<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>
DYERSBURG CORPORATION
- --------------------------------------------------------------------------------
(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
DYERSBURG CORPORATION
1315 PHILLIPS STREET
DYERSBURG, TENNESSEE 38024
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 22, 1997
As a shareholder of Dyersburg Corporation (the "Company"), you are
hereby given notice of and invited to attend in person or by proxy the Annual
Meeting of Shareholders of the Company to be held at The Millennium Hotel, 145
West 44th Street, New York, New York 10036 on Wednesday, January 22, 1997, at
9:00 a.m. E.S.T. for the following purposes:
1. To elect three Class II directors for three-year terms and
until their successors are duly elected and qualified;
2. To ratify the appointment of Ernst & Young LLP as the
independent accountants of the Company; and
3. To transact such other business as may properly come before
the meeting or any adjournment thereof.
Only shareholders of record of Common Stock of the Company at the
close of business on December 3, 1996 are entitled to notice of and to vote at
the meeting.
Whether or not you expect to attend the meeting, management desires to
have the maximum representation at the meeting and respectfully requests that
you date, execute, and mail promptly the enclosed proxy in the enclosed stamped
envelope, which requires no postage if mailed in the United States. A proxy
may be revoked by a shareholder any time prior to its use as specified in the
enclosed proxy statement.
BY ORDER OF THE BOARD OF DIRECTORS,
/s/ William S. Shropshire, Jr.
WILLIAM S. SHROPSHIRE, JR.
SECRETARY
Dyersburg, Tennessee
December 16, 1996
<PAGE> 3
DYERSBURG CORPORATION
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 22, 1997
To Our Shareholders:
This Proxy Statement is furnished to shareholders of Dyersburg
Corporation (the "Company") in connection with the solicitation of proxies by
the Board of Directors of the Company to be voted at the Annual Meeting of
Shareholders (the "Annual Meeting") to be held at the date, time, and place and
for the purposes set forth in the accompanying Notice of Annual Meeting of
Shareholders, or at any adjournment or adjournments thereof. The approximate
date on which this Proxy Statement and the enclosed proxy are first being sent
to shareholders is December 16, 1996. The principal executive offices of the
Company are located at 1315 Phillips Street, Dyersburg, Tennessee 38024.
The record of shareholders entitled to vote at the Annual Meeting was
taken at the close of business on December 3, 1996. On such date, 13,127,508
shares of Common Stock, $.01 par value per share (the "Common Stock"), having
one vote each were outstanding.
Shares represented by valid proxies will be voted in accordance with
instructions contained therein, or, in the absence of such instructions, in
accordance with the Board of Directors' recommendations. Any shareholder of
the Company has the unconditional right to revoke his or her proxy at any time
prior to the voting thereof by any action inconsistent with the proxy,
including notifying the Secretary of the Company in writing, executing a
subsequent proxy, or personally appearing at the Annual Meeting and casting a
contrary vote. No such revocation will be effective, however, unless and until
notice of such revocation has been received by the Company at or prior to the
Annual Meeting.
The cost of soliciting proxies in the accompanying form will be borne
by the Company. In addition to the use of mail, officers of the Company may
solicit proxies by telephone or telecopy. Upon request, the Company will
reimburse brokers, dealers, banks, and trustees, or their nominees, for
reasonable expenses incurred by them in forwarding proxy material to beneficial
owners of the Common Stock.
PROPOSAL ONE - ELECTION OF CLASS II DIRECTORS
The Board of Directors of the Company is divided into three classes
(Class I, Class II, and Class III). At each annual meeting of shareholders,
directors constituting one class are elected for a three-year term. The
Amended and Restated Charter of the Company provides that each class shall
consist, as nearly as may be possible, of one-third of the total number of
directors constituting the entire Board of Directors. The current Board of
Directors is comprised of ten members, three of whom will be elected at the
Annual Meeting. The Board of Directors of the Company has nominated and
recommends to the shareholders L.R. Jalenak, Jr., T. Eugene McBride, and
Patricia Hilsberg (who was appointed to fill a vacancy on the Board of
Directors on July 24, 1996), each of whom is an incumbent Class II director,
for election as Class II directors to serve until the annual meeting of
shareholders in 2000 and until such time as their respective successors are
duly elected and qualified. The election of directors requires the vote of a
plurality of the Common Stock.
If any of the nominees should become unable to accept election, the
persons named in the proxy may vote for such other person or persons as may be
designated by the Board of Directors. Management has no reason to believe that
any of the nominees named above will be unable to serve. Certain information
with respect to the nominees for election as Class II directors and with
respect to Class I and Class III directors (who are not nominees for election
at the Annual Meeting) is set forth on the following pages.
