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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Burlington Industries, Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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:
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(4) Date Filed:
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Notes:
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[BURLINGTON INDUSTRIES, INC. LOGO]
3330 West Friendly Avenue
Greensboro, North Carolina 27410
December 22, 2000
Dear Stockholder:
We cordially invite you to attend your Company's 2001 Annual Meeting of
Stockholders on Thursday, February 1, 2001. The meeting will be held at
Corporate Headquarters in Greensboro, North Carolina and will begin at 9:30
a.m.
The formal notice of meeting, proxy statement and form of proxy accompany
this letter and describe in detail the matters to be acted upon at the
meeting.
As a stockholder, your vote is important. We urge you to execute and
return your proxy promptly whether or not you plan to attend so we may have as
many shares as possible represented at the meeting. Returning your completed
proxy will not prevent you from voting in person at the meeting if you wish to
do so.
On behalf of your Board of Directors, thank you for your continued support
and interest in Burlington Industries, Inc.
Sincerely,
/s/ George W. Henderson, III
George W. Henderson, III
Chairman of the Board and
Chief Executive Officer
<PAGE>
[BURLINGTON INDUSTRIES, INC. LOGO]
3330 West Friendly Avenue
Greensboro, North Carolina 27410
---------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
to be held February 1, 2001
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December 22, 2000
To the Holders of Common Stock of
BURLINGTON INDUSTRIES, INC.
The 2001 Annual Meeting of Stockholders of Burlington Industries, Inc. will
be held at the principal executive offices of the Company, 3330 West Friendly
Avenue, Greensboro, North Carolina on Thursday, February 1, 2001, at 9:30 a.m.
for the following purposes:
1. To elect three Class III Directors to serve for a three-year term and
until the election and qualification of their respective successors;
2. To consider and act upon the selection of independent public
accountants to audit the books and accounts of the Company for the
2001 fiscal year; and
3. To transact such other business as may properly be brought before the
meeting or any adjournment thereof.
Only the holders of record of Common Stock of the Company as of the close
of business on December 4, 2000, will be entitled to notice of and to vote at
the meeting.
By Order of the Board of Directors,
/s/ Randall A. Hanson
Randall A. Hanson
Corporate Secretary
IMPORTANT--YOUR PROXY IS ENCLOSED
Stockholders are requested to respond promptly. Proxies may be completed
electronically (by telephone or internet) or by signing, dating and returning
the enclosed Proxy in the envelope provided. The Company will pay the postage
for mailing in the United States.
<PAGE>
[BURLINGTON INDUSTRIES, INC. LOGO]
3330 West Friendly Avenue
Greensboro, North Carolina 27410
----------------------
PROXY STATEMENT
----------------------
Annual Meeting of Stockholders, February 1, 2001
The enclosed Proxy is solicited on behalf of the Board of Directors of
Burlington Industries, Inc. (hereinafter "Burlington" or the "Company") and is
revocable at any time before it is exercised by written notice to the
Secretary of the Company, by submission of a Proxy bearing a later date or by
voting in person at the Meeting. Unless revoked, properly executed and
returned Proxies will be voted as specified thereon. If no choice is
specified, the Proxy will be voted in favor of proposals 1 and 2. The enclosed
Proxy also will serve as confidential voting instructions with respect to
shares held by the Trustee under Burlington's Employee's 401(k) Savings Plan
(the "401(k) Plan"). This Proxy Statement and the accompanying form of Proxy
are being mailed to stockholders on or about December 22, 2000.
The cost of soliciting Proxies will be borne by Burlington. Solicitation
may be made by the Company's officers, Directors or employees, personally or
by telephone or facsimile. In addition, Burlington has retained Morrow &
Company, Inc. to assist in the solicitation of Proxies and will pay that firm
a fee estimated not to exceed $6,000 plus out-of-pocket expenses. Burlington
will reimburse brokerage houses and other custodians, nominees and fiduciaries
for their reasonable out-of-pocket expenses for forwarding soliciting
materials to the beneficial owners of its Common Stock.
On December 4, 2000, the record date for the 2001 Annual Meeting of
Stockholders, there were outstanding 52,075,748 shares of common stock, par
value $.01 per share ("Common Stock"), having one vote each. Only holders of
Common Stock of record at the close of business on December 4, 2000 will be
entitled to vote at the Meeting.
1. Election of Directors
Burlington's Restated Certificate of Incorporation and Bylaws provide that
the number of Directors, as determined from time to time by the Board of
Directors, shall be not less than three nor more than fifteen. The Board of
Directors currently has fixed the number of Directors at eight. The Restated
Certificate of Incorporation and Bylaws further provide that
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Directors shall be divided into three classes (Class I, Class II and Class
III) serving staggered three-year terms, with each class to be as nearly equal
in number as possible.
In accordance with the recommendation of its Nominating Committee, the
Board of Directors has nominated, and recommends a vote FOR, John G. Medlin,
Jr., Nelson Schwab III, and Theresa M. Stone for election as Class III
Directors for a term expiring at the 2004 Annual Meeting and in each case
until their respective successors are elected and qualified. All nominees are
currently Directors of the Company whose terms expire at the 2001 Annual
Meeting. Abraham B. Stenberg retired from Burlington's Board of Directors on
October 31, 2000, following his retirement as Vice Chairman of the Company.
Other Directors who are remaining on the Board will continue in office in
accordance with their previous elections until the expiration of their terms
at the 2002 or 2003 Annual Meeting, as the case may be.
It is the intention of the persons named in the enclosed form of Proxy to
vote such Proxies for the election of the nominees listed herein. The proposed
nominees are willing to be elected and serve, but in the event any nominee at
the time of election is unable to serve or is otherwise unavailable for
election, it is intended that votes will be cast pursuant to the accompanying
Proxy for substitute nominees designated by the Board of Directors, unless the
Board of Directors reduces the number of Directors to be elected. The Board of
Directors is not aware of any circumstances under which the proposed nominees
would decline or become unable to serve.
Information about Nominees and Directors
The following information is furnished for each person who is nominated
for election as a Director or who is continuing as an incumbent Director:
name, age, whether such person is a nominee for election ("Nominee") or an
incumbent Director whose term does not expire at the 2001 Annual Meeting
("Incumbent"), year in which term expires, length of service as a Director of
the Company, principal occupation and employment during the past five years,
service on boards of directors of other publicly-owned companies, and
membership on Committees of the Board of the Company.
JERALD A. BLUMBERG, 60 Incumbent Term Expires in 2003
Mr. Blumberg retired during 2000 as President, Chief Executive Officer and
a Director of Ambar Inc., an oilfield services company, positions he had held
since January 1998. Prior thereto, he was Executive Vice President of E.I. du
Pont de Nemours and Co. until his retirement at the end of 1997. Mr. Blumberg
also is a Director of Lubrizol Corporation.
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He has been a Director of Burlington since April 1998. Mr. Blumberg is
Chairman of the Audit Committee and a member of the Compensation and Benefits
and Nominating Committees.
JOHN D. ENGLAR, 53 Incumbent Term Expires in 2003
Mr. Englar has been Senior Vice President, Corporate Development and Law
of Burlington since 1995. Prior thereto he was Senior Vice President, Finance
and Law and Chief Financial Officer of the Company. Mr. Englar has been a
Director of Burlington since 1990, and is Chairman of the Investment
Committee.
GEORGE W. HENDERSON, III, 52 Incumbent Term Expires in 2002
Mr. Henderson has been Chairman of the Board of Directors of Burlington
since February 1998 and Chief Executive Officer since 1995. Prior thereto he
was President and Chief Operating Officer (from 1993). Mr. Henderson is also a
Director of Jefferson Pilot Corporation, The Research Triangle Foundation of
North Carolina and Wachovia Corporation. Mr. Henderson has been a Director of
Burlington since 1990, and is Chairman of the Executive Committee.
