<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
WestPoint Stevens Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(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:
<PAGE> 2
[LOGO WESTPOINT STEVENS]
April 10, 1998
Dear Stockholder:
You are cordially invited to attend the 1998 Annual Meeting of
Stockholders of WestPoint Stevens Inc. (the "Company") on Wednesday, May 13,
1998, beginning at 10:00 a.m., Eastern Daylight Time, at the Company's New York
offices, 1185 Avenue of the Americas (13th floor), New York, New York. I look
forward to greeting as many of you as can attend the Annual Meeting.
Holders of the Company's Common Stock are being asked to vote on the
matters listed in the enclosed Notice of Annual Meeting of Stockholders. YOUR
BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL OF THE MATTERS SET FORTH IN THE
NOTICE.
Whether or not you plan to attend the Annual Meeting, it is important
that your shares of Common Stock be represented and voted at the Annual Meeting.
Accordingly, after reading the enclosed Notice of Annual Meeting and
accompanying Proxy Statement, please sign, date and mail the enclosed proxy card
in the envelope provided.
Very truly yours,
/s/ Holcombe T. Green, Jr.
Holcombe T. Green, Jr.
Chairman of the Board and
Chief Executive Officer
<PAGE> 3
[LOGO WESTPOINT STEVENS]
---------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 13, 1998
---------------------
To the Stockholders
of WestPoint Stevens Inc.:
The Annual Meeting of Stockholders of WestPoint Stevens Inc. (the
"Company") will be held at the Company's New York offices, 1185 Avenue of the
Americas (13th floor), New York, New York, on Wednesday, May 13, 1998, at 10:00
a.m., Eastern Daylight Time, for the following purposes:
1. To elect three directors to serve for a term of three years and until
their respective successors are elected and qualified.
2. To approve the amendment and restatement of the Company's Restated
Certificate of Incorporation (the "Existing Certificate"), to increase
the number of authorized shares of Common Stock.
3. To ratify the appointment of Ernst & Young LLP, independent certified
public accountants, as auditors for the Company for fiscal 1998.
4. To act upon such other matters as may properly come before the meeting
or any adjournment or adjournments thereof.
Only stockholders of record at the close of business on March 20, 1998,
are entitled to notice of, and to vote at, the meeting.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING AND REGARDLESS OF
THE NUMBER OF SHARES YOU OWN, YOU ARE REQUESTED TO FILL IN, DATE AND SIGN THE
ENCLOSED PROXY, WHICH IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY, AND
TO MAIL IT PROMPTLY IN THE ACCOMPANYING ENVELOPE.
Your proxy will be revocable by filing with the Secretary a written
revocation or a proxy bearing a later date at any time prior to the time it is
voted, or by attending the Annual Meeting and voting thereat.
By Order of the Board of Directors,
/s/ Christopher N. Zodrow
Christopher N. Zodrow
Vice President and Secretary
West Point, Georgia
April 10, 1998
<PAGE> 4
[LOGO WESTPOINT STEVENS]
WESTPOINT STEVENS
507 WEST TENTH STREET
WEST POINT, GEORGIA 31833
(706) 645-4000
---------------
PROXY STATEMENT
---------------
ANNUAL MEETING OF STOCKHOLDERS
MAY 13, 1998
---------------
This Proxy Statement is furnished to holders of Common Stock, par value
$.01 per share (the "Common Stock"), of WestPoint Stevens Inc., a Delaware
corporation (the "Company"), in connection with the solicitation of proxies by
the Board of Directors of the Company for use at the Annual Meeting of
Stockholders of the Company to be held on Wednesday, May 13, 1998, at 10:00
a.m., Eastern Daylight Time, at the Company's New York offices, 1185 Avenue of
the Americas (13th floor), New York, New York, 10036, and at any adjournment or
adjournments thereof (the "Annual Meeting"). This Proxy Statement and the
accompanying form of proxy are first being mailed to stockholders on or about
April 10, 1998.
THE PROXY
Thomas J. Ward, President and Chief Operating Officer of the Company,
and Christopher N. Zodrow, Vice President and Secretary of the Company, have
been selected as proxies by the Board of Directors of the Company with respect
to the matters to be voted upon at the Annual Meeting.
All shares of Common Stock represented by properly executed proxies
received prior to or at the Annual Meeting and not revoked prior to the Annual
Meeting in accordance with the procedures therefor will be voted and will be
voted as specified in the instructions indicated in such proxies. IF NO
INSTRUCTIONS ARE INDICATED, SUCH PROXIES WILL BE VOTED IN ACCORDANCE WITH THE
RECOMMENDATIONS OF THE BOARD OF DIRECTORS CONTAINED IN THIS PROXY STATEMENT AND,
IN THE DISCRETION OF THE PERSONS NAMED IN THE PROXY, ON SUCH OTHER MATTERS AS
MAY PROPERLY COME BEFORE THE ANNUAL MEETING.
A stockholder may revoke his, her or its proxy at any time prior to use
of such proxy by delivering to the Secretary of the Company a signed notice of
revocation or a later dated and signed proxy or by attending the Annual Meeting
and voting in person. Attendance at the Annual Meeting will not in itself
constitute the revocation of a proxy.
<PAGE> 5
RECORD DATE; SHARES ENTITLED TO VOTE
The Board of Directors of the Company has fixed the close of business
on March 20, 1998 as the date (the "Record Date") for determining the
stockholders entitled to notice of, and to vote at, the Annual Meeting. On the
Record Date, there were 60,188,258 shares of Common Stock outstanding (excluding
5,208,994 shares in the Company's treasury), with each share entitled to one
vote per share on each matter submitted to stockholders for consideration at the
Annual Meeting. See "AMENDMENT AND RESTATEMENT OF THE EXISTING CERTIFICATE."
QUORUM; REQUIRED VOTE
The presence, in person or by proxy, of the holders of record of a
majority of the issued and outstanding shares of Common Stock entitled to vote
at the Annual Meeting is necessary to constitute a quorum at the Annual Meeting.
With respect to abstentions and broker non-votes, the shares covered thereby are
deemed to be present at the Annual Meeting for purposes of determining a quorum.
A plurality of the votes cast by the shares of Common Stock entitled to
vote at the Annual Meeting present in person or by proxy is required to elect
the nominees for director in respect of the Election Proposal (as defined under
"BOARD OF DIRECTORS -- Election Proposal").
The affirmative vote of the holders of record of a majority of the
issued and outstanding shares of Common Stock entitled to vote at the Annual
Meeting is required to approve the adoption of the proposed amendments to the
Company's Restated Certificate of Incorporation as currently in effect. In the
case of such vote, abstentions and failures to vote are not affirmative votes
for such matter, and therefore, have the same effect as votes against such
matter.
The affirmative vote of a majority of votes cast by the shares of
Common Stock at the Annual Meeting represented in person or by proxy and
entitled to vote is required to ratify the appointment of Ernst & Young LLP as
the Company's independent auditors. In the case of such vote, abstentions are
not votes cast for such matters, and therefore, are not counted.
On each matter submitted to stockholders for consideration at the
Annual Meeting, only shares of Common Stock that are voted in favor of such
matter (including proxies for which no direction is provided) will be counted
toward approval of such matter. Shares of Common Stock present at the Annual
Meeting that are not voted for a particular matter or shares of Common Stock
present by proxy where the stockholder properly withheld authority to vote for
such matter (including broker non-votes) will not be counted toward approval of
such matter. Stockholders will not be allowed to cumulate their votes in the
election of directors.
A broker non-vote occurs when a nominee holding shares for a beneficial
owner does not vote on a particular proposal because the nominee does not have
discretionary voting power with respect to that proposal and has not received
instructions from the beneficial owner. With respect to broker non-votes, the
shares of Common Stock are not considered present at the Annual Meeting as to
the proposal for which the broker withheld authority. Consequently, broker
non-votes are not counted regarding any such proposal.
Stockholders are not entitled to appraisal rights or similar rights of
dissenters under the Delaware General Corporation Law ("DGCL") in connection
with any of the matters to be acted upon at the Annual Meeting.
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<PAGE> 6
BOARD OF DIRECTORS
ELECTION PROPOSAL
The Board of Directors of the Company currently consists of ten
members, divided into three classes (Class I and Class II (each of which has
three members) and Class III* (which currently consists of four members)). The
terms of office of the members of the Class III directors expire at the Annual
Meeting. The terms of office of the members of each class of directors are
staggered so that the terms of office of no more than one class expires in any
one year. At each annual meeting of stockholders, the directors elected to
succeed the directors in the class whose terms then expire are elected for a
term of office to expire at the third succeeding annual meeting of stockholders,
with each newly-elected director holding office until his successor is duly
elected and qualified, or until his earlier death, resignation or removal.
The Board of Directors has nominated for election Messrs. Hugh M.
Chapman, John G. Hudson and Joseph L. Jennings, Jr. to serve as Class III
directors of the Company until the 2001 Annual Meeting of Stockholders and until
their successors are duly elected and qualified (the "Election Proposal").
Messrs. Chapman, Hudson and Jennings currently are members of the Board of
Directors. The six directors in Class I and Class II will continue in office.
The following table lists the name, age and positions with the Company
of each of the three nominees and each of the continuing directors, as well as
the year in which each such person's term of office will expire and the month
and year in which each director was first elected as a director of the Company
(in each case assuming that each of the nominees is elected at the Annual
Meeting).
<TABLE>
<CAPTION>
Term Positions with the Served as
Name Age Expires Company Director Since
---- --- ------- ------------------ --------------
<S> <C> <C> <C> <C> <C>
NOMINEES
Class III*
Hugh M. Chapman 65 2001 Director August 1997
John G. Hudson 72 2001 Director September 1992
Joseph L. Jennings, Jr. 60 2001 Director, Vice Chairman March 1993
CONTINUING DIRECTORS
Class I
M. Katherine Dwyer 49 1999 Director October 1996
Gerald B. Mitchell 70 1999 Director September 1992
Phillip Siegel 55 1999 Director September 1992
Class II
Holcombe T. Green, Jr. 58 2000 Chairman of the Board and September 1992
Chief Executive Officer
Charles W. McCall 54 2000 Director May 1994
John F. Sorte 50 2000 Director January 1993
</TABLE>
*In February 1998, Mr. Douglas T. McClure, Jr. announced his decision not to
stand for re-election at the Annual Meeting due to personal reasons. Mr. McClure
will continue as a Class III director of the Company until the time of election
of directors at the Annual Meeting ("Time of Election"). Pursuant to its
authority under the Company's Restated Certificate of Incorporation and Amended
and Restated By-laws, in February 1998, the
3
<PAGE> 7
Board of Directors took action, which will be effective at the Time of Election,
which will reduce the number of directors comprising the entire Board of
Directors of the Company from ten to nine and the number of directors comprising
Class III from four to three.
