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 Section 240.14a-11(c) or Section
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] No Fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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 (set forth the amount
on which the filing fee is calculated and state how it was
determined):
4) Proposed maximum aggregate value of transaction:
................................................................................
5) Total fee paid:
................................................................................
[ ] 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:
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<PAGE>
(Collins & Aikman letterhead appears here)
April 11, 1997
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
of Collins & Aikman Corporation to be held on May 28, 1997, at The New York
Palace, 455 Madison Avenue at 50th Street, New York, New York, at 12:00 p.m.,
Eastern Daylight Savings Time.
You are urged to read carefully the formal notice of the meeting and the
Proxy Statement which follow. 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 May 28, 1997
-------------------
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 May 28, 1997, at The New York Palace, 455 Madison Avenue at 50th Street,
New York, New York, commencing at 12:00 p.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 year
2000 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 March 31, 1997, 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.
April 11, 1997
<PAGE>
PROXY STATEMENT
----------
COLLINS & AIKMAN CORPORATION
701 McCullough Drive
Charlotte, North Carolina 28262
-----------
ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 28, 1997
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 May 28, 1997, at The New York Palace, 455 Madison Avenue
at 50th Street, New York, New York, commencing at 12:00 p.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 March 31, 1997,
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: Proxy Department) 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 April 11, 1997.
1
<PAGE>
Voting Securities and Principal Stockholders
On the Record Date, 66,370,192 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 March 25, 1997,
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) 39.4%
118 North Bedford Road, Suite 300
Mount Kisco, New York 10549
Wasserstein/C&A 27,874,573 (2) 42.0%
Holdings, L.L.C.
31 West 52nd Street
New York, New York 10019
</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 Management Associates L.L.C. ("BMA"), (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) Of these shares (i) 27,629,573 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"), which is an indirect wholly owned subsidiary of Wassertein
Perella Group, Inc. ("WP Group"), (ii) 200,000 are held directly by WPPN,
Inc., an indirect subsidiary of WP Group, and (iii) 45,000 shares are held
directly 33% by each of three trusts for which Bruce Wasserstein, the
Chairman and Chief Executive Officer of WP Management (who is also a
director and stockholder of WP Group), is the Co-Trustee.
2
<PAGE>
Executive officers and directors of the Company as a group (14 persons)
beneficially own 1,704,528 shares of Common Stock as of March 25, 1997. 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 March 25, 1997:
<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) 1.47%
Dennis E. Hiller 117,106 (2) *
John D. Moose 197,129 (3) *
Elizabeth R. Philipp 92,853 (4) *
J. Michael Stepp 65,000 (5) *
</TABLE>
* Less than one percent of shares of Common Stock outstanding.
(1) 981,435 represent shares underlying options granted under the Company's
1993 Employee Stock Option Plan (the "1993 Plan") which are vested. 6,000
shares are held directly.
(2) 95,566 represent shares underlying options granted under the 1993 Plan
which are vested and 13,200 represent shares underlying options granted
under the Company's 1994 Employee Stock Option Plan (the "1994 Plan") which
are vested. 7,895 shares are held directly and 445 shares are held by Mr.
Hiller's spouse.
(3) 196,629 represent shares underlying options granted under the 1993 Plan
which are vested. 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.
(4) 91,853 represent shares underlying options granted under the 1993 Plan
which are vested. 1,000 shares are held directly.
(5) All shares are held directly.
3
<PAGE>
Voting. As of March 25, 1997, Blackstone Partners and its affiliates and
the Wasserstein L.L.C., which is controlled by WP Partners, and its affiliates
(collectively, the "Partners") beneficially own or have the right to vote in the
aggregate approximately 81% 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 year 2000 Annual Meeting and until his
successor is elected and qualified, subject, however, to prior death,
resignation, retirement, disqualification or removal from office. All 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 March 25, 1997, 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 herein) 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.
Clark, Stockman and Weisenburger.
Nominees for Election at the Meeting - Class III Directors
Robert C. Clark, 53, 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, 50, 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 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 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. and Bar Technologies Inc.
