<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
15720 JOHN J. DELANEY DRIVE, SUITE 445
CHARLOTTE, NORTH CAROLINA 28277
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 26, 2000
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 Ballantyne Country Club, 11120
Ballantyne Crossing, Charlotte, North Carolina 28277 on Wednesday, January 26,
2000, at 9:00 a.m. local time for the following purposes:
1. To elect three Class II directors to serve for a term of three
years and until their successors are duly elected and qualified and
to elect two Class III directors to serve for a term of one year
and until their successors are duly elected and qualified;
2. To amend the Company's 1992 Stock Incentive Plan (the "1992 Stock
Plan") to increase the number of shares of the Company's common
stock, par value $0.01 per share (the "Common Stock"), available
for grant under the 1992 Stock Plan by 1,000,000 shares; 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 at the close of business on
December 13, 1999 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
Charlotte, North Carolina
December 13, 1999
<PAGE> 3
DYERSBURG CORPORATION
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 26, 2000
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 (the "Board of Directors") 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 17, 1999. The principal executive offices
of the Company are located at 15720 John J. Delaney Drive, Suite 445, Charlotte,
North Carolina 28277.
The record of shareholders entitled to vote at the Annual Meeting was
taken at the close of business on December 13, 1999 (the "Record Date"). On such
date, 13,347,231 shares of the Company's common stock, par value $0.01 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 DIRECTORS
The Board of Directors 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. Directors who were elected to fill
a vacancy in a class whose term expires in a later year are elected for a term
equal to the remaining term for their respective class. 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. Five members of the Board of Directors will be elected at the Annual
Meeting.
The Board of Directors has nominated and recommends to the shareholders,
L.R. Jalenak, Jr., T. Eugene McBride and John D. Howard for election as Class II
directors to serve until the annual meeting of shareholders in 2003 and until
such time as their respective successors are duly elected and qualified. Messrs.
Jalenak, McBride and Howard are currently Class II directors of the Company
having been previously elected by the shareholders. The Board of Directors has
nominated and recommends M.L. Fontenot and James P. Casey for election as Class
III directors to serve until the annual meeting of shareholders in 2001 and
until such time as their respective successors are duly elected and qualified.
Both Mr. Fontenot and
1
<PAGE> 4
Mr. Casey are currently serving as directors of the Company having been
previously elected by the Board of Directors to fill vacancies on the Board of
Directors.
Each of Messrs. Manohar, Shankar and Ganot were appointed to the Board of
Directors pursuant to an Agreement, dated as of April 8, 1997 (the "Texmaco
Agreement"), among Polysindo Hong Kong Limited ("Texmaco"), PT. Texmaco Jaya, an
Indonesian corporation and affiliate of Texmaco, and the Company, entered into
in connection with the acquisition by Texmaco of 3,000,000 shares of the
Company's Common Stock from certain shareholders of the Company. Pursuant to the
Texmaco Agreement, the Company agreed to fill three vacancies on the Board of
Directors with designees of Texmaco reasonably acceptable to the Board of
Directors. The members of the Board of Directors not affiliated with Texmaco
(the "Disinterested Directors") are obligated pursuant to the Texmaco Agreement
to recommend each of the Texmaco designees for election at each annual meeting
of the Company's shareholders at which each such designee shall stand for
election. At such time as Texmaco and its affiliates own less than 20% but at
least 15% of the Company's outstanding Common Stock, Texmaco is only entitled to
two designees. Between 15% and 10%, Texmaco is only entitled to one designee and
at less than 10%, Texmaco is not entitled to any designees. Pursuant to the
Texmaco Agreement, Texmaco has agreed to vote its shares of Common Stock in
accordance with the recommendation of the Disinterested Directors with respect
to the election of directors.
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 directors who are nominees for election at the Annual Meeting
and with respect to directors who are not nominees for election at the Annual
Meeting is set forth on the following pages.
The directors shall be elected by a plurality of the votes cast in the
election by the holders of the Common Stock represented and entitled to vote at
the Annual Meeting. The Board of Directors recommends that the shareholders vote
FOR all of the director nominees.
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL OCCUPATION/DIRECTORSHIPS DIRECTOR SINCE
---- --- ---------------------------------- --------------
<S> <C> <C> <C>
DIRECTOR NOMINEES
Class II Directors
(Terms Expire 2003)
L.R. Jalenak, Jr. 69 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 56 Mr. McBride is Chairman of the Board and Chief Executive 1989
Officer of the Company. He joined the Company in September
1988 as Executive Vice President. Mr. McBride was named
Chief Operating Officer of the Company in January 1989,
Chief Executive Officer in September 1990, and Chairman of
the Board in July 1995. In addition, Mr. McBride served as
President of the Company from January 1989 until July 1997.