Nominees
HUGH M. CHAPMAN. Mr. Chapman, from January 1992 until his retirement in
June 1997, served as Chairman of NationsBank, National Association (South). He
also is a director of SCANA Corporation (and a member of its executive
committee, chairman of its management development and corporate performance
committee and chairman of its long term compensation committee) and Printpack
Inc. Mr. Chapman is a member of the Company's pension committee (the "Pension
Committee"). The Pension Committee is not a committee of the Board of Directors.
JOHN G. HUDSON. Mr. Hudson, from July 1986 until his retirement in
September 1990, served as President of Avondale Mills, Inc., a textile
manufacturer. He also is a director of Oneita Industries, Inc. (and a member of
its executive committee and chairman of its compensation committee). Mr. Hudson
is Chairman of the cotton committee and a member of the compensation committee
and the nominating committee of the Board of Directors (the "Cotton Committee,"
"Compensation Committee" and "Nominating Committee," respectively).
JOSEPH L. JENNINGS, JR. Mr. Jennings joined West Point-Pepperell, Inc.,
a former subsidiary of the Company which was merged with and into the Company on
December 10, 1993 ("WPP"), as President and Chief Operating Officer on February
1, 1993 and, upon consummation of the merger of WPP with and into the Company,
assumed the same positions with the Company. On January 1, 1997, Mr. Jennings
left the office of President and Chief Operating Officer to fill the newly
created office of Vice Chairman of the Board of Directors. Prior to joining WPP,
Mr. Jennings spent almost 20 years with Mount Vernon Mills, Inc., a major
textile manufacturer of denims and other fabrics, the last 11 years of which he
served as its President and Chief Operating Officer. Mr. Jennings is a member of
the Cotton Committee.
Each of the above-named nominees has consented to being named in the
Proxy Statement and will serve as a director if elected. If at the time of the
Annual Meeting, however, any of the above-named nominees should be unable or
decline to serve, the persons named as proxies herein will vote for such
substitute nominee or nominees as the Board of Directors recommends, or vote to
allow the vacancy created thereby to remain open until filled by the Board of
Directors, as the Board of Directors recommends.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION PROPOSAL TO
ELECT THE THREE NOMINEES FOR DIRECTOR NAMED ABOVE.
CONTINUING DIRECTORS
M. KATHERINE DWYER. Ms. Dwyer is Senior Vice President of Revlon, Inc.
and President of two divisions, Revlon Consumer Products USA and since November
1995, Revlon Cosmetics USA. Previously, Ms. Dwyer served as Executive Vice
President and General Manager of Mass Cosmetics and Executive Vice President of
Cosmetics and Fragrance Marketing for Revlon North America. She joined Revlon in
June 1993. Prior to joining Revlon, Ms. Dwyer was Vice President of Marketing
Consumer Products for Clairol, Inc., from 1991 until 1993, Executive Vice
President and General Manager for Victoria Creations from 1989 to 1991, and Vice
President of US Communications and Group Director of Skin Care for Avon
Products, Inc., from 1987 until 1989. Ms. Dwyer is a director of Reebok
International Ltd. (and a member of its compensation and audit committees) and
until April 1998 a director of Chesapeake Corp. (and a member of its audit
committee). She is a member of the Company's Compensation Committee and
Nominating Committee. Until August 14, 1997, she also was a member of the
Company's Pension Committee.
4
<PAGE> 8
HOLCOMBE T. GREEN, JR. Mr. Green is founder and principal of Green
Capital Investors, L.P., a private investment partnership, and certain other
affiliated partnerships. He is the retired Chairman of HBO & Company ("HBOC"), a
supplier of hospital information systems. Mr. Green became Chairman and Chief
Executive Officer of the Company and WPP on October 22, 1992. Mr. Green is
Chairman of the Nominating Committee and a member of the Cotton Committee.
CHARLES W. MCCALL. Mr. McCall has been President, Chief Executive
Officer and a director of HBOC since January 1991 (and a member of its executive
committee) and received the additional title of Chairman of that company on
February 10, 1998. From 1985 until joining HBOC, he served as President and
Chief Executive Officer of CompuServe, Inc., a computer services and
communications company. Mr. McCall also is a director of EIS International, Inc.
(and a member of its compensation committee) and AMERIGROUP Corporation. Mr.
McCall is a member of the audit committee (the "Audit Committee").
GERALD B. MITCHELL. Mr. Mitchell retired in 1988 after serving as
Chairman of Dana Corporation, an auto parts original equipment manufacturer. He
also is a director of Geo Weston Ltd. (and a member of its pension committee and
chairman of its environment, health and safety committee), Worthington
Industries (and a member of its compensation committee) and Eastman Chemical
Company, Inc. (and a member of its director affairs committee and chairman of
its nominating committee). Mr. Mitchell is Chairman of the Compensation
Committee and a member of the Nominating Committee.
PHILLIP SIEGEL. Mr. Siegel is a general partner of Endeavor Capital
Management, LLC. He served as Vice President and Chief Financial Officer of
Health Management Systems, Inc., a health care information systems company, from
May 1996 until March 1998. He was an independent business consultant from
February 1993 until May 1996. He served as a senior executive officer of
Presidential Life Insurance Company from December 1989 until February 1993, most
recently as its Senior Vice President. During 1988, Mr. Siegel served as Chief
Operating Officer and Chief Financial Officer of Sherwood Group and Sherwood
Securities. Mr. Siegel also is an independent general partner of Fiduciary
Capital Partners, L.P. and Fiduciary Capital Pension Partners, L.P. Mr. Siegel
is Chairman of the Audit Committee and until August 14, 1997, was a member of
the Compensation Committee.
JOHN F. SORTE. Mr. Sorte has been President of New Street Advisors
L.P., a merchant bank, and of New Street Investments L.P., its broker-dealer
affiliate, since he co-founded such entities in March 1994. From April 1992
until February 1994, Mr. Sorte served as President and Chief Executive Officer
of New Street Capital Corporation ("New Street Capital"). Mr. Sorte served as
President and Chief Executive Officer of The Drexel Burnham Lambert Group Inc.
from July 1990 until April 1992, as Executive Vice President and co-head of
Corporate Finance of Drexel Burnham Lambert Incorporated ("Drexel"), an
investment banking firm and predecessor to New Street Capital, from January 1989
to June 1990 and previously as a Managing Director of Drexel. Mr. Sorte also is
a director of Vail Resorts, Inc. (and a member of its audit committee) and is
Chairman of The New York Media Group, Inc. Mr. Sorte is Chairman of the Pension
Committee.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of the Company has an Audit Committee, a
Compensation Committee, a Cotton Committee and a Nominating Committee, the
current members of which are named below.
AUDIT COMMITTEE
The Company's Audit Committee was formed in September 1992 and held two
meetings during the fiscal year ended December 31, 1997 ("Fiscal 1997"). The
members of the Audit Committee are Phillip Siegel
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<PAGE> 9
(Chairman), Charles W. McCall and Douglas T. McClure, Jr. Among other things,
the Audit Committee (i) reviews the procedures employed in connection with the
internal auditing program, internal control procedures and accounting procedures
of the Company, (ii) consults with the Company's independent auditors, (iii)
reviews the reports submitted by the Company's independent auditors, (iv)
reviews with the Company's management compliance reporting and accounting, and
(v) makes such reports and recommendations to the Board of Directors as it deems
appropriate.
COMPENSATION COMMITTEE
The Compensation Committee was formed in February 1993 and held four
meetings during Fiscal 1997. The members of the Compensation Committee are
Gerald B. Mitchell (Chairman), John G. Hudson and M. Katherine Dwyer. The
function of the Compensation Committee is to establish salaries, bonuses and
other incentive plans in order to attract persons to serve as, and to retain,
motivate and reward qualified persons serving as, directors, executive officers
and key employees of the Company. In addition, the Compensation Committee
administers the MIP, the Key Employee Stock Bonus Plan, the Omnibus Stock
Incentive Plan (each as defined under "EXECUTIVE COMPENSATION"), and the 1994
Non-Employee Directors Stock Option Plan (the "Directors Stock Option Plan").
COTTON COMMITTEE
The Cotton Committee was formed in August 1995. The Cotton Committee
met on various occasions during Fiscal 1997. The members of the Cotton Committee
are John G. Hudson (Chairman), Holcombe T. Green, Jr. and Joseph L. Jennings,
Jr. The function of the Cotton Committee is to review and monitor the conditions
of the cotton supply market, to review cotton purchase and use planning with
Company management and to make such reports to the Board of Directors as it
deems appropriate with respect to this aspect of the Company's business.
NOMINATING COMMITTEE
The Nominating Committee was formed in February 1994. The Nominating
Committee met two times during Fiscal 1997. The members of the Nominating
Committee are Holcombe T. Green, Jr. (Chairman), Gerald B. Mitchell, M.
Katherine Dwyer and John G. Hudson. The Nominating Committee is responsible for
(i) evaluating and recommending qualified persons as nominees for re-election or
election as directors of the Company; (ii) establishing procedures for
identifying nominees; (iii) recommending criteria for membership on the Board of
Directors or any committee thereof; (iv) recommending directors for membership
on, and to serve as chairman of, any committee of the Board of Directors; (v)
recommending qualified persons to serve as Chairman of the Board of Directors
and as senior executive officers of the Company; and (vi) considering nominees
for election as directors of the Company submitted by stockholders.
The Nominating Committee will consider nominees recommended by a
stockholder entitled to vote for the election of the director nominated, upon
written notice of such stockholder given to the Secretary in accordance with the
notice provisions and procedures set forth in the By-laws. With respect to an
election to be held at an annual meeting, such notice must be given not less
than 60 nor more than 90 days prior to the first anniversary of the preceding
year's annual meeting, unless the date of the annual meeting is advanced by more
than 30 or delayed by more than 60 days from such anniversary, in which case
such notice must be given not less than 60 nor more than 90 days prior to such
annual meeting or the tenth day following the day on which public announcement
is first made of the date of such meeting, whichever is later. Other
requirements may apply in the event of an election involving an increase in the
number of members of the Board of Directors. With respect to an election to be
held at a special meeting of stockholders at which directors are to be elected
pursuant to the Company's notice of special meeting, such notice must be given
not less than 60 nor more than 90 days prior to
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<PAGE> 10
such special meeting or the tenth day following the day on which public
announcement is first made of the date of the special meeting and of the
nominees proposed by the Board of Directors to be elected at such meeting,
whichever is later. Each such notice shall set forth as to each nominee, each
stockholder giving the notice and as to the beneficial owner, if any, on whose
behalf the nomination is made: (i) the name, age, business address and residence
address of each such person, (ii) the principal occupation or employment of each
such person, (iii) the class and number of shares of Common Stock of the Company
which are owned beneficially and of record by each such person and (iv) any
other information relating to each such person that is required to be disclosed
in connection with the solicitation of proxies for the election of directors or
as otherwise required under applicable proxy rules (including, without
limitation, the nominee's written consent to being named in a proxy statement as
a nominee and to serving as a director, if elected).
