<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>
Worldtex, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
WORLDTEX, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
----------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Worldtex, Inc. (the "Company") will be held at Bank of America Plaza, 335
Madison Avenue, Fifth Floor, Room 5A, New York, New York at 11:00 A.M. (New York
City time) on Thursday, May 14, 1998, for the following purposes:
-to elect three members of the Board of Directors of the Company;
-to approve the Company's 1992 Stock Incentive Plan, as amended; and
-to transact such other business as may properly come before the
meeting or any adjournment or adjournments thereof.
The close of business on March 27, 1998 has been fixed as the record
date for the determination of stockholders entitled to notice of and to vote at
the meeting.
If you will be unable to attend the meeting, you are respectfully
requested to sign and return the accompanying proxy in the enclosed envelope.
By Order of the Board of Directors,
MITCHELL R. SETZER
April 14, 1998 Secretary
---------------------------------------------
<PAGE> 3
WORLDTEX, INC.
PROXY STATEMENT
This proxy statement is furnished to the stockholders of Worldtex, Inc.
(hereinafter referred to as the "Company") in connection with the solicitation
of proxies for the Annual Meeting of Stockholders to be held on May 14, 1998.
The address of the Company's principal executive office and the Company's
mailing address is 212-12th Avenue, N.E., Hickory, North Carolina 28601 and the
telephone number of its principal executive office is (704) 328-5381. This proxy
statement and the enclosed proxy are being sent to stockholders commencing on or
about April 14, 1998.
The enclosed proxy is solicited by the Board of Directors of the
Company. Execution of the proxy will not affect a stockholder's right to attend
the Annual Meeting and to vote in person or to revoke the proxy. A proxy may be
revoked at any time before it is exercised by written notice of revocation
delivered to the Secretary of the Company.
The Company will bear the cost of the solicitation of proxies,
including the charges and expenses of brokerage firms and others for forwarding
solicitation material to beneficial owners of stock. In addition to the use of
the mail, proxies may be solicited by personal interview, telephone or telecopy.
VOTING SECURITIES OUTSTANDING
Prior to November 12, 1992, the Company was a wholly-owned subsidiary
of Willcox & Gibbs, Inc., a New York corporation, which subsequently changed its
name to Rexel, Inc. ("Rexel"). On that date, Rexel declared a dividend of one
share of Common Stock of the Company for each share of Rexel Common Stock
outstanding on November 23, 1992.
The only outstanding class of voting securities of the Company is its
Common Stock, of which there were 14,428,671 shares outstanding at February 5,
1998. Each share is entitled to one vote.
Only holders of Common Stock of record at the close of business on
March 27, 1998, will be entitled to vote at the Annual Meeting of Stockholders.
1
<PAGE> 4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following persons were known by the Company to be the beneficial
owners of more than five percent of the outstanding Common Stock as of December
31, 1997 (based on Schedule 13G and 13D Securities and Exchange Commission
("SEC") filings):
<TABLE>
<CAPTION>
SHARES PERCENT
NAMES AND ADDRESS OF BENEFICIAL OWNER OWNED OF CLASS
- ------------------------------------- ------ --------
<S> <C> <C>
EGS Associates, L.P. 1,373,799 (1) 9.52%
300 Park Avenue
New York, New York 10022
Pioneering Management Corporation 1,370,000 9.49%
60 State Street
Boston, MA 02109-1820
FMR Corp. 1,351,800 (1) 9.37%
82 Devonshire Street
Boston, MA 02109-3614
Dimensional Fund Advisors, Inc. 1,107,671 (2) 7.68%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
Wellington Management Company, LLP 881,200 (1) 6.11%
75 State Street
Boston, MA 12109
- --------------------------------------------------------------------------------------------
</TABLE>
- ---------------------
(1) Reported shared power to dispose of and to vote these shares.
(2) Reported that Dimensional Fund Advisors, Inc. ("Dimensional"), a
registered investment advisor, is deemed to have beneficial ownership of
1,107,671 shares of Worldtex, Inc. stock as of December 31, 1997, all of which
shares are held in portfolios of DFA Investment Dimensions Group Inc., a
registered open-end investment company, or in series of the DFA Investment Trust
Company, a Delaware business trust, or the DFA Group Trust and DFA Participation
Group Trust, investment vehicles for qualified employee benefit plans, for all
of which Dimensional Fund Advisors, Inc. serves as investment manager.
Dimensional disclaims beneficial ownership of all such shares.
2
<PAGE> 5
SECURITY OWNERSHIP OF MANAGEMENT
As of February 5, 1998, shares of Common Stock were beneficially owned
by directors and nominees for director, by the executive officers required to be
listed in the Summary Compensation Table below (see "Executive Compensation"),
and by all directors and executive officers as a group as follows:
<TABLE>
<CAPTION>
SHARES PERCENT
NAME OWNED (1) OF CLASS (2)
- ---- --------- ------------
<S> <C> <C>
Claude D. Egler......................................................................75,000 ( 3)..........*
John B. Fraser.......................................................................13,000 ( 4)..........*
Salim Ibrahim.........................................................................5,000 ( 5) .........*
Richard J. Mackey...................................................................564,764 ( 6).......3.91
A. Orrin Maldoff.....................................................................24,000 ( 7)..........*
Kenneth W. O'Neill...................................................................80,409 ( 8)..........*
Willi Roelli.........................................................................14,000 ( 9)..........*
Barry D. Setzer.....................................................................422,862 (10).......2.93
Mitchell R. Setzer...................................................................36,842 (11) .........*
Michael B. Wilson....................................................................10,184 ( 4)..........*
John K. Ziegler.................................................................... 239,008 (12).......1.66
All Directors and Executive Officers as a Group...................................1,489,069 (13) .....10.32
</TABLE>
- ---------------
* Less than one percent
(1) The persons included in the table had sole voting and investment power with
respect to shares reported as beneficially owned, except as otherwise
indicated in the following notes.