DOUGLAS J. MCGREGOR, 59 Incumbent Term Expires in 2002
Mr. McGregor was elected President and Chief Operating Officer of
Burlington on June 1, 2000. Prior thereto, he was Chairman, Chief Executive
Officer and a director of the M. A. Hanna Company until his retirement in
1998. Mr. McGregor is also a director of KeyCorp and Vulcan Materials Company.
He was elected to the Board in July 2000 and is a member of the Investment
Committee.
JOHN G. MEDLIN, JR., 67 Nominee Term Expires in 2001
Mr. Medlin has been Chairman Emeritus of Wachovia Corporation, a bank
holding company, since 1998. He served at Wachovia as non-executive Chairman
of the Board from 1994 to 1998, Chief Executive Officer from 1977 to 1993, and
a director until April 2000. Mr. Medlin is a director of BellSouth Corp.,
Media General, Inc., R. J. Reynolds Tobacco Holdings, Inc., and US Airways
Group, Inc. He has been a Director of Burlington since 1994. Mr. Medlin is
Chairman of the Nominating Committee and a member of the Audit, Compensation
and Benefits, and Executive Committees.
NELSON SCHWAB III, 55 Nominee Term Expires in 2001
Mr. Schwab is co-founder of Carousel Capital, a merchant banking firm, and
has been Managing Director since its inception in 1996. He was Chairman and
Chief Executive Officer of Paramount Parks Inc., owner of
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theme amusement parks, from 1992 until 1995. He is also a Director of Summit
Properties, Inc. and First Union National Bank of North Carolina. He has been
a Director of Burlington since 1995. Mr. Schwab is Chairman of the
Compensation and Benefits Committee and a member of the Executive, Investment,
and Nominating Committees.
THERESA M. STONE, 56 Nominee Term Expires in 2001
Ms. Stone has been President of Jefferson-Pilot Communications Company
since 1997. Prior thereto she was President and Chief Executive Officer of
Chubb Life Insurance Company (1994-1997) and Senior Vice President of Chubb
Corporation (1990-1994). Ms. Stone was elected to the Board in April 1999, and
is a member of the Audit and Nominating Committees.
W. BARGER TYGART, 65 Incumbent Term Expires in 2002
Mr. Tygart is President and Chief Executive Officer of e-Tygart Consulting
Services, an e-commerce consulting company formed in 1999. He served as Vice
Chairman (1997-1998) and a Director (1995-1998) of The J. C. Penney Company, a
retail marketing company. Prior thereto, Mr. Tygart was President and Chief
Operating Officer of The J. C. Penney Company from 1995 to 1997 and senior
executive vice president from 1992 to 1995. He has been a Director of
Burlington since April 1998 and is a member of the Audit, Compensation and
Benefits, and Executive Committees.
Board and Committee Meetings; Functions of Certain Committees
During the 2000 fiscal year, the Board of Directors met eight times, the
Audit and Nominating Committees each met four times, the Investment Committee
met one time, and the Compensation and Benefits Committee met seven times.
Each of the Directors attended at least 75% of the meetings of the Board and
of each of the Committees on which he or she served.
The Audit Committee's principal responsibilities consist of recommending
the selection of independent auditors, reviewing the scope of the audit
conducted by such auditors, as well as the results of the audit itself,
reviewing Burlington's internal audit staff function and reviewing with
appropriate officers of the Company matters relating to financial reporting
and to accounting and auditing procedures and policies generally. The duties
of the Audit Committee are more fully described in its Report included in this
Proxy Statement. The Audit Committee also submits to the Board of Directors
recommendations with respect to financial reporting, accounting practices and
policies and other appropriate matters.
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The Compensation and Benefits Committee has authority to formulate and
give effect to policies respecting salary, compensation and other matters
relating to employment of executive officers with Burlington, including,
without limitation, incentive compensation plans for such persons. The
Committee also reviews and makes recommendations with respect to pension,
profit sharing and other compensation plans of the Company.
The Nominating Committee's responsibilities are to review the size and
composition of the Board and the qualifications of possible candidates for the
Board and, as a result, to make recommendations respecting nominees to be
proposed for election. In addition, it is authorized to evaluate the
existence, composition and membership of the Committees of the Board of
Directors and to recommend a successor to the Chief Executive Officer in the
event of a vacancy. The Committee will consider recommendations made in
writing by stockholders respecting possible candidates for the Board of
Directors to be elected at the 2002 Annual Meeting. Such recommendations must
be received by the Secretary of the Company not later than the latest date on
which such stockholder could otherwise nominate such person for Director
pursuant to Burlington's Bylaws, and must include a written consent of the
possible candidate to be considered for a nomination. The procedure for
nominating candidates for Director is described under "Proposals of
Stockholders" below.
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Security Ownership of Certain Beneficial Owners and Management
The following Table sets forth, as of the most recent date for which
information is available, information with respect to each person known to the
Company (based on public filings) to be the beneficial owner of more than five
percent of the outstanding shares of Common Stock. Beneficial ownership
disclosed in the Tables in this section has been determined in accordance with
Rule 13d-3 under the Securities Exchange Act of 1934. Each of the owners
listed below has sole voting and investment power with respect to all of the
shares listed except as noted. In addition to the beneficial owners listed
below, as of October 31, 2000, the 401(k) Plan holds 4,819,519 shares of
Common Stock (9.25%) which is allocated to the accounts of the plan
participants.
<TABLE>
<CAPTION>
Amount and Nature of As of Percent
Name and Address of Beneficial Owner Beneficial Owner Date of Class
------------------------------------ -------------------- ------- --------
<S> <C> <C> <C>
Reich & Tang Asset Management L.P. 5,826,600 9/30/00 11.19
600 Fifth Avenue
New York, NY 10020-2302
Merrill Lynch Asset Management Inc. 5,176,600 9/30/00 9.94
800 Scudders Mill Road
Plainsboro, NJ 08536-1606
Dimension Funds Advisors 4,678,800 9/30/00 8.98
1299 Ocean Avenue
Santa Monica, CA 90401-1005
Masters Capital Management, LLC 2,655,000(a) 10/9/00 5.10
3060 Peachtree Road NW
Atlanta, GA 30305
</TABLE>
-----------
(a) According to information provided by Masters Capital Management, LLC, it
has shared voting and investment power with respect to all of such shares.
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The following Table sets forth the number of shares of Common Stock
beneficially owned, as of December 15, 2000 by each Director and nominee for
Director, each of the named executive officers of Burlington (as defined in
"Executive Compensation--Summary Compensation Table") and all Directors and
executive officers of the Company as a group.
<TABLE>
<CAPTION>
Amount and Nature of Percent
Name of Beneficial Owner Beneficial Ownership(a) of Class
------------------------ ----------------------- --------
<S> <C> <C>
Jerald A. Blumberg 16,500(b)(c) *%
John D. Englar 260,309(d) *
George W. Henderson, III 794,144(d) 1.52
James R. McCallum 38,651(d) *
Douglas J. McGregor 50,000(d) *
John G. Medlin, Jr. 20,000(b)(c) *
Charles E. Peters, Jr. 98,209(d) *
Nelson Schwab III 30,250(b)(c) *
Abraham B. Stenberg 179,644(d) *
Theresa M. Stone 1,500(b)(c) *
W. Barger Tygart 1,500(b)(c) *
All Directors and executive officers as a
group (18 persons), including the above 1,930,602(d) 3.71
</TABLE>
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* Represents less than 1% of the class.
(a) Unless otherwise indicated in a footnote below, each Director and
executive officer possesses sole voting and sole investment power with
respect to the shares shown in the Table above.
(b) Includes 7,500 shares held in the name of Mr. Medlin, 5,250 shares held in
the name of Mr. Schwab and 1,500 shares each held in the names of Ms.
Stone and Messrs. Blumberg and Tygart under the Directors Stock Plan, as
to which such persons possess voting power but not investment power.
