers at the end of the fiscal year ended January 27, 1996 (the
individuals named in clauses (i) and (ii) being referred to in this Proxy
Statement as the "Named Executive Officers"). All compensation shown has been
paid by Collins & Aikman Products Co., a wholly owned subsidiary of the Company
("Products"), or by a subsidiary of Products (although the options shown as
awarded are for Common Stock of the Company). The Company does not separately
compensate its executive officers for their duties as officers of the Company
(except for any such options).
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
Other Awards Payouts
Name and Annual Securities All Other
Principal Year Salary Bonus Compensation Underlying LTIP Compensation
Position (1) ($) ($) ($) Options (#) Payouts ($) ($)
<S> <C> <C> <C> <C> <C> <C> <C>
Thomas E. Hannah 1995 525,000 275,625 20,869 (2) 0 0 30,487 (3)
Chief Executive Officer 1994 515,833 807,188 4,030 (2) 0 0 34,190
1993 415,000 783,960 (2) 981,435 2,319,907 (4) 17,153
John D. Moose 1995 311,250 62,000 (2) 0 0 14,808 (5)
President, Automotive 1994 295,417 279,000 83,200 (6) 0 0 11,215
Fabrics Division 1993 262,500 119,900 (2) 196,629 417,122 (4) 9,568
Harry F. Schoen, III 1995 277,083 0 (2) 0 0 13,376 (7)
President, Mastercraft 1994 266,667 247,500 (2) 0 0 10,385
Division 1993 250,000 112,000 (2) 164,005 192,582 (4) 8,536
Elizabeth R. Philipp 1995 299,683 100,136 (2) 0 0 13,674 (8)
Executive Vice President, 1994 270,000 241,400 (2) 0 0 10,647
General Counsel, 1993 256,250 120,000 (2) 91,853 77,433 (4) 9,364
and Secretary
J. Michael Stepp 1995 197,230 (10) 92,000 56,555 (11) 100,000 0 1,380 (12)
Executive Vice 1994 N/A N/A N/A N/A N/A N/A
President and 1993 N/A N/A N/A N/A N/A N/A
Chief Financial
Officer (9)
</TABLE>
(1) The information given in this table is for the fiscal years indicated,
not calendar years. 1995 indicates the fiscal year ended January 27,
1996. 1994 indicates the fiscal year ended January 28, 1995. 1993
indicates the fiscal year ended January 29, 1994.
(2) Total perquisites for executive officer were less than the lesser of
$50,000 or 10% of annual salary and bonus and accordingly the dollar
value of such perquisites is not shown. Perquisites for an executive
officer may, but do not necessarily, include reimbursement for any of the
following expenses: car; financial planning; executive fitness; executive
physicals and medical; luncheon club; and relocation.
(3) Amount for fiscal 1995 for Mr. Hannah consists of (i) contributions to
the Collins & Aikman Corporation Profit Sharing Plan, a defined
contribution plan (the "PSP"), in the amount of $3,000, (ii)
contributions to the non-qualified supplement to the PSP (the "SPSP") in
the amount of $23,644 and (iii) premiums in the amount of $2,484 and
$1,359 paid for basic term life insurance and Accidental Death &
Dismemberment insurance ("AD&D insurance"), respectively, under group
life insurance policies.
(4) The amounts represent payouts in November 1993 under the Equity Share
Plan, which was terminated in October 1993. In connection with such
termination, certain conditions as to the vesting of awards were modified
as follows: Mr. Hannah (approximately $464,000 of the amount shown as a
payout was attributable to such modification); Mr. Moose (approximately
$89,400 was attributable to such modification); Mr. Schoen (approximately
$41,300 was attributable to such modification); and Ms. Philipp ($12,000
of the amount shown as a payout was due to a supplemental payout and
approximately $24,500 was attributable to such modification).
(5) Amount for fiscal 1995 for Mr. Moose consists of (i) contributions to the
PSP in the amount of $3,000, (ii) contributions to the SPSP in the amount
of $8,780 and (iii) premiums in the amount of $2,484 and $544 paid for
basic term life insurance and AD&D insurance, respectively, under group
life insurance policies.