(2) Percentages are calculated by dividing (x) shares in the "Shares Owned"
column by (y) the number of shares outstanding as of February 5, 1998 and
the number of shares that a particular owner (or group of owners) has a
right to acquire within 60 days of such date.
(3) Includes 70,000 shares issuable upon the exercise of stock options that are
currently exercisable.
(4) Includes 6,000 shares issuable upon the exercise of stock options that are
currently exercisable.
(5) Includes 2,000 shares issuable upon the exercise of stock options that are
currently exercisable .
(6) Includes 240,000 shares issuable upon the exercise of stock options that
are currently exercisable and 36,374 shares as to which Mr. Mackey directs
the voting by the Trustee under the Company's Profit Sharing & Retirement
Savings Plan.
(7) Includes 21,000 shares issuable upon the exercise of stock options that are
currently exercisable and 3,000 shares owned indirectly through Fodlam
Holdings, of which Mr. Maldoff is President.
(8) Includes 59,000 shares issuable upon the exercise of stock options that are
currently exercisable and 10,064 shares as to which Mr. O'Neill directs the
voting by the Trustee under the Company's Profit Sharing & Retirement
Savings Plan.
(9) Includes 4,000 shares issuable upon the exercise of stock options that are
currently exercisable and 1,000 shares owned by Mr. Roelli's wife.
(10) Includes 310,000 shares issuable upon the exercise of stock options that
are currently exercisable and 13,788 shares as to which Mr. Setzer directs
the voting by the Trustee under the Company's Profit Sharing & Retirement
Savings Plan.
(11) Includes 21,000 shares issuable upon the exercise of stock options that are
currently exercisable and 9,258 shares as to which Mr. Setzer directs the
voting by the Trustee under the Company's Profit Sharing & Retirement
Savings Plan.
(12) Includes 590 shares held by Mr. Ziegler as Co-Trustee for the benefit of
his children, as to which Mr. Ziegler shares voting and investment power,
13,510 shares held by Mr. Ziegler as Trustee for the benefit of his wife,
as to which Mr. Ziegler has sole voting and investment power and 6,000
shares issuable upon the exercise of stock options that are currently
exercisable.
(13) Includes 749,000 shares issuable upon the exercise of stock options that
are currently exercisable and 69,484 shares as to which the holder directs
the voting by the Trustee under the Company's Profit Sharing & Retirement
Savings Plan.
3
<PAGE> 6
ELECTION OF DIRECTORS
The Company's Certificate of Incorporation provides for the classification
of the Board of Directors into three classes (Class I, Class II and Class III).
At the time of this year's Annual Meeting of Stockholders, the Board will
consist of eight directors.
At this year's Annual Meeting, three Class III directors are to be elected
to serve for three year terms expiring at the 2001 Annual Meeting. The three
nominees are Claude D. Egler, Richard J. Mackey and John K. Ziegler. Mr. Egler,
Mr. Mackey and Mr. Ziegler were all previously elected to the Board by the
stockholders. The remaining five directors in Classes I and II were previously
elected by stockholders and will continue to serve their terms of office, which
will expire at the Annual Meetings to be held in 1999 and 2000, respectively.
If any nominee becomes unavailable for any reason or if a vacancy should
occur before the election (which events are not anticipated), the shares
represented by the accompanying proxy may be voted for such other person as may
be determined by the holders of such proxies.
Directors are elected by a plurality vote. Under the Company's Certificate
of Incorporation and By-Laws and under Delaware law, abstentions and broker
non-votes will not have the effect of votes in opposition to a nominee. The
Board of Directors of the Company recommends that stockholders vote FOR each
nominee listed below.
The following table sets forth information with respect to each nominee for
election as a director of the Company:
<TABLE>
<CAPTION>
NAME OF NOMINEE; YEAR TERM
POSITIONS AND OFFICES WOULD EXPIRE DIRECTOR PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS;
WITH COMPANY AGE AND CLASS SINCE OTHER DIRECTORSHIPS *
- --------------------- --- ------------- -------- ---------------------------------------------------------
<S> <C> <C> <C> <C>
Claude D. Egler 63 2001 1994 Vice President of the Company (August 1992 to December
Director Class III 1996); President and Managing Director of Filix Lastex
(prior to 1987 to December 1996).
Richard J. Mackey 66 2001 1992 Chairman of the Board and Chief Financial Officer of the
Director; Chairman Class III Company (August 1992 to present); Chief Executive
of the Board and Officer of the Company (August 1992 to May 1994);
Chief Financial President of Rexel (May 1987 to November 1992);
Officer Director, Willcox & Gibbs, Inc.
John K. Ziegler 61 2001 1992 Chief Executive Officer of Willcox & Gibbs, Inc.
Director; Consultant Class III (distributor of parts and supplies for the apparel
to the Company industry) (July 1994 to present); Consultant to the
Company (November 1994 to present); Chairman of the
Board and Chief Executive Officer of Rexel (May 1987 to
March 1994); President of Rexel (1977 to May 1987
and November 1992 to March 1994).
</TABLE>
4
<PAGE> 7
The following table sets forth information with respect to those incumbent
directors whose terms will continue after the Annual Meeting:
<TABLE>
<CAPTION>
NAME OF NOMINEE; YEAR TERM
POSITIONS AND OFFICES WOULD EXPIRE DIRECTOR PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS;
WITH COMPANY AGE AND CLASS SINCE OTHER DIRECTORSHIPS *
- --------------------- --- ------------- -------- ---------------------------------------------------------
<S> <C> <C> <C> <C>
John B. Fraser 63 1999 1992 President, Geneva Financial Corp. (investment
Director Class I banking) (July 1994 to present); Managing Director,
Citibank N.A. (June 1987 to July 1994); Director,
International Medical Innovations, Inc. (February 1998
to present).