1
<PAGE> 4
<TABLE>
<CAPTION>
Name Age Principal Occupation/Directorships Director Since
---- --- ---------------------------------- --------------
<S> <C> <C> <C>
DIRECTOR NOMINEES
- -----------------
Class II Directors
L.R. Jalenak, Jr. 66 Mr. Jalenak retired in December 1993 from the position of 1992
Chairman of the Board of Cleo Inc., a Gibson Greetings Company
manufacturing giftwrap, greeting cards, and related products, a
position he had held since June 1990. For over ten years prior
to June 1990, Mr. Jalenak was President and Chief Executive
Officer of Cleo Inc. Mr. Jalenak is also a director of Perrigo
Company and Lufkin Industries, and is an independent trustee
and vice-chairman of First Funds, a family of mutual funds
managed by First Tennessee Bank, Memphis, Tennessee.
T. Eugene McBride 53 Mr. McBride is Chairman of the Board, President, and Chief 1989
Executive Officer of the Company. He joined the Company in
September 1988 as Executive Vice President. Mr. McBride was
named President and Chief Operating Officer of the Company in
January 1989, Chief Executive Officer in September 1990, and
Chairman of the Board in July 1995.
Patricia Hilsberg 43 Ms. Hilsberg has been the Executive Vice President - 1996
Merchandising of Bernard Chaus since June 1995. Ms. Hilsberg
had been the Executive Vice President - Merchandising of Evan
Picone from November 1991 through May 1993.
CONTINUING DIRECTORS
- --------------------
Class I Directors
(Terms Expire 1999)
John D. Howard 44 Mr. Howard has been the Chief Executive Officer of Gryphon 1986
Capital Partners Corporation, a merchant banking firm ("Gryphon
Capital"), since July 1996. Previously, Mr. Howard was the Co-
Chief Executive Officer of Vestar Capital Partners, Inc., a
merchant banking firm ("Vestar Capital"), from August 1993.
Mr. Howard had been Managing Partner of Vestar Capital from
March 1990 to August 1993. Mr. Howard also serves as a director
of Celestial Seasonings, Inc., Access Beyond, Inc., Clark-
Schwebel Inc. and National Realty Trust.
Julius Koppelman 80 Mr. Koppelman has been Chairman of Harding Service, LLC and 1995
President and Chairman of the Board of its predecessor, Harding
Service Corporation, a management consulting firm ("Harding
Service"), since 1985. Mr. Koppelman is also a director of
Princess House, Inc. and Artegraft Inc.
Julius Lasnick 67 Mr. Lasnick, now retired, was the President-Manufacturing of 1992
Springs Industries, Inc., a textile company ("Springs
Industries"), from 1991 until April 1993. From 1986 until
April 1993 he also served as Executive Vice President and a
director of Springs Industries. Mr. Lasnick is also a director
of National Spinning Co., Inc. and Sandlapper Fabrics, Inc.
Class III Directors
(Terms Expire 1998)
Marvin B. Crow 64 Mr. Crow has been President of KBO Enterprises, the predominant 1990
business of which is operating "TCBY" frozen yogurt stores,
since April 1988. Prior to that he was President of J. P.
Stevens & Co., Inc., a textile company. Mr. Crow is also a
director of National Spinning Co., Inc., Ameritex Yarn
Corporation and The Bibb Company.
</TABLE>
2
<PAGE> 5
<TABLE>
<S> <C> <C> <C>
James E. Herring 51 Mr. Herring is the President of IQUE, Inc., a manufacturer of 1994
finished garments and indirect wholly owned subsidiary of the
Company ("IQUE"). Mr. Herring served as the President and
Chief Executive Officer of United Knitting, Inc., a
manufacturer of stretch fabrics and indirect wholly owned
subsidiary of the Company ("United Knitting") from 1994 to
1996. Mr. Herring served as Chairman of the Board and Chief
Executive Officer of United Knitting from 1991 until its
acquisition by the Company in January 1994.
Daniel W. Miller 46 Mr. Miller has been the Managing Director of Vestar Resources, 1990
Inc., a management consulting firm and affiliate of Vestar
Capital since September 1993. Mr. Miller had been President of
Harding Service, from January 1992 to September 1993 and a
Senior Vice President of Harding Service until December 31,
1995. Mr. Miller is also a director of Anvil Knitwear, Inc.
and Russell-Stanley Corporation.
Jerome M. Wiggins 56 Mr. Wiggins is President - Operations of the Company. Mr. 1992
Wiggins joined the Company in August 1989 as Vice President,
Chief Financial Officer, Treasurer, and Secretary and served in
those capacities until he was named President - Operations in
December 1995.
</TABLE>
The Board of Directors holds regular quarterly meetings and meets on
other occasions when required by special circumstances. Certain directors also
devote their time and attention to the Board's principal standing committees.
The committees, their primary functions, and memberships are as follows:
Executive Committee -- This committee is authorized generally to act
on behalf of the Board of Directors between scheduled meetings of the
Board, subject to certain limitations established by the Board and
applicable corporate law. The Executive Committee is also given
specific authorization by the Board, from time to time, with respect
to certain matters. Members of the Executive Committee are T. Eugene
McBride, Marvin B. Crow, Julius Koppelman and Julius Lasnick.