(6) Includes $31,254 for reimbursement of relocation for costs for Mr.
Moose's move to Roxboro, North Carolina, and $17,165 for gross-ups of
relocation reimbursements to compensate the executive for incremental
federal and state income taxes and $25,833 (an amount equal to one
month's salary) for miscellaneous additional moving expenses.
11
<PAGE>
(7) Amount for fiscal 1995 for Mr. Schoen consists of (i) contributions to
the PSP in the amount of $3,000, (ii) contributions to the SPSP in the
amount of $7,450 and (iii) premiums in the amount of $2,484 and $442 paid
for basic term life insurance and AD&D insurance, respectively, under
group life insurance policies.
(8) Amount for fiscal 1995 for Ms. Philipp consists of (i) contributions to
the PSP in the amount of $3,000, (ii) contributions to the SPSP in the
amount of $7,804 and (iii) premiums in the amount of $2,484 and $386 paid
for basic term life insurance and AD&D insurance, respectively, under
group life insurance policies.
(9) Mr. Stepp was appointed Executive Vice President and Chief Financial
Officer on April 6, 1995. Prior to that date, Mr. Stepp held no positions
with the Company or its subsidiaries. "N/A" appearing in the table
opposite Mr. Stepp's name denotes not applicable, as it pertains to
fiscal years in which Mr. Stepp held no positions with the Company or its
subsidiaries.
(10) Includes salary for the period from April 6, 1995 through January 27,
1996, the portion of the last fiscal year during which Mr. Stepp was an
executive officer of the Company.
(11) Includes $33,699 for reimbursement of relocation costs for Mr. Stepp's
move to Charlotte, North Carolina, and $18,059 for gross-ups of
relocation reimbursements to compensate the executive for incremental
federal and state income tax.
(12) Amount for fiscal 1995 for Mr. Stepp consists of premiums in the
amount of $1,242 and $138 paid for basic term life insurance and AD&D
insurance, respectively, under group life insurance policies.
Option Grants In Last Fiscal Year
Shown below is further information on grants of stock options for the
fiscal year ended January 27, 1996, to the Named Executive Officers. No grants
of stock options were made during the fiscal year ended January 27, 1996, to the
Named Executive Officers other than to Mr. Stepp.
<TABLE>
<CAPTION>
Number of % of Total
Securities Options
Underlying Granted Exercise
Options to Employees Price Expiration Grant Date
Name Granted (#) in Fiscal 1995 ($/sh)(1) Date Present Value ($)(2)
<S> <C> <C> <C> <C> <C>
Thomas E. Hannah 0 0 N/A N/A N/A
John D. Moose 0 0 N/A N/A N/A
Harry F. Schoen, III 0 0 N/A N/A N/A
Elizabeth R. Philipp 0 0 N/A N/A N/A
J. Michael Stepp 100,000 25% $8.00 4/06/2005 $502,954
</TABLE>
(1) "N/A" appearing in the table denotes not applicable since no options
were granted to the Named Executive Officer.
(2) Option values reflect Black-Scholes model output for options. The
assumptions used in the model were expected volatility of 40%, risk-free
rate of return of 7.39%, dividend yield of 0% and time to exercise of
nine years. Additionally, no liquidity discount or forfeiture discount
was applied.
12
<PAGE>
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year End Option
Values
Shown below is information with respect to the year-end value of
unexercised options to purchase Common Stock granted to the Named Executive
Officers and held by them as of January 27, 1996. The value of in-the-money
options is based on the difference between the exercise price of such options
and the closing price of the Common Stock on the New York Stock Exchange on
January 26, 1996 (the last trading day of the fiscal year ended January 27,
1996), which was $7.00.