DIRECTORS' COMPENSATION
Non-Employee directors receive a $25,000 retainer fee per year, plus a
fee of $1,500 for each Board and committee meeting attended. In addition, the
chairman of a committee receives an additional $4,000 retainer fee per year and
all committee members receive an additional $3,000 retainer fee per year. Mr.
Hudson is paid a fee of $1,000 per month in connection with meetings of the
Cotton Committee rather than $1,500 for each such meeting. Directors and other
members of any committee of the Company who are employees of the Company or its
affiliates are not paid extra compensation or retainer fees for their services
on the Board or any committee.
Stock options exercisable for shares of Common Stock are granted to
non-employee directors of the Company pursuant to the Directors Stock Option
Plan or the Omnibus Stock Incentive Plan in order to provide non-employee
directors of the Company an opportunity to acquire a proprietary interest in the
Company through awards of Common Stock and thus to create in such directors an
increased interest in and a greater concern for the welfare of the Company and
its subsidiaries. In connection with Ms. M. Katherine Dwyer becoming a director
of the Company, on November 12, 1997, the Company granted Ms. Dwyer an option to
purchase 10,000 shares of the Company's Common Stock outside of the Company's
stock option plans. The exercise price of such option was the fair market value
of common stock on October 15, 1996, the date Ms. Dwyer became a director of the
Company. Also see "EXECUTIVE COMPENSATION" for information concerning the
granting of options to purchase, and awards of, Common Stock to directors.
DIRECTOR ATTENDANCE
The Board of Directors held eight meetings during Fiscal 1997. Other
than Ms. M. Katherine Dwyer, none of the incumbent directors attended fewer than
75% of the aggregate of (i) the total number of meetings of the Board of
Directors (held during the periods such director served) and (ii) the total
number of meetings of all committees of the Board of which they were members
(held during the periods such director served). See "--Committees of the Board
of Directors."
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS
The members of the Compensation Committee are Gerald B. Mitchell
(Chairman), John G. Hudson and M. Katherine Dwyer. None of the current members
of the Compensation Committee of the Board of Directors of the Company is an
executive officer of the Company.
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<PAGE> 11
MANAGEMENT
On December 10, 1993, certain subsidiaries of the Company were merged
with and into each other and into the Company, with the Company as the ultimate
sole surviving corporation (collectively, the "Mergers"). Pursuant to the
Mergers, the Company acquired the publicly held shares of its indirect
subsidiary, WPP. On such date, the officers of WPP became the officers of the
Company. Accordingly, the information set forth under this caption and the
caption "EXECUTIVE COMPENSATION" includes information with respect to the
Company and WPP. References in this Proxy Statement to the Company prior to
December 10, 1993 include WPP and the Company's other former and present
subsidiaries, unless the context otherwise requires.
EXECUTIVE OFFICERS
The following individuals are the executive officers of the Company:
<TABLE>
<CAPTION>
NAME OF OFFICER AGE TITLE
--------------- --- -----
<S> <C> <C>
Holcombe T. Green, Jr.................... 58 Chairman of the Board of Directors and
Chief Executive Officer
Thomas J. Ward........................... 51 President and Chief Operating Officer
Morgan M. Schuessler..................... 62 Executive Vice President/Finance and Chief
Financial Officer
William F. Crumley....................... 60 Executive Vice President/Manufacturing
Richmond B. Terry........................ 64 Senior Vice President/Manufacturing Services
Robert J. Gehm........................... 39 Senior Vice President, President-Mass Brands
Division
John T. Toolan........................... 39 Senior Vice President, President-Fashion Brands
Division
Dale C. Williams......................... 43 Senior Vice President, President-International
Division
</TABLE>
For a discussion of the business experience of Mr. Green, see "BOARD OF
DIRECTORS -- Election Proposal."
THOMAS J. WARD. Mr. Ward has been President and Chief Operating Officer
since January 1, 1997. Mr. Ward was Executive Vice President/Sales and Marketing
and President-Home Fashions Division from October 1992 and September 1992,
respectively, until December 31, 1996. Mr. Ward originally joined the Company in
connection with its acquisition of J.P. Stevens & Co., Inc. ("Stevens") in 1988;
he had been with Stevens since 1969. Prior to his present position, Mr. Ward
served as Vice President/Sales of Stevens since August 1988 and as President of
Stevens since August 1989.
MORGAN M. SCHUESSLER. Mr. Schuessler joined the Company as Executive
Vice President/Finance and Chief Financial Officer on April 1, 1993. Since 1982
until joining the Company, Mr. Schuessler was employed by Dixie Yarns, Inc.,
most recently as its Senior Vice President and Chief Financial Officer. Mr.
Schuessler is a member of the Pension Committee.
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<PAGE> 12
WILLIAM F. CRUMLEY. Mr. Crumley originally joined the Company as Vice
President/Manufacturing for Stevens Terry and Bath Products in 1989. He then
became Vice President/Manufacturing for Bed Products, Finishing Fabrication and
Distribution, and in 1991 assumed the same additional responsibilities for the
Company's accessories operations. In September 1992, Mr. Crumley became
Executive Vice President/ Manufacturing of the Company.
RICHMOND B. TERRY. Mr. Terry joined the Company in 1950. Mr. Terry has
held his current position since May 1989 and prior thereto served as Vice
President of Stevens since June 1988.
ROBERT J. GEHM. Mr. Gehm has been Senior Vice President of the Company
since January 1, 1997, and President of the Mass Brands Division since January
1, 1998. Mr. Gehm originally joined the Company in connection with its
acquisition of Stevens in 1988. He had been with Stevens since 1984. Prior to
his present position he served as Senior Vice President/Home Fashions Division
from January 1995.
JOHN T. TOOLAN. Mr. Toolan has been Senior Vice President of the
Company since January 1, 1997 and President of the Fashion Brands Division since
January 1, 1998. Prior to his present position Mr. Toolan served as Senior Vice
President/Home Fashions Division from January 1, 1996 and Vice President/Home
Fashions Division from October 1, 1994. Since May 1990 until joining the Company
in October 1994, Mr. Toolan was Vice President Sales of Crown Crafts Inc.
DALE C. WILLIAMS. Mr. Williams has been Senior Vice President of the
Company since January 1, 1997, and President of the International Division since
January 1, 1998. Prior to his present position he served as Senior Vice
President/Home Fashions Division since January 1, 1996 and Vice President
Marketing/Home Fashions Division since March 15, 1993. Since 1984 until joining
the Company in March 1993, Mr. Williams was employed by Pillowtex Corp. most
recently as Senior Vice President/Marketing.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of March 10, 1998
(except as otherwise specified in the footnotes thereto) with respect to the
beneficial ownership (as such term is defined under Section 13(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) of the Common
Stock by (i) each person who is the beneficial owner of more than 5% of the
Common Stock outstanding as of such date, (ii) all directors of the Company and
the nominees for director whose names are set forth under "BOARD OF DIRECTORS --
Election Proposal," (iii) the Named Officers (as defined under "EXECUTIVE
COMPENSATION"), and (iv) all directors and executive officers as a group, as
reported by each such person.
9
<PAGE> 13
<TABLE>
<CAPTION>
Amount and Nature of Percent
Name and Address of Beneficial Owner(1) Beneficial Ownership of Class
--------------------------------------- -------------------- --------
<S> <C> <C>
Holcombe T. Green, Jr................................................ 18,541,498(2) 30.2%
WPS Investors, L.P................................................... 17,408,306(2) 28.4%
3343 Peachtree Road, N.E. Suite 1420
Atlanta, Georgia 30326
Hugh M. Chapman...................................................... 24,000(3) *
Kathy M. Dwyer....................................................... 25,000(4) *
John G. Hudson....................................................... 75,800(5) *
Charles W. McCall.................................................... 79,000(6) *
Douglas T. McClure .................................................. 16,000(7) *
Gerald B. Mitchell................................................... 65,000(8) *
Phillip Siegel....................................................... 63,000(9) *
John F. Sorte........................................................ 125,000(10) *
Joseph L. Jennings, Jr............................................... 90,244(11) *
Thomas J. Ward....................................................... 358,698(12) *
Morgan M. Schuessler................................................. 281,242(13) *
William F. Crumley................................................... 202,942(14) *
Robert J. Gehm....................................................... 99,052(15) *
John T. Toolan....................................................... 51,646(16) *
Dale C. Williams..................................................... 94,611(17) *
All Directors and Executive Officers as a group (17 persons)......... 20,244,324(18) 32.3%
</TABLE>
- ----------------
* Represents less than 1%
(1) Except as otherwise noted, the address of each person who is an officer or
director of the Company is c/o WestPoint Stevens Inc., 507 West Tenth Street,
West Point, Georgia 31833.
(2) As of March 10, 1998 Mr. Green possessed shared voting and investment power
with respect to (i) 17,408,306 shares held directly by WPS Investors, L.P. of
which HTG Corp., a company owned by him, is general partner; (ii) 232,500 shares
held by Hall Family Investments, L.P., of which Mr. Green's wife is general
partner and (iii) 338 shares held in a non-employee compensation plan of which
Mr. Green is trustee. In addition, the total amount for Mr. Green includes
648,008 shares owned directly by Mr. Green; 240,000 shares as to which Mr. Green
holds currently exercisable options and 12,346 shares held through the WestPoint
Stevens Retirement Savings Value Plan (the "Savings Plan"). See "EXECUTIVE
COMPENSATION -- Employment Agreements, Termination Provisions and Change in
Control Arrangements."
(3) Includes 4,000 shares held directly and 20,000 shares as to which Mr.
Chapman holds currently exercisable options.
10
<PAGE> 14
(4) Includes 25,000 shares as to which Ms. Dwyer holds currently exercisable
options.