Audit Committee -- This committee makes recommendations to the Board
of Directors with respect to the Company's financial statements and
the appointment of independent auditors, reviews significant audit and
accounting policies and practices, meets with the Company's
independent public accountants concerning, among other things, the
scope of audits and reports, and reviews the performance of the
overall accounting and financial controls of the Company. Members of
the Audit Committee are Marvin B. Crow, L.R. Jalenak, Jr. and Daniel
W. Miller.
Compensation Committee -- This committee has the responsibility for
reviewing and approving the salaries, bonuses, and other compensation
and benefits of executive officers, reviewing and advising management
regarding benefits and other terms and conditions of compensation of
management, and administering the Company's 1992 Stock Incentive Plan
(the "1992 Stock Plan") and the Nonqualified Stock Option Plan for
Employees of Acquired Companies (the "Stock Option Plan"). Members of
the Compensation Committee are Julius Koppelman, L.R. Jalenak, Jr. and
Julius Lasnick. See "Compensation Committee Report on Executive
Compensation."
Nominating Committee -- This committee is responsible for reviewing
the size and composition of the Board and the qualifications of
possible candidates for the Board and making recommendations
respecting nominees to be proposed to shareholders for election at
each Annual Meeting. In accordance with the Company's Bylaws,
nominations for election to the Board of Directors may be made by the
Board of Directors, a nominating committee appointed by the Board of
Directors, or by any shareholder entitled to vote for the election of
directors. Nominations made by shareholders must be made by written
notice (setting forth the information required by the Company's
Bylaws)
3
<PAGE> 6
received by the Secretary of the Company at least 120 days in advance
of an annual meeting or within 10 days of the date on which notice of
a special meeting for the election of directors is first given to
shareholders. Members of the Nominating Committee are John D. Howard,
L.R. Jalenak, Jr., Julius Koppelman and Julius Lasnick.
Mergers and Acquisitions Committee. The Board of Directors has
recently established a mergers and acquisitions committee, the
responsibilities of which will be to explore opportunities for growth
through acquisitions. Members of the Mergers and Acquisitions
Committee are T. Eugene McBride, John D. Howard, L.R. Jalenak, Jr.,
Julius Koppelman and Julius Lasnick.
The Board of Directors held 4 meetings during the fiscal year ended
September 28, 1996 ("fiscal 1996"). The Executive Committee held 1 meeting
during fiscal 1996, the Audit Committee held 1 meeting during fiscal 1996, the
Compensation Committee held 7 meetings during fiscal 1996, the Mergers and
Acquisitions Committee held 2 meetings during fiscal 1996 and the Nominating
Committee held 2 meetings during fiscal 1996. Each of the directors attended at
least 75% of the meetings of the Board of Directors and the committees on which
such director served.
4
<PAGE> 7
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
As of December 3, 1996, there were 13,127,508 shares of Common Stock
outstanding and entitled to vote at the Annual Meeting. Each share of Common
Stock is entitled to one vote on each of the matters to be voted on at the
Annual Meeting. The following table sets forth, as of December 3, 1996, the
beneficial ownership of each current director (including the three nominees for
director), each of the executive officers named in the Summary Compensation
Table beginning on page 6 hereof (the "Named Executive Officers"), the
executive officers and directors as a group, and each shareholder known to
management of the Company to own beneficially more than 5% of the outstanding
Common Stock. Unless otherwise indicated, the Company believes that the
beneficial owner set forth in the table has sole voting and investment power.
<TABLE>
<CAPTION>
Name of Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership(1) Class
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
Stephen J. Dauer 156,412(2) 1.2
James E. Herring 304,901(3)(4) 2.3
T. Eugene McBride 208,000(3) 1.6
Janice L. Whitlock 6,792(3) *
Jerome M. Wiggins 217,733(3) 1.6
John D. Howard 269,602 2.1
Julius Lasnick 9,000(3) *
Julius Koppelman 80,000 *
L.R. Jalenak, Jr. 16,500(3) *
Frank E. Richardson(6) 654,225(5) 5.2
Marvin B. Crow 8,000(3) *
Daniel W. Miller -- --
Patricia Hilsberg 5,000(3) *
MCJ Foundation(7) 1,595,370(8) 12.2
Directors and executive officers as a group 1,535,672(9) 11.6
(17 persons)
- ------------------------------------------------------------------------------------------------------
</TABLE>
__________________________________
* Less than one percent.
(1) Pursuant to the rules of the Securities and Exchange Commission (the
"SEC"), shares of Common Stock subject to options held by directors
and executive officers of the Company that are exercisable within 60
days of the date hereof are deemed outstanding for the purpose of
computing such director's or executive officer's beneficial ownership
and the beneficial ownership of all executive officers and directors
as a group.
(2) Includes 300 shares of Common Stock owned by Mr. Dauer's spouse and
6,386 shares of Common Stock issuable upon the exercise of an option
granted pursuant to the 1992 Stock Plan.
(3) Includes shares of Common Stock issuable upon the exercise of options
granted pursuant to the 1992 Stock Plan held by the individual in the
following amount: Ms. Whitlock, 6,792; Mr. McBride, 17,499; Mr.