<TABLE>
<CAPTION>
Number of Securities Underlying
Unexercised Options at Value of Unexercised
FY-End (#) In-The-Money-Options at FY-End ($)
Shares Acquired Value
Name On Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Thomas E. Hannah 0 0 420,615 420,615 1,266,051 1,266,051
70,102 70,103 (1) (1)
John D. Moose 0 0 58,622 87,933 176,452 264,678
20,029 30,045 (1) (1)
Harry F. Schoen, III 0 0 39,199 58,799 117,989 176,985
26,402 39,605 (1) (1)
Elizabeth R. Philipp 0 0 33,403 50,105 100,543 150,816
3,338 5,007 (1) (1)
J. Michael Stepp 0 0 0 100,000 0 (1)
</TABLE>
(1) Options were not in-the-money at fiscal year end because the exercise
price of such options exceeded the closing price of the Common Stock on
January 26, 1996 (the last trading day of the fiscal year).
Defined Benefit or Actuarial Plan Disclosure
C&A Co. Plan. Provided certain eligibility requirements are met, at the
end of each calendar month, pay credits are applied to a participant's account
under the Collins & Aikman Corporation Employees' Pension Account Plan (the "C&A
Co. Plan") based on the participant's length of credited service and
compensation (as defined) during that month. For participants aged 50 or older,
the monthly pay credit is based on either credited service and compensation or
age and compensation, whichever results in the higher amount.
The following chart sets forth how pay credits are determined under the
C&A Co. Plan:
<TABLE>
<CAPTION>
Percentage of
Compensation Used to
Determine Pay Credits
Eligibility Requirements Up to 1/3 Over 1/3
Years Of of the S.S. of the S.S.
Credited Service or Age Wage Base Wage Base
<S> <C> <C> <C>
less than 10 less than 50 2.5% 4.5%
10 - 14 50 - 54 3.0% 5.5%
15 - 19 55 - 59 4.0% 6.5%
20 - 24 60 - 64 5.0% 8.0%
25 or more 65 or more 6.0% 10.0%
</TABLE>
The dollar amounts that result from these percentages are added together and the
total is the pay credit for the month.
In addition, interest credits are applied each month to the account
balance. Participants make no contributions to the C&A Co. Plan. Employer
contributions are 100% vested after five years of service or at age 65,
whichever is earlier, and may vest under certain other circumstances as set
forth in the C&A Co. Plan. The estimated annual benefits payable upon retirement
at normal retirement age under the C&A Co. Plan for Messrs. Hannah, Moose,
Schoen and Stepp and Ms. Philipp are $12,544, $50,808, $5,655, $200 and $22,085,
respectively. Participants in the C&A Co. Plan have the option, however, of
receiving the value of their vested account in a lump sum following termination
of employment.
13
<PAGE>
C&A Co. Excess Plan. The Excess Benefit Plan of Collins & Aikman
Corporation (the "C&A Co. Excess Plan") works in conjunction with the C&A Co.
Plan (which is described above) and provides to the employee any benefit which
the C&A Co. Plan would have provided but for certain legal limitations under the
Employee Retirement Income Security Act of 1974 and Internal Revenue Service
regulations. The pay credits and interest credits are determined as described
with respect to the C&A Co. Plan as if no legal limitations existed, and then
this plan provides any benefit which is in excess of the benefit provided under
the C&A Co. Plan. The estimated annual benefits payable upon retirement at
normal retirement age under the C&A Co. Excess Plan for Messrs. Hannah, Moose,
Schoen and Stepp and Ms. Philipp are $47,838, $22,388, $6,488, $0 and $15,771,
respectively.
C&A Co. SRIP. Participation in the Collins & Aikman Corporation
Supplemental Retirement Income Plan (the "C&A Co. SRIP") is solely at the
discretion of the Board of Directors of Products and is extended to a select
group of key executives. The plan provides a participating employee with a
retirement benefit at or after age 62. A target benefit is first calculated for
each employee based on Total Annual Compensation (final base salary plus the
average of the bonuses paid for the last three fiscal years) and years of
service at retirement. The benefit payable from the C&A Co. SRIP is determined
as the excess of the target benefit over any pension benefits payable from
Social Security and any other retirement plans sponsored by the Company. An
employee does not become vested in a benefit until reaching age 62.