Randall J. Weisenburger, 38, 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 Wasserstein Perella & Co., Inc. ("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. and Co-Chairman of Alliance
Entertainment Corp.
4
<PAGE>
Directors Whose Terms Expire at the 1998 Annual Meeting - Class I Directors
Thomas E. Hannah, 58, 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., 35, 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, 50, 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.
Directors Whose Terms Expire at the 1999 Annual Meeting - Class II Directors
James J. Mossman, 38, has been a director of the Company since January
1995. Mr. Mossman 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 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, 67, 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,
Prime Succession and the Raytheon Company and an independent trustee of
seventeen mutual funds of the Dreyfus Corporation.
W. Townsend Ziebold, Jr., 35, has been a director of the Company since
December 1992. Mr. Ziebold has been a Managing Director of 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. Mr. Ziebold is a director of
Alliance Entertainment Corp.
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"), and BMA, which is the general partner of BFIP.
WP Partners is a Delaware limited partnership, the general partner of which
is WP Management. WP Partners was formed by 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 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.
5
<PAGE>
Blackstone Partners and its affiliates and the Wasserstein L.L.C., which is
controlled by WP Partners, and its affiliates as of March 25, 1997 beneficially
own approximately 39.4% and 42.0%, 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 as of March 25, 1997 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) 6,000 shares owned by Mr. Majoros, (iii) 22,000 shares owned by Mr.
Weisenburger, (iv) 3,000 shares owned by Mr. Ziebold, (v) 30,000 shares
underlying options granted to Mr. Clark pursuant to the 1994 Directors Stock
Option Plan (the "Directors Plan"), and (vi) 20,000 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 and Members of BMA,
collectively share with all general partners of Blackstone Associates and
Members of BMA 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 or BMA 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 or BMA 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. An additional 245,000
shares of Common Stock are held by affiliates of the Wasserstein L.L.C. 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. or
its affiliates.
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
the Wasserstein L.L.C. and their affiliates have, in each case, been pledged to
The Chase Manhattan Bank in connection with the financing of the purchase of a
portion of those shares under a credit facility with The Chase Manhattan Bank
and to secure the obligations of the pledgors under such credit facility. Each
credit facility with The Chase Manhattan 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).
Meetings and Committees of the Board of Directors.
Meetings and Attendance. In fiscal 1996, the Board of Directors held a
total of six 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, except for Mr. Hannah and Mr.
Schwarzman who each missed two Board of Directors meetings.
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.
6
<PAGE>
The Audit Committee held two meetings in fiscal 1996. 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 meeting in fiscal 1996. 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 Company's 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 no meetings in fiscal 1996, having acted only
by written consent during such period. 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 key employees of the quality required to successfully
manage the Company's businesses.
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
8
<PAGE>
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.
Four of the Named Executive Officers, as well as Mr. Hannah (whose bonus is
discussed separately below), received bonuses for fiscal 1996 under the Bonus
Plan. For such four Named Executive Officers, the target bonuses assigned
equaled 40% of base salary and bonuses actually awarded were approximately 80%,
33%, 58% and 58% of annual base salary, respectively. Such awards were generally
pursuant to the formula under the Bonus Plan, except that the impact of one
newly acquired subsidiary, Manchester Plastics, and half of the impact of labor
strikes at General Motors, one of the Company's major customers, were excluded
from the EBIT calculations.
LONG-TERM INCENTIVE
The third major component of the Company's executive compensation program is its
long-term incentive compensation plans. Through the 1993 Plan and the 1994 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 Named Executive Officers
received stock option grants in fiscal 1993 under the 1993 Plan, which vested in
increments and were fully vested in June 1996. One such Named Executive Officer
also received a grant in fiscal 1993 under the 1994 Plan, which vested 33% in
January 1997, and will vest 33% in January 1998 and 34% in January 1999. In
light of these grants in fiscal 1993, there have been no further stock option
grants to the Chief Executive Officer and the Named Executive Officers except as
follows. One Named Executive Officer, who joined the Company in April 1995,
received at that time a grant of stock options under the 1994 Plan, which vest
100% in April 1998. In addition, in the last fiscal year, grants of stock
options were made to two Named Executive Officers as part of a special
Chairman's Award made for the purpose of recognizing outstanding contributions.