</TABLE>
2
<PAGE> 5
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL OCCUPATION/DIRECTORSHIPS DIRECTOR SINCE
---- --- ---------------------------------- --------------
<S> <C> <C> <C>
John D. Howard 47 Mr. Howard has been a Senior Managing Director of Bear 1998
Stearns & Co., a merchant banking firm, since March 1997 and
the Chief Executive Officer of Gryphon Capital Partners
Corporation, a merchant banking firm, from July 1996 through
1997. Previously, Mr. Howard was the Co-Chief Executive
Officer of Vestar Capital Partners, Inc., a merchant banking
firm, from 1990 to 1996. Mr. Howard had been a director of
the Company from 1986 through July 1997 and since January
1998. Mr. Howard also serves as a director of Celestial
Seasonings, Inc. and Safety First Inc.
M.L. Fontenot 56 Mr. Fontenot is President and Chief Operating Officer of the 1999
Company. He joined the Company in January 1999 as President
of Marketing and a director. Mr. Fontenot was named
President and Chief Operating Officer in July 1999. Prior to
joining the Company, Mr. Fontenot was President and Chief
Executive Officer of Decorative Home Accents from 1996-1998
and President and Chief Executive Officer of Perfect Fit
Industries from 1989-1996.
James P. Casey 58 Mr. Casey has been Vice President of Government Affairs of 1999
Wellman, Inc. since 1999. From 1993 to 1999, Mr. Casey was
President of Wellman, Inc.'s Fiber Division. Prior to his
tenure with Wellman, Inc., Mr. Casey was Vice President of
Marketing for Fiber Industries. Mr. Casey serves on the
Board of Directors of the Fashion Institute of Technology
and on the Board of Trustees of Philadelphia University.
CONTINUING DIRECTORS
Class III Director
(Term Expires 2001)
Ravi Shankar 36 Mr. Shankar has been a Vice President of Operations in 1997
Texmaco's Textile division and Director of Texmaco Perkasa
Engineering since 1987. Mr. Shankar was appointed to the
Board of Directors as a designee of Texmaco.
Class I Directors
(Terms Expire 2002)
P. Manohar 46 Mr. Manohar has been Group Executive Vice President/Finance 1997
of Texmaco Group since 1989. Prior to that time, he held
Finance Executive positions in various companies of the
Texmaco Group and with SRF Ltd., an Indian textile company.
Mr. Manohar was appointed to the Board of Directors as a
designee of Texmaco.
Mickey Ganot 48 Mr. Ganot has been the Director of Global Marketing of 1997
Texmaco since 1993. Prior to joining Texmaco, he served as
Corporate Vice President of Manufacturing and Operations of
Liz Claiborne. Mr. Ganot was appointed to the Board of
Directors as a designee of Texmaco.
Julius Lasnick 70 Mr. Lasnick, now retired, was the President-Manufacturing of 1992
Springs Industries, Inc., a textile company, from 1991 until
April 1993. From 1986 until April 1993 he also served as
Executive Vice President and a director of Springs
Industries, Inc. Mr. Lasnick is also a director of National
Spinning Co., Inc.
Donna M. Randall 46 Donna M. Randall, PhD., has been Interim Senior Vice Provost 1998
for Academic Affairs at The University of Memphis since
February 1999. Prior to that time, she served as Dean and
Professor of Management, Fogelman College of Business and
Economics, The University of Memphis from 1995 to 1999. Dr.
Randall serves on the Advisory Board of Enterprise National
Bank.
</TABLE>
3
<PAGE> 6
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, Mickey
Ganot, 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
auditors 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 L.R. Jalenak,
Jr., Julius Lasnick and Donna M. Randall.
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 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 of Directors and the qualifications of
possible candidates for the Board of Directors 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) 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 L.R. Jalenak, Jr. Julius Lasnick, and Donna M. Randall.
Mergers and Acquisitions Committee. -- This committee is responsible for
exploring opportunities for growth through acquisitions. Members of the
Mergers and Acquisitions Committee are John D. Howard, T. Eugene McBride,
P. Manohar, L.R. Jalenak, Jr., and Julius Lasnick.
The Board of Directors held five meetings during the fiscal year ended
October 2, 1999 ("fiscal 1999"). The Executive Committee held no meetings during
fiscal 1999, the Audit Committee held three meetings during fiscal 1999, the
Compensation Committee held two meetings during fiscal 1999, the Nominating
Committee held no meetings during fiscal 1999, the Mergers and Acquisitions
Committee held no meetings during fiscal 1999, and the Disinterested Directors
held no meetings during fiscal 1999. Each of the directors, other than P.
Manohar and Ravi Shankar, 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 13, 1999, there were 13,347,231 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 November 26, 1999 unless
otherwise noted, the beneficial ownership of each current director (including
the five 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>
Amount and Nature of Percent of
Name of Beneficial Owner Beneficial Ownership(1)(2) Class
- ------------------------------------------------------- -------------------------- ----------
<S> <C> <C>
T. Eugene McBride 279,415 2.1%
M.L. Fontenot 23,000 *
Donald L. Carswell 10,000 *
William S. Shropshire, Jr. 50,200 *
Stephen J. Dauer 114,937(3) *
Julius Lasnick 22,573 *
L.R. Jalenak, Jr. 40,073 *
John D. Howard 6,588 *
Donna M. Randall 6,231 *
James P. Casey -- *
P. Manohar --(4) *
Ravi Shankar --(4) *
Mickey Ganot --(4) *
Marimutu Sinivisan --(5) *
Texmaco 3,000,000(6) 22.2
Dimensional Fund Advisors, Inc. 798,100(7) 5.9
Directors and executive officers as a group 824,050 6.1
(19 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 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: Mr. McBride, 43,414; Mr. Fontenot, 6,000; Mr. Carswell,
6,000; Mr. Shropshire, 33,000; Mr. Dauer, 14,911; Mr. Lasnick, 9000; Mr.