(5) Includes 20,000 shares held directly, 400 shares held indirectly as
custodian for a grandson, 400 shares held by Mr. Hudson's daughter as custodian
for another grandson and 55,000 shares as to which Mr. Hudson holds currently
exercisable options. Mr. Hudson disclaims beneficial ownership of the 400 shares
held as custodian for a grandson and the 400 shares held by his daughter for the
other grandson.
(6) Includes 20,000 shares held directly, 4,000 shares held indirectly by nieces
and nephews and 55,000 shares as to which Mr. McCall holds currently exercisable
options. Mr. McCall disclaims beneficial ownership of the 4,000 shares held by
nieces and nephews.
(7) Includes 16,000 shares held directly.
(8) Includes 10,000 shares held directly and 55,000 shares as to which Mr.
Mitchell holds currently exercisable options.
(9) Includes 8,000 shares held directly and 55,000 shares as to which Mr. Siegel
holds currently exercisable options.
(10) Includes 70,000 shares held directly and 55,000 shares as to which Mr.
Sorte holds currently exercisable options.
(11) Includes 79,658 shares held directly, 10,000 shares as to which Mr.
Jennings holds currently exercisable options and 586 shares held through the
Savings Plan. See "EXECUTIVE COMPENSATION --Employment Agreements, Termination
Provisions and Change in Control Arrangements."
(12) Includes 38,652 shares held directly, 290,600 shares as to which Mr. Ward
holds currently exercisable options and 29,446 shares held through the Savings
Plan. See "EXECUTIVE COMPENSATION --Employment Agreements, Termination
Provisions and Change in Control Arrangements."
(13) Includes 114,508 shares held directly, 10,000 shares held by Mr.
Schuessler's wife, 149,000 shares as to which Mr. Schuessler holds currently
exercisable options and 7,734 shares held through the Savings Plan. Mr.
Schuessler disclaims beneficial ownership of the 10,000 shares held by his wife.
See "EXECUTIVE COMPENSATION -- Employment Agreements, Termination Provisions and
Change in Control Arrangements."
(14) Includes 47,452 shares held directly, 13,000 shares held by Mr.Crumley's
wife, 141,920 shares as to which Mr. Crumley holds currently exercisable options
and 570 shares held through the Savings Plan. Mr. Crumley disclaims beneficial
ownership of the 13,000 shares held by his wife.
(15) Includes 9,766 shares held directly, 82,600 shares as to which Mr. Gehm
holds currently exercisable options and 6,686 shares held through the Savings
Plan.
(16) Includes 7,194 shares held directly, 41,208 shares as to which Mr. Toolan
holds currently exercisable options and 3,244 shares held through the Savings
Plan.
11
<PAGE> 15
(17) Includes 13,176 shares held directly, 80,900 shares as to which Mr.
Williams holds currently exercisable options and 535 shares held through the
Savings Plan.
(18) Includes 1,123,314 shares held directly,19,121,010 shares held indirectly,
of which 63,498 shares are held through the Savings Plan, 1,064,728 shares as to
which certain members of management hold currently exercisable options, and
320,000 shares as to which non-employee directors hold currently exercisable
options. See footnotes 2-17.
SECTION 16(A) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
During 1997 Messrs. John Toolan and Thomas J. Ward, executive officers,
and Joseph L. Jennings, Jr. each inadvertently failed to timely file with the
Securities and Exchange Commission one Form 4 related to one transaction each
and Mr. William F. Crumley, an executive officer, inadvertently failed to timely
file with the Securities and Exchange Commission one Form 5 related to one
transaction.
12
<PAGE> 16
EXECUTIVE COMPENSATION
The following table sets forth information concerning total
compensation earned by or paid to the Chief Executive Officer and the six other
highest-paid executive officers of the Company employed as of December 31, 1997
(the "Named Officers") during the fiscal years indicated for services rendered
to the Company and its subsidiaries.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
--------------------------
LONG-TERM COMPENSATION
----------------------
ANNUAL COMPENSATION AWARDS
------------------- ------
Restricted
Bonus Stock Stock Options All Other
Name and Principal Position Year Salary ($) ($)(1) Awards ($)(2) (# of shares)(3) Comp. ($)(4)
- --------------------------- ----- ---------- --------- ------------- --------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Holcombe T. Green, Jr...... 1997 650,000 780,000 529,983 0 1,600
Chairman and Chief 1996 629,500 755,400 484,934 400,000 1,500
Executive Officer 1995 622,000 684,946 682,749 0 1,500
Thomas J. Ward............. 1997 400,000 480,000 326,145 0 1,600
President and Chief 1996 335,083 402,100 252,565 200,000 1,500
Operating Officer(5) 1995 323,917 388,700 355,018 0 1,500
Morgan M. Schuessler....... 1997 300,000 360,000 244,617 0 1,600
Executive Vice President 1996 280,167 336,200 210,605 100,000 1,500
1995 270,083 297,416 295,845 0 1,500
William F. Crumley......... 1997 285,000 342,000 232,368 0 1,600
Executive Vice President 1996 258,250 309,900 194,291 100,000 1,500
1995 249,167 299,000 273,096 0 1,500
Robert J. Gehm............. 1997 215,000 215,000 175,307 20,000 1,600
Senior Vice President 1996 176,667 176,667 132,116 80,000 1,500
1995 153,000 153,000 165,557 0 1,500
John T. Toolan............. 1997 215,000 215,000 175,307 20,000 1,600
Senior Vice President 1996 162,533 162,533 121,463 80,000 1,500
1995 141,575 141,575 159,308 0 1,500
Dale C. Williams........... 1997 215,000 215,000 175,307 20,000 1,600
Senior Vice President 1996 193,796 193,796 150,762 80,000 1,500
1995 169,917 169,917 187,172 0 1,500
</TABLE>
(1) Bonuses earned for 1995 were paid in the first quarter of Fiscal 1996,
except Mr. Green received partial payment of his bonus in 1995 and the
remainder in the first quarter of Fiscal 1996. Bonuses earned for
Fiscal 1996 were paid in the first quarter of 1997. Bonuses earned for
1997 were paid in the first quarter of Fiscal 1998.
(2) Bonus Awards earned under the WestPoint Stevens Inc. 1995 Key Employee
Stock Bonus Plan (the "Key Employee Stock Bonus Plan") are subject to
vesting requirements. The dollar value is based upon the share price
on the date of grant of the Bonus Awards.
(3) Shares available under stock option awards are adjusted to reflect the
two-for-one stock split effective in March 1998.
(4) These amounts represent the Company's matching contribution under the
Savings Plan which was $1,600 for each of the Named Officers.
13
<PAGE> 17
SENIOR MANAGEMENT INCENTIVE PLAN
Pursuant to the WestPoint Stevens Inc. Senior Management Incentive Plan
(the "MIP"), performance awards were made to key employees of the Company and
its subsidiaries with respect to Fiscal 1997. The purpose of this incentive plan
is to provide additional compensation above base salary to key employees if the
Company meets or exceeds certain performance goals established by the
Compensation Committee. Incentive payments for certain participants are based
solely upon predetermined annual operating profit goals of the Company. Other
participants' payments are based on the operating profit (as defined in the MIP)
of the Company and certain business units and/or divisions. The MIP provides
that no participant will receive payments under the plan unless the Company's
actual annual operating profit equals or exceeds 90% of the predetermined
operating profit goal. Incentive payments to each of the Named Officers under
the MIP and previous years' management incentive plans are included in the
Summary Compensation Table.
Performance awards payable to the Named Officers with respect to 1998
will be determined based on the terms and provisions of the MIP with new
predetermined operating profit goals established by the Compensation Committee
in writing during the first ninety days of 1998.
KEY EMPLOYEE STOCK BONUS PLAN
Pursuant to the Key Employee Stock Bonus Plan, the Company may grant
bonus awards of shares of Common Stock to those key employees of the Company who
are deemed eligible to participate in the Key Employee Stock Bonus Plan, based
on the Company's achievement of certain pre-established earnings levels during
the Company's fiscal year. On February 13, 1997, the Company granted Bonus
Awards (as defined in the Key Employee Stock Bonus Plan) covering an aggregate
of 398,456 Common Stock (on a post split basis) to certain key employees,
including each of the Named Officers. On February 11, 1998, the Compensation
Committee certified in writing that Bonus Awards for Fiscal 1997 were earned
(except for Bonus Awards forfeited by certain individuals). Twenty percent of
each earned Bonus Award for Fiscal 1997 vested on February 11, 1998, and the
remainder of such Bonus Award is subject to vesting ratably on January 1 of each
of years 1999 through 2002.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Stock options exercisable for shares of Common Stock are granted to
certain key employees of the Company pursuant to the WestPoint Stevens Inc.
Omnibus Stock Incentive Plan (the "Omnibus Stock Incentive Plan") in order to
secure and retain the services of persons capable of filling key positions with
the Company, to encourage their continued employment and to increase their
interest in the growth and performance of the Company by providing them with an
ownership stake. The following table provides information on stock options
granted to the Named Officers during the last fiscal year pursuant to the
Omnibus Stock Incentive Plan.
The table also shows, among other data, hypothetical potential gains
from stock options granted in Fiscal 1997. These hypothetical gains are based
entirely on assumed annual growth rates of 5% and 10% in the value of the price
of Common Stock over the ten-year life of the stock options granted in Fiscal
1997 (which would equal a total increase in the Company's stock price of 62.9%
and 159.4%, respectively, from the date of the grant). The assumed rates of
growth were selected by the Securities and Exchange Commission (the
"Commission") for illustrative purposes only, and are not intended to predict
future stock prices, which will depend upon market conditions and the Company's
future performance and prospects.
14
<PAGE> 18
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Potential Realizable Value at
Assumed Annual Rates of Stock
Price Appreciation for Ten-Year
Individual Grants Term of Options
------------------------------------------------- ---------------------------------
% of Total
Number of Options/SARs Exercise Price
Options/SARs Granted to All Per Share Expiration At 5% Annual At 10% Annual
Name of Executive Granted Employees ($/Sh) Date Growth Rate ($) Growth Rate($)
- ----------------- --------- ----------- -------------- ------ --------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Holcombe T. Green, Jr. 0
Thomas J. Ward 0
Morgan M. Schuessler 0
William F. Crumley 0
Robert J. Gehm 20,000 1.8 $20.703 11/12/07 260,400 659,905
John T. Toolan 20,000 1.8 $20.703 11/12/07 260,400 659,905
Dale C. Williams 20,000 1.8 $20.703 11/12/07 260,400 659,905
</TABLE>
FISCAL YEAR-END OPTION HOLDINGS
The following table summarizes for each of the Named Officers option
exercises during Fiscal 1997, including the aggregate value of gains on the date
of exercise, the total number of unexercised options for Common Stock, if any,
held at December 31, 1997, and the aggregate dollar value of unexercised
in-the-money options for Common Stock, if any, held at December 31, 1997. Value
of unexercised in-the-money options at fiscal year-end is the difference between
the exercise or base price of such options and the fair market value of the
underlying Common Stock on December 31, 1997, which was $47-1/4 per share. These
values have not been, and may never be, realized, as these options have not
been, and may never be, exercised. Actual gains, if any, upon exercise will
depend on the value of Common Stock on the date of any exercise of options.