Such options will vest in March 2001.
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 agreement was further amended
in October 1996 to increase the target and maximum bonus percentages to the
levels discussed below in order to keep Mr. Hannah's total compensation package
competitive and to increase his incentives. The terms of Mr. Hannah's employment
agreement are described under "Employment Agreements" elsewhere in this Proxy
Statement.
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 100 percent of current annual base salary, with a maximum
opportunity of 200 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 1996, the Company's financial performance exceeded the
targets set by the Compensation Committee, excluding, as discussed above, the
impact of the Manchester Plastics subsidiary and half of the impact of the
General Motors strikes. Mr. Hannah's annual bonus award for the most recent
fiscal year was $761,250.
9
<PAGE>
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 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, this legislation has not limited the
Company's tax deductions for executive compensation prior to fiscal 1996 and,
except as follows, is not expected to limit the Company's tax deductions for
fiscal 1996. Due to a modification of Mr. Hannah's employment agreement in
fiscal 1996 to increase certain bonus percentages as discussed above, the
grandfather provisions of Section 162(m) are not expected to apply to certain
compensation paid for fiscal 1996 pursuant to Mr. Hannah's employment agreement.
Consequently, the Company expects that Section 162(m) will limit the Company's
tax deductions with respect to a portion of Mr. Hannah's compensation in excess
of $1 million for fiscal 1996.
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 $100,000 and who were serving as
executive officers at the end of the fiscal year ended December 28, 1996 (the
individuals named in clauses (i) and (ii) being referred to in this Proxy
Statement as the "Named Executive Officers"). All compensation shown has been
paid by Collins & Aikman Products Co., a wholly owned subsidiary of the Company
("Products"), or by a subsidiary of Products (although the options shown as
awarded are for Common Stock of the Company). The Company does not separately
compensate its executive officers for their duties as officers of the Company
(except for any such options).
<PAGE>
<TABLE>
<CAPTION>
Summary Compensation Table
Annual Compensation Long Term Compensation
Other Awards
Name and Annual Securities All Other
Principal Year Salary Bonus Compensation Underlying Compensation
Position (1) ($) ($) ($) Options (#) ($)
<S> <C> <C> <C> <C> <C> <C>
Thomas E. Hannah 1996 481,250 761,250 (2) 0 18,604 (3)
Chief Executive Officer 1995 525,000 275,625 20,869 (2) 0 30,487
1994 515,833 807,188 4,030 (2) 0 34,190
Dennis E. Hiller 1996 215,417 188,000 (2) 25,000 8,463 (4)
President, Automotive 1995 202,917 132,000 51,465 (5) 40,000 8,542
Carpet and Acoustics 1994 173,750 119,250 131,038 (6) 0 5,773
Group
John D. Moose 1996 297,917 106,600 (2) 0 9,246 (7)
President, Automotive 1995 311,250 62,000 (2) 0 14,808
Fabrics Division 1994 295,417 279,000 83,200 (8) 0 11,215
Elizabeth R. Philipp 1996 265,850 174,116 (2) 0 9,079 (9)
Executive Vice President, 1995 299,683 100,136 (2) 0 13,674
General Counsel, 1994 270,000 241,400 (2) 0 10,647
and Secretary
J. Michael Stepp 1996 228,000 155,120 135,005 (12) 25,000 9,169 (14)
Executive Vice 1995 197,230 (11) 92,000 56,555 (13) 100,000 1,380
President and Chief 1994 N/A N/A N/A N/A N/A
Financial Officer (10)
</TABLE>
(1) The information given in this table is for the fiscal years indicated,
not calendar years. In 1996, the Company changed its fiscal year end to
the last Saturday of December. Previous fiscal years ended on the last
Saturday of January. Accordingly, in this table, 1996 indicates the
fiscal year ended December 28, 1996 (an 11 month fiscal year). 1995
indicates the fiscal year ended January 27, 1996.
1994 indicates the fiscal year ended January 28, 1995.