Jalenak, 9,000; Mr. Howard, 5,000; Dr. Randall, 5,000; and directors and
executive officers as a group, 131,325.
(3) Includes 300 shares of Common Stock owned by Mr. Dauer's spouse.
(4) Excludes shares held by Texmaco that may be deemed to be beneficially
owned because such person is a Texmaco designee to the Company's Board of
Directors pursuant to the Texmaco Agreement.
(6) Excludes shares held by Texmaco that may be deemed to be beneficially
owned because such person is a controlling person of Texmaco.
(7) Address: Sentra Mulia Suite 1008, 10th Floor, JI. H.R. Resuna Said Kav.
X-6 No. 8, Jakarta-12540 Indonesia.
(8) Source of data is most recent Form 13F-NT quarterly filing for the
quarter ended September 30, 1999. Address: 1299 Ocean Avenue, 11th Floor,
Santa Monica, California 90401.
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 Limited Partnership, I
("Dyersburg Fabrics"), IQUE Limited Partnership, I ("IQUE"), United Knitting
Limited Partnership, I ("United Knitting"), and AIH Inc. ("Alamac"). The
following table provides information as to annual, long-term, and other
compensation paid by the Company and its subsidiaries 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
Compensation Awards
-------------------
Annual Compensation Securities
--------------------- Underlying All Other
Name and Principal Positions Fiscal Year Salary Bonus Options(#) Compensation(1)
- ---------------------------- ----------- -------- ---------- ------------------- ---------------
<S> <C> <C> <C> <C> <C>
T. Eugene McBride, 1999 $310,752 $ -- 60,000 $ 4,682
Chairman and Chief 1998 311,929 -- 6,000 44,031
Executive Officer 1997 282,802 211,875 -- 19,871
M.L. Fontenot, 1999 $201,676 $ 117,000 60,000 $ 508
President and Chief 1998 -- -- -- --
Operating Officer 1997 -- -- -- --
Donald L. Carswell, 1999 $201,684 $ 39,562(2) 10,000 $ 1,763
President of International 1998 70,830 -- 20,000 --
Operations 1997 -- -- -- --
William S. Shropshire, Jr., 1999 $190,008 $ -- 1,500 $ 2,246
Executive Vice President, 1998 189,174 -- 5,000 26,009
Chief Financial Officer, 1997 181,550 120,000 25,000 15,040
Secretary and Treasurer
Stephen J. Dauer, 1999 $185,016 $ 8,000 $ 5,370
Sr. Vice President-Sales 1998 182,262 -- 4,000 24,792
1997 178,072 112,500 -- 18,234
</TABLE>
- ------------------------------
(1) Includes contributions by the Company in fiscal 1999 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>
Deferred Group Term Life
Name Profit Sharing Plan Compensation Plan Insurance Premiums
- --------------------------- ------------------- ----------------- ------------------
<S> <C> <C> <C>
T. Eugene McBride $547 $2,875 $1,260
M.L. Fontenot -- -- 508
Donald L. Carswell 547 -- 1,216
William S. Shropshire, Jr. 547 741 958
Stephen J. Dauer 547 3,891 932
</TABLE>
(2) Represents a stock grant of 4,000 shares of Common Stock valued at
$20,750 and a cash bonus of $18,812.
6
<PAGE> 9
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information concerning options
granted in fiscal 1999:
<TABLE>
<CAPTION>
Individual Grants Potential Realizable Value at
------------------------------------------------------- Assumed Annual Rates of
Number of Percent of Total Stock Price Appreciation for
Securities Options/SARs Option Term
Underlying Granted to Exercise ------------------------------
Options/SARs Employees in or Base Expiration
Name Granted Fiscal Year Price Date 5% 10%
- ------------------------ ------------ ---------------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
T. Eugene McBride 60,000 19.42% $3.63 11/3/08 $136,800 $347,400
M.L. Fontenot 60,000 19.42 3.13 1/27/09 118,200 299,400
Donald L. Carswell 10,000 3.23 3.63 11/3/08 22,800 57,900
Williams S. Shropshire, 15,000 4.85 3.63 11/3/08 34,200 86,850
Jr.
Stephen J. Dauer 8,000 2.59 3.63 11/3/08 18,240 46,320
</TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
The following table provides information as to options exercised by the
Named Executive Officers during fiscal 1999. The numbers and value of the
unexercised options held by the Named Executive Officers are also set forth in
the following table. None of the Named Executive Officers has held or exercised
separate stock appreciation rights ("SARs").