The following table shows, for specified compensation/years of service
classifications, the hypothetical annual target benefits under the C&A Co. SRIP
for employees retiring at age 65, assuming that the retiring participant elects
a single life annuity.
<TABLE>
<CAPTION>
PENSION PLAN TABLE
Total Annual Years of Service
Compensation
10 15 20 25 30 35 41
<S> <C> <C> <C> <C> <C> <C> <C>
$ 200,000 $ 84,000 $102,000 $120,000 $120,000 $120,000 $120,000 $120,000
225,000 94,500 114,750 135,000 135,000 135,000 135,000 135,000
250,000 105,000 127,500 150,000 150,000 150,000 150,000 150,000
275,000 115,500 140,250 165,000 165,000 165,000 165,000 165,000
300,000 126,000 153,000 180,000 180,000 180,000 180,000 180,000
350,000 147,000 178,500 210,000 210,000 210,000 210,000 210,000
400,000 168,000 204,000 240,000 240,000 240,000 240,000 240,000
450,000 189,000 229,500 270,000 270,000 270,000 270,000 270,000
500,000 210,000 255,000 300,000 300,000 300,000 300,000 300,000
600,000 252,000 306,000 360,000 360,000 360,000 360,000 360,000
700,000 294,000 357,000 420,000 420,000 420,000 420,000 420,000
800,000 336,000 408,000 480,000 480,000 480,000 480,000 480,000
900,000 378,000 459,000 540,000 540,000 540,000 540,000 540,000
1,000,000 420,000 510,000 600,000 600,000 600,000 600,000 600,000
1,100,000 462,000 561,000 660,000 660,000 660,000 660,000 660,000
1,200,000 504,000 612,000 720,000 720,000 720,000 720,000 720,000
1,300,000 546,000 663,000 780,000 780,000 780,000 780,000 780,000
1,400,000 588,000 714,000 840,000 840,000 840,000 840,000 840,000
1,500,000 630,000 765,000 900,000 900,000 900,000 900,000 900,000
</TABLE>
Messrs. Hannah, Moose, Schoen and Stepp are the only Named Executive
Officers participating in the C&A Co. SRIP. Mr. Hannah currently has seven
years, 3 months of plan service, and at age 65, he will have an estimated 14
years, 5 months of plan service. Mr. Moose currently has 35 years, 10 months of
plan service and at age 65 will have an estimated 41 years, 4 months of plan
service. Mr. Schoen currently has four years of plan service and at age 65 will
have an estimated 8 years, 7 months of plan service. Mr. Stepp currently has one
year of plan service and at age 65 will have an estimated 14 years of plan
service.
14
<PAGE>
Employment Agreements
In July 1992, Products entered into an employment agreement with Mr.
Hannah, which was amended as of February 1994. The agreement, as amended,
provides for an initial base salary of $525,000 and participation in any
executive bonus plan, with a target bonus of 75% of the base salary then in
effect up to a maximum of 150% of base salary. The agreement expires January 31,
1997, with automatic one year renewals thereafter unless Products notifies Mr.
Hannah prior to that time of its intention to terminate the agreement. In the
event of involuntary termination for reasons other than cause and other than a
change of control, the agreement provides for severance benefits equal to Mr.
Hannah's base salary then in effect for a period of one year from the
termination date plus any unpaid cash bonus for the prior fiscal year and a pro
rata portion of any bonus he would have received had he been employed for the
entire fiscal year. Products also entered into a letter agreement with Mr.
Hannah in May 1991 pursuant to which Mr. Hannah is entitled to receive an amount
equal to two times his base salary then in effect in the event his employment is
terminated by Products within three months prior to or one year following a
change of control (as defined) of Products.