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN THE
LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
Value of Unexercised
(at year end)
Shares Number of Unexercised in-the-Money
Acquired on Value Options at FY-End (#)(1) Options at FY-End ($)
Exercise Realized --------------------- ---------------------
Name (#)(1) ($) Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- --------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Holcombe T. Green, Jr. 0 0 160,000 240,000 1,650,000 2,475,000
Thomas J. Ward 9,400 140,046 244,600 126,000 3,596,925 1,307,250
Morgan M. Schuessler 11,000 188,375 129,000 60,000 1,953,875 611,250
William F. Crumley 14,580 181,339 135,420 62,500 2,032,923 646,563
Robert J. Gehm 3,400 49,938 62,600 64,000 799,863 535,752
John T. Toolan 26,792 194,242 17,208 68,000 193,745 600,252
Dale C. Williams 5,100 68,531 60,900 64,000 770,326 535,752
</TABLE>
(1)The number of shares shown is an adjusted number reflecting the two-for-one
stock split effective in March 1998.
15
<PAGE> 19
PENSION PLAN AND RETIREMENT PLANS
WestPoint Pension Plan
Executive officers of the Company and certain of its subsidiaries are
covered by the WestPoint Stevens Inc. Retirement Plan (the "WestPoint Pension
Plan"). The WestPoint Pension Plan covers all salaried employees of the Company
and certain subsidiaries and affiliates who have met eligibility requirements
and may include certain hourly employees if designated for coverage.
Contributions to the plan are computed on an actuarial basis and, as
such, individual employee payments (or accruals) cannot be calculated until
retirement. Compensation covered by the pension plan consists of all payments
made to a participant for personal services rendered as an employee of the
Company that are subject to federal income tax withholding, including before tax
contributions to certain employee benefit plans and excluding income
attributable to stock based awards and imputed income attributable to certain
fringe benefit programs. With respect to executive officers, plan compensation
covers up to a maximum of $160,000 per individual for Fiscal 1997. The plan
provides that participants' benefits fully vest after five years of service or
the attainment of age 65.
Retirement benefits for the WestPoint Pension Plan are computed as the
sum of 1% of a participant's average compensation (the annual average of five
consecutive, complete plan years of highest compensation during the last 10
years of service) multiplied by the years of benefit service, plus 0.6% of a
participant's average compensation which exceeds the participant's Social
Security Integration Level ($29,304 in Fiscal 1997), multiplied by the
participant's years of benefit service, not to exceed 35 years.
The following table indicates the approximate amounts of annual
retirement income that would be payable under the WestPoint Pension Plan based
on various assumptions as to compensation and years of service for certain
employees. There is no social security or other offset deducted from the amounts
shown.
16
<PAGE> 20
PENSION PLAN TABLE(1)
YEARS OF SERVICE
<TABLE>
<CAPTION>
5 YEAR(2)
COMPENSATION 15 20 25 30 35
- -------------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$ 250,000........... $ 57,363 $ 76,484 $ 95,604 $114,725 $133,846
300,000........... 69,363 92,484 115,604 138,725 161,846
350,000........... 81,363 108,484 135,604 162,725 189,846
400,000........... 93,363 124,484 155,604 186,725 217,846
450,000........... 105,363 140,484 175,604 210,725 245,846
500,000........... 117,363 156,484 195,604 234,725 273,846
550,000........... 129,363 172,484 215,604 258,725 301,846
600,000........... 141,363 188,484 235,604 282,725 329,846
650,000........... 153,363 204,484 255,604 306,725 357,846
700,000........... 165,363 220,484 275,604 330,725 385,846
750,000........... 177,363 236,484 295,604 354,725 413,846
800,000........... 189,363 252,484 315,604 378,725 441,846
850,000........... 201,363 268,484 335,604 402,725 469,846
900,000........... 213,363 284,484 355,604 426,725 497,846
950,000........... 225,363 300,484 375,604 450,725 525,846
1,000,000........... 237,363 316,484 395,604 474,725 553,846
1,050,000........... 249,363 332,484 415,604 498,725 581,846
1,100,000........... 261,363 348,484 435,604 522,725 609,846
1,150,000........... 273,363 364,484 455,604 546,725 637,846
1,200,000........... 285,363 380,484 475,604 570,725 665,846
1,400,000........... 333,363 444,484 555,604 666,725 777,846
1,600,000........... 381,363 508,484 635,604 762,725 889,846
</TABLE>
- ------------------
(1) Assumes individual retires at age 65 with indicated years of service but
further assumes covered compensation as it was determined in Fiscal 1997,
which was $29,304 (Table I of IRS Notice 85-4), as updated each year for
annual covered compensation. Includes benefits payable under the
Supplemental Retirement Plan (as defined under "-- Supplemental Retirement
Plan").
(2) Represents the average of the annual covered compensation for the five
consecutive, complete plan years of highest compensation during the last 10
years of service.
As of the date hereof, Messrs. Green, Ward, Schuessler, Crumley, Gehm, Toolan
and Williams have 5.5, 22.3, 5, 8.9, 12.7, 8.3, and 5.1 years, respectively,
of credited service under the WestPoint Pension Plan. The benefits payable under
the WestPoint Pension Plan and the Supplemental Retirement Plan to the above
individuals would be based on each individual's annual average compensation
received for their five consecutive, complete plan years of highest compensation
during their last ten years of service which, as of December 31, 1997, is as
follows: Mr. Green $972,303.07, Mr. Ward $654,823.15, Mr. Schuessler
$527,945.63, Mr. Crumley $503,321.30, Mr. Gehm $297,392.54, Mr. Toolan
$225,774.94, and Mr. Williams $349,045.10.
17
<PAGE> 21
Supplemental Retirement Plan
The Company's Supplemental Retirement Plan for Eligible Executives
("Supplemental Retirement Plan") provides for payment of amounts which would
have been paid under the WestPoint Pension Plan but for the limitations on
covered compensation and benefits applicable to qualified retirement plans
imposed by the Internal Revenue Code of 1986, as amended (the "Code"). For
certain participants, the compensation taken into account under the Supplemental
Retirement Plan on and after January 1, 1996, is limited to the lesser of (i)
$300,000 or (ii) 120% of the participant's base salary. The Supplemental
Retirement Plan is not qualified under Section 401(a) of the Code and benefits
are paid from the general assets of the Company. Benefits payable under the
Supplemental Retirement Plan are included in the "Pension Plan Table" above.
Supplemental Executive Retirement Plan
The Supplemental Executive Retirement Plan (the "Executive Retirement
Plan") provides an enhanced level of post-retirement income to those executives
who participated in the 1982 Restricted Stock and Performance Share Plan (of
WPP) and its successor plans (collectively, the "RSPSP"), all of which were
terminated in the first half of 1989. The benefit is based on the executive's
average monthly compensation ("AMC"), including salary, bonus and commissions
during the 60 consecutive calendar months during which compensation was highest
out of the executive's last 120 calendar months of employment. The Executive
Retirement Plan provides a monthly benefit calculated as a single life and
10-year certain annuity based upon the following formula:
3.5% x (AMC) x (lesser of 10 or number of years of service
under RSPSP) plus 1% x (AMC) x (years of service under RSPSP
in excess of 10 not to exceed 30) minus benefits payable under
the WestPoint Pension Plan and the Supplemental Retirement
Plan and minus amounts attributable to employer contributions
under the WestPoint Stevens Inc. Retirement Savings Value Plan
("RSVP").
Participation in the Executive Retirement Plan was frozen by the
Company as of December 31, 1993. At such time, seven of the Company's current
executives were accruing benefits under the Executive Retirement Plan. Of the
Named Officers, only Mr. Ward was a participant and accruing a benefit under the
Executive Retirement Plan. As of December 31, 1997, due to the offset of
benefits payable under the WestPoint Pension Plan, the Supplemental Retirement
Plan and the RSVP, no amounts would be paid to Mr. Ward under the Executive
Retirement Plan upon termination of employment at age 65.
EMPLOYMENT AGREEMENTS, TERMINATION PROVISIONS AND CHANGE IN CONTROL ARRANGEMENTS
The Company entered into employment agreements with Messrs. Green
(effective as of March 8, 1993), Jennings (effective as of February 1, 1993),
Ward (effective as of March 8, 1993), and Schuessler (effective as of April 1,
1993).
Each agreement was for a three-year term and, except for Mr.
Schuessler's employment agreement, is automatically renewable for successive
additional one-year terms, unless a notice of termination is given one year
prior to the expiration of any such term. Mr. Schuessler's employment agreement
is automatically extended upon January 1 of each year of the term of his
employment for successive additional one-year periods, except for the year in
which he attains the age of 65 (in which event any extension period for that
year expires on his 65th birthday), unless a notice of termination is given on
or prior to January 1 of each year of Mr. Schuessler's term
18
<PAGE> 22
of employment. Each executive receives an annual base salary, subject to annual
review. Annual base salaries in Fiscal 1997 were as follows: Mr. Green --
$650,000; Mr. Jennings -- $120,000; Mr. Ward -- $400,000; and Mr. Schuessler --
$300,000. For 1998 the annual base salary for each of the following executives
was increased effective January 1, 1998 to the following: Mr. Green -- $673,000;
Mr. Ward -- $414,000; and Mr. Schuessler -- $310,500. Effective January 1, 1997,
Mr. Jennings' employment agreement was superseded by a new agreement under which
he left the office of President and Chief Operating Officer and became Vice
Chairman of the Board. Although no longer responsible for daily management of
operations of the Company, Mr. Jennings remains an employee of the Company.
Under his new agreement his base salary is $120,000 and he continues to
participate in the annual cash bonus and stock bonus programs. Mr. Green also is
entitled under his employment agreement to reimbursement from the Company for
all reasonable living expenses for maintaining a residence in New York, New
York, that are reasonably attributable to business time he spends there for the
Company. Each executive also is entitled to receive an annual bonus in an amount
initially up to 120% of such executive's annual base salary based on the
Company's achievement of certain performance goals in accordance with the
Company's management incentive plan in existence from time to time. See "--
Senior Management Incentive Plan" and "--Key Employee Stock Bonus Plan."