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Shares Value Options at Fiscal Year End Options at Fiscal Year-End
Acquired on Realized --------------------------- ---------------------------
Named Executive Officer Exercise(#) ($) Exercisable Unexercisable Exercisable Unexercisable
- ----------------------------- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
T. Eugene McBride............ -- $-- 43,414 48,000 -$- -$-
M.L. Fontenot................ -- -- 6,000 24,000 -- --
Donald L. Carswell........... -- -- 6,000 24,000 -- --
William S. Shropshire, Jr.... -- -- 33,000 12,000 -- --
Stephen J. Dauer............. -- -- 14,911 6,400 -- --
</TABLE>
COMPENSATION OF DIRECTORS
Directors who are not employees of the Company or Texmaco designees are
entitled to receive an annual fee of $12,000 in cash and $4,000 worth of Common
Stock, plus $1,000 for each Board of Directors meeting attended and $500 for
each committee meeting attended. Directors who are not employees of the Company
or Texmaco designees also received a grant of 1,231 shares of Common Stock
during the past fiscal year. In addition, those directors who serve as a
chairman of a committee receive a $2000 retainer and those directors who serve
on a committee receive a $1000 retainer. 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 immediately after the date of
grant.
7
<PAGE> 10
CERTAIN TRANSACTIONS
RELATIONSHIP WITH TEXMACO
Texmaco is a Hong Kong corporation under common control with P.T.
Polysindo Eka Perkasa and PT. Texmaco Jaya. Texmaco is a vertically integrated
polyester chemical and textile manufacturer based in Jakarta, Indonesia. The
mailing address and telephone number of the principal executive office of
Texmaco are Sentra Mulia Suite 1008, 10th Floor, JI. H.R. Resuna Said Kav. X-6
No. 8, Jakarta-12540 Indonesia, 0-11-62-21-522-9390. Marimutu Sinivisan is a
controlling person of Texmaco.
On April 8, 1997, Texmaco acquired from certain shareholders of the
Company 3,000,000 shares or approximately 22.8% of the outstanding Common Stock.
In connection with such purchase, Texmaco stated its intention to acquire
additional shares of Common Stock so that it would own a majority of the Common
Stock prior to November 5, 1998. On November 5, 1998, Texmaco owned 3,000,000
shares of Common Stock. On April 8, 1997, the Company and Texmaco entered into
the Texmaco Agreement pursuant to which the Company and Texmaco made certain
agreements, including:
1. If Texmaco and its affiliates do not own more than 50% of
the Company's outstanding Common Stock within 18 months following the
Closing Date, Texmaco and its affiliates shall be prohibited from
acquiring additional shares of Common Stock, except pursuant to certain
specified exceptions, such as Texmaco's exercise of its preemptive rights,
described below, and Texmaco's receipt of stock dividends from the
Company.
2. Texmaco shall have preemptive rights to acquire additional
shares of Common Stock in the event the Company proposes to issue
additional shares, except in certain specified events, such as (i) stock
dividends, stock splits, recapitalizations, or other subdivisions of
shares of Common Stock and (ii) issuances of shares of Common Stock or
related options to employees, officers, and directors of, and consultants
to, the Company pursuant to the Company's current stock incentive plan.
3. Subject to certain limited exceptions set forth in the
Texmaco Agreement, Texmaco and its affiliates shall not sell or otherwise
transfer any shares of the Common Stock that they may own without first
offering to sell such shares to the Company.
4. Texmaco is entitled to designate three persons who are
senior executive officers of Texmaco to serve on the Company's Board of
Directors. However, if at any time Texmaco and its affiliates own less
than 20% but at least 15% of the outstanding Common Stock, Texmaco shall
be entitled to only two designees. If at any time Texmaco and its
affiliates own less than 15% but at least 10% of the outstanding Common
Stock, Texmaco shall be entitled to only one designee. If at any time
Texmaco and its affiliates own less than 10% of the outstanding Common
Stock, Texmaco shall not be entitled to any designees.
5. Texmaco shall use its best efforts to ensure that the
Company's Board of Directors has at all times four disinterested members,
who shall be persons who are not affiliates of Texmaco and who are not
Texmaco's designees to the Board of Directors.
6. Any transaction between the Company and Texmaco or its
affiliates shall be on terms no less favorable than those that would be
obtained from unaffiliated parties in arms' length transactions, and any
such transaction or series of related transactions that exceeds $1,000,000
must be approved by a committee comprised of the Company's disinterested
directors.
7. Texmaco shall have the right to request that the Company effect
registration under the Securities Act of 1933, as amended (the "1933
Act"), of the shares owned by Texmaco and its affiliates, subject to
certain conditions including, without limitation, the Company shall be
obligated to effect no more than three such demand registrations under a
Registration Statement on Form S-3 and no more than two such demand
registrations under a Registration Statement on Form S-1. In the event
8
<PAGE> 11
that the Company proposes to register shares of its Common Stock under the
1933 Act, Texmaco shall have the right to request that shares of the
Common Stock owned by it be included in such registration, subject to
certain customary restrictions.