In May 1991, Products entered into a letter agreement with Mr. Moose
which provides that if his employment is terminated by Products or any successor
company other than for cause at any time within three months prior to or one
year following a change of control (as defined) of Products, then in lieu of any
severance available under policies or practices of Products he shall receive an
amount equal to two times his base salary as in effect at the time of
termination. In June 1995, Products entered into another letter agreement with
Mr. Moose which provides that if his employment is terminated by Products
without cause (except in the event the change of control provisions of the May
1991 letter govern) (i) prior to or on June 30, 1996, then he shall receive
severance in an amount equal to his base salary then in effect for the period
remaining between the date of termination and June 30, 1997 and (ii) after June
30, 1996 while he is a member of Products' Operating Committee, he shall receive
severance in accordance with Products' policy and practices regarding
involuntary termination of employment of a member of the Operating Committee.
In July 1990, Products entered into an employment agreement with Ms.
Philipp at an initial base salary of $225,000 per year. The agreement is
automatically renewed each year. In the event of involuntary termination for
reasons other than cause, including failure to renew the agreement, any
requirement that Ms. Philipp's office be relocated or any change in control (as
defined), the agreement provides for severance benefits equal to Ms. Philipp's
base salary then in effect for a period of one year from the termination date
plus the pro rata portion of any cash bonuses she would have received had she
been employed for the entire fiscal year.
In April 1995, Products entered into an employment agreement with Mr.
Stepp for a period of three years ending April 5, 1998, subject to the terms and
conditions of the agreement. The agreement provides for an initial base salary
of $240,000 per year and a guaranteed cash bonus for Mr. Stepp's first year of
employment of no less than $92,000. In the event of involuntary termination due
to death or physical or mental disability, the agreement provides that Products
shall pay to Mr. Stepp or his estate or legal representative his unpaid base
salary accrued to the date his employment terminates but in no event less than
an amount equal to one year's base salary. In the event of involuntary
termination for any other reason other than cause, the agreement provides for
severance benefits equal to Mr. Stepp's base salary for the entire remaining
portion of his term of employment then in effect or, if longer, for a one year
period following the termination date.
15
<PAGE>
PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return from
July 7, 1994 (the date the Common Stock was first registered under Section 12 of
the Exchange Act and traded on the New York Stock Exchange) through January 26,
1996 of the Company, the S&P 500 and a peer group of companies selected by the
Company for purposes of the comparison and more fully described below (the "Peer
Group"). Dividend reinvestment has been assumed and, with respect to the
companies in the Peer Group, the returns of each such company have been weighted
to reflect relative stock market capitalization. The graph assumes an investment
of $100 on July 7, 1994 in each of the Common Stock, the stocks comprising the
S&P 500 and the stocks comprising the Peer Group.
Line graph depicting the change in a $100 investment made on July 7,
1994 through January 28, 1995 in (1) the Common Stock of the Company, (2) the
S&P 500 and (3) a peer group of companies. Dollar values at January 28, 1995
are indicated in the chart below.
<TABLE>
<CAPTION>
===================================================================================================================================
July 7, January 28, January 26,
1994 1995 1996
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Collins & Aikman Corporation $ 100.00 $ 80.95 $ 68.69
- -----------------------------------------------------------------------------------------------------------------------------------
S&P 500 $ 100.00 $107.02 $145.61
- -----------------------------------------------------------------------------------------------------------------------------------
Peer Group* $ 100.00 $ 87.16 $106.28
===================================================================================================================================
</TABLE>
* The Company does not believe that there is a single published industry or line
of business index that is appropriate for comparing stockholder return. The Peer
Group selected by the Company is made up of companies which supply similar
customers in the Automotive Products, Interior Furnishings and Wallcoverings
markets as well as companies with which the Company believes it competes for
managers. The Peer Group consists of Masland Corporation, Lear Seating
Corporation, Burlington Industries, Inc., Quaker Fabric Corporation, Culp, Inc.,
Norwall Group Inc., Fieldcrest Cannon, Inc. and Cone Mills Corporation.