(c) Does not include stock units held for the account of each non-employee
Director under the Director Stock Plan, as follows: Mr. Blumberg,
36,865.71 units; Mr. Medlin, 16,618.80 units; Mr. Schwab, 27,135.33
units; Ms. Stone, 35,113.80 units; and Mr. Tygart, 16,618.80 units.
(d) Includes for executive officers of Burlington shares in which they have
voting power, but not investment power, under the 401(k) Plan. Also
includes shares not currently owned but which are issuable upon exercise
of stock options under Burlington's Amended and Restated 1990 Equity
Incentive Plan, 1992 Equity Incentive Plan, 1995 Equity Incentive Plan
and 1998 Equity Incentive Plan, which are currently exercisable, as
follows: Mr. Henderson, 602,861 shares; Mr. Stenberg,
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90,000 shares; Mr. McGregor, 0 shares; Mr. Peters, 38,667 shares; Mr.
Englar, 176,082 shares; Mr. McCallum, 12,201 shares; and all executive
officers as a group (13 persons), 1,200,511 shares.
Compensation of Directors
An annual fee of $30,000 is paid to each Director who is not an employee
of the Company. No separate attendance fees are paid with respect to
participation in and attendance at Board or Committee meetings. No fees are
paid to employee Directors for their services in such capacity. Directors may
participate, along with all other employees of the Company, in Burlington's
matching charitable gifts program to qualifying educational institutions.
Each non-employee Director is awarded stock units at the end of each
fiscal quarter pursuant to the Company's Director Stock Plan (the "Stock
Plan"). The number of units is the number of shares of Common Stock that could
be purchased for $7,500 based on the average closing price of the Common Stock
on the New York Stock Exchange for the last five trading days prior to quarter
end.
Non-employee Directors may elect to defer receipt of all or a portion of
their annual fees until the termination of Board service. Amounts deferred are
credited to the Director's stock unit account under the Stock Plan. Amounts
previously deferred by Directors under a prior plan have been transferred into
their stock unit accounts under the Stock Plan.
Upon retirement or death, the stock units credited to a Director's account
are paid in cash in either a lump sum or in installments over a period not
exceeding ten years, as elected by the Director. The Board Compensation and
Benefits Committee may accelerate payment of deferred amounts upon certain
change of control events as defined in the Stock Plan.
Upon first being elected to Burlington's Board of Directors, a non-
employee Director is awarded a one-time grant of 1,500 restricted shares of
Common Stock under the Stock Plan. Ownership of such shares vests upon the
completion of one year of service on the Board. Such stock grants are subject
to (a) restrictions on transfer and other disposition until completion of the
Director's service on the Board, and (b) forfeiture in whole or in part of
unvested share awards in the event the Director fails to complete the year of
service.
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REPORT OF THE COMPENSATION AND BENEFITS COMMITTEE
ON EXECUTIVE COMPENSATION
Compensation Philosophy
Burlington's executive compensation program is designed to achieve
superior operating performance, thereby maximizing stockholder value, and to
attract, retain and motivate a highly qualified senior management team which
is critical to the Company's long-term success. The Compensation and Benefits
Committee of the Board of Directors (the "Committee") believes that these
objectives can best be obtained by directly tying executive compensation to
meeting annual and long-term financial performance goals and to appreciation
in Burlington's stock price.
In line with these objectives, the total compensation program for
Burlington's executive officers consists of three components:
1. Base salary.
2. Annual incentive compensation consisting of a cash bonus if
designated financial performance objectives are achieved.
3. Long-term incentives composed of awards based on achieving
cumulative long-term financial objectives and increase in shareholder
value.
To support these fundamental principles, the portion of executives'
compensation related to annual incentive compensation and equity-based long-
term incentive plans is designed to be significant in relation to base salary,
especially for senior executives.
The Committee
The Committee establishes compensation objectives and policies for
executive officers, sets compensation payable to executive officers under
those policies, administers each of Burlington's equity incentive plans and
has general oversight responsibility for incentive compensation and benefit
plans. The Committee is composed entirely of independent, non-employee
Directors. The Committee uses independent compensation consultants and
compensation surveys furnished and evaluated by such consultants to provide
advice and data to assist it in developing compensation that is competitive
with other similarly-situated United States industrial companies and which
reinforce Burlington's objective of aligning executive compensation with the
interests of its stockholders.
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Base Salary
The base salary of the Company's executive officers is determined by
evaluating the responsibilities of the position and individual performance. A
salary range is established for each position based on survey information of
salary levels of similarly-situated U.S. industrial companies, which
Burlington regards as the competitive marketplace for executive talent.
Because of the Company's size and diversification, the Committee has not
limited these comparisons to companies in the U.S. textile industry or
companies reflected in the Stock Performance Graph set forth below. These
salary ranges are reviewed on an annual basis and adjusted when appropriate.
Actual salaries paid to Burlington's executive officers are positioned within
the salary range for their position based upon their level of experience and
performance. Mr. Henderson's salary is below the median of salaries for chief
executive officers of industrial companies in the United States. In fiscal
year 2000, Messrs. Englar and McCallum received salary increases.
Annual Incentive Bonus
Burlington's 2000 Annual Incentive Plan (the "2000 Plan"), in which
approximately 160 senior managers participated, provides for an annual bonus
based on achieving certain earnings per share (operating earnings before
interest and taxes for divisional participants) and working capital levels.
For divisional participants, a portion of the available bonus is based on
division performance and a portion is based on corporate performance. For Mr.
Henderson and other corporate staff participants, the bonus opportunity is
based only on corporate performance.
Bonus awards are earned in proportion to the achievement of divisional and
corporate performance goals and, if threshold targets are met, will be based
on varying percentages (previously established by the Committee) of base
salary, depending on the Committee's determination of the executive officer's
level of contribution to the business unit's performance. The 2000 Plan is
positioned so that bonuses paid at target performance levels are at the median
range of annual incentive awards for similarly situated U.S. industrial
companies. The Committee reviewed and approved each of the performance
standards for the Company, individual divisions, and individual executive
officers and, based upon the advice of an independent compensation consultant,
believes they are reasonable.
For fiscal year 2000, one division exceeded established performance goals;
payments were made to participants in that division in accordance with
provisions of the Plan. The remaining divisions and the overall corporation
did not achieve the goals set for the year under the 2000 Plan, and therefore
did not receive an incentive bonus payment.
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Long-term Incentives
Burlington has provided long-term, stock-related incentives to key
executives and employees (including the named executive officers) under the
1998 Equity Incentive Plan. Awards under the Plan consist of options to
purchase shares of Common Stock and Performance Shares dependent upon
achievement of specified total shareholder return goals. The Plan permits
awards of restricted shares of Common Stock, although the Committee has used
such awards only in exceptional circumstances (e.g., new hires if the
situation required). Options also may be awarded under the 1995 Equity
Incentive Plan to the extent registered shares remain to be issued thereunder.
The Equity Incentive Plans are positioned so that targeted awards are at the
lower median range of awards for similarly-situated United States industrial
companies.
The awards granted in fiscal year 2000 included stock options and, in some
cases (including the named executive officers), Performance Shares. These
awards are designed to further align management's incentives with the
interests of Burlington's stockholders and to reward executives for increases
in stockholder value. The stock options awarded were granted at the fair
market value on the grant date and, therefore, will only have value to the
extent the Common Stock increases in value over the exercise price.
Performance Shares awarded may be earned only if specified total shareholder
return ("TSR") goals are achieved during the period November 4, 1999 through
November 3, 2002. TSR goals provide for annual stock price growth ranging from
7% (at Threshold level) to 20% (at Superior level performance). Stock price
growth at less than Threshold level would result in no Performance Shares
being earned. Stock price growth at Superior level performance will result in
a maximum number of Performance Shares being earned, that being two times the
number of Performance Shares granted at Target level.