Wiggins, 11,895; Mr. Herring, 51,599; Mr. Lasnick, 7,000; Mr. Jalenak,
7,000; Mr. Crow, 7,000; and Ms. Hilsberg, 5,000.
(4) Includes 9,000 shares of Common Stock owned by Mr. Herring's spouse.
(5) Includes 23,493 shares of Common Stock owned by The Richardson
Foundation, a charitable foundation, of which Mr. Richardson is
trustee.
(6) Address: c/o Vestar Capital Partners, 245 Park Avenue, 41st Floor,
New York, New York 10167.
(7) Address: 330 South Street, P.O. Box 1975, Morristown, New Jersey
07962-1975.
(8) Based upon Amendment No. 2 to Schedule 13D filed with the SEC on
November 11, 1996, by Kurt T. Borowsky, David J. Roy, The MCJ
Foundation ("MCJ"), Van Beuren Management Trust ("VBM") and The PICK
Foundation, Inc. ("PICK"), as joint filers. As the Designated
Trustees of MCJ, Messrs. Borowsky and Roy have the sole power to vote
and dispose of 1,100,000 shares owned by MCJ; as the sole trustees of
VBM, Messrs. Borowsky and Roy have the sole power to vote and dispose
of the 394,670 shares owned by VBM; and Mr.Borowsky shares voting and
dispositive power with his spouse and children over 100,700 shares
owned by PICK. Does not include 177, 263 shares owned by Mr. Borowsky
individually.
(9) Includes 149,244 shares of Common Stock issuable upon the exercise of
options granted pursuant to the 1992 Stock Plan.
5
<PAGE> 8
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
Unless the context otherwise requires, the term "Company" as used in
connection with executive compensation refers to the Company and its wholly
owned operating subsidiaries, Dyersburg Fabrics Inc. ("Dyersburg Fabrics") ,
IQUE and United Knitting. As a general rule, Dyersburg Fabrics pays directly
the cash compensation to employees of the Company other than employees of IQUE
and United Knitting, who are paid directly by their respective employers. The
following table provides information as to annual, long-term, and other
compensation paid by the Company to the Company's Chief Executive Officer and
to each of the other Named Executive Officers of the Company for services
rendered in all capacities to the Company and its subsidiaries.
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation Awards
--------------------- --------------------
All Other
Name and Principal Positions(1) Fiscal Year Salary Bonus Options (#) Compensation(2)
- ------------------------------- ----------- -------- -------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
T. Eugene McBride, 1996 $259,386 $96,950 25,414 (3) $15,446
Chairman, President and 1995 250,008 50,000 -- 15,771
Chief Executive Officer 1994 243,756 79,832 24,000 17,513
James E. Herring, 1996 $241,329 $97,781 66,751 (3) $ 8,311
President - IQUE 1995 240,104 -- -- 9,355
1994(4) 182,365 92,142 135,000 (5) 17,956
Jerome M. Wiggins, 1996 $186,258 $65,012 16,492 (3) $12,731
President - Operations 1995 172,008 27,500 -- 13,486
1994 161,760 45,984 11,000 11,886
Janice L. Whitlock, 1996 $181,678 $61,287 34,981 (6) $14,228
President - Dyersburg 1995 165,000 -- 10,776
Marketing 1994 3,438 41,158 25,000 N/A
N/A
Stephen J. Dauer, 1996 $174,000 $52,612 9,311 (3) $13,784
Sr. Vice President - 1995 173,004 41,948 -- 14,089
Sales 1994 168,762 49,706 9,000 16,975
</TABLE>
___________________________
(1) Except for Mr. Herring, who is employed by IQUE, positions below are
with Dyersburg Fabrics. Mr. Herring was employed by United Knitting
during fiscal years 1995 and 1994.
6
<PAGE> 9
(2) Includes contributions by the Company in fiscal 1996 to the Dyersburg
Fabrics Inc. Profit Sharing Plan (the "Profit Sharing Plan"), and to
the Company's Deferred Compensation Plan and premiums paid by the
Company for term life insurance provided for the benefit of the Named
Executive Officer, all as reflected in the table below.
<TABLE>
<CAPTION>
Group Term Life
Name Profit Sharing Plan Deferred Compensation Plan Insurance Premiums
---- ------------------- -------------------------- ------------------
<S> <C> <C> <C>
T. Eugene McBride $8,710 $5,296 $1,440
James E. Herring 7,650 -- 661
Jerome M. Wiggins 8,710 3,877 144
Janice L. Whitlock 8,710 4,472 1,046
Stephen J. Dauer 8,710 4,072 1,002
</TABLE>
(3) Reflects number of options repriced in fiscal 1996. See "Report on
Repricing of Options/SARs."
(4) For services rendered beginning January 19, 1994, the date of the
acquisition of United Knitting by the Company.
(5) Options issued under the 1992 Stock Plan in connection with the
acquisition of United Knitting.
(6) Includes 16,981 options repriced in fiscal 1996. See "Report on
Repricing of Options/SARs."