16
<PAGE>
COMPENSATION OF DIRECTORS
Each director of the Company and Products who is not a full-time employee
thereof (or the Partner who designates such director to the Board of Directors)
receives a fee of $40,000 per year, payable quarterly.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee is currently comprised of Mr. Stockman and Mr.
Weisenburger, the Co-Chairmen of the Company. Neither Mr. Stockman nor Mr.
Weisenburger is separately compensated for serving as an executive officer of
the Company or any of its subsidiaries, including Products. See "COMPENSATION
COMMITTEE REPORT ON EXECUTIVE COMPENSATION". Mr. Stockman and Mr. Weisenburger
participated in deliberations during the last completed fiscal year concerning
compensation of executive officers who are separately compensated for serving as
executive officers. None of the executive officers who are separately
compensated for serving as executive officers (or who received options) serve on
the Compensation Committee.
Mr. Stockman is a Member of BGH and Blackstone Management Partners L.L.C.
and a general partner of Blackstone Associates. Mr. Weisenburger is a Managing
Director of WP & Co., which is a subsidiary of WP Group. WP Group formed WP
Partners. See "Information as to Nominees and Other Directors - Certain
Relationships" and "Information as to Nominees and Other Directors - Directors'
Ownership of Securities".
Pursuant to the Stockholders Agreement, each of Blackstone Partners and
WP Partners or their affiliates receive a $1 million annual monitoring fee and
the reimbursement of expenses from the Company. Since the beginning of fiscal
1995, pursuant to the Stockholders Agreement the Company has paid to each of
Blackstone Partners and WP Partners or their affiliates $1.5 million plus
expenses.
Wasserstein Perella Securities, Inc. ("WP Securities"), a wholly owned
subsidiary of WP Group, has acted, and may in the future act, as agent for the
Company in the repurchase from time to time of the Common Stock. Since the
beginning of fiscal 1995, approximately $62,000 in fees have been paid or
accrued to WP Securities in connection with such repurchases. In addition, WP
Securities is acting as the lead underwriter in a proposed offering of debt
securities of Products and is expected to receive in connection therewith
customary commissions.
For advisory services in connection with the acquisition of Manchester
Plastics in January 1996, the Company paid or accrued to each of Blackstone
Partners and WP Partners or their affiliates approximately $1.2 million plus
expenses.
For a description of the relationships of the Company's directors with
any of BGH, Blackstone Partners, Blackstone Management, WP Partners, WP & Co. or
WP Management, see "Information as to Nominees and Other Directors - Certain
Relationships" above.
RELATIONSHIPS WITH INDEPENDENT ACCOUNTANTS
Arthur Andersen LLP served as independent auditors of the Company for the
fiscal year ended January 27, 1996, and has served as independent auditors of
the Company since the Company's inception in 1988. The Board of Directors has
selected Arthur Andersen LLP to serve as independent auditors of the Company for
the fiscal year ending January 25, 1997. A representative of Arthur Andersen LLP
is expected to be present at the Meeting with the opportunity to make a
statement if he or she desires to do so and to respond to appropriate questions
from stockholders.
STOCKHOLDER PROPOSALS
Any stockholder who wishes to submit a proposal for action to be included
in the proxy materials for the Company's 1997 Annual Meeting must submit such
proposal so that it is received by the Secretary of the Company not later than
January 30, 1997. Proposals must be in writing and sent via registered,
certified or express mail. Facsimile or other forms of electronic submissions
will not be accepted.
17
<PAGE>
ANNUAL REPORT
The Company's Annual Report for the fiscal year ended January 27, 1996,
is being sent to the stockholders of the Company. The Company will furnish
without charge to any stockholder who so requests in writing a copy of the
Company's Annual Report on Form 10-K for the fiscal year ended January 27, 1996,
including financial statements and financial statement schedules. The Company
will furnish a copy of any of the exhibits referenced in the Annual Report on
Form 10-K upon the request in writing of a stockholder for a fee of not more
than $.50 per page to cover the cost of reproduction and mailing. Requests may
be directed to: Collins & Aikman Corporation, 701 McCullough Drive, P.O. Box
32665, Charlotte, NC 28232- 2665, Attention: Director-Investor Relations.