Pursuant to the Texmaco Agreement, Texmaco has designated P. Manohar, Ravi
Shankar, and Mickey Ganot as nominees to the Company's Board of Directors. By
virtue of its ownership in the Company and representation on the Company's Board
of Directors, Texmaco is in a position to exert substantial influence on the
business policies of the Company.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors, the Company's executive officers, and persons who
beneficially own more than ten percent of the Common Stock to file reports of
ownership and changes in ownership with the SEC. Such directors, officers, and
greater than ten percent shareholders are required by SEC regulations to furnish
the Company with copies of all Section 16(a) forms they file.
Based solely on the Company's review of the copies of such forms furnished
to the Company, or written representations from certain reporting persons, the
Company believes that during fiscal 1999 its officers, directors, and greater
than ten percent beneficial owners were in compliance with all applicable filing
requirements.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors of the Company is
currently comprised of L.R. Jalenak, Jr. and Julius Lasnick. None of the above
mentioned persons has at any time been an officer or employee of the Company or
any of its subsidiaries. No executive officer of the Company served during
fiscal 1999 as a member of the compensation committee or as a director of any
entity of which any of the Company's directors serves as an executive officer.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The compensation of the Company's executive officers and key managers
(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 two 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 1999
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 measurement utilized by the Compensation Committee in fiscal 1999
for establishing executive compensation was the Company's earnings per share
("EPS"), 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
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<PAGE> 12
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.
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 indices 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 1999 was to provide for
potential bonuses based on corporate operating performance in amounts ranging
from 10% to 65% of the executives' base salaries. Based on the Company's 1999
EPS, none of the bonus pool was distributed to the senior executives as
incentive compensation. Executives were not entitled to any incentive
compensation because EPS was less than 75% of the targeted amount. The objective
corporate performance portion of the bonus pool would have been 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 fiscal 1999, option awards were consistent with the
relative pay levels of the executives.
Employment Contracts. In June of 1999, the Company entered into Change of
Control Agreements and Noncompetition, Severance, and Employment Agreements with
certain key managers. Mr. McBride, Mr. Fontenot and Mr. Shropshire were included
in this group. All agreements were similar to those detailed in the following
discussion of Mr. McBride's compensation with the exception that the applicable
Noncompetition, Severance, and Employment Agreements are for a two (2) year
term. In addition, the Company entered into a Change of Control Agreement with
Mr. Carswell.
Deferred Compensation. The nonqualified Deferred Compensation Plan
provided for the Company's officers was terminated in July with all balances
paid to the participants.
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<PAGE> 13
CEO MCBRIDE'S COMPENSATION
In reviewing and approving Mr. McBride's fiscal 1999 compensation, the
Compensation Committee considered the same criteria detailed herein with respect
to executives in general. Mr. McBride's base salary for fiscal 1999 was
established at $310,752, a 0% increase over his fiscal 1998 base salary. Mr.
McBride received no incentive bonus for fiscal 1999 because the EPS was less
than 75% of the targeted amount. Mr. McBride's targeted bonus for 1999 was 32.5%
of his base salary if the Company achieved its targeted EPS. Had the Company
achieved greater than 150% of its targeted EPS in fiscal 1999, Mr. McBride would
have been eligible to receive a bonus pay out at 100% of his targeted bonus or a
bonus equivalent to 65% of his base salary. Such amount and percentage were
lower than prior years and reflected the Compensation Committee's belief that
lower profit expectations necessitated a lower bonus opportunity. 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, his bonus opportunity should be closely tied to that performance.
In June 1999, the Company entered into a Change of Control Agreement and a
Noncompetition, Severance, and Employment Agreement with Mr. McBride. The
Compensation Committee recommended both agreements to insure management
continuity and stability in light of the challenges facing the Company. The
Change of Control Agreement, which is for a rolling three (3) year term, calls
for Mr. McBride to receive aggregate compensation equal to three (3) times his
annual compensation being paid at the time of termination, should he no longer
be employed after a Change in Control. The Company is also required to maintain
a life insurance policy for his benefit with a face amount of $500,000. The
Noncompetition, Severance, and Employment Agreement, which has a fixed term of
three (3) years and must be reviewed by the Board of Directors not less than six
(6) months prior to the expiration of its term to be eligible to be renewed,
calls for Mr. McBride to receive severance upon termination without just cause
for the remainder of the term or six (6) months, whichever is greater.
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 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.
L.R. JALENAK, JR., Chairman, and JULIUS LASNICK
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<PAGE> 14
PERFORMANCE GRAPH
The following graph compares the cumulative returns of $100 invested in
(a) the Company, (b) the Media General New York Stock Exchange Index ("Media
General NYSE Index"), and (c) the Media General Financial Services Industry
Group 628-Textile Manufacturing Index ("Media General Textile Mfg."), for the
period covering the Company's five most recent fiscal years, assuming
reinvestment of all dividends.
<TABLE>
<CAPTION>
9/94 9/95 9/96 9/97 9/98 9/99
---- ---- ----- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Dyersburg Corporation 100 74 88 188 59 5
Media General Textile Mfg. 100 97 112 124 102 75
Media General NYSE Index 100 121 143 196 201 240
</TABLE>
12
<PAGE> 15
PROPOSAL TWO - AMENDMENT TO 1992 STOCK PLAN
The Board of Directors has approved and recommends that the shareholders
approve an amendment to the 1992 Stock Plan to increase the number of shares of
Common Stock available for grant under the 1992 Stock Plan by 1,000,000 shares,
for a total of 2,200,000 shares subject to option thereunder.