Upon a termination of employment by the Company without "Cause" or by
the executive for "Good Reason" (which includes, among other things, a change in
control of the Company in certain circumstances), each of the following
executives will receive the following payments within 30 days after such
termination becomes effective (in addition to all compensation owed to the
executive at the time of such termination): a one-time, lump-sum cash payment
equal to the sum of (i) two times the executive's 1993 annual base salary (plus,
in the case of Mr. Green, $50,000) and (ii) the maximum bonus amount payable to
such executive under the management incentive plan applicable to the year in
which such termination becomes effective, whether or not the requirements
otherwise applicable to the payment of such bonus amount under such plan have
been met. Accordingly, if such a termination were to occur in 1998, Mr. Green
would be entitled to a payment of $2,057,600; Mr. Ward -- $1,096,800 ; and Mr.
Schuessler -- $872,600. In addition, the Company has agreed to make an indemnity
payment to each executive with respect to any of the aforementioned lump-sum
cash payments and any payments under any plan or other compensatory arrangement
in connection therewith, in an amount equal to the sum of (i) the excise tax, if
any, imposed on each executive under Section 4999 of the Code, in respect of any
such payments and (ii) any federal, state or local income tax imposed on any
such indemnity payment. In addition, each executive's then unvested options will
become immediately vested at the time of such termination and each executive
will be entitled to receive all fringe benefits provided by the Company under
such agreements for a period of one year following such termination (see
"--Option/SAR Grants in Last Fiscal Year" and "--Fiscal Year-End Option
Holdings").
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee sets the compensation policies applicable to
the Company's executive officers.
General Policies. The goals of the Company's executive compensation
program for Fiscal 1997 were to attract, retain, motivate and reward qualified
persons serving as executive officers. To achieve the goals of the program, the
Company relies primarily on salary, annual bonuses and stock options.
The salary levels for existing executive officers depend primarily on
individual levels of responsibility within the Company. The level of salaries
for newly hired executive officers, while similarly dependent on individual
levels of responsibility within the Company, also is affected by the market for
executive talent. Additional consideration in setting salary levels is given to
the Company's competitive position in its industry
19
<PAGE> 23
and the need to establish compensation and terms of employment that will attract
and retain the leadership the Company believes necessary to maintain its
position. The Compensation Committee also takes into account the expenses of
relocation and the loss of accrued benefits.
Bonus levels for executive officers and other key employees of the
Company depend on performance and are designed to encourage the achievement of
certain annual operating profit goals. Annual bonuses for Fiscal 1997 for
executive officers and certain other key employees were determined by the
Compensation Committee under the MIP. In the case of the most senior executive
officers, 50% or more of total compensation depended on exceeding predetermined
annual operating profit goals. Other participants' payments were based on a
combination of factors, including the operating profit of the Company and
certain business units and/or divisions. The MIP provided for threshold
incentive payments to all participants only when actual annual operating profit
equaled or exceeded 90% of the predetermined annual operating profit goal.
Annual bonuses for 1998 for the Named Officers will be determined under the MIP
based upon whether the Company meets or exceeds certain performance goals
established by the Compensation Committee for 1998. See "-- Senior Management
Incentive Plan."
The Omnibus Stock Incentive Plan provides for the grant by the Company
of stock-based incentives to certain key employees of the Company. The
stock-based incentives offered pursuant to the Omnibus Stock Incentive Plan are
a matter of separate inducement to key employees and are not granted in lieu of
any other compensation. By means of the Omnibus Stock Incentive Plan, the
Company seeks to retain the services of persons now holding key positions with
the Company and to secure and retain the services of persons capable of filling
such positions by providing them with an ownership stake in the Company. A
committee appointed by the Board of Directors to administer the Omnibus Stock
Incentive Plan will be able to choose from among six categories of incentive
awards: stock options, stock appreciation rights, restricted shares, deferred
shares, performance shares and performance units. See "--Option/SAR Grants in
Last Fiscal Year." The number of options held by a key employee is not a factor
in determining or otherwise limiting future grants. Such a factor could create
an incentive to exercise options and sell the underlying shares, defeating the
Company's objective of providing key employees with an ownership stake in the
Company's business.
In order to advance the interest of the Company and its stockholders by
motivating key employees to attain extraordinary performance exceeding industry
norm, promote the long-term success and growth of the Company and to remain in
the service of the Company, participants in the Key Employee Stock Bonus Plan
may receive, if the Company achieves certain performance criteria, annual
bonuses, payable in shares of Common Stock of the Company, equal to 80% of their
base salary. Earned Bonus Awards are subject to a vesting schedule determined by
the Compensation Committee, provided, however, that at least 20% of the shares
of Common Stock earned will vest on January 1 of each of the five calendar years
following the performance year for which such Bonus Awards are earned.
Compensation of the Chief Executive Officer. Mr. Green's compensation
is determined pursuant to the principles noted above and by the terms of his
employment agreement. Mr. Green will receive 35,480 shares of Common Stock under
the terms of the Key Employee Stock Bonus Plan in 1998 for Fiscal 1997. The only
other component of his compensation for Fiscal 1997 that was not determined
under the terms of his employment agreement was his annual bonus, which was
determined under the MIP. The Compensation Committee believes that Mr. Green, as
a substantial stockholder of the Company, is committed to acting to optimize
overall Company performance to the benefit of all stockholders, and that he
demonstrated such commitment in Fiscal 1997. In Fiscal 1997, Mr. Green was
instrumental in, among other things, the continued implementation of aggressive
cost reduction and capital expenditure programs as well as in substantially
increasing earnings per share. In the Compensation Committee's view, these
actions on the part of Mr. Green improved the Company's operating results and
capital structure.
20
<PAGE> 24
Compliance with Section 162(m) of the Code. With certain exceptions,
Section 162(m) of the Code ("Section 162(m)") disallows a publicly-held
company's deduction for compensation paid in excess of $1 million per taxable
year to certain executives. The Company does not believe it is currently subject
to Section 162(m). However, even if Section 162(m) applies to the Company, the
Company believes that compensation paid under the MIP and the Key Employee Stock
Bonus Plan to the Chief Executive Officer and the Chief Operating Officer should
qualify for the performance-based compensation exception to Section 162(m) and
that options granted under the Omnibus Stock Incentive Plan before the Company's
1998 annual meeting of stockholders should qualify for a special transition rule
which exempts such options from Section 162(m). In addition, options granted
under the Omnibus Stock Incentive Plan should qualify for the performance-based
compensation exception to Section 162(m).
Compensation Committee
Gerald B. Mitchell, Chairman
John G. Hudson
M. Katherine Dwyer
PERFORMANCE GRAPH
The following graph provides a comparison of the cumulative total
returns on the Common Stock based on an investment of $100 after the close of
the market on August 2, 1993, the date the Common Stock became listed for
quotation on the National Association of Securities Dealers Automated Quotation
System (National Market System)1, on December 31, 1993, December 30, 1994,
December 29, 1995, December 31, 1996, and December 31, 1997, against Standard &
Poor's 500 Stock Index ("S&P 500") and an index compiled consisting of 46
companies (listed on Annex A hereto) with market capitalizations that were
similar to that of the Company at the end of 1996 (the "Market Index") (prepared
by Standard & Poor's Compustat Services, Inc.), in each case assuming
reinvestment of any dividends. The Company believes that published industry
indices are not representative of the Company and its lines of business and that
it cannot reasonably identify a group of peer issuers that are in the same
industry or lines of business as the Company or that are reasonably comparable
with the Company on any other basis. Therefore, in accordance with the rules and
regulations of the Commission, the Company has selected the Market Index for
purposes of comparing the Company's cumulative total returns on the Common
Stock. Furthermore, the following graph is not, nor is it intended to be,
indicative of future performance of the Company's Common Stock, which
performance could be affected by factors and circumstances outside of the
Company's control.
- --------------
(1) The Company registered the Common Stock (formerly Class A Common Stock) and
rights to purchase such stock pursuant to Section 12(g) of the Exchange Act
on a registration statement on Form 10 originally filed with the Commission
on July 1, 1993, as amended on January 6, 1994, and declared effective by
order of the Commission on July 30, 1993.
21
<PAGE> 25
TOTAL SHAREHOLDER RETURN
<TABLE>
<CAPTION>
BASE
PERIOD
COMPANY NAME/INDEX 8/2/93 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
================================================================================================
<S> <C> <C> <C> <C> <C> <C>
WESTPOINT STEVENS INC 100 140.19 107.48 150.00 223.37 353.28
S&P 500 INDEX 100 105.04 106.43 146.42 180.04 240.11
PEER GROUP 100 108.53 103.75 138.71 151.63 172.89
</TABLE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In Fiscal 1997, the Company made payments to Mr. Green and HTG Corp. in
the aggregate amount of $382,753 (i) as payments to HTG Corp. for use by the
Company of an airplane HTG Corp. owns and (ii) as reimbursement from the Company
for all reasonable living expenses for maintaining a residence in New York, New
York, pursuant to his employment agreement (see "EXECUTIVE COMPENSATION
- --Employment Agreements, Termination Provisions and Change in Control
Arrangements"). Such payments were made at rates that the Company believes were
no less favorable than rates available from non-affiliated third parties for
comparable services.
Under the terms of Mr. Jennings employment agreement with the Company,
the Company has agreed to purchase his residence located at 208 North 18th
Street, Lanett, Alabama, for an amount equal to his cost basis of the property
plus $50,000. In February 1998 the Board of Directors authorized Mr. Jennings to
sell the property for $1 million in response to an offer received from a third
party. In order to induce Mr. Jennings to proceed with the sale the Board of
Directors authorized the Company to waive certain rights under the employment
agreement in exchange for an agreement to split between Mr. Jennings and the
Company the amount
22
<PAGE> 26
by which the offered purchase price exceeded the price the Company would have
been required to pay if Mr. Jennings had decided to sell the property to the
Company.
Also see "BOARD OF DIRECTORS -- Compensation Committee Interlocks and
Insider Participation in Compensation Decisions" for additional information
concerning transactions and relationships with management and others.
AMENDMENT AND RESTATEMENT OF THE EXISTING CERTIFICATE
AMENDMENT AND RESTATEMENT OF THE EXISTING CERTIFICATE
GENERAL
On February 12, 1998, the Board of Directors approved the amendment and
restatement of the Existing Certificate (as amended and restated, the "New
Certificate"). The purpose of the amendment and restatement is to increase the
authorized capital stock of the Company. The Board of Directors determined that
such amendment is desirable and directed that the New Certificate be submitted
to the stockholders for approval at the Annual Meeting.