Neither the Annual Report nor any of the financial statements contained
therein are to be considered filed as part of this Proxy Statement or deemed
soliciting material.
OTHER MATTERS
It is not expected that any other matters will be brought before the
Meeting. If any matter not described in this Proxy Statement should properly
come before the Meeting, the persons named in the accompanying proxy will vote
the proxy in accordance with their best judgment unless a stockholder, by
striking out the appropriate provision of the proxy, chooses to withhold
authority to vote on such matters.
By Order of the Board of Directors,
/s/ Elizabeth R. Philipp
ELIZABETH R. PHILIPP
Secretary
PLEASE MARK, SIGN AND DATE THE ENCLOSED PROXY CARD AND MAIL IT PROMPTLY. NO
POSTAGE STAMP IS NECESSARY IF MAILED IN THE UNITED STATES.
18
<PAGE>
*********************************************************************
APPENDIX
<PAGE>
COLLINS & AIKMAN CORPORATION
P R O X Y
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 27, 1996
AND ANY ADJOURNMENT OR POSTPONEMENT THEREOF
The undersigned hereby appoints Thomas E. Hannah, David A. Stockman, and
Randall J. Weisenburger (the "Agents") as proxies (each with the power to act
alone and to appoint a substitute) and hereby authorizes each of them to
represent and to vote, as designated hereon, all the shares of Common Stock, par
value $0.01 per share, of Collins & Aikman Corporation (the "Company"), held of
record by the undersigned at the close of business on May 15, 1996, at the
Annual Meeting of Stockholders of the Company to be held on June 27, 1996, at
11:00 a.m., Eastern Daylight Savings Time, and at any adjournment or
postponement thereof, on the proposal referred to below.
THIS PROXY, WHEN EXECUTED, WILL BE VOTED IN ACCORDANCE WITH THE
SPECIFICATIONS HEREON. IN THE ABSENCE OF SUCH SPECIFICATIONS, THIS PROXY WILL BE
VOTED FOR PROPOSAL (I) AND IF ANY NOMINEE SHALL BE UNAVAILABLE TO SERVE AS A
DIRECTOR, THIS PROXY WILL BE VOTED FOR THE ELECTION OF SUCH OTHER PERSON OR
PERSONS AS THE NOMINATING COMMITTEE OF THE BOARD OF DIRECTORS OR THE COMPANY MAY
SELECT.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL (I).
THE UNDERSIGNED HEREBY REVOKES ANY PROXIES HERETOFORE GIVEN AND DIRECTS THE
AGENTS TO VOTE AS FOLLOWS:
PROPOSAL (I) Election of the following Nominees as Directors: James J.
Mossman, Warren B. Rudman and W. Townsend Ziebold, Jr.
<TABLE>
<S> <C> <C>
[ ] FOR all Nominees (except as [ ] WITHHOLD AUTHORITY (for all nominees) [ ] If you wish to withhold authority to
indicated) vote for any nominee(s), write his
(their) name(s), on the lines below.
</TABLE>
Continued, and to be signed and dated, on reverse side.
<PAGE>
In their discretion, the Agents are authorized to vote on any other matters
as may properly come before the meeting or any adjournment or postponement
thereof.
The undersigned hereby ratifies
and confirms all that these Agents
may do by virtue hereof and hereby
acknowledges receipt of the Notice
of Annual Meeting of Stockholders
and the Proxy Statement.
Dated , 1996
Signature(s)*
*Please sign your name(s) exactly
as it (they) appear(s) opposite.
When shares are held by joint
owners, all should sign. When
signing as attorney, executor,
administrator, trustee or
guardian, please give full title
as such. If a corporation, please
sign in full corporate name by
president or other authorized
officer and indicate title. If a
partnership, please sign in
partnership name by authorized
person and indicate title.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE. VOTES SHOULD BE INDICATED
(X) IN BLACK OR BLUE INK.