The Board of Directors believes that it is important to make stock option
grants on an annual basis to its management employees and also to grant options
to newly hired employees. The Board of Directors believes that the Company's
ability to grant options to purchase Common Stock is an essential element to
assure that existing management employees remain committed to the Company as
well as to assure that the Company can recruit additional management employees
when needed.
Accordingly, on November 3, 1999, the Board of Directors adopted a
resolution amending the 1992 Stock Plan, subject to shareholder approval, to
increase the number of shares authorized for issuance thereunder by 1,000,000.
If the proposed amendment is approved, there will be 2,200,000 shares available
for issuance under the 1992 Stock Plan. A copy of the proposed amendment to the
1992 Stock Plan is attached as Exhibit A.
The proposed amendment to the 1992 Stock Plan will be approved if the
votes cast in favor of the amendment exceed the votes cast against it. The Board
of Directors recommends that the shareholders vote FOR the approval of the
amendment to the 1992 Stock Plan.
SUMMARY OF MATERIAL PROVISIONS OF THE 1992 STOCK PLAN
The following is a summary of the material provisions of the 1992 Stock
Plan, as amended by Proposal No. 2:
Shares: The 1992 Stock Plan authorizes the issuance of up to
2,200,000 shares of the Company's Common Stock. Shares awarded under the
1992 Stock Plan may consist, in whole or in part, of any combination of
authorized and unissued or treasury shares. Any shares as to which an
option or other award expires, lapses unexpired, or is forfeited,
terminated or canceled may become subject to a new option or other award.
Currently, there are approximately 174,321 shares issued under or subject
to awards under the 1992 Stock Plan.
Eligibility: Officers and other key employees of the Company and
its subsidiaries and affiliates who are responsible for or contribute to
the management, growth, or profitability of the Company are eligible to be
granted awards under the 1992 Stock Plan. The maximum number of shares of
Common Stock for which awards may be granted to any participant in any one
year is 100,000. The number of officers and other key employees currently
eligible for awards under the 1992 Stock Plan is approximately 45.
As part of their compensation for serving as directors of the
Company, Outside Directors will receive an option to purchase 5,000 shares
of Common Stock 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 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. There are currently five Outside Directors eligible to participate
in the 1992 Stock Plan.
Administration. The 1992 Stock Plan will be administered by a
Committee of not less than three disinterested persons appointed by the
Board of Directors, which Committee is currently the Compensation
Committee. The Compensation Committee shall have no authority to determine
the terms and conditions of any awards to Outside Directors.
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<PAGE> 16
Awards Under the Plan. The Compensation Committee will have the
authority to grant the following types of awards to officers and key
employees under the 1992 Stock Plan: Stock Options, Stock Appreciation
Rights, Restricted Stock, Deferred Stock and Other Stock-Based Awards.
Stock Options. Incentive stock options ("ISOs") and non-qualified
stock options may be granted for such number of shares as the Compensation
Committee may determine and may be granted alone, in conjunction with, or
in tandem with, other awards under the 1992 Stock Plan or cash awards
outside the 1992 Stock Plan. A stock option is exercisable at such times
and subject to such terms and conditions as the Compensation Committee
determines. However, in the case of an ISO, the term may be no more than
ten years after the date of grant (five years in the case of ISOs for
certain 10% shareholders). The option price for any ISO may not be less
than 100% (110% in the case of certain 10% shareholders). The option price
for any ISO may not be less than 100% (110% in the case of certain 10%
shareholders) of the fair market value of the Common Stock as of the date
of grant and for any non-qualified stock option may not be less than 50%
of the fair market value as of the date of grant. Stock options and stock
appreciation rights granted under the 1992 Stock Plan may not be assigned
or transferred other than by will or by the laws of descent and
distribution.
Stock Appreciation Rights. Stock appreciation rights may be granted
under the 1992 Stock Plan in conjunction with all or part of a stock
option and are exercisable only when the underlying stock option is
exercisable. Once a stock appreciation right has been exercised, the
related portion of the stock option underlying the stock appreciation
rights terminates. Upon the exercise of a stock appreciation right, the
Company must pay to the employee in cash, Common Stock or a combination
thereof (the method of payment to be at the discretion of the Compensation
Committee), an amount equal to the excess between the fair market value of
the Common Stock on the exercise date and the option price, multiplied by
the number of stock appreciation rights being exercised.
Restricted Stock and Deferred Stock. Restricted stock and deferred
stock awards may be granted alone, in conjunction with, or in tandem with,
other awards under the 1992 Stock Plan. The provisions attendant to a
grant of restricted stock or deferred stock may vary from participant to
participant. In making award of restricted stock or deferred stock, the
Compensation Committee determines the periods during which the restricted
stock or deferred stock is subject to forfeiture and may provide such
other awards designed to guarantee a minimum value for such stock. During
the restriction period or the deferral period, the employee may not sell,
transfer, pledge, or assign the restricted stock or his right to deferred
stock but will be entitled to vote the restricted stock and to receive, at
the election of the Compensation Committee, cash or deferred dividends.