(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 1996 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 $2,750, (ii)
contributions to the non-qualified supplement to the PSP (the "SPSP") in
the amount of $11,928 and (iii) premiums in the amount of $2,699 and
$1,227 paid for basic term life insurance and Accidental Death &
Dismemberment insurance ("AD&D insurance"), respectively, under group
life insurance policies.
11
<PAGE>
(4) Amount for fiscal 1996 for Mr. Hiller consists of (i) contributions to
the PSP in the amount of $2,750, (ii) contributions to the SPSP in the
amount of $3,978 and (iii) premiums in the amount of $1,414 and $321 paid
for basic term life insurance and AD&D insurance, respectively, under
group life insurance policies.
(5) Includes $32,969 for reimbursement of relocation costs in connection with
Mr. Hiller's move to North Carolina and $12,553 for gross-ups of
relocation reimbursements to compensate the executive for incremental
federal and state income taxes.
(6) Includes $64,975 for reimbursement of relocation costs in connection with
Mr. Hiller's move to North Carolina and $62,552 for gross-ups of
relocation reimbursements to compensate the executive for incremental
federal and state income tax.
(7) Amount for fiscal 1996 for Mr. Moose consists of (i) contributions to the
PSP in the amount of $2,750, (ii) contributions to the SPSP in the amount
of $4,345 and (iii) premiums in the amount of $1,671 and $480 paid for
basic term life insurance and AD&D insurance, respectively, under group
life insurance policies.
(8) Includes $31,254 for reimbursement of relocation 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.
(9) Amount for fiscal 1996 for Ms. Philipp consists of (i) contributions to
the PSP in the amount of $2,750, (ii) contributions to the SPSP in the
amount of $4,397 and (iii) premiums in the amount of $1,544 and $388 paid
for basic term life insurance and AD&D insurance, respectively, under
group life insurance policies.
(10) 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.
(11) Includes salary for the period from April 6, 1995 through January 27,
1996, the portion of fiscal 1995 during which Mr. Stepp was an executive
officer of the Company.
(12) Includes $81,438 for reimbursement of relocation costs in connection with
Mr. Stepp's move to Charlotte, North Carolina and $44,268 for gross-ups
of relocation reimbursements to compensate the executive for incremental
federal and state income tax.
(13) Includes $33,699 for reimbursement of relocation costs in connection with
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.
(14) Amount for fiscal 1996 for Mr. Stepp consists of (i) contributions to the
PSP in the amount of $2,750, (ii) contributions to the SPSP in the amount
of $3,922 and (iii) premiums in the amount of $1,871 and $626 paid for
basic term life insurance and AD&D insurance, respectively, under group
life insurance policies.
12
<PAGE>
Option Grants In Last Fiscal Year
Shown below is further information on grants of stock options for the
fiscal year ended December 28, 1996, to the Named Executive Officers. No grants
of stock options were made during the fiscal year ended December 28, 1996, to
the Named Executive Officers other than to Mr. Hiller and Mr. Stepp.
<TABLE>
<CAPTION>
Number of
Securities % of Total
Underlying Options Granted Exercise
Options to Employees Price Expiration Grant Date
Name Granted (#) in Fiscal 1996 ($/sh)(1) Date Present Value ($)(2)
<S> <C> <C> <C> <C> <C>
Thomas E. Hannah 0 0 N/A N/A N/A
Dennis E. Hiller 25,000 (3) 20% 7.00 3/06/2006 111,139
John D. Moose 0 0 N/A N/A N/A
Elizabeth R. Philipp 0 0 N/A N/A N/A
J. Michael Stepp 25,000 (3) 20% 7.00 3/06/2006 111,139
</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 6.39%, dividend yield of 0% and time to exercise of ten
years. Additionally, no liquidity discount or forfeiture discount was
applied.
(3) Options were awarded pursuant to the 1994 Plan and vest in March 2001.
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 December 28, 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
December 27, 1996 (the last trading day of the fiscal year ended December 28,
1996), which was $6.125.