During the fiscal year, the Committee considered the status of current
outstanding stock options previously granted to members of management
(including the named executive officers). The Committee's consideration
focused on the desire to increase the retentive effect of stock-based awards
and to recognize the fact that certain outstanding options had exercise prices
below the current stock price. The Committee secured the services of outside
compensation consultants to provide potential alternatives to address the
situation. The consultants provided alternatives and a recommendation to the
Committee for allowing the exchange of certain outstanding options for a grant
of restricted stock, which would require vesting over three years. The
Committee elected to provide holders of stock options granted prior to 1998
the opportunity to exchange some or all of those options for grants of
restricted stock with
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three year vesting. The Committee used a methodology provided by outside
consultants for the valuation of the exchange; the intention of the Committee
was that the exchange provided participants with an equivalent basis of value.
The methodology involved the valuation of outstanding options using the Black-
Scholes option valuation model; the value was then used to determine the
number of restricted shares to award based on the closing share price on April
26, 2000 (the date of Board approval).
As a result of this opportunity, the majority of eligible participants did
elect to participate in this exchange, including some of the named executive
officers. The number of shares of restricted stock received by the named
executive officers in connection with this exchange is included in the Summary
Compensation Table. Mr. Henderson did not elect to participate in the exchange
opportunity; Mr. Stenberg exchanged 25,000 options with exercise prices of
$14.75 due to expire in November 2005; Mr. McGregor did not have any of the
eligible options; Mr. Peters exchanged 90,000 options with exercise prices
between $11.625 and $14.75 due to expire in November 2005; Mr. Englar
exchanged 57,112 options with exercise prices between $11.625 and $21.93 due
to expire between March and July 2002; and Mr. McCallum exchanged 24,700
options with exercise prices between $11.625 and $14.75 due to expire between
July 2002 and November 2005. As a group, all officers exchanged 417,682
options with exercise prices between $9.673 and $21.93 due to expire between
March 2002 and November 2005. Fifty-eight per cent (58%) of the eligible
options, or 1,384,943 options, were exchanged for the issuance of 409,266
shares of restricted stock.
Performance Units were awarded under the 1995 Equity Incentive Plan in
fiscal year 1996 which were dependent upon achievement of earnings and return
on invested capital goals over fiscal years 1996, 1997, and 1998. Only one
division of the Company met the targeted performance goals. Payment of these
awards occurs in three annual installments in fiscal years 1998, 1999, and
2000. Mr. McCallum is the only named executive officer to receive this award.
No Performance Units were earned by any of the other named executive officers,
including Mr. Henderson.
Deductibility of Executive Compensation
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code") limits the tax deductibility of certain compensation exceeding $1.0
million per year paid to a company's chief executive officer and its four
other highest paid officers in office at fiscal year end. The Company believes
that the impact, if any, of such limitation is immaterial to the Corporation
with respect to fiscal year 2000. The Equity Incentive
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Plans are structured so as to preserve the tax deduction for performance-based
compensation paid thereunder. The Committee will continue to monitor this tax
law and evaluate whether any modifications should be made to Burlington's
compensation programs in future years.
COMPENSATION AND BENEFITS COMMITTEE
Nelson Schwab III, Chairman
Jerald A. Blumberg
John G. Medlin, Jr.
W. Barger Tygart
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EXECUTIVE COMPENSATION
Summary Compensation Table
The following Table sets forth information regarding the compensation of
Burlington's Chief Executive Officer and each of its four most highly
compensated senior executive officers (collectively, the "named executive
officers") for services in all capacities to the Company in fiscal years 2000,
1999 and 1998.
<TABLE>
<CAPTION>
Long Term
Compensation
------------------
Other Awards Payouts
Annual Restricted ---------- -------
Compen- Stock Securities LTIP All Other
Name and Principal sation Awards Underlying Payouts Compen-
Position Year Salary($) Bonus($) ($)(3) ($)(4) Options(#) ($)(5) sation($)(6)
------------------ ---- --------- -------- ------- ---------- ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
George W. Henderson, III
Chairman of the Board 2000 600,000 -- -- -- 149,300 -- 6,800
and Chief Executive 1999 595,000 25,000 -- -- 80,000 -- 6,400
Officer 1998 540,000 552,100 -- -- 50,000 -- 1,947
Abraham B. Stenberg(1) 2000 450,000 -- 10,791 34,855 50,000 -- 6,800
Vice Chairman 1999 450,000 56,600 27,093 -- 40,000 -- 6,400
1998 435,417 349,200 -- -- 25,000 -- 1,947
Douglas J. McGregor(2) 2000 175,000 87,500 95,313 95,313 100,000 -- --
President and Chief 1999 -- -- -- -- -- -- --
Operating Officer 1998 -- -- -- -- -- -- --
Charles E. Peters, Jr.
Senior Vice President 2000 350,000 -- 267 137,167 50,000 -- 6,800
and Chief Financial 1999 305,000 15,000 673 -- 38,000 -- 6,400
Officer 1998 255,000 140,500 -- -- 40,000 -- 1,872
John D. Englar
Senior Vice President, 2000 301,667 -- 643 26,677 45,000 -- 6,800
Corporate Development 1999 285,000 15,000 1,615 -- 40,000 -- 6,400
and Law 1998 266,667 157,000 -- -- 10,000 -- 1,947
James R. McCallum 2000 190,417 121,100 -- 28,252 25,000 15,000 6,800
President, Lees Carpets 1999 157,639 108,800 -- -- 5,800 15,000 6,400
1998 130,000 68,700 -- -- 10,000 20,000 1,902
</TABLE>
14
<PAGE>
-----------
(1) Mr. Stenberg retired as an employee of the Company on September 30, 2000.
(2) Mr. McGregor was first employed by Burlington in June of 2000.
(3) Amounts equivalent to interest, earned on deferred compensation, in excess
of 120% of the long term annual federal rate, compounded quarterly, and,
for Mr. McGregor, the value of 25,000 shares of unrestricted stock awarded
upon his employment.
(4) The value of shares granted in exchange for options with exercise prices
below fair market value, as more fully described in the Report of the
Compensation Committee, and, for Mr. McGregor, the value of 25,000 shares
of restricted stock awarded upon his employment.
(5) Payments upon achievement of specified aggregate performance goals in
connection with Performance Units awarded under the 1995 Equity Incentive
Plan which vested in 1998 and payable over a three-year period primarily
in shares of Common Stock valued at fair market value on the payment date.
(6) The amounts in this column for 1998 are the value of shares of
Burlington's Common Stock allocated to the named executive officers'
accounts under Burlington's Employee Stock Ownership Plan (merged into the
401(k) Plan effective 1/1/99), valued on the respective allocation dates.
For 1999 and 2000, the amounts in this column are Burlington's
contributions (half made in cash and half used for purchase of Common
Stock) to the 401(k) Plan with respect to the named executive officers.
In November 1999, Burlington acquired a controlling interest in a
privately-held company called AvantGarb, LLC (now known as Nano-Tex, LLC), a
California limited liability company engaged in developing novel chemistry for
fabric applications. Prior thereto, Burlington had made a preliminary
investment in AvantGarb in order to explore the commercial application of this
technology. In connection with its investment, Burlington has responsibility
for the marketing and licensing of the technology developed by Nano-Tex and
has an exclusive right to use these developments on products Burlington
produces. In April 2000, the Board of Directors of Nano-Tex (which includes
Mr. Henderson and Mr. Englar, who did not participate in the consideration of
this matter) adopted an equity incentive plan pursuant to which five of the
named executive officers and certain other executive officers and members of
senior management of the Company were granted options and restricted
membership units during fiscal year 2000. The options vest one third each year
beginning one year after the date of grant, expire ten years after the
15
<PAGE>
date of grant, and were granted with an exercise price of $2.25 per unit. The
restricted awards were purchased by the recipients for $2.25 per unit with
such purchase price paid by a promissory note. The number of options and
restricted units issued to each of the named executive officers is as follows:
Mr. Henderson, 450,000 options and 50,000 units; Mr. McGregor, 135,000 options
and 15,000 units; Messrs. Peters and Englar, 90,000 options and 10,000 units
each; and Mr. McCallum, 45,600 options and 4,400 units.