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information concerning options granted
in fiscal 1996:
<TABLE>
<CAPTION>
Individual Grants
- -------------------------------------------------------------------------------------
Potential Realizable Value At
Assumed Annual Rates of Stock
Price Appreciation for Option
Percent of Term
Number of Total ------------------------------
Securities Options/SARs
Underlying Granted to Exercise
Options/SARs Employees In of Base Expiration
Name Granted Fiscal Year(1) Price Date 5% 10%
- ------------------- ------------ -------------- -------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
T. Eugene McBride 11,250 (2) 2.9 $4.50 4/16/02 $31,837.79 $80.683.21
14,164 (2) 3.6 $4.50 11/3/03 40,084.49 101,581.96
James E. Herring 66,751 (2) 17.0 $4.50 1/19/04 188,907.05 478,727.56
Jerome M. Wiggins 10,000 (2) 2.5 $4.50 4/16/02 28,300.26 71,718.41
6,492 (2) 1.6 $4.50 11/3/03 18,372.53 46,559.59
Janice L. Whitlock 16,981 (2) 4.3 $4.50 9/26/04 48,056.67 121,785.03
18,000 (3) 4.6 $5.00 9/26/04 56,600.52 143,436.82
Stephen J. Dauer 4,000 (2) 1.0 $4.50 4/16/02 11,320.10 28,687.36
5,311 (2) 1.3 $4.50 11/3/03 15,030.27 38,089.65
</TABLE>
(1) Includes options initially granted and all options repriced in fiscal 1996.
See "Report on Repricing of Options/SARs."
(2) Options repriced in fiscal 1996. See "Report on Repricing of
Options/SARs."
(3) Options initially granted in fiscal 1996.
7
<PAGE> 10
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUE TABLE
No options or stock appreciation rights ("SARs") were exercised by the
Named Executive Officers during fiscal 1996 and 5 of the Named Executive
Officers held "in-the-money" options or SARs at the end of fiscal 1996. The
numbers and value of the unexercised options held by the Named Executive
Officers is set forth in the following table.
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised
Options at In-the-Money
Fiscal Year-End Options at Fiscal Year-End
---------------------------- -------------------------------
Named Executive Officer Exercisable Unexercisable Exercisable Unexercisable
----------------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
T. Eugene McBride 17,499 7,915 $19,686 $8,904
James E. Herring 51,599 15,152 58,049 17,046
Jerome M. Wiggins 11,895 4,597 13,301 5,172
Janice L. Whitlock 6,792 28,189 7,641 22,713
Stephen J. Dauer 6,386 2,925 7,184 3,290
</TABLE>
REPORT ON REPRICING OF OPTIONS/SARS
On January 15, 1996, the Compensation Committee approved the exchange of all
options then outstanding (the "existing options") pursuant to the 1992 Stock
Plan and the Stock Option Plan held by executive officers and other management
employees of the Company for a reduced number of new options. The following
table sets forth certain information concerning the exchange, which has been
the only repricing of options or SARs held by an executive officer of the
Company during the last ten completed fiscal years:
TEN YEAR OPTIONS/SAR REPRICINGS
<TABLE>
<CAPTION>
Number of Length of
Securities Market Price Original Option
Underlying of Stock at Exercise Price Term Remaining
Options/ Time of at Time of New at Date of
SARs Repriced Repricing or Repricing or Exercise Repricing or
Name Date or Amended Amendment Amendment Price Amendment
- ----------------- ------- ------------- ------------ -------------- -------- -----------------
<S> <C> <C> <C> <C> <C> <C>
T. Eugene McBride 1/24/96 22,500(1) $4.50 $9.00 $4.50 6 years 3 months
1/24/96 24,000(2) $4.50 $7.63 $4.50 7 years 9 months
James E. Herring 1/24/96 118,946(3) $4.50 $8.02 $4.50 8 years
Jerome M.Wiggins 1/24/96 20,000(4) $4.50 $9.00 $4.50 6 years 3 months
1/24/96 11,000(5) $4.50 $7.63 $4.50 7 years 9 months
Janice L. Whitlock 1/24/96 25,000(6) $4.50 $6.63 $4.50 8 years 8 months
Stephen J. Dauer 1/24/96 8,000(7) $4.50 $9.00 $4.50 6 years 3 months
1/24/96 9,000(8) $4.50 $7.63 $4.50 7 years 9 months
</TABLE>
- ----------------------
(1) 11,250 shares after repricing.
(2) 14,164 shares after repricing.
(3) 66,751 shares after repricing.
(4) 10,000 shares after repricing.
(5) 6,492 shares after repricing.
(6) 16,981 shares after repricing.
(7) 4,000 shares after repricing.
(8) 5,311 shares after repricing.