Salim M. Ibrahim 65 2000 1996 Vice-President and General Manager, E.I. DuPont de
Director Class II Nemours (1992 to 1996); President, Worldwide Textile
Institute (1992 to 1995); Director, Courtaulds
Textiles, U.K.; Director, International Wool
Secretariat; Chairman, Supervisory Board,
Dupont, Netherlands.
Willi Roelli 64 1999 1996 President and Director, Diethelm Holding (USA) Ltd (a
Director Class I holding company )(1988 to present); Vice-President and
Director, Swiss Benevolent Society (charitable
organization) (1985 to 1998); Director, Celestron
International (telescopes); Director, Zyliss (USA) Corp.
(housewares); Director, Alex C. Fergusson, Inc.
(specialty chemicals); Director, d-SCAN Inc. (furniture).
Barry D. Setzer 55 2000 1992 President and Chief Executive Officer of the Company
Director; President and Class II (May 1994 to present); President and Chief Operating
Chief Executive Officer Officer of the Company (August 1992 to May 1994);
President of Rexel's Covered Yarn Division (September
1988 to November 1992); Vice President of Rexel
(November 1987 to November 1992).
Michael B. Wilson 61 1999 1992 Vice President Sales, Inbrand, Inc. (hygiene
Director Class I products)(1995 to 1997); President and Chief Executive
Officer, Innova Pure Water, Inc. (filtered water) (1993
to 1995); Vice President of Sales, Consumer and
Commercial Paper Products of Georgia Pacific (1984 to
1992); Director, Catalina Marketing Corporation.
</TABLE>
* All references to "Rexel" include the company under its pre-May 1995 name
of "Willcox & Gibbs, Inc." All references to "Willcox & Gibbs, Inc." refer
to the company originally known as "WG, Inc." which changed its name to
"Willcox & Gibbs, Inc." in December 1995.
5
<PAGE> 8
COMMITTEES AND MEETINGS
The Company has standing Executive, Audit, Nominating and Compensation
Committees of the Board of Directors. The Executive Committee, which is composed
of Messrs. B. Setzer, Mackey and Ziegler, may exercise the powers of the Board
of Directors (with certain statutory exceptions) between meetings of the Board.
The Audit Committee, whose members are Messrs. Ziegler, Roelli, Egler and
Wilson, reviews accounting matters with Company management and discusses
accounting matters with the Company's independent accountants in connection with
the annual audit. The Nominating Committee, whose members are Messrs., Mackey,
B. Setzer and Ziegler, considers and recommends nominees for election to the
Company's Board of Directors. The Nominating Committee considers nominees
recommended by security holders. See "Stockholder Proposals". Messrs. Fraser,
Ibrahim and Wilson are members of the Compensation Committee, which reviews
compensation matters, including adoption and implementation of benefit plans,
and takes action or makes recommendations with respect thereto. During the 1997
fiscal year, the Executive Committee held two meetings, the Compensation
Committee held three meetings, the Audit Committee held two meetings, the
Nominating Committee held one meeting and the Company's Board of Directors held
six meetings. All directors attended at least 75% of the meetings of the Board
of Directors and of committees of which they were members with the exception of
Mr.Ibrahim.
DIRECTOR COMPENSATION
Non-Management directors are paid a fee at an annual rate of $12,000 per
year and an additional $900 for each meeting attended.
The Company's 1992 Stock Incentive Plan, as currently in effect, provides
for the grant of a stock option to each director of the Company other than one
who is an officer or employee of the Company or of an entity in which the
Company owns at least a 20% interest (an "Outside Director"). Each person who
was an Outside Director at the close of the 1994 Annual Meeting of Stockholders
was granted, as of the date of such meeting, and each subsequently elected
Outside Director is granted, as of the date of such person's election to the
Board, a non-qualified stock option to purchase 10,000 shares of Common Stock.
While the Board has authority to determine the terms of such option, all options
granted to Outside Directors to date have had the following terms. The option
price is equal to the fair market value of the Common Stock on the date of the
option grant, (or, in some cases, the date the individual agreed to become a
director) and may be paid in cash or shares of Common Stock which have been
owned by the optionee for at least six months (with such shares valued based on
the fair market value of the Common Stock on the date of option exercise). The
option becomes exercisable in 20% increments on each of the first five
anniversaries of the date following the date of grant, provided the optionee is
a director of the Company on such date. The option will expire ten years from
the date of grant, subject to earlier termination upon termination of the
optionee's service as a director. If the optionee dies during his or her period
of service as a director, the optionee's legal representative will have the
right to exercise the option for a period of twelve months after the optionee's
death, even if such option would otherwise have expired earlier. An option
exercised after termination of service can only be exercised to the extent it
was exercisable at the time of such termination of service. Stock options
granted to Outside Directors are not transferable except by will or by the laws
of descent and distribution.
Mr. Ziegler has been retained as a consultant to the Company and is paid
$100,000 per year less any fees received as a director of the Company for his
services in such capacity.