Stock Options and Performance Units
The following Table shows information about stock options granted to each
of the named executive officers during fiscal year 2000. No SARs were granted
to any of the named executive officers during fiscal year 2000.
Option Grants in Fiscal Year 2000
<TABLE>
<CAPTION>
Potential
Realizable
Value at
Percent of Assumed Annual
Number of Total Rates of Stock
Securities Options Price
Underlying Granted to Exercise Appreciation
Options Employees or Base for Option Term
Granted in Fiscal Price Expiration ---------------
Name (#) Year ($/Share) Date 5% ($) 10% ($)
---- ---------- ---------- --------- ---------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
George W. Henderson, III 149,300 8.5 3.75 11/4/09 352,102 892,297
Abraham B. Stenberg 50,000 2.9 3.75 11/4/09 117,918 298,827
Douglas J. McGregor 100,000 5.7 3.4375 6/1/10 216,183 547,849
Charles E. Peters, Jr. 50,000 2.9 3.75 11/4/09 117,918 298,827
John D. Englar 45,000 2.6 3.75 11/4/09 106,126 268,944
James R. McCallum 25,000 1.4 3.75 11/4/09 58,959 149,413
</TABLE>
The following Table shows information about stock options held by each of
the named executive officers as of December 1, 2000 (the value being the
difference between the closing price of Burlington's Common Stock on December
1, 2000 and the respective option prices). No SARs are held by any of the
named executive officers.
Aggregated Option Exercises in Fiscal Year 2000 and Option Values
<TABLE>
<CAPTION>
Shares Number of Securities Underlying
Acquired Unexercised Options at
on Value December 1, 2000(#)
Exercise Realized ----------------------------------
Name (#) ($) Exercisable Unexercisable
---- -------- -------- --------------- ----------------
<S> <C> <C> <C> <C>
George W. Henderson, III 0 0 602,861 126,201
Abraham B. Stenberg 0 0 90,000 0
Douglas J. McGregor 0 0 0 100,000
Charles E. Peters, Jr. 0 0 38,667 49,333
John D. Englar 0 0 176,082 48,333
James R. McCallum 0 0 12,201 18,599
</TABLE>
16
<PAGE>
The following table shows information about performance shares granted
under Burlington's 1998 Equity Incentive Plan to each of the named executive
officers during fiscal 2000. No performance shares were granted to Mr.
McGregor.
Long-Term Incentive Plans--Awards in Fiscal Year 2000
<TABLE>
<CAPTION>
Performance
Number Period
Name of Shares(#) Until Payout
---- ------------ ---------------
<S> <C> <C>
George W. Henderson, III 0-43,800 11/4/99-11/3/02
Abraham B. Stenberg 0-14,000 11/4/99-11/3/02
Charles E. Peters, Jr. 0-14,400 11/4/99-11/3/02
John D. Englar 0-13,000 11/4/99-11/3/02
James R. McCallum 0-8,000 11/4/99-11/3/02
</TABLE>
The number of performance shares which may be earned ranges from zero to
the maximum number shown depending upon the executive officer's employment
status and total shareholder return (the percentage increase of a rolling 20-
trading day average of the closing prices of the Common Stock as reported on
the New York Stock Exchange Composite Transactions over the rolling average
for the 20 trading days ending on 11/3/99, which was $4.25). Superior level
performance will be achieved, and the maximum number of performance shares
earned, if the rolling average increases 173% to $7.35 at any time during the
period 11/3/99 to 12/2/02. If superior level performance is not achieved, the
number of performance shares earned will be based on the highest rolling
average achieved during the six month period ending 12/2/02. Performance
shares will be paid in shares of Common Stock, cash or a combination thereof.
Retirement Plans
Retirement System
Each eligible employee, including the named executive officers, may elect
to participate in Burlington's "Retirement System", which is a defined-benefit
plan qualified under the Internal Revenue Code. Both individual and Company
contributions are made to the Retirement System. Employee contributions
represent a fixed percentage of base salary, calculated at the rate of 1.5% or
3.0%, as the employee elects, of base salary up to $6,600 plus 3.0% of base
salary in excess of $6,600 each plan year, subject to maximum participating
earnings levels established by the Internal Revenue Service ("IRS").
The Retirement System provides an annual benefit payable to an eligible
member at age 65 equal to the greater of (a) the sum of (i) the number of
years of continuous participation prior to October 1, 1984, multiplied by the
sum of 0.75% of the first $12,000 of annual salary at
17
<PAGE>
September 30, 1984, plus 1.5% of the excess over $12,000, and (ii) one-half of
the member's contributions after September 30, 1984, (b) one-half of the
member's total contributions, or (c) an amount determined under applicable
Federal law requiring a minimum return on a participant's personal
contributions. This benefit represents a life annuity with a guaranteed
minimum return of personal contributions and may, at the participant's
election, be paid as a lump sum discounted to a present value at rates set by
the plan or applicable regulations. Benefits are not subject to offset for
Social Security benefits or other amounts. Contributions made by the Company
to the Retirement System in respect of a specified person cannot readily be
separately or individually calculated by the actuaries of the Retirement
System.
The credited years of service to date under the Retirement System for
named executive officers are as follows: Mr. Henderson--21, Mr. Stenberg--40,
Mr. McGregor--0, Mr. Peters--4, Mr. Englar--15, and Mr. McCallum--10. Covered
remuneration under the Retirement System for such individuals is the base
salary amount described in the first paragraph of "Employment Agreements"
below, subject to limitations on amount imposed under Federal regulations.
Estimated annual benefits payable upon retirement under the Retirement System
at age 65 to the named executive officers (which benefits are fully vested),
assuming no increase in present salary levels, would be: Mr. Henderson--
$210,497; Mr. Peters--$105,847; Mr. Englar--$103,518; and Mr. McCallum --
$78,779. Mr. Stenberg received a lump sum Retirement System benefit in the
amount of $1,346,761 following his attainment of age 65 during fiscal year
2000 and $261,865 from the benefit equalization plan. Mr. McGregor is not yet
eligible for retirement benefits.
Benefits provided under the Retirement System are subject to certain
restrictions and limitations under the Code and applicable regulations
promulgated thereunder, as in effect from time to time, and the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"). Under a benefits
equalization plan, Burlington will pay to certain participants in the
Retirement System upon retirement supplemental benefits equal to the reduction
in such plan benefits mandated by maximum benefit and salary limitations
established under the Code and ERISA. Such supplemental amounts are reflected
in the individual annual benefits indicated in the next preceding paragraph.
Supplemental Pre-Retirement/Post-Retirement Plan
The named executive officers and other senior management employees
participate in the Company's Supplemental Executive Retirement Plan (the
"SERP") and have entered into split dollar life insurance agreements which
will provide the named executive officers with
18
<PAGE>
life insurance whose death benefit is approximately two times annual base
salary plus target bonus, less the aggregate premiums paid by the Company to
such date.
In the event of the death before retirement of a named executive officer
prior to age 65, the SERP provides for a pre-retirement survivor benefit of
120 monthly payments equal to one-half of Monthly Base Salary (which is the
greater of (i) the monthly base salary on the January 1 occurring concurrently
with or immediately preceding such person's death or (ii) the average of the
monthly base salary on January 1 for each of the previous five years) in the
case of death prior to age 60, thereafter decreasing by 5% each year to 25% of
Monthly Base Salary if death occurs at or after age 64. The amount of the
monthly pre-retirement survivor benefit (to be paid for 120 months) calculated
assuming the death of the participant as of December 1, 2000, would be: Mr.