8
<PAGE> 11
The Compensation Committee believed that repricing the existing options was
in the best interests of the Company and its shareholders. In the view of the
Compensation Committee, the decline of the market price of the Company's common
stock following its initial public offering substantially impaired the
effectiveness of the existing options as incentives to management's
performance. The Compensation Committee further believed that repricing the
existing options would provide an incentive for employees of the Company to
acquire an equity interest in the Company. The Committee set the exercise price
of the new options at $4.50 per share,the closing price of the Company's stock
on the New York Stock Exchange at the time of the repricing. The Compensation
Committee further determined that the number of shares covered by the new
options should be reduced in proportion to the amount the exercise price of the
existing option exceeded the exercise price of the new option. For example,
existing options on 1000 shares with an exercise price of $9.00 per share could
be exchanged for 500 new options with the $4.50 per share exercise price. The
new options are exercisable in accordance with the vesting schedule previously
established for the existing options, expire on the expiration date of the
existing options and otherwise are identical in all material respects to the
existing options they replaced.
JULIUS KOPPELMAN, Chairman L.R. JALENAK, JR. JULIUS LASNICK
COMPENSATION OF DIRECTORS
Directors who are not employees of the Company are entitled to receive
an annual fee of $12,000, plus $1,000 for each Board of Directors meeting
attended and $500 for each committee meeting attended. Directors who are
employed by the Company receive no directors' fees. All directors are
reimbursed for their expenses incurred in attending meetings.
As of the date hereof, the 1992 Stock Plan provides for automatic
grants of non-qualified stock options to directors who have not served as an
officer or employee of the Company or any Subsidiary or Affiliate, or any
person beneficially owning five percent or more of the Common Stock of the
Company ("Outside Directors"). Options to purchase 5,000 shares of Common
Stock are automatically granted to Outside Directors upon their initial
election to the Board of Directors. In addition, options to purchase 2,000
shares of Common Stock are automatically granted to each Outside Director upon
his reelection to the Board of Directors if such director has served as such
for at least one year prior to such reelection. The exercise price of such
options is equal to the fair market value of the Common Stock on the date of
election. The term of such options is ten years and they are exercisable one
year from the date of grant.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The compensation of the Company's executive officers and key managers,
25 persons including the Named Executive Officers in fiscal 1996 (collectively
referred to in this report as "executives"), is reviewed and approved annually
by the Compensation Committee of the Board of Directors, currently comprised of
three non-employee directors. In addition to reviewing and approving
executives' salary and bonus arrangements, the Compensation Committee
establishes policies and guidelines for other benefits and administers the
awards of stock and stock options pursuant to the Company's stock plans. The
Compensation Committee is assisted in making compensation decisions by the
Company's Chief Executive Officer (referred to in this report as the "CEO") and
independent professional compensation consultants.
COMPENSATION POLICIES AND PROCEDURES APPLICABLE TO EXECUTIVES FOR FISCAL 1996
General. Compensation of the Company's executives is intended to
attract, retain, and reward persons who are essential to the corporate
enterprise. The fundamental policy of the Company's executive compensation
program is to offer competitive compensation to executives that appropriately
rewards the individual executive's contribution to corporate performance. The
objective corporate performance measurements utilized by the Compensation
Committee in fiscal 1996 for establishing executive compensation was the
Company's earnings before taxes ("EBT") which measurement the Compensation
Committee believes reflects shareholder value. Additionally, the Compensation
Committee utilizes subjective criteria for evaluating individual performance,
and relies substantially on the key managers, principally the CEO, in doing so.
The Compensation Committee focuses on three primary components of the Company's
executive compensation program, each of which is intended to reflect individual
and corporate performance: base salary compensation, annual incentive
compensation, and long-term incentive compensation.
9
<PAGE> 12
The compensation of James E. Herring is determined, in part, in
accordance with an employment agreement between Mr. Herring and United Knitting
that was negotiated on an arm's length basis between representatives of the
Company and Mr. Herring and executed in January 1994 when the Company acquired
United Knitting. The employment agreement provides for an annual base salary
of $245,000 per year for three years, an award of options to purchase 135,000
shares of Common Stock (see "Report on Repricing of Options/SARs"), and
participation in a bonus plan dependent primarily upon United Knitting's
earnings.
Base Salary Compensation. Executives' base salaries are determined
primarily by reference to compensation packages for similarly situated
executives of companies of similar size or in comparable lines of business,
with whom the Company expects to compete for executive talent. The
Compensation Committee also assesses subjective qualitative factors to discern
a particular executive's relative "value" to the corporate enterprise in
establishing base salaries. At the initial Compensation Committee meeting each
fiscal year, the Company's CEO proposes to the Compensation Committee a
compensation package for each of the Company's executives, excluding the CEO.
The Compensation Committee reviews the CEO's recommendations and determines the
appropriate compensation packages for each of the executives for the
forthcoming fiscal year. It has been the objective of the Compensation
Committee, based on formal surveys conducted by the Company's compensation
consultants and informal surveys of other publicly held companies in the
textile industry or of similar market capitalization, that base salaries for
the Company's executives be targeted at the 50th percentile of total cash
compensation for comparable positions. The Compensation Committee believes
that the Company's principal competitors for executive talent are not
necessarily the same companies that would be included in a peer group compiled
for purposes of measuring shareholder returns. Consequently, the comparable
companies examined for compensation purposes are not the same as the companies
comprising the Media General Financial Services Industry Group 56 -- Textile
Manufacturing Index in the Performance Graph included in this Proxy Statement.