6
<PAGE> 9
EXECUTIVE COMPENSATION
The following table sets forth information concerning compensation of the
Chief Executive Officer of the Company and each of the Company's four other most
highly compensated executive officers for services in all capacities to the
Company and its subsidiaries during the Company's 1997, 1996 and 1995 fiscal
years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
--------------------- ------------
OPTIONS/ OTHER
YEAR SALARY BONUS SARS COMPENSATION
NAME AND PRINCIPAL POSITION ($) ($) (#) ($)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Barry D. Setzer, 1997 $ 350,000 $ 207,062 None $ 85,640(1)
President and Chief Executive Officer 1996 275,000 283,660 100,000 99,837
1995 275,000 162,108 None 64,587
Richard J. Mackey, 1997 $ 225,000 $ 203,387 None $ 239(2)
Chairman of the Board and Chief Financial 1996 200,000 281,820 50,000 1,239
Officer; 1995 200,000 160,042 None 2,879
Kenneth W. O'Neill 1997 $ 125,000 $ 12,261 None $ 2,445(3)
Vice President; President of the Company's 1996 110,000 5,297 None 1,622
Regal Manufacturing Company, Inc. subsidiary 1995 110,000 10,900 None 2,991
("Regal Manufacturing")
A. Orrin Maldoff, 1997 $ 104,880 None None $ 2,740(4)
Vice President; President of the Company's 1996 109,665 7,215 None 2,870
Rubyco (1987), Inc. subsidiary ("Rubyco") 1995 111,765 7,353 None 2,870
Mitchell R. Setzer, 1997 $ 100,000 $ 41,096 10,000 $ 1,842(5)
Secretary/Treasurer; Vice-President and 1996 75,000 37,751 None 1,461
Treasurer Regal Manufacturing 1995 75,000 26,325 15,000 2,803
</TABLE>
(1) Includes $4,030 in contributions under defined contribution plans and
$30,610 in premiums on life insurance policies required to be transferred
to Mr. Setzer if he terminates employment with the Company. Also includes
$51,000 representing the imputed interest attributable to the Company's
interest-free loan to Mr. Setzer.
(2) Includes $239 in premiums on life insurance policies.
(3) Includes $2,157 in contributions under defined contribution plans and $288
in premiums on life insurance policies.
(4) Includes $2,460 in contributions under defined contribution plans and $280
in premiums on life insurance policies.
(5) Includes $1,668 in contributions under defined contribution plans and $174
in premiums on life insurance policies.
7
<PAGE> 10
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM (3)
----------------- -----------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/SARS EXERCISE
UNDERLYING GRANTED TO OR BASE
OPTIONS/SARS EMPLOYEES IN PRICE EXPIRATION
NAME GRANTED (#)(1) FISCAL YEAR ($/SHARE) DATE (2) 5% ($) 10% ($)
---- -------------- ------------ --------- ----------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Mitchell R.Setzer 10,000 25.0% 7.10 January 9,
2007 $ 44,600 $ 113,200
January 9,
All Stockholders NA 7.10 2007 $64,351,873 $163,332,556
</TABLE>
- ----------------
(1) The options are exercisable in installments such that 20% of the grant
becomes exercisable on each anniversary of January 9, 1997, and were
granted in tandem with a limited SAR applicable in the event of a "Change
of Control" of the Company. See: " - Change of Control Provisions" below.
(2) The Stock Options are subject to termination prior to their expiration date
in the event of a termination of employment.
(3) This information is provided pursuant to the rules of the Securities and
Exchange Commission. Using $7.10, the market price of the Company's common
stock on the date of the option grant, the 5% and 10% annual rates of
appreciation would result in per share prices of $11.56 and $18.42,
respectively, at the end of the 10 year option term. This presentation is
not a prediction of possible future prices of the Company's common stock.
(4) For "All Stockholders", the potential realizable value is calculated from
$7.10 for the 14,428,671 outstanding shares of Company common stock.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS/SARS IN-THE-MONEY OPTIONS/SARS
AT FISCAL YEAR-END AT FISCAL YEAR-END
--------------------------------- ------------------------------
SHARES
ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
NAME (#) ($) (#) (#) ($) ($)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Barry D. Setzer -0- -0- 310,000 140,000 807,900 488,600
Richard J. Mackey -0- -0- 240,000 60,000 396,800 206,200
Kenneth W. O'Neill -0- -0- 59,000 11,000 115,990 41,910
A. Orrin Maldoff -0- -0- 21,000 4,000 41,610 15,240
Mitchell R. Setzer -0- -0- 19,000 23,000 40,970 38,280
</TABLE>
8
<PAGE> 11
EMPLOYMENT CONTRACTS
Mr. Mackey and the Company are parties to an employment contract pursuant
to which the Company employs Mr. Mackey in a senior executive capacity for an
indefinite period, subject to termination by either the Company or Mr. Mackey
upon not less than three years' notice. Under the employment contract, Mr.
Mackey is entitled to receive a base salary of no less than $200,000 per annum
and a bonus for each fiscal year in an amount equal to 2% of annual net income
before taxes and after certain interest charges of the Company and its
subsidiaries for such fiscal year in excess of 12% of the average of the net
assets employed therein, reduced by any awards earned under Regal
Manufacturing's incentive bonus plan for the particular year. Mr. Mackey will
also be entitled to receive a supplemental retirement benefit, payable in
monthly installments over a ten year period following his retirement, in the
aggregate amount equal to 400% of Mr. Mackey's highest annual compensation in
effect at any time during his employment at the Company. Mr. Mackey's contract
contains provisions for termination and severance payments in case of a Change
in Control Event, as described below under "Change of Control Provisions."
Mr. B. Setzer and the Company are parties to an employment contract
pursuant to which the Company employs Mr. Setzer in a senior executive capacity
for an indefinite period, subject to termination by either the Company or Mr.