<TABLE>
<CAPTION>
Number of Securities Underlying Value of Unexercised
Unexercised Options at In-The-Money-Options at FY-End
FY-End (#) ($)
Shares Acquired Value
Name On Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Thomas E. Hannah 0 0 841,230 0 1,796,026 0
140,205 0 (1) 0
Dennis E. Hiller 0 0 83,048 40,000 177,307 (1)
12,518 25,000 (1) (1)
John D. Moose 0 0 146,555 0 312,895 0
50,074 0 (1) 0
Elizabeth R. Philipp 0 0 83,508 0 178,290 0
8,345 0 (1) 0
J. Michael Stepp 0 0 0 100,000 0 (1)
0 25,000 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
December 27, 1996 (the last trading day of the fiscal year).
13
<PAGE>
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, Hiller,
Moose and Stepp and Ms. Philipp are $14,166, $34,099, $52,726, $2,104 and
$25,152, 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.
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, Hiller,
Moose and Stepp and Ms. Philipp are $54,275, $12,766, $25,607, $3,187 and
$20,582, 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.
14
<PAGE>
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>
All the Named Executive Officers except Ms. Philipp participate in the
C&A Co. SRIP. Mr. Hannah currently has eight years, two months of plan service,
and at age 65, he will have an estimated 14 years, five months of plan service.
Mr. Hiller currently has four years, three months of plan service and at age 65
will have an estimated 27 years, nine months of plan service. Mr. Moose
currently has 36 years, nine months of plan service and at age 65 will have an
estimated 41 years, four months of plan service. Mr. Stepp currently has two
years of plan service and at age 65 will have an estimated 14 years of plan
service.
15
<PAGE>
Employment Agreements
In July 1992, Products entered into an employment agreement with Mr.
Hannah, which was amended as of February 1994 and October 1996. 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 100% of the base salary then in
effect up to a maximum of 200% of base salary. The agreement is automatically
renewed each year unless Products notifies Mr. Hannah 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) 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 for
any 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.
16
<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 December 27,
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.
(Graph appears here with the following plot points.)
<TABLE>
<CAPTION>
July 7, January 28, January 26, December 27,
1994 1995 1996 1996
<S> <C> <C> <C> <C>
Collins & Aikman Corporation $ 100.00 $ 80.95 $68.69 $60.10
S&P 500 $ 100.00 $107.02 $145.61 $180.25
Peer Group* $ 100.00 $ 87.16 $106.28 $116.36
========================================= ====================== ================== =============== ==================
</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, which the Company served during 1996, as well as companies with which
the Company believes it competes for managers. The Peer Group consists of Lear
Seating Corporation, Burlington Industries, Inc., Quaker Fabric Corporation,
Culp, Inc., Norwall Group Inc., Fieldcrest Cannon, Inc., Cone Mills Corporation
and Masland Corporation. Masland Corporation was acquired by Lear Seating
Corporation in June 1996 and was included in the Peer Group until such time as
separate information was unavailable due to such acquisition.
17
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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, BMA 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
payable quarterly and the reimbursement of expenses from the Company. Since the
beginning of fiscal 1996, pursuant to the Stockholders Agreement the Company has
paid to each of Blackstone Partners and WP Partners or their affiliates $1.25
million in annual monitoring fees 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 1996, approximately $110,000 in fees have been paid or
accrued to WP Securities in connection with such repurchases. In addition, WP
Securities acted as the lead underwriter in an offering of debt securities of
Products in June 1996 and was paid fees of approximately $5.4 million by
Products in connection therewith.
For advisory services in connection with the acquisition of Manchester
Plastics in January 1996, the Company paid to each of Blackstone Partners and WP
Partners or their affiliates approximately $1.2 million plus expenses. For
advisory services in connection with the acquisition of JPS Automotive L.P. in
December 1996, the Company has accrued $1.45 million in fees to each of
Blackstone Partners and WP Partners or their affiliates. For advisory services
in connection with the acquisition in December 1996 of Perstorp AB's automotive
supply operations in Europe and North America, the Company has accrued $.7
million in fees to each of Blackstone Partners and WP Partners or their
affiliates. For advisory services in connection with a joint venture entered
into in December 1996 relating to Perstorp's automotive supply facilities in
Sweden, Belgium and France, the Company has accrued $.5 million to each of
Blackstone Partners and WP Partners or their affiliates. In addition, for
advisory services in connection with the disposition of the Company's
Floorcoverings subsidiary in February 1997, the Company has accrued $1.2 million
in fees to each of Blackstone Partners and WP Partners or their affiliates. In
connection with advisory services for all these transactions, the Company also
reimbursed Blackstone Partners and WP Partners or their affiliates for
reasonable out-of-pocket 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.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and officers and persons who own more than 10% of the
Company's Common Stock to file reports of ownership and changes in ownership
with the Securities and Exchange Commission and the New York Stock Exchange.