Henderson --$25,000; Mr. Peters--$14,583; Mr. Englar--$11,875; and
Mr. McCallum--$7,500. Mr. Stenberg has retired, and Mr. McGregor has not yet
reached the three-year service eligibility requirement.
Each named executive officer who attains age 50 and completes 10 years of
service with Burlington (currently each of them other than Messrs. McGregor,
Peters and McCallum) has a nonforfeitable right to receive post-retirement
benefits under the SERP of two and one-half times the greater of (a) final
annual base salary as of the January 1 occurring concurrently with or
immediately preceding retirement or (b) an average of annual base salary on
January 1 for each of the five years preceding retirement (such greater amount
being referred to as the "Annual Base Salary"), reduced in the event of early
retirement as described below. Any named executive officer who receives post-
retirement benefits before age 65 will have his benefits reduced by a factor
of 5% for each year remaining until he attains age 60 and reduced by a factor
of 3% for each year remaining between age 61 and 65. The amount of post-
retirement benefits (payable over 10 years) calculated assuming retirement as
of December 1, 2000, at current plan salary would be: Mr. Henderson --$675,000
and Mr. Englar--$356,250; and Messrs. McGregor, Peters and McCallum--$0. Mr.
Stenberg is receiving monthly installment payments of his total post-
retirement benefit of $1,125,000.
Any payments in the future will depend upon the Annual Base Salary level
of the named executive officer at that time and whether he or she meets all
the terms and conditions of the SERP, including refraining from engaging in
any activities materially competitive with the business of the Company.
19
<PAGE>
Employment Agreements
Burlington has employment agreements with the named executive officers
providing for employment through December 31, 2003, in the case of Messrs.
Henderson, Peters and Englar; June 1, 2003, in the case of Mr. McGregor; and
December 31, 2001 in the case of Mr. McCallum. These agreements provide, among
other things, for minimum annual salaried compensation. Current annual
salaries are as follows: Mr. Henderson--$630,000; Mr. McGregor--$525,000; Mr.
Peters--$375,000; Mr. Englar--$310,000; and Mr. McCallum--$205,000.
The employment agreements with the named executive officers provide that
in the event of a voluntary termination of employment for "good reason" or an
involuntary termination of employment "without cause", such executive will
receive a lump sum in cash equal to (x) the salary that would have been
payable over the "severance period" of the agreement had such executive not
been terminated plus (y) the amount of the target incentive bonus payment for
the year in which termination occurred, times the number of years or partial
years in the "severance period". The executive also is entitled to continue
participating in all applicable benefit and welfare plans of the Company
during the "severance period". With regard to such termination, the "severance
period" is two years for Mr. Henderson, one and one-half years for Messrs.
McGregor, Peters and Englar, and one year for Mr. McCallum. "Good reason"
means a failure to pay compensation due and payable, a reduction in
compensation level (other than changes to incentive or benefit plans affecting
all executives), an assignment of duties resulting in a diminution of the
executive's position, authority, duties or responsibilities which is not
agreed to by the executive, or a change in employment requirements which the
Compensation and Benefits Committee determines subjects the executive to an
unfair change of circumstances.
All the employment agreements provide that in the event of a voluntary
termination of employment for "good reason" or an involuntary termination of
employment "without cause" which occurs within two years of a "change of
control", the "severance period" shall mean three years. In the event of
disability (as defined in the agreements), the employment agreements provide
that Burlington may terminate the agreement and provide the executive with
salary payments and benefits for one year in the case of Mr. Henderson and six
months in the case of Messrs. McGregor, Peters, Englar and McCallum. Further,
all the employment agreements provide that in the event of an involuntary
termination for cause where such conduct is not found to be willful, the
executive will
20
<PAGE>
receive a lump sum equal to the present value of the amount payable under the
terms of the Company's payroll severance policy applicable to such employee.
Change of Control Arrangements
In addition to the provisions of the employment agreements discussed
above, the agreements which Burlington has entered into with each of the named
executive officers in connection with the SERP contain provisions under which
such officer's rights to receive pre-retirement survivor benefits and post-
retirement benefits automatically, upon the occurrence of a "change of
control" of the Company, become fully vested, nonforfeitable and payable on
normal payment dates at 100% of benefit level (without regard to reductions of
benefits arising from early retirement). Such officers have also entered into
agreements with Burlington in connection with each of the Equity Incentive
Plans under which such officers' awards of stock options and performance
shares will fully vest if their employment is terminated "without cause" or
they voluntarily terminate their employment for "good reason", in each case
within two years after the occurrence of a "change of control" of the Company.
21
<PAGE>
Stock Performance Graph
The following is a line graph presentation comparing the yearly percentage
change in the cumulative total shareholder return on Burlington's Common Stock
with the cumulative total return on the Standard & Poor's 500 Stock Index and
a peer group index for the period from September 29, 1995 to September 29,
2000 (assuming reinvestment of any dividends and an investment of $100 in each
on September 29, 1995):
[Performance graph appears here]
<TABLE>
<CAPTION>
9/29/95 9/27/96 9/26/97 10/2/98 10/1/99 9/29/00
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Burlington Industries, Inc. ... $100.00 $ 79.21 $112.87 $ 71.78 $ 41.09 $ 9.90
S&P 500........................ 100.00 120.14 168.98 182.08 236.05 267.37
Peer Group..................... 100.00 105.35 142.95 91.07 67.77 58.52
</TABLE>
This peer group consists of Burlington Industries, Inc., Cone Mills
Corporation, Culp, Inc., Delta Apparel, Inc., Delta Woodside Industries, Inc.,
The Dixie Group, Inc., Duck Head Apparel Company, Inc., Dyersburg Corporation,
Fab Industries, Inc., Forstmann & Company, Inc., Galey & Lord, Inc., Guilford
Mills, Inc., Mohawk Industries, Inc., Springs Industries, Inc., Texfi
Industries, Inc. and Unifi, Inc. (for the portions of the above periods during
which such companies had publicly traded common stock).
REPORT OF THE AUDIT COMMITTEE
The Audit Committee (the "Committee") oversees the Company's financial
reporting process on behalf of the Board of Directors. The Committee operates
pursuant to a written charter, a copy of which is
22
<PAGE>
included as Appendix A to this proxy statement. During fiscal year 2000, the
Committee held three meetings.
All of the members of the Audit Committee, who are listed below, are
independent, financially literate, and have accounting or related financial
management experience, as such qualifications are defined in the rules of the
New York Stock Exchange and interpreted by the Board of Directors in its
business judgment. No member of the Committee is a current or former employee,
executive officer, or family member of an executive officer of the Company or
any of its affiliates. No member of the Committee has a direct business
relationship with the Company which, in the business judgment of the Board of
Directors, interferes with such Director's exercise of independent judgment.
No member of the Committee is employed as an executive officer of a
corporation where any executive officer of Burlington serves as a member of
the compensation committee.
Management has primary responsibility for the financial statements and
reporting process including the systems of internal controls. In fulfilling
its oversight responsibilities, the Committee has reviewed and discussed the
audited financial statements of the Company with management, discussed with
the independent accountants the matters required to be discussed by Statement
on Auditing Standards No. 61 (such as significant adjustments, management
judgments and accounting estimates, significant new accounting policies, any
disagreements with management, the independent accountants' judgments about
the quality of the Company's accounting principles, and any uncorrected
misstatements pertaining to a current period whose effects management believes
are immaterial to the financial statements taken as a whole), received from
the independent accountants the written disclosures and letter required by
Independence Standards Board Standard No. 1, and discussed with the
independent accountants the independence of the independent accountants.
The Committee discussed with the Company's internal auditors and
independent accountants the overall scope and plans for their respective
audits. The Committee meets with the internal auditors and independent
accountants, with and without management present, to discuss the results of
their examination, their evaluations of the Company's internal controls, and
the overall quality of the Company's financial reporting.