Setzer upon not less than three years' notice. Under the employment contract,
Mr. Setzer is entitled to receive a base salary of $275,000 per annum and a
bonus for each fiscal year in an amount equal to 2% of annual net income before
taxes and after certain interest charges of the Company and its subsidiaries for
such fiscal year in excess of 12% of the average of the net assets employed
therein, reduced by any awards earned under Regal Manufacturing's incentive
bonus plan for the particular year. Mr. Setzer will also be entitled to receive
a supplemental retirement benefit, payable in monthly installments over a ten
year period following his retirement, in an aggregate amount equal to 400% of
his highest annual compensation in effect at any time during his employment with
the Company. In the event of Mr. Setzer's death or retirement due to disability
prior to his 65th birthday, the payments shall be made in an aggregate amount
equal to 400% of his highest annual compensation in effect at any time prior to
his death or disability. Mr. Setzer's contract contains provisions for
termination and severance payments in case of a Change in Control Event, as
described below under "Change of Control Provisions." The Company also is
obligated to maintain in effect certain insurance policies on Mr. Setzer's life
and to transfer the ownership of such policies to Mr. Setzer in the event notice
is given of the termination of his employment contract.
CHANGE OF CONTROL PROVISIONS
Upon a Change in Control Event (defined to mean the date a person or group
other than the Company or an affiliate becomes a 20% beneficial owner of Company
voting securities, the date on which one-third or more of the Board of Directors
consists of persons other than Current Directors (as defined), or the date
stockholders approve certain agreements providing for merger, consolidation or
disposition of all or substantially all assets of the Company), the existing
contracts of Messrs. Mackey and Setzer shall each continue for a three year
term, subject to earlier termination (i) by the Company upon death, disability,
or cause (as defined) or (ii) by the individual if he determines in good faith
that the Company has taken any of certain specified actions which are
inconsistent with his executive status or employment arrangement or if, for any
reason, he gives notice of termination during the 30-day period commencing on
the 181st day following the Change in Control Event. Upon termination by the
Company other than for one of the reasons specified in clause (i) of the
preceding sentence, or upon termination by the individual as described in clause
(ii), the individual will be entitled as a severance benefit to a lump sum cash
amount equal to 2.99 times his "base amount" compensation (as defined in section
280G(b)(3) of the Internal Revenue Code). If the Company terminates the
individual's employment (other than for one of the reasons specified in clause
(i)) prior to a Change in Control Event but after the Company enters into an
arrangement or any person announces an intention to take or consider taking
actions
9
<PAGE> 12
which would result in a Change in Control Event, and if a Change in Control
Event occurs within three years, the individual will be entitled to receive an
amount equal to such severance benefit.
If Messrs. Mackey and Setzer were to be entitled to severance benefits as
of February 5, 1998, their base amount compensation would entitle them to
payments in the following amounts: Mr. Mackey - $1,148,704 and Mr. Setzer -
$1,304,265.
The Company's 1992 Stock Incentive Plan provides that if there is a Change
of Control of the Company (as defined below), unless otherwise determined by the
Compensation Committee or the Board at the time of grant, all stock options and
SARs granted under the Plan which are not then exercisable will become fully
exercisable and vested and the restrictions and deferral limitations applicable
to restricted stock and deferred stock granted under the Plan will lapse and
such shares and awards will be deemed fully vested. To the extent the cash
payment of any award is based on the fair market value of Company Common Stock,
such fair market value shall be the Change of Control Price, as defined below.
The Company's outstanding stock options are subject to these provisions.
A Change of Control under the Plan occurs on the date a person or group
other than the Company or certain of its affiliates becomes a beneficial owner
of 25% or more of the voting securities of the Company, the date on which
one-third or more of the Board of Directors consists of persons other than
Current Directors (as defined) or the date of approval by stockholders of
certain agreements providing for merger, consolidation or disposition of all or
substantially all assets. The Change of Control Price is the highest price per
share of Company Common Stock paid in any open market transaction, or paid or
offered to be paid relating to a Change of Control of the Company, at any time
during the 90-day period ending with the Change of Control.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's executive compensation program consists of the following key
elements: base salary, annual bonuses and periodic grants of stock options. Each
element of the overall compensation program of executive officers has a
different purpose, as described below:
Base Salary. Base pay levels are largely determined through
comparisons with companies of similar businesses of comparable size. Actual
salaries are based on individual performance contributions within a competitive
salary range.
Bonuses. Each of the Company's subsidiaries has an incentive bonus
plan that provides for the grant of annual bonuses for management and
supervisory employees based on corporate and individual performance. These plans
provide for an aggregate yearly bonus pool for each subsidiary determined by
reference to achieving and exceeding certain targeted profit levels for such
year set by the Executive Committee of the Company's Board of Directors for such
subsidiary. Bonuses are allocated from this pool to eligible employees based on
their relative base salary and an evaluation of their individual performance. In
addition, the employment contracts between the Company and Messrs. Mackey and B.
Setzer provide for incentive payments pursuant to a specified formula. See
"Employment Contracts" above.
Stock Awards. Stock option grants are intended to provide incentives
for superior long-term future performance. Such grants are intended to create
and maintain in the Company the entrepreneurial environment and spirit of a
small company as well as to broaden the understanding of the effect that the
day-to-day achievements of these employees will have on the long-term value of
the Company's stock. The number of stock options awarded to a particular
employee is intended to provide a significant portion of such employee's
compensation in the form of options and is based on the Committee's subjective
judgment of the appropriate value of the employee's entire compensation to be
represented by stock options. In general, the Committee
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<PAGE> 13
expects to grant the largest awards to the Company's Chief Executive Officer due
to his substantial influence on the Company's performance.
Compensation of Chief Executive Officer. Mr. Setzer's employment contract
entitles him to a base salary of $275,000. Based on performance and other
factors discussed above, Mr. Setzer's base salary was increased in 1997 to
$350,000. Mr. Setzer's bonus for 1997 of $207,062 was determined in accordance
with the formula specified in his employment contract. During 1997 no options
were granted Mr. Setzer due to the small balance of options available under the
Company's Stock Incentive Plan and the desire to award performance-based options
to other employees.