The description of the New Certificate set forth herein is qualified in
its entirety by reference to the form of the proposed New Certificate attached
as Annex B hereto.
AUTHORIZED STOCK
The authorized capital stock of the Company currently consists of
75,000,000 shares of Common Stock. As of March 20, 1998, there were only
9,602,748 shares of Common Stock for issuance, with 60,188,258 shares issued and
outstanding, 5,208,994 shares held in the Company's treasury and 4,789,318
shares reserved for issuance pursuant to the Company's existing stock incentive
plans.
On February 2, 1998, the Board of Directors declared a two-for-one
stock split payable in the form of 100% stock dividend. The stock dividend was
distributed on March 2, 1998, on all of the issued and outstanding shares of
Common Stock as of February 16, 1998, the record date for purposes of the
dividend. The stock dividend on the Company's 5,051,230 shares of Common Stock
held in the Company's treasury on February 16, 1998, will be paid when the
amendment and restatement of the Existing Certificate becomes effective.
The Board of Directors feels it is in the best interest of the
Company to increase the authorized capital stock of the Company to 200,000,000
shares in order to provide sufficient shares for such corporate purposes as may
be determined by the Board of Directors, including flexibility for possible
future financings; facilitating broader ownership of the Company's Common Stock
by effecting a stock split or issuing a stock dividend; for use in conjunction
with possible acquisitions; or for any other proper corporate purpose. The
Company at present has no commitments, agreements or undertakings to issue any
such additional shares. The Board of Directors considers the authorization of
additional shares of Common Stock advisable to ensure prompt availability of
shares for issuance should the occasion arise. If required by law or
regulation, the Company will seek shareholder approval prior to any issuance of
shares.
REQUIRED APPROVAL
The affirmative vote of holders of a majority of the issued and
outstanding shares of Common Stock entitled to vote at the Annual Meeting is
required to approve the New Certificate.
23
<PAGE> 27
As soon as practicable after the New Certificate has been approved by
the Company's stockholders, the New Certificate will be filed with the Secretary
of State of the State of Delaware and, upon such filing, the New Certificate
will become effective in accordance with the DGCL.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE AMENDMENT AND
RESTATEMENT OF THE EXISTING CERTIFICATE.
APPOINTMENT OF AUDITORS
Ernst & Young LLP, independent auditors, audited the financial
statements of the Company for the year ended December 31, 1997, contained in the
Company's Annual Report on Form 10-K (which was filed with the Commission on
March 30, 1998). Such audit services consisted of the firm's audit of and report
on such financial statements and other annual financial statements of the
Company and other matters.
Representatives of Ernst & Young LLP are expected to attend the Annual
Meeting and will have the opportunity to make a statement if they desire to do
so and will be available to respond to appropriate questions.
Based upon the recommendation of the Audit Committee, and subject to
ratification by the stockholders, the Board of Directors has appointed Ernst &
Young LLP, independent auditors, as auditors for the Company for the fiscal year
ending December 31, 1998.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR SUCH RATIFICATION.
1999 PROPOSALS OF STOCKHOLDERS
The Company intends to hold the 1999 Annual Meeting of Stockholders in
the spring of 1999. Any stockholder of the Company wishing to include proposals
in the proxy materials for such meeting must meet the requirements of the rules
of the Commission relating to stockholders' proposals. Such proposal must be
received by the Secretary of the Company in writing at the principal executive
offices of the Company prior to December 11, 1998.
OTHER BUSINESS
The Board of Directors of the Company is not aware of any other matters
that may be presented at the Annual Meeting other than those mentioned in the
Company's Notice of Annual Meeting of Stockholders enclosed herewith and a part
hereof. If, however, any other matters do properly come before the Annual
Meeting, or any adjournment or adjournments thereof, it is intended that the
persons named as proxies will vote, pursuant to their discretionary authority,
according to their best judgment in the interest of the Company.
ADDITIONAL INFORMATION
All of the expenses involved in preparing, assembling and mailing this
Proxy Statement and the accompanying materials will be paid by the Company. In
addition to solicitation by mail, directors, officers and regular employees of
the Company may solicit proxies by telephone, telegram or by personal
interviews. Such persons will receive no additional compensation for such
services. The Company will reimburse brokers and certain other persons for their
charges and expenses in forwarding proxy materials to the beneficial owners of
Common Stock held of record by such persons.
24
<PAGE> 28
Copies of the Company's 1997 Annual Report to Stockholders are being
mailed to the stockholders simultaneously with this Proxy Statement. The
financial statements and financial information appearing in such Annual Report
are incorporated by reference herein.
By Order of the Board of Directors,
/s/ Christopher N. Zodrow
Christopher N. Zodrow
Vice President and Secretary
West Point, Georgia
April 10, 1998
25
<PAGE> 29
ANNEX A
MARKET INDEX FOR WESTPOINT STEVENS INC.
AK Steel Holding Corp. Kaiser Aluminum Corp.
Alberto-Culver Co. Kemet Corp.
Amdahl Corp. Madeco S A
American Pwr Cnvrsion Micron Electronics Inc.
Arrow International Nautica Enterprises Inc.
Banta Corp. Nordson Corp.
Beckman Instruments Inc. Oce Van Der Grinten NV
Blyth Industries Inc. Pentair Inc.
Cephalon Inc. Perrigo Company
Cincinnati Milacron Inc. Pittway Corp/DE
Coca-Cola Femsa De C V Plum Creek Timber Co.
Coleman Co. Inc. Quebecor Inc.
Cooper Cameron Corp. Rauma OY
Cypress Semiconductor Corp. Rayonier Inc.
Cytec Industries Inc. Sci Systems Inc.
De Reigo S P A Shiva Corp.
Desc S A De C V Smith International Inc.
Domtar Inc. Summit Technology Inc.
Echostar Commun Corp. Symbol Technologies
Exide Corp. Thermedics Inc.
First Brands Corp. Thermo Fibertek Inc.
Freeport McMoran Inc. Thermolase Corp.
Hanna (M A) Co. Thermotrex Corp.
Integrated Device Tech Inc. Tootsie Roll Inds
Iomega Corp. U S Industries Inc.
Jefferson Smurfit CP Unisys Corp.
Jones Apparel Group Inc. Universal Foods Corp.
Jostens Inc. Valspar Corp.
<PAGE> 30
ANNEX B
RESTATED
CERTIFICATE OF INCORPORATION
OF
WESTPOINT STEVENS INC.
------------------
Pursuant to Sections 242 and 245 of the
General Corporation Law of Delaware
------------------
WestPoint Stevens Inc., a corporation organized and existing under the
General Corporation Law of the State of Delaware (the "DGCL"), for the purposes
of amending and restating its Restated Certificate of Incorporation, as
currently in effect, hereby certifies that:
1. The name of the Corporation is WestPoint Stevens Inc. (the
"Corporation").
2. The Corporation was originally incorporated under the name of Acme
Boot Holding Corporation and its original Certificate of Incorporation was filed
with the Secretary of State of the State of Delaware on February 24, 1987. On
December 10, 1993, the Corporation changed its name to WestPoint Stevens Inc.
pursuant to the filing of a Certificate of Merger with the Secretary of State of
the State of Delaware merging Valley Fashions Tender Corp. with and into the
Corporation.
3. This Restated Certificate of Incorporation has been duly authorized
and adopted by the Board of Directors and stockholders of the Corporation in
accordance with Sections 242 and 245 of the DGCL.
4. This Restated Certificate of Incorporation hereby amends and
restates in its entirety the Restated Certificate of Incorporation of the
Corporation as follows:
FIRST: The name of the Corporation is WestPoint Stevens Inc.
SECOND: The address of the registered office of the Corporation in the
State of Delaware is Corporation Service Company, 1013 Centre Road, City of
Wilmington, County of New Castle, State of Delaware. The name of the registered
agent of the Corporation in the State of Delaware at such address is Corporation
Service Company.
THIRD: The purpose of the Corporation is to engage in and conduct any
lawful act or activity for which corporations may be organized under the DGCL,
as from time to time amended.
B - 1
<PAGE> 31
FOURTH: (a) The total number of shares of capital stock that the
Corporation shall have authority to issue is 200,000,000 shares, all of which
shall be Common Stock, par value $.01.
(b) Subject to the provisions of applicable law or of the
by-laws of the Corporation with respect to the closing of the transfer books or
the fixing of a record date for the determination of stockholders entitled to
vote, the holders of outstanding shares of Common Stock shall exclusively
possess the voting power for the election of directors and for all other
purposes, each holder of record of shares of Common Stock being entitled to one
vote for each share of Common Stock outstanding in his name on the books of the
Corporation.
FIFTH: No action required to be taken or which may be taken at any
annual or special meeting of stockholders of the Corporation may be taken
without a meeting, and the power of stockholders to consent in writing, without
a meeting, to the taking of any action is specifically denied.
SIXTH: The number of directors constituting the entire Board of
Directors of the Corporation shall be fixed at nine, unless and until otherwise
determined by a majority of the entire Board; provided that the number of
directors shall not be reduced at any time so as to shorten the term of any
director at the time in office.
SEVENTH: The members of the Board shall be divided into three classes,
designated Class I, Class II and Class III, each to consist of three directors,
with Class I directors to hold office initially for a term expiring at the
annual meeting of stockholders to be held in 1996, Class II directors to hold
office initially for a term expiring at the annual meeting of stockholders to be
held in 1997 and Class III directors to hold office initially for a term
expiring at the annual meeting of stockholders to be held in 1995. In the event
of an increase or decrease in the number of directors constituting the entire
Board, however, the number of directors constituting each class shall be as
equally proportionate as possible. Successors to the class of directors whose
term expires at each annual meeting shall be elected for a term expiring at the
third succeeding annual meeting of stockholders. In all cases, each director so
elected shall hold office until his successor is elected and qualified or until
his earlier death, resignation or removal.
EIGHTH: (a) A director may be removed from office for "cause" by the
affirmative vote of the holders of a majority of the outstanding shares entitled
to vote thereon. For purposes of this Article EIGHTH, "cause" shall mean, with
respect to any director, (i) the willful failure by such director to perform, or
the gross negligence of such director in performing, the duties of a director,
(ii) the engaging by such director in willful or serious misconduct that is
injurious to the Corporation or (iii) the conviction of such director of, or the
entering by such director of a plea of nolo contendere to, a crime that
constitutes a felony.
(b) Any director may be removed from office without cause by
the affirmative vote of the holders of at least 75% of the outstanding shares
entitled to vote thereon.