Annual Incentive Compensation. At the initial Compensation Committee
meeting, the Compensation Committee also establishes the amounts available for
cash bonuses (in the aggregate and per executive) based on the achievement of
Company performance objectives approved by the full Board of Directors. The
policy of the Compensation Committee for fiscal 1996 was to provide for
potential bonuses based on corporate operating performance in amounts ranging
from 15% to 50% of the executives' base salaries. The bonus pool for Dyersburg
Fabrics employees was weighted towards Dyersburg Fabrics' EBT. The bonus pool
for United Knitting employees was weighted towards United Knitting's EBT.
Based on the Company's 1996 EBT, an aggregate of approximately 73% of the bonus
pool was distributed to the executives as incentive compensation. Executives
would not have been entitled to any incentive compensation if EBT was less than
75% of targeted amounts. The objective corporate performance portion (75%) of
the bonus pool was divided among the individual executives based upon sharing
ratios established at the beginning of the fiscal year. The sharing ratios
were determined on the basis of base salaries as well as the subjective,
informal evaluation by the CEO of an individual executive's performance and his
or her ability to affect the Company's operating performance.
Long-Term Incentive Compensation. It is the Compensation Committee's
philosophy that significant stock ownership by management creates a powerful
incentive for executives to build long-term shareholder value. Accordingly,
the Compensation Committee believes that an integral component of executive
compensation is the award of equity-based compensation, which is intended to
align executives' long-term interests with those of the Company's shareholders.
Awards of stock options to executives have historically been at then-current
market prices and, in keeping with the Company's objective to link pay with
corporate performance, generally vest over a period of one to five years
depending on the percentage increase in the Company's pre-tax earnings over the
prior fiscal year. In general, the amount of shares subject to option awards
are consistent with the relative pay levels of the executives. On January 15,
1996, the Compensation Committee determined that because substantially all of
the existing options outstanding pursuant to the 1992 Stock Plan had exercise
prices well in excess of the market price of the Common Stock, the
effectiveness of such options as incentives to management performance had been
substantially impaired. Accordingly, the Compensation Committee approved the
exchange of the existing options for new options on specified terms. See
"Report on Repricing of Options/SARs."
10
<PAGE> 13
CEO MCBRIDE'S COMPENSATION
In reviewing and approving Mr. McBride's fiscal 1996 compensation, the
Compensation Committee considered the same criteria detailed herein with
respect to executives in general. Mr. McBride's base salary for fiscal 1996
was established at $259,375, a 2.6% increase over his fiscal 1995 base salary.
Mr. McBride's incentive bonus for fiscal 1996 was $96,950, or 37.4% of his base
salary. Had the Company achieved 100% of its targeted EBT in fiscal 1996, Mr.
McBride would have been eligible for a bonus equivalent to 50% of his base
salary, which is a higher percentage than that available to other executives.
This is consistent with the Compensation Committee's philosophy that, because
the Chief Executive Officer is in the greatest position to affect Company
operating performance, he should have the largest portion of his compensation
"at risk."
COMPLIANCE WITH INTERNAL REVENUE CODE 162(M)
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), enacted as part of the Omnibus Budget Reconciliation Act of 1993,
generally disallows a tax deduction to public companies for compensation over
$1,000,000 paid to Named Executive Officers. Under the regulations, certain
"performance based" compensation is not subject to the deduction limit. The
1992 Stock Plan contains certain per-participant limitations on grants pursuant
to the 1992 Stock Plan so that awards of stock options pursuant to such plan
should be considered "performance based." Because the Company does not believe
it is otherwise in any immediate danger of losing any deductions, no definitive
determinations have been made by the Compensation Committee as to whether it
will cause the $1,000,000 limit to be exceeded in the future.
JULIUS KOPPELMAN, Chairman L.R. JALENAK, JR. JULIUS LASNICK
11
<PAGE> 14
PERFORMANCE GRAPH
The following graph compares the cumulative returns of $100 invested
on May 12, 1992 (the date of the Company's initial public offering) in (a) the
Company, (b) the Media General New York Stock Exchange Index ("NYSE"), and (c)
the Media General Financial Services Industry Group 56 - Textile Manufacturing
Index ("Textile Manufacturing"), assuming reinvestment of all dividends.
[GRAPH]
<TABLE>
<CAPTION>
05/92 09/92 09/93 09/94 09/95 09/96
<S> <C> <C> <C> <C> <C> <C>
Dyersburg Corporation 100 70 75 71 52 63
Media General NYSE Index 100 100 115 121 146 173
Media General Textile Mfg. 100 97 99 96 93 107
</TABLE>
12
<PAGE> 15
PROPOSAL TWO - RATIFICATION OF APPOINTMENT OF ACCOUNTANTS
Upon recommendation of the Audit Committee, the Board of Directors has
appointed Ernst & Young LLP, independent public accountants, to audit the
accounts of the Company for fiscal 1997 and recommends that shareholders vote
to ratify such selection. A representative of Ernst & Young LLP is expected to
be present at the Annual Meeting, will have an opportunity to make a statement
if he or she so desires, and is expected to be available to respond to
appropriate questions. THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS
VOTE "FOR" PROPOSAL TWO.