Policy With Respect to Section 162(m). Section 162(m) of the Internal
Revenue Code limits to $1 million for each person the tax deduction that the
Company or its subsidiaries can take with respect to the compensation of certain
executive officers, unless the compensation is "performance-based." The
Committee feels that it should not use only mechanical formulas in carrying out
its responsibilities for compensating the Company's management. Therefore, the
Committee currently intends to continue to make cash bonus payments that are
based on the achievement of subjective, non-quantifiable goals, and that may
therefore not qualify as performance-based compensation. The Committee believes
that these goals, while not properly measurable by the kind of quantifiable
targets that are required to qualify compensation as performance-based, are
important to the long-term financial success of the Company and to its
stockholders. The Committee intends to grant future stock options under the
Stock Incentive Plan in a manner that will qualify as performance-based.
COMPENSATION COMMITTEE
John B. Fraser Chair
Salim M.Ibrahim
Michael B. Wilson
The information above under the caption "Board Compensation Committee
Report on Executive Compensation" and under the caption "Performance Graph"
below shall not be deemed to be incorporated by reference into any filing by the
Company under the Securities Act of 1933, as amended, or the Securities Exchange
Act of 1934, as amended, except to the extent that the Company expressly states
in any such filing that the information under either or both such captions is
incorporated by reference therein.
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<PAGE> 14
PERFORMANCE GRAPH
The following graph shows the total shareholder return of (1) the
Company's Common Stock, (2) an index of knitting mills published by Media
General Financial Services, Inc. ("Media General") and (3) the Standard & Poor's
500 Index over the five year period ended December 31, 1997, based on
information provided by Media General. In each case the Graph assumes an
investment of $100 on December 31, 1992 and that all dividends were reinvested.
CUMULATIVE TOTAL RETURN
<TABLE>
<CAPTION>
- ----------------------------------------------FISCAL YEAR ENDING---------------------------------
1992 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C> <C>
WORLDTEX, INC. 100 66.67 46.03 73.02 112.70 100.79
INDUSTRY INDEX 100 83.64 86.88 81.37 111.53 105.63
BROAD MARKET 100 110.08 111.54 153.45 188.69 251.64
</TABLE>
[GRAPH]
12
<PAGE> 15
PROPOSAL TO AMEND THE 1992 STOCK INCENTIVE PLAN
The Company's 1992 Stock Incentive Plan ("the Plan") was adopted in 1992.
It was amended in 1994 with shareholder approval to provide for a one-time grant
of stock options to Outside Directors and make certain other changes. The Plan
was further amended by the Board of Directors in 1997 to permit the Board of
Directors to determine the terms and conditions (but not the number) of options
granted to Outside Directors, and to make certain technical changes. The
purposes of the Plan are to enable the Company to attract and retain employees
who contribute to the Company's success by their ability, ingenuity and
industry, to enable the Company to pay part of the compensation of its Outside
Directors in the form of stock options and to enable such employees and Outside
Directors to participate in the long term growth of the Company by giving them
an equity interest in the Company.
The Board of Directors believes that the Plan is accomplishing its
purposes. Since only 51,000 shares remain available of the 1,400,000 previously
authorized by the stockholders, the Board believes that additional shares should
be authorized for grant under the Plan.
Accordingly, at its March 24, 1998 meeting, the Board of Directors took
action to amend the Plan, subject to stockholder approval at the 1998 Annual
Meeting, to (i) increase the number of shares authorized for awards under the
Plan by 700,000, providing for an aggregate of 2,100,000 shares, available since
the inception of the plan; (ii) provide that shares surrendered to the Company
or withheld by the Company to satisfy the option exercise price or the
optionee's tax liability with respect to an award, will become available for
issuance under the plan; (iii) limit the number of shares with respect to which
awards under the Plan can be granted to any individual in any fiscal year to
500,000; (iv) permit the grant of transferable stock options; and (v) make
certain technical amendments to the Plan.
PRINCIPAL PROVISIONS OF THE PLAN
The following summary of the Plan, as amended and restated (subject to
stockholders' approval) effective as of May 14, 1998, is qualified in its
entirety by reference to the full text of the Plan which is available by written
request to the Secretary of the Company at 212 12th Avenue, NE, Hickory, NC
28601, or by oral request at (828) 328-5381.
Shares. The total number of shares of the Company's Common Stock available
for issuance under the plan is 2,100,000.
Shares awarded under the Plan may be authorized or unissued shares or
treasury shares. If shares subject to an option under the Plan cease to be
subject to such option, or shares awarded under the Plan are forfeited, or an
award under the Plan otherwise terminates without a payment being made to the
participant in the form of Common Stock, such shares will again be available for
future distribution under the Plan. In addition, shares surrendered to the
Company or withheld by the Company to satisfy the option exercise price or to
satisfy the optionee's tax liability with respect to an award, will become
available for issuance under the Plan.
Administration. The Plan is administered by the Executive Compensation
Committee or such other committee (the "Committee") of not less than two
directors as may be appointed by the Board of Directors. The Committee is
authorized to, among other things, grant and set the terms of awards to
employees (including officers) under the Plan, amend such awards, waive
compliance with the terms of such awards and interpret the Plan and awards. The
terms of an award under the Plan may vary from participant to participant. With
respect to awards to Outside Directors, the Committee has authority to interpret
the Plan and awards, adopt administrative regulations and administer the Plan,
but not to determine the amount or terms of awards. The
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<PAGE> 16
Board of Directors has the power to determine the terms (but not the amount) of
grants of stock options to Outside Directors and to amend such awards.
Participation. The Committee may make awards under the Plan to employees
(including officers) of the Company or of an entity in which the Company owns at
least a 20% interest, but not to any Outside Director. The employee participants
in the Plan are selected from among those eligible in the sole discretion of the
Committee. No employee may be granted awards under the Plan with respect to more
than 500,000 shares of Common Stock in any fiscal year. The Plan also provides
for the automatic grant of an option to purchase 10,000 shares of Common Stock
to each Outside Director of the Company, the terms of such option to be
determined by the Board. Outside Directors are not eligible for awards other
than stock options.