(c) Any vacancy on the Board of Directors may be filled by the
Board of Directors, acting by a majority of the directors then in office,
although less than a quorum, and any
B - 2
<PAGE> 32
director so chosen shall hold office until the next election of the class for
which such director shall have been chosen and until his successor shall be
elected and qualified.
NINTH: The amendment or repeal of Article FIFTH, Article SIXTH,
Article SEVENTH, Article EIGHTH or this Article NINTH of this Restated
Certificate of Incorporation and the adoption of any provision inconsistent
therewith shall require the affirmative vote of the holders of at least 75% of
the outstanding shares of Common Stock.
TENTH: In furtherance and not in limitation of the powers conferred
by law, subject to any limitations contained elsewhere in this Restated
Certificate of Incorporation, the by-laws of the Corporation may be adopted,
amended or repealed by a majority of the Board of Directors of the Corporation,
but any by-law of the Corporation adopted by the Board of Directors may be
amended or repealed by the stockholders entitled to vote thereon. Election of
directors need not be by written ballot.
ELEVENTH: (a) A director of the Corporation shall not be personally
liable either to the Corporation or to any stockholder for monetary damages for
breach of fiduciary duty as a director, except (i) for any breach of the
director's duty of loyalty to the Corporation or its stockholders, or (ii) for
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, or (iii) under Section 174 of the DGCL or any
successor provision thereto, or (iv) for any transaction from which the director
shall have derived an improper personal benefit. Neither amendment nor repeal of
this paragraph (a) nor the adoption of any provision of the certificate of
incorporation inconsistent with this paragraph (a) shall eliminate or reduce the
effect of this paragraph (a) in respect of any matter occurring, or any cause of
action, suit or claim that, but for this paragraph (a) of this Article ELEVENTH,
would accrue or arise, prior to such amendment, repeal or adoption of an
inconsistent provision.
(b) The Corporation shall indemnify any person who was or is a
party or is threatened to be made a party to, or testifies in, any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative in nature, by reason of the fact that such
person is or was a director or officer of the Corporation, or is or was serving
at the request of the Corporation as a director or officer of another
corporation, partnership, joint venture, employee benefit plan, trust or other
enterprise (an "Other Entity"), against expenses (including attorneys' fees and
disbursements), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceeding to the full extent permitted by law. Persons who are not directors or
officers of the Corporation may be similarly indemnified in respect of service
to the Corporation or to an Other Entity at the request of the Corporation to
the extent the Board at any time specifies that such persons are entitled to the
benefits of this Article ELEVENTH, and the Corporation may adopt By-laws or
enter into agreements with any such person for the purpose of providing for such
indemnification. Any director or officer of the Corporation serving in any
capacity for (a) another corporation of which a majority of the shares entitled
to vote in the election of its directors is held, directly or indirectly, by the
Corporation or (b) any employee benefit plan of the Corporation or any
corporation referred to in clause (a) shall be deemed to be doing so at the
request of the Corporation.
B - 3
<PAGE> 33
(c) The Corporation shall, from time to time, reimburse or
advance to any director or officer or other person entitled to indemnification
under this Article ELEVENTH the funds necessary for payment of expenses
(including attorney's fees and disbursements) actually and reasonably incurred
by such person in defending or testifying in a civil, criminal, administrative
or investigative action, suit or proceeding; provided, however, that the
Corporation may pay such expenses in advance of the final disposition of such
action, suit or proceeding upon receipt of an undertaking by or on behalf of
such director or officer to repay such amount if it shall ultimately be
determined by final judicial decision that such director or officer is not
entitled to be indemnified by the Corporation against such expenses as
authorized by this Article ELEVENTH, and the Corporation may adopt By-laws or
enter into agreements with such persons for the purpose of providing for such
advances.
(d) The Corporation shall have the power to purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of an Other Entity against
any liability asserted against such person and incurred by such person in any
such capacity, or arising out of such person's status as such, whether or not
the Corporation would have the power to indemnify such person against such
liability under the provisions of this Article ELEVENTH or otherwise.
(e) The rights to indemnification and reimbursement or
advancement of expenses provided by, or granted pursuant to, this Article
ELEVENTH shall not be deemed exclusive of any other rights to which a person
seeking indemnification or reimbursement or advancement of expenses may have or
hereafter be entitled under any statute, this Certificate of Incorporation, the
by-laws, any agreement, any vote of stockholders or disinterested directors or
otherwise, both as to action in his or her official capacity and as to action in
another capacity while holding such office.
(f) (i) The rights to indemnification and reimbursement or
advancement of expenses provided by, or granted pursuant to, this Article
ELEVENTH shall continue as to a person who has ceased to be a director or
officer (or other person indemnified hereunder) and shall inure to the benefit
of the executors, administrators, legatees and distributees of such person.
(ii) The provisions of this Article ELEVENTH shall be a
contract between the Corporation, on the one hand, and each director and officer
who serves in such capacity at any time while this Article ELEVENTH is in effect
and any other person indemnified hereunder, on the other hand, pursuant to which
the Corporation and each such director, officer, or other person intend to be
legally bound. No repeal or modifications of this Article ELEVENTH shall affect
any rights or obligations with respect to any state of facts then or theretofore
existing or thereafter arising or any proceeding theretofore or thereafter
brought or threatened based in whole or in part upon any such state of facts.
(g) The rights to indemnification and reimbursement or
advancement of expenses provided by, or granted pursuant to, this Article
ELEVENTH shall be enforceable by any person entitled to such indemnification or
reimbursement or advancement of expenses in any court of competent jurisdiction.
The burden of proving that such indemnification or reimbursement or
B - 4
<PAGE> 34
advancement of expenses is not appropriate shall be on the Corporation. Neither
the failure of the Corporation (including its Board of Directors, its
independent legal counsel and its stockholders) to have made a determination
prior to the commencement of such action that such indemnification or
reimbursement or advancement of expenses is proper in the circumstances nor an
actual determination by the Corporation (including its Board of Directors, its
independent legal counsel and its stockholders) that such person is not entitled
to such indemnification or reimbursement or advancement of expenses shall
constitute a defense to the action or create a presumption that such person is
not so entitled. Such a person shall also be indemnified for any expenses
incurred in connection with successfully establishing his or her right to such
indemnification or reimbursement or advancement of expenses, in whole or in
part, in any such proceeding.
(h) Any person entitled to be indemnified or to reimbursement
or advancement of expenses as a matter of right pursuant to this Article
ELEVENTH may elect to have the right to indemnification or reimbursement or
advancement of expenses interpreted on the basis of the applicable law in effect
at the time of the occurrence of the event or events giving rise to the
applicable action, suit or proceeding, to the extent permitted by law, or on the
basis of the applicable law in effect at the time such indemnification or
reimbursement or advancement of expenses is sought. Such election shall be made,
by a notice in writing to the Corporation, at the time indemnification or
reimbursement or advancement of expenses is sought; provided, however, that if
no such notice is given, the right to indemnification or reimbursement or
advancement of expenses shall be determined by the law in effect at the time
indemnification or reimbursement or advancement of expenses is sought.
IN WITNESS WHEREOF, the undersigned has duly executed this Restated
Certificate of Incorporation on this 13th day of May 1998.
WESTPOINT STEVENS INC.
Attest: By:
-------------------------------
Holcombe T. Green, Jr.
- ---------------------- Chairman of the Board and
Christopher N. Zodrow Chief Executive Officer
Vice President and Secretary
B-5
<PAGE> 35
APPENDIX
WESTPOINT STEVENS INC.
ANNUAL MEETING OF STOCKHOLDERS
MAY 13, 1998
PROXY SOLICITED ON BEHALF OF BOARD OF DIRECTORS
The undersigned stockholder of WestPoint Stevens Inc., a Delaware
corporation (the "Company"), hereby appoints THOMAS J. WARD and CHRISTOPHER N.
ZODROW, and each of them, with full power of substitution and revocation, as
proxies to represent the undersigned at the Annual Meeting of Stockholders of
the Company to be held at the Company's New York offices, 1185 Avenue of the
Americas (13th floor), New York, New York on Wednesday, May 13, 1998 at 10:00
a.m., Eastern Daylight Time, and at any and all adjournments therof, and
thereat to vote all shares of the Company which the undersigned would be
entitled to vote, with all powers the undersigned would possess if personally
present in accordance with the instructions on the reverse side of this proxy.
WHEN THIS PROXY IS PROPERLY EXECUTED, THE SHARES REPRESENTED HEREBY WILL BE
VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR
THE ELECTION OF ALL NOMINEES AS DIRECTORS IN RESPECT OF THE ELECTION PROPOSAL,
FOR THE APPROVAL OF THE AMENDMENT AND RESTATEMENT OF THE COMPANY'S RESTATED
CERTIFICATE OF INCORPORATION, FOR THE RATIFICATION OF THE APPOINTMENT OF THE
COMPANY'S AUDITORS AND, IN THE DISCRETION OF THE PROXIES, WITH RESPECT TO ALL
OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE MEETING AND ANY AND ALL
ADJOURNMENTS THEREOF. THE UNDERSIGNED ACKNOWLEDGES RECEIPT OF THE ACCOMPANYING
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT.
(CONTINUED, AND TO BE SIGNED AND DATED ON THE REVERSE SIDE.)
<PAGE> 36
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL ITEMS.
Please mark boxes ___ or X in blue or black ink.
1. ELECTION PROPOSAL: GRANTING __ WITHHOLDING __ authority to vote for the
election as directors of all the nominees listed below:
Hugh M. Chapman, John G. Hudson, and Joseph L. Jennings, Jr.
(Instructions: To withhold authority to vote for any individual nominee,
mark the "GRANTING" box and strike a line through the nominee's name
for which authority to vote is withheld.)
2. With respect to the proposal to approve the amendment and restatement of the
Company's Restated Certificate of Incorporation to increase the number of
authorized shares of Common Stock. FOR __ AGAINST __ ABSTAIN __
3. With respect to the proposal to ratify the appointment of Ernst & Young LLP,
independent certified public accountants, as auditors for the Company for the
year ending December 31, 1998. FOR __ AGAINST __ ABSTAIN __
4. In their discretion, on such other matters as may properly come before the
meeting and any and all adjournments thereof.
Please sign exactly as name or
names appear on this proxy. If
stock is held jointly, each
holder should sign. If signing
as attorney, trustee, executor,
administrator, custodian,
guardian or corporate officer,
please give full title.
Date , 1998
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Signature
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Signature
Sign, Date and Return the Proxy Card Promptly Using the Enclosed Envelope.