Based on such review and discussions, the Committee recommended to the
Board of Directors that the audited financial statements be included in the
Company's Annual Report on Form 10-K for the year ended September 30, 2000,
for filing with the Securities and Exchange
23
<PAGE>
Commission. The Committee and the Board of Directors also have recommended,
subject to ratification by the stockholders, the appointment of Ernst & Young
LLP as the Company's independent accountants. A representative of Ernst &
Young LLP will attend the 2001 Annual Meeting of Stockholders to answer
appropriate questions and to make any statement such representative may desire
to make.
AUDIT COMMITTEE
Jerald A. Blumberg, Chairman
John G. Medlin, Jr.
Theresa M. Stone
W. Barger Tygart
2. Selection of Independent Public Accountants
The appointment of auditors is approved annually by the Board of Directors
and subsequently submitted to the stockholders for ratification. In
recommending the ratification by the stockholders of the appointment of Ernst
& Young LLP, the Board of Directors is acting upon the recommendation of the
Audit Committee, which is composed entirely of non-employee Directors and
which has satisfied itself as to the firm's professional competence and
standing. In making its recommendation, the Audit Committee has taken into
consideration the audit scope and audit fees associated with such retention. A
representative of Ernst & Young LLP will attend the 2001 Annual Meeting of
Stockholders to answer appropriate questions and to make any statement that
such representative may desire to make.
The Board of Directors recommends a vote FOR Proposal 2, the approval of
the selection of Ernst & Young LLP as independent public accountants to audit
the books and accounts of the Corporation for the 2001 fiscal year, and your
proxy will be so voted unless you specify otherwise.
3. Other Business
Management of the Company is not aware of any other business which may be
presented for action at the 2001 Annual Meeting; however, the enclosed Proxy
confers discretionary authority with respect to matters that are not known to
the Board at the date hereof and which may properly come before the meeting.
It is the intention of the persons named in the accompanying Proxy to vote in
accordance with their best judgment on any such matter.
24
<PAGE>
Vote Required for Approval
Votes with respect to matters submitted to stockholders at the 2001 Annual
Meeting will be tabulated and certified by a representative of First Union
National Bank, the Company's transfer agent, who will be appointed as an
independent inspector of election. The presence in person or by proxy of the
holders of a majority of the outstanding shares of Common Stock entitled to
vote at the Annual Meeting shall constitute a quorum for the transaction of
business at the Annual Meeting. Treasury shares shall not be counted for
quorum purposes and shall not be voted for any purpose at the Annual Meeting.
Although abstentions and broker non-votes (matters subject to vote on validly
submitted proxies for which no vote is indicated) are counted for purposes of
determining whether a quorum is present at the Annual Meeting, they are not
treated as votes cast on any matter as to which no voting instruction is
indicated. The vote required to elect each Director is a plurality of the
votes cast at the Meeting. On all matters other than the election of
Directors, the affirmative vote of the holders of a majority of the shares of
Common Stock present in person or by proxy at the Annual Meeting and entitled
to vote is required. An abstention will in effect constitute a vote against
any such matter while a broker non-vote will not be counted.
Proposals of Stockholders
In order for proposals by stockholders to be considered for inclusion in
the Proxy and the Proxy Statement for the 2002 Annual Meeting, such proposals
must be received by the Secretary of the Company at P.O. Box 21207,
Greensboro, North Carolina 27420 no later than August 15, 2001.
Burlington's Bylaws set forth certain procedures stockholders must follow
in order to nominate a director or present any other business at an Annual
Meeting of Stockholders. In addition to any other applicable requirements, for
business to be properly brought before the 2002 Annual Meeting by a
stockholder, such stockholder must have given timely notice thereof in proper
written form to the Secretary of the Company. To be timely, a stockholder's
notice to the Secretary must be delivered to or mailed and received at the
principal executive offices of the Company not less than 90 days nor more than
120 days prior to the anniversary date of the 2001 Annual Meeting, provided
that if the 2002 Annual Meeting is called for a date that is not within 30
days before or after such anniversary date, notice by the stockholder must be
so received not later than the close of business on the tenth day following
the day on which notice of the date of the 2002 Annual Meeting is mailed or
public disclosure of the date of the 2002 Annual Meeting is made, whichever
first occurs. The
25
<PAGE>
Bylaw provisions relating to advance notice of business to be transacted at
Annual Meetings may be obtained from the Secretary of the Company.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires Burlington's
directors and executive officers, and any persons who own beneficially more
than 10% of the outstanding Common Stock, to file with the Securities and
Exchange Commission and the New York Stock Exchange reports disclosing their
ownership of and transactions in the Common Stock. To the Company's knowledge,
based solely on a review of the copies of such reports furnished to Burlington
and written representations that no such reports were required during the
fiscal year ended September 30, 2000, Burlington's directors and executive
officers complied with all Section 16(a) filing requirements, except that the
initial Form 3 filed on behalf of one executive officer, Mr. Bernard J.
Leonard, inadvertently failed to include certain shares. An amended Form 3 was
promptly filed as soon as this oversight was discovered.
Availability of Form 10-K
Burlington's Annual Report on Form 10-K with respect to the fiscal year
ended September 30, 2000, as well as the Proxy Statement and the 2000 Annual
Report to Stockholders, may be accessed through the Company's World Wide Web
site (www.burlington.com). A copy of the Form 10-K is available without charge
upon written request to Mr. J. Ross Haymes, Manager of Investor Relations and
Chief Economist, Burlington Industries, Inc., P.O. Box 21207, Greensboro,
North Carolina 27420. Such request must include a good faith representation
that, as of December 4, 2000, the person making such request was a beneficial
owner of shares of Common Stock.
Stockholders are urged to specify choices on the enclosed Proxy and to
date and return it in the enclosed envelope. Your prompt response will be
appreciated.
By Order of the Board of Directors,
/s/ Randall A. Hanson
Randall A. Hanson
Corporate Secretary
December 22, 2000
26
<PAGE>
APPENDIX A
Audit Committee Charter
I. Purpose
The primary function of the Audit Committee is to assist the Board of
Directors in fulfilling its oversight responsibilities by reviewing: the
financial reports and other financial information provided by the Corporation
to any governmental body or the public; the Corporation's systems of internal
controls regarding finance, accounting, legal compliance and ethics that
management and the Board have established; and the Corporation's auditing,
accounting and financial reporting processes generally. Consistent with this
function, the Audit Committee should encourage continuous improvement of, and
should foster adherence to, the corporation's policies, procedures and
practices at all levels.
II. Composition
The Audit Committee shall be comprised of three or more directors as
determined by the Board, each of whom shall be independent directors, and free
from any relationship that, in the opinion of the Board, would interfere with
the exercise of their independence from management and the corporation. All
members of the Committee shall have a working familiarity with basic finance
and accounting practices, and at least one member of the Committee shall have
accounting or related financial management expertise. Audit Committee members
and the Committee Chair shall be designated by the full board of directors
upon the recommendation of the Nominating Committee.
III. Duties and Responsibilities
1. Hold such regular meetings as may be necessary and such special
meetings as may be called by the Chairman of the Audit Committee or at the
request of the outside auditors or Director of Internal Audit. The Committee
should meet at least annually with management, the director of the internal
auditing department and the outside auditors in separate executive sessions to
discuss any matters that the Committee or each of these groups believe should
be discussed privately.
2. Review and update this Charter at least annually.
3. Provide an open avenue of communication between the internal auditors,
the outside auditors, and the board of directors.
A-1
<PAGE>
4. Recommend to the board of directors the outside auditors to be
nominated, approve the compensation, and review and approve the discharge of
the outside auditors.