Based solely on the Company's review of the reporting forms received by it, and
written representations from certain persons that no Form 5 reports were
required to be filed by those persons, the Company believes that for fiscal 1996
all such filing requirements were satisfied except that WPPN, Inc., a
corporation in common control with the Wasserstein L.L.C., filed one report four
days late. The late report related to seven transactions.
RELATIONSHIPS WITH INDEPENDENT ACCOUNTANTS
Arthur Andersen LLP served as independent auditors of the Company for the
fiscal year ended December 28, 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 December 27, 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.
18
<PAGE>
STOCKHOLDER PROPOSALS
Any stockholder who wishes to submit a proposal for action to be included
in the proxy materials for the Company's 1998 Annual Meeting must submit such
proposal so that it is received by the Secretary of the Company not later than
December 12, 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.
OTHER MATTERS TO COME BEFORE THE MEETING
The federal proxy rules specify what constitutes timely submission for a
stockholder proposal to be included in the Proxy Statement, as discussed above
under "STOCKHOLDER PROPOSALS". If a stockholder desires to bring business before
an annual meeting which is not the subject of a proposal timely submitted for
inclusion in the Proxy Statement, the stockholder must follow procedures
outlined in the Company's By-laws. A copy of these By-law procedures is
available upon request from the Secretary of the Company, 701 McCullough Drive,
Charlotte, North Carolina 28262. One of the procedural requirements in the
By-laws is timely notice in writing of the business the stockholder proposes to
bring before the annual meeting. Notice must be received not less than 90 days
nor more than 120 days prior to the anniversary date of the immediately
preceding annual meeting of stockholders; provided, however, that if the annual
meeting is called for a date that is not within 30 days before or after such
anniversary date, notice by the stockholder in order to be timely must be so
received not later than the close of business on the tenth day following the day
on which notice of the date of the annual meeting was mailed or public
disclosure was made, whichever occurs first. It should be noted that those
By-law procedures govern proper submission of business to be put before a
stockholder vote and do not preclude discussion by any stockholder of any
business properly brought before an annual meeting.
For a description of the requirements for recommending director
candidates for consideration to the Nominating Committee, see "Information as to
Nominees and Other Directors - Committees of the Board." If a stockholder wants
to nominate a person for election to the Board of Directors other than a
director nominated by the Nominating Committee, notice of the proposed
nomination must be delivered to or mailed and received by the Secretary of the
Company at the address set forth in the previous paragraph by the time periods
set forth in the previous paragraph in the case of an annual meeting and, in the
case of a special meeting called for the purpose of electing directors, by the
close of business on the tenth day following the day on which public disclosure
of the date of the special meeting was made. The By-law provision contains other
requirements for notice and a copy thereof is available upon request from the
Secretary of the Company.
ANNUAL REPORT
The Company's Annual Report for the fiscal year ended December 28, 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 December 28,
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-Public 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.
19
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APPENDIX
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 MAY 28, 1997
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 March 31, 1997, at the
Annual Meeting of Stockholders of the Company to be held on May 28, 1997, at
12:00 p.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: Robert C.
Clark, David A. Stockman and Randall J. Weisenburger.
<TABLE>
<S> <C> <C>
[ ] FOR all Nominees (except as [ ] WITHHOLD AUTHORITY (for all [ ] If you wish to withhold authority
indicated) nominees) to 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 , 1997
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 VOTES SHOULD BE INDICATED
CARD PROMPTLY USING THE ENCLOSED ENVELOPE. (X) IN BLACK OR BLUE INK.
<PAGE>