Awards to Outside Directors. Each person who was an Outside Director at
the close of the 1994 Annual Meeting of Stockholders was granted as of such
date, and each person who subsequently becomes an Outside Director shall be
granted as of the date of his or her election, a Stock Option to purchase 10,000
shares of Common Stock of the Company. The terms of the stock options are
determined by the Board of Directors, subject to the same restrictions as set
forth below with respect to awards of stock options to employees.
Awards to Employees. The Plan authorizes the Committee to grant awards to
employees (including officers) in the form of stock options, stock appreciation
rights, restricted stock, deferred stock, loans, and tax offset payments. Awards
may be granted alone or in tandem with other types of awards under the Plan. A
summary of these awards is set forth below.
1. Stock Options.
Incentive stock options ("ISOs") and non-qualified stock options
may be granted for such number of shares of Common Stock as the Committee
determines. A stock option will be exercisable at such times, over such
term and subject to such terms and conditions as the Committee determines,
at an exercise price determined by the Committee. (ISOs are subject to
restrictions as to exercise period and price as required by the Code.)
Payment of the exercise price may be made in such manner as the Committee
may provide, including cash, delivery of shares of Common Stock already
owned or subject to award under the Plan, or any other manner determined
by the Committee. The Committee may provide that the stock options will be
transferable.
Upon an optionee's termination of employment, the option will be
exercisable to the extent determined by the Committee, either in the
initial grant or an amendment thereto. The Committee may provide that an
option which is outstanding on the date of an optionee's death will remain
outstanding for an additional period after the date of such death,
notwithstanding that such option would have expired earlier under its
terms.
2. Stock Appreciation Rights ("SARs").
Upon the exercise of an SAR, the Company will pay to the employee
in cash, Common Stock or a combination thereof (the method of payment to
be at the discretion of the Committee), an amount equal to the excess of
the fair market value of the Common Stock on the exercise date over the
amount determined by the Committee (generally, the exercise price of
options granted in tandem with SARs), multiplied by the number of SARs
being exercised.
The Committee may also grant limited SARs that will be exercisable
only in the event of a "Change of Control" of the Company (as defined in
the Plan). In awarding SARs or limited SARs, the Committee may provide
that in the event of a Change in Control, SARs or limited SARs may be paid
on the basis of the "Change of Control Price" (as defined in the Plan).
See "Executive Compensation - Change of Control Provisions" for a summary
of these terms.
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<PAGE> 17
3. Restricted Stock.
In making an award of restricted stock, the Committee will
determine the periods, if any, during which the stock is subject to
forfeiture, and the purchase price, if any, for the stock. The vesting of
restricted stock may be unconditional or may be conditioned upon the
completion of a specified period of service with the Company or a
subsidiary, the attainment of specific performance goals or such other
criteria as the Committee may determine.
During the restricted period, the employee may not sell, transfer,
pledge or assign the restricted stock, except as may be permitted by the
Committee. The certificate evidencing the restricted stock will be
registered in the employee's name, although the Committee may direct that
it remain in the possession of the Company until the restrictions have
lapsed. Except as may otherwise be provided by the Committee, upon the
termination of the employee's employment for any reason during the period
before all restricted stock has vested, or in the event the conditions to
vesting are not satisfied, all restricted stock that has not vested will
be subject to forfeiture and the Committee may provide that any purchase
price paid by the employee, or an amount equal to the restricted stock's
fair market value on the date of forfeiture, if lower, shall be paid to
the employee. During the restricted period, the employee will have the
right to vote the restricted stock and to receive any cash dividends, if
so provided by the Committee. Stock dividends will be treated as
additional shares of restricted stock and will be subject to the same
terms and conditions as the initial grant, unless otherwise provided by
the Committee.
4. Deferred Stock.
Deferred stock may be conditioned upon the attainment of specific
performance goals or such other criteria as the Committee may determine.
In making an award of deferred stock the Committee will determine the
periods, if any, during which the award is subject to forfeiture, and may
provide for the issuance of stock pursuant to the award without payment
therefor. Upon vesting, the award will be settled in shares of Common
Stock, cash equal to the fair market value of such stock, or a combination
thereof, as provided by the Committee. During the deferral period set by
the Committee, the employee may not sell, transfer, pledge or assign the
deferred stock award. In the event of termination of employment before the
expiration of the deferral period, the deferred stock award will be
forfeited, except as may be provided by the Committee. Deferred stock will
carry no voting rights until such time as the Common Stock is actually
issued.
5. Loans.
The Committee may provide that the Company will make, or arrange
for, a loan to an employee with respect to the exercise of any stock
option granted under the Plan, with respect to the payment of the purchase
price, if any, of any restricted stock awarded under the Plan, with
respect to any taxes arising from an award under the Plan, or any
combination thereof, provided that the Company will not loan to any
employee more than (i) the excess of the purchase or exercise price of an
award over the par value of any shares of Common Stock awarded, plus (ii)
the amount of any taxes arising from such award. The Committee will
determine the terms of any such loan.
6. Tax Offset Payments.
The Committee may provide for a tax offset payment to an employee
in cash, not in excess of the amount necessary to pay the federal, state,
local and other taxes payable with respect to any award and the receipt of
the tax offset payment, assuming the employee is taxed at the maximum tax
rate applicable to such income.
15
<PAGE> 18
Deferrals of Awards. The Committee may permit an employee to elect to
defer receipt of any award for a specified period or until a specified event.