PROPOSALS OF SHAREHOLDERS
A proper proposal submitted by a shareholder in accordance with
applicable rules and regulations for presentation at the Company's Annual
Meeting of Shareholders in 1998 and received at the Company's executive offices
no later than August 19, 1997, will be included in the Company's Proxy
Statement and form of proxy relating to such Annual Meeting.
OTHER MATTERS
The Board of Directors is not aware of any matter to be presented for
action at the meeting other than the matters set forth herein. Should any
other matter requiring a vote of shareholders arise, the proxies in the
enclosed form confer upon the person or persons entitled to vote the shares
represented by such proxies discretionary authority to vote the same in
accordance with their best judgment in the interest of the Company.
METHOD OF COUNTING VOTES
Unless a contrary choice is indicated, all duly executed proxies will
be voted in accordance with the instructions set forth on the back side of the
proxy card. Abstentions and broker non-votes will be counted as present for
purposes of determining a quorum. Abstentions and broker non-votes are treated
as votes against the proposals presented to the shareholders other than the
election of directors and the verification of the appointment of the Company's
accountants. Because directors are elected by a plurality of the votes cast,
abstentions are not considered in the election. A broker non-vote occurs when
a broker holding shares registered in street name is permitted to vote, in the
broker's discretion, on routine matters without receiving instructions from the
client, but is not permitted to vote without instructions on non-routine
matters, and the broker returns a proxy card with no vote (the "non-vote") on
the non-routine matter.
FINANCIAL STATEMENTS AVAILABLE
A copy of the Company's 1996 Annual Report containing audited
financial statements accompanies this Proxy Statement. The Annual Report does
not constitute a part of the proxy solicitation material.
UPON WRITTEN REQUEST TO WILLIAM S. SHROPSHIRE, JR., SECRETARY,
DYERSBURG CORPORATION, 1315 PHILLIPS STREET, DYERSBURG, TENNESSEE 38024, THE
COMPANY WILL PROVIDE, WITHOUT CHARGE, COPIES OF THE COMPANY'S ANNUAL REPORT TO
THE SEC ON FORM 10-K.
BY ORDER OF THE BOARD OF DIRECTORS,
/s/ William S. Shropshire, Jr.
WILLIAM S. SHROPSHIRE, JR.
SECRETARY
December 16, 1996
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<PAGE> 16
APPENDIX A
PROXY
DYERSBURG CORPORATION
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF
SHAREHOLDERS OF DYERSBURG CORPORATION (THE "COMPANY") TO BE HELD JANUARY 22,
1997.
The undersigned hereby appoints T. Eugene McBride and William S.
Shropshire, Jr., and each of them, as proxies, with full power of substitution,
to vote all shares of the undersigned as shown hereon on this proxy at the
Annual Meeting of Shareholders of the Company to be held at The Millennium
Hotel, 145 West 44th Street, New York, New York 10036, on Wednesday, January 22,
1997, at 9:00 a.m. E.S.T. and any adjournment thereof.
Your shares will be voted in accordance with your instructions. IF NO
CHOICE IS SPECIFIED, SHARES WILL BE VOTED FOR THE ELECTION OF ALL THREE NOMINEES
AND FOR RATIFICATION OF THE APPOINTMENT OF ACCOUNTANTS.
- --------------------------------------------------------------------------------
IF YOU HAVE CHANGED YOUR ADDRESS, PLEASE PRINT YOUR NEW ADDRESS ON THIS LINE.
(PLEASE DATE AND SIGN THIS PROXY ON THE REVERSE SIDE.)
(1) ELECTION OF DIRECTORS:
<TABLE>
<S> <C>
FOR all nominees listed WITHHOLD AUTHORITY
to the right (except as to vote for all nominees
marked to the contrary) listed to the right
[ ] [ ]
</TABLE>
(2) Ratification of Appointment of Accountants:
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
Class II director nominees: L.R. Jalenak, Jr., T. Eugene McBride and Patricia
Hilsberg
(INSTRUCTION: To withhold authority to vote for any individual nominee, print
that nominee's name in the space provided below.)
- ---------------------------------------------------------
(3) In their discretion on any other matter that may properly come before said
meeting or any adjournment thereof.
PLEASE SIGN HERE AND RETURN PROMPTLY
- ---------------------------------------------------------
- ---------------------------------------------------------
Date: , 199
------------------------------------ --
PLEASE SIGN EXACTLY AS YOUR NAME APPEARS ON YOUR STOCK CERTIFICATE. IF
REGISTERED IN THE NAMES OF TWO OR MORE PERSONS, EACH SHOULD SIGN. EXECUTORS,
ADMINISTRATORS, TRUSTEES, GUARDIANS, ATTORNEYS, AND CORPORATE OFFICERS SHOULD
SHOW THEIR FULL TITLES.