Other Stock-Based Amounts. The Compensation Committee may grant
eligible individuals stock purchase rights with respect to the Common
Stock at (a)'a price not less than 85% nor greater than 100% of the fair
market value, or (b)'book value (all values being as of the date of
grant). The Compensation Committee may condition such rights, or their
exercise, on such terms and conditions as it may determine. Rights to
purchase the Common Stock are exercisable for a period of up to 30 days as
determined by the Compensation Committee.
The Compensation Committee also may grant other types of awards
such as performance shares, convertible preferred stock, convertible
debentures, or other exchangeable securities, that are valued, as a whole
or in part, by reference to or otherwise based on the Common Stock. These
awards may be granted alone, in addition to, or in tandem with, stock
options, stock appreciation rights, restricted stock, deferred stock,
stock purchase rights, or cash awards outside of the 1992 Stock Plan.
Awards will be made upon such terms and conditions as the Compensation
Committee may determine.
Change of Control Provisions. If there is a change in control or a
potential change in control of the Company (as defined in the 1992 Stock Plan),
stock appreciation rights and limited stock appreciation rights outstanding for
at least six months, and any stock options which are not then exercisable, in
the discretion of the Board, may become fully exercisable and vested.
Notwithstanding the foregoing, stock appreciation rights held by any person
subject to Section 16(b) of the Exchange Act will be automatically exercised if
the change
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<PAGE> 17
in control or potential change in control is not within the control of such
person for purposes of Rule 16b-3(e)(3) of the Exchange Act. Also, in the
discretion of the Board, the restrictions and deferral limitations applicable to
restricted stock, deferred stock, stock purchase rights, and other stock-based
awards may lapse and such shares and awards will be deemed fully vested. Stock
options, stock appreciation rights, limited stock appreciation rights,
restricted stock, deferred stock, stock purchase rights, and other stock-based
awards will, unless otherwise determined by the Compensation Committee in its
sole discretion, be cashed out on the basis of the change in control price (as
defined in the 1992 Stock Plan and as described below). The change in control
price will be the highest price per share paid in any transaction reported on
the New York Stock Exchange or paid or offered to be paid in any bona fide
transaction relating to a change in control or potential change in control, at
any time during the immediately preceding sixty-day period. The Compensation
Committee has the discretion to determine the change in control price, based on
the parameters described in the preceding sentence.
Amendment. The 1992 Stock Plan may be amended by the Board of Directors,
except that the Board of Directors may not, without the approval of the
Company's shareholders, increase the number of shares available for
distribution, change the pricing rules applicable for stock options or stock
purchase rights, change the class of employees eligible to receive awards under
the 1992 Stock Plan, or extend the term of the 1992 Stock Plan.
Adjustment. In the case of a stock split, stock dividend,
reclassification, recapitalization, merger, reorganization, or other change in
the Company's structure affecting the Common Stock, appropriate adjustments (as
determined by the Compensation Committee in its sole discretion) will be made in
the number of shares reserved under the 1992 Stock Plan, in the number of shares
covered by options and other awards then outstanding under the 1992 Stock Plan
and, where applicable, the exercise price for awards under the 1992 Stock Plan.
Federal Income Tax Aspects with Respect to Stock Options and Restricted
Stock Awards. The following is a brief summary of the federal tax income tax
aspects of stock options and restricted stock awards made under the 1992 Stock
Plan based upon the federal income tax laws in effect on the date hereof. This
summary is not intended to be exhaustive, and does not describe state or local
tax consequences:
Incentive Stock Options. No taxable income is realized by the
participant upon the grant or exercise of an ISO. If Common Stock is
issued to a participant pursuant to the exercise of an ISO, and if no
disqualifying disposition of the shares is made by the participant within
two years of the date of grant or within one year after the transfer of
the shares to the participant, then: (a) upon the sale of the shares, any
amount realized in excess of the option price will be taxed to the
participant as a long-term capital gain, and any loss sustained will be a
capital loss, and (b) no deduction will be allowed to the Company for
federal income tax purposes. The exercise of an ISO will give rise to an
item of tax preference that may result in an alternative minimum tax
liability for the participant unless the participant makes a disqualifying
disposition of the shares received upon exercise.
If Common Stock acquired upon the exercise of an ISO is disposed of
prior to the expiration of the holding periods described above, then
generally: (a) the participant will realize ordinary income in the year of
disposition in an amount equal to the excess, if any, of the fair market
value of the shares at exercise (or, if less, the amount realized on the
disposition of the shares) over the option price paid for such shares, and
(b) the Company will be entitled to deduct any such recognized amount. Any
further gain or loss realized by the participant will be taxed as
short-term or long-term capital gain or loss, as the case may be, and will
not result in any deduction by the Company.
Subject to certain exceptions for disability or death, if an ISO is
exercised more than three months following the termination of the
participant's employment, the option will generally be taxed as a
non-qualified stock option.