5. Confirm the independence of the outside auditor by ensuring receipt of
a formal written statement delineating all relationships between the auditor
and the Company. Also, initiate dialog with the outside auditor and other
actions as appropriate to assure this independence.
6. Confirm the understanding that the outside auditor is ultimately
accountable to the board of directors and the audit committee, as
representatives of shareholders, and that the board of directors and the audit
committee have the ultimate authority and responsibility to select, evaluate,
and where appropriate, replace the outside auditor (or to nominate the outside
auditor to be proposed for shareholder approval in any proxy statement).
7. Prepare a summary description of the audit committee's responsibilities
and actions for inclusion in the Company's proxy statement for its annual
meeting of shareholders.
8. Inquire of management, the director of internal auditing, and the
outside auditor about significant risks or exposures and assess the steps
management has taken to minimize such risk to the company.
9. Consider, in consultation with the outside auditor and the director of
internal auditing, the audit scope and plan of the internal auditors and the
outside auditor.
10. Review the Company's audited annual financial statements and the
outside auditors' opinion rendered with respect to such financial statements,
including reviewing the nature and extent of any significant changes in
accounting principles.
11. Review with management and the outside auditor any significant changes
required in their audit plan and any serious difficulties or disputes with
management encountered during the course of the audit.
12. Consider and review with the management and the director of internal
auditing any significant findings during the year and management's responses
thereto, any difficulties encountered in the course of their audits and any
changes required in the planned scope of their audit plan.
13. Review the adequacy of the Company's systems of internal control,
including computerized information system controls and security.
A-2
<PAGE>
14. Obtain from the outside auditors and internal auditors their
recommendations regarding internal controls and other matters relating to the
accounting procedures and the books and records of the Company and its
subsidiaries and review the correction of controls deemed to be deficient.
15. Review filings with the SEC and other published documents containing
the company's financial statements and consider whether the information
contained in these documents is consistent with the information contained in
the financial statements.
16. Review policies and procedures with respect to officers' expense
accounts and perquisites, including their use of corporate assets, and
consider the results of any review of these areas by the internal auditor or
the outside auditor.
17. Review with the director of internal auditing and the outside auditor
the results of their review of the company's monitoring compliance with the
company's code of conduct.
18. Review legal and regulatory matters that may have a material impact on
the financial statements, related company compliance policies, and programs
and reports received from regulators.
19. Report committee actions to the board of directors with such
recommendations as the committee may deem appropriate.
20. Maintain minutes or other records of meetings and activities of the
Audit Committee.
21. The committee will perform such other functions as assigned by law,
the company's charter or bylaws, or the board of directors.
Adopted by the Audit Committee of the Board of Directors of Burlington
Industries, Inc.
December 8, 1999
As amended by the Board of Directors, April 26, 2000
A-3
<PAGE>
[GRAPHIC]
Burlington Industries, Inc.
<TABLE>
<S> <C>
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VOTE BY TELEPHONE OR INTERNET
QUICK * * * EASY * * * IMMEDIATE
----------------------------------------------------
Your telephone or Internet vote authorizes the named proxies to vote your shares in the same manner as if you marked, signed and
returned your proxy card.
VOTE BY PHONE: You will be asked to enter a CONTROL NUMBER located in the box.
------------------------------------------------------------------------------------------------------------------------------------
OPTION A: To vote as the Board of Directors recommends on ALL proposals: Press 1
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OPTION B: If you choose to vote on each item separately, press 0. You will hear these instructions:
------------------------------------------------------------------------------------------------------------------------------------
Item 1: To vote FOR ALL nominees, press 1; to WITHHOLD FOR ALL nominees, press 9
To WITHHOLD FOR AN INDIVIDUAL nominee, Press 0 and listen to the instructions
Item 3: To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press 0. The instructions are the same for all
remaining items to be voted.
When asked, you must confirm your vote by pressing 1.
VOTE BY INTERNET: THE WEB ADDRESS IS WWW.PROXYVOTING.COM/BURLINGTON
IF YOU VOTE BY PHONE OR INTERNET - DO NOT MAIL THE PROXY CARD
THANK YOU FOR VOTING
----------------------------------------------
CALL * * TOLL FREE * * ON A TOUCH TONE TELEPHONE
1-800-659-8688 - ANYTIME ----------------------------------------------
There is NO CHARGE to you for this call CONTROL NUMBER FOR
TELEPHONIC/INTERNET VOTING
</TABLE>
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The Board of Directors recommends a vote FOR proposals 1 and 2.
1. Election of Directors
Nominees: 01 John G. Medin, Jr., 02 Nelson Schwab III and 03 Theresa M.
Stone
<TABLE>
<S> <C> <C> <C> <C> <C>
[ ] FOR all nominees [ ] Withhold authority [ ] For, except withhold vote from the
to vote for all nominees following nominee(s)______________
</TABLE>
2. Approval of the selection of Ernst & Young LLP as independent public
accountants.
<TABLE>
<S> <C> <C> <C> <C> <C>
[ ] FOR [ ] AGAINST [ ] ABSTAIN
</TABLE>
I plan to attend the Annual Meeting of Stockholders on February 1, 2001.
YES [ ] NO [ ]
I want to access Burlington's Annual Report and Proxy Statement electronically
in the future and do not want to receive paper copies of these documents in the
mail. [ ] YES [ ] NO
(Signature)_____________________
(Signature)_____________________
Date:___________________________
IMPORTANT: Please sign exactly
as name appears hereon and date
proxy in the blank space
provided above. For joint
accounts, each joint owner must
sign. When signing as attorney,
executor, administrator,
trustee or guardian, please
give your full title as such.
If signing for a corporation,
indicate your capacity.
<PAGE>
YOUR VOTE IS IMPORTANT!
You can vote in one of three ways:
1. Call toll-free 1-800-659-8688 on a Touch-Tone telephone and follow the
instructions on the reverse side. There is NO CHARGE to you for this call.
or
2. Vote by Internet at our Internet Address: WWW.PROXYVOTING.COM/BURLINGTON
or
3. Mark, sign and date your proxy card and return it promptly in the enclosed
envelope.
PLEASE VOTE
-------------------------------------------------------------------------------
[GRAPHIC]
Burlington Industries, Inc.
Proxy for Annual Meeting of Stockholders
February 1, 2001
The undersigned hereby (a) appoints Randall A. Hanson and Robert A. Wicker, and
each of them, proxies with full power of substitution, to vote the stock the
undersigned is entitled to vote at the 2001 Annual Meeting of Stockholders of
Burlington Industries, Inc. to be held at the offices of the Company, 3330
West Friendly Avenue, Greensboro, North Carolina, on February 1, 2001, and at
any adjournment thereof, with all the powers the undersigned would possess if
personally present, as specified on the reverse side of this card on proposals
1 and 2, and in their discretion upon any other matters that may properly come
before the meeting and any adjournment thereof and (b) directs the Trustee of
the Burlington Industries, Inc. Employee's 401(k) Savings Plan (the "401(k)
Plan") to vote all of the shares allocated to the undersigned's 401(k) Plan
account at such 2001 Annual Meeting of Stockholders, and at any adjournment
thereof, as specified on the reverse side of this card on proposals 1 and 2,
and in the Trustee's discretion upon any other matters that may properly come
before the meeting and any adjournment thereof. If the Trustee does not receive
the undersigned's voting instructions by 5:00 p.m. EST on January 29, 2001, the
Trustee will vote the shares allocated to the undersigned's 401(k) Plan account
in proportion to those shares held in other accounts in the 401(k) Plan for
which voting instructions have been received by the Trustee.
This Proxy is solicited on behalf of the Board of Directors. This Proxy will be
voted as provided on the reverse side. If not otherwise specified, this Proxy
will be voted FOR each Director nominee and FOR item 2.
If you are not voting by telephone or the internet, please vote, sign and date
this Proxy on the reverse side and return it in the enclosed envelope. Thank
you for your prompt response.