Non-qualified Stock Options. Except as noted below, with respect
to non-qualified stock options: (a) no income is realized by the
participant at the time the option is granted; (b) generally
15
<PAGE> 18
upon exercise of the option, the participant realized ordinary income is
an amount equal to the difference between the option price paid for the
shares and the fair market value of the shares on the date of exercise and
the Company will be entitled to a tax deduction in the same amount; and
(c) at disposition, any appreciation (or depreciation) after date of
exercise is treated either as short-term or long-term capital gain or
loss, depending upon the length of time that the participant has held the
shares.
Restricted Stock. A participant receiving restricted stock
generally will recognize ordinary income in the amount of the fair market
value of the restricted stock at the time the stock is no longer subject
to forfeiture, less the consideration paid for the stock. However, a
participant may elect, under Section 83(b) of the Code within thirty (30)
days of the grant of the stock, to recognize taxable ordinary income on
the date of grant equal to the excess of the fair market value of the
shares of restricted stock (determined without regard to the restrictions)
over the purchase price of the restricted stock. Thereafter, if the shares
are forfeited, the participant will be entitled to a capital loss in an
amount equal to the purchase price of the forfeited shares regardless of
whether the participant made a Section 83(b) election.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Upon recommendation of the Audit Committee, the Board of Directors has
selected Ernst & Young LLP to serve as independent auditors for the current
fiscal year. Such firm has served as the Company's independent auditors since
1992. Representatives of Ernst & Young LLP are expected to be present at the
Annual Meeting and will be given the opportunity to make a statement if they
desire to do so and to respond to appropriate questions.
PROPOSALS OF SHAREHOLDERS
Pursuant to Rule 14a-8 under the Exchange Act, shareholders may present
proper proposals for inclusion in the Company's proxy statement and for
consideration at the next annual meeting of its shareholders by submitting their
proposals to the Company in a timely manner. In order to be so included for the
next annual meeting, shareholder proposals must be received by the Company no
later than August 19, 2000, and must comply with the requirements of Rule 14a-8.
In addition, the Company's Bylaws establish an advance notice procedure with
regard to certain matters, including shareholder proposals not included in the
Company's proxy statement, to be brought before an annual meeting of
shareholders. In general, notice must be received by the Secretary of the
Company not less than 120 days prior to the date the Company's proxy statement
was released to shareholders in connection with the previous year's annual
meeting and must contain specified information concerning the matters to be
brought before such meeting and concerning the shareholder proposing such
matters.
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.
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<PAGE> 19
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 will not be
considered for the purpose of determining the number of votes cast for or
against any director nominee or the proposal to amend the 1992 Stock Plan. A
broker non-vote occurs when a broker holding shares registered in a 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 1999 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, 15720 JOHN J. DELANEY DRIVE, SUITE 445, CHARLOTTE, NORTH CAROLINA
28277, 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 13, 1999
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<PAGE> 20
EXHIBIT A
AMENDMENT TO THE DYERSBURG CORPORATION
1992 STOCK INCENTIVE PLAN
Dyersburg Corporation, a Tennessee corporation, hereby amends its 1992
Stock Incentive Plan (the "1992 Stock Plan") to be effective upon shareholder
approval in accordance with the 1992 Stock Plan so that the first paragraph of
Section'3 shall be deleted in its entirety and replaced by the following:
"The aggregate number of shares of Common Stock reserved and
available for distribution under the 1992 Stock Plan shall not exceed
2,200,000, subject to adjustment as provided in the final paragraph of
this Section 3. The maximum number of shares of Common Stock for which
awards may be granted to any participant in any one year period shall be
100,000, subject to adjustment as provided in the final paragraph of this
Section 3. Notwithstanding the foregoing limitation, nothing herein shall
cause a reduction in the number of shares of Common Stock subject to
awards outstanding to any eligible employee as of January 24, 1996."
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<PAGE> 21
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 26,
2000).
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 Ballantyne Country Club, 11120
Ballantyne Crossing, Charlotte, North Carolina 28277 on Wednesday, January 26,
2000, at 9:00 a.m. E.S.T. and any adjournment thereof.
(1) ELECTION OF DIRECTORS:
<TABLE>
<S> <C> <C>
[ ] FOR all nominees listed to the [ ] WITHHOLD AUTHORITY to vote for [ ] Class I director nominees: L.R.
right (except as marked to the all nominees listed to the right Jalenak, Jr., T. Eugene McBride and
contrary) John D. Howard. Class III
director nominees: M.L. Fontenot
and James P. Casey.
</TABLE>
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, PRINT
THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.)
- --------------------------------------------------------------------------------
(2) Amendment to the Company's 1992 Stock Incentive Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) In their discretion on any other matter that may properly come before said
meeting or any adjournment thereof.
(Please date and sign this proxy on the reverse side.)
Your shares will be voted in accordance with your instructions. If no choice
is specified, shares will be voted FOR the election of all five director
nominees and FOR the amendment to the Company's 1992 Stock Incentive Plan.
PLEASE SIGN HERE AND RETURN
PROMPTLY
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Date:
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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.
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If you have changed your address, please PRINT your new address on this line