Change of Control Provisions. If there is a Change of Control of the
Company, unless otherwise determined by the Board or Committee at the time of
grant, all stock options and SARs which are not then exercisable will become
fully exercisable and vested, and the restrictions and deferral limitations
applicable to restricted stock and deferred stock will lapse and such shares and
awards will be deemed fully vested. Unless the Board or Committee provides
otherwise, to the extent the cash payment of any award is based on the fair
market value of Common Stock such fair market value shall be the Change of
Control Price.
Amendment. The Plan may be discontinued or amended by the Board of
Directors, except that no amendment or discontinuation may adversely affect any
outstanding award without the holder's written consent. Amendments may be made
without stockholder approval except as required to satisfy stock exchange or
regulatory requirements.
Adjustment. In the case of certain changes in the Company's structure
affecting the Common Stock, appropriate adjustments may be made by the
Committee, in its sole discretion, in the number of shares reserved under the
Plan, the number of shares as to which awards can be granted to any individual
in any fiscal year, in the number of shares covered by options and other awards
then outstanding under the Plan and, where applicable, the amount to be paid by
the employees or the Company pursuant to awards under the Plan. No such
adjustment may increase the aggregate value of any outstanding award. If the
Committee makes any adjustment under this provision to outstanding stock
options, a similar adjustment will be made to the number and terms of stock
options granted to Outside Directors under the Plan.
Certain Federal Income Tax Consequence. The following is a summary of
certain federal income tax aspects of stock options which may be awarded under
the Plan based upon the laws in effect on the date hereof.
1. Incentive Stock Options.
Generally, no taxable income is recognized by the participant upon
the grant of an ISO or upon the exercise of an ISO during the period of his
employment with the Company or one of its subsidiaries or within three months
(12 months in the event of permanent and total disability, or the term of the
option in the event of death) after termination. However, the exercise of an ISO
may result in alternative minimum tax liability to the participant. If the
participant continues to hold the shares acquired upon exercise of an ISO for at
least two years from the date of the grant and one year from the transfer of the
shares to the participant, then upon the sale of the shares, any amount realized
in excess of the option price will be taxed as capital gain.
If Common Stock acquired upon the exercise of an ISO is disposed
of prior to the expiration of the one-year and two-year holding periods
described above, then generally the participant will recognize ordinary income
in an amount equal to the excess, if any, of the fair market value of the shares
on the date of exercise (or, if less, the amount realized on the disposition of
the shares) over the option price. Any further gain recognized by the
participant on such disposition will be treated as capital gain.
2. Non-Qualified Stock Options.
No income is recognized by the participant at the time the option
is granted. Upon exercise of the option, the participant recognizes ordinary
income in an amount equal to the excess of the fair market value of the shares
on the date of exercise over the option price. At disposition, any appreciation
after the date of exercise is treated as capital gain.
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<PAGE> 19
3. Company Deductions.
As a general rule, the Company or one of its subsidiaries will be
entitled to a deduction for federal income tax purposes at the same time and in
the same amount that an employee or Outside Director recognizes ordinary income
from awards under the Plan, to the extent such income is considered reasonable
compensation under the Code. The Company will not, however, be entitled to a
deduction with respect to payments which are contingent upon a change of control
if such payments are deemed to constitute "excess parachute payments" pursuant
to Section 280G of the Code and do not qualify as reasonable compensation
pursuant to that Section; such payments will subject the recipients to a 20%
excise tax. In addition, the Company will not be entitled to a deduction to the
extent compensation in excess of $1 million is paid to an executive officer
named in the proxy statement who was employed by the Company at year-end, unless
the compensation qualifies as "performance based" under Section 162(m) of the
Code.
BENEFITS UNDER THE PLAN
If the stockholders approve the amendment of the Plan, it is anticipated
that the Committee will make grants under the Plan to employees (including
officers) from time to time. The size of future awards and the identity of
recipients cannot be determined at this time. It is expected that approximately
50 to 75 employees will be selected to receive awards under the Plan. In
addition, future Outside Directors will be granted a stock option for 10,000
shares upon their election to the Board.
MISCELLANEOUS
The closing price of the Common Stock on the New York Stock Exchange
Composite Tape on March 31, 1998 was $7.56.
Approval of the 1992 Stock Incentive Plan as amended requires the
affirmative vote of a majority of the Common Stock represented in person or by
proxy at the Annual Meeting and voting either for or against, or abstaining from
voting on, such matter. Accordingly abstentions will have the effect of a vote
against. Broker "non-votes" (shares not voted on a matter because a nominee
holding shares for a beneficial owner neither receives voting instructions from
such beneficial owner nor has discretionary voting power with respect thereto)
will not have an effect on the vote at the Annual Meeting.
The Board of Directors recommends that stockholders vote FOR the approval
of the 1992 Stock Incentive Plan, as amended.
INDEPENDENT ACCOUNTANTS
KPMG Peat Marwick LLP ("KPMG") served as independent accountants in the
audit of the books and accounts of the Company for the 1997 fiscal year. A
representative of KPMG is expected to be present at the Annual Meeting of
Stockholders with the opportunity to make a statement if so desired. Such
representative is expected to be available to respond to appropriate questions.
The Audit Committee of the Board of Directors has not yet selected the
independent accountants for the 1998 fiscal year audit.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Securities Exchange Act of 1934 requires that the Company's directors
and officers file reports of ownership and changes of ownership with the SEC and
the New York Stock Exchange. The Company believes that all directors and
officers filed on a timely basis all such reports required of them with respect
to stock ownership and changes in ownership during 1997.
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<PAGE> 20
STOCKHOLDER PROPOSALS
Pursuant to the By-Laws of the Company, nominations for the election of
directors may be made by the Board of Directors, the Nominating Committee or any
stockholder entitled to vote for the election of directors, provided such
stockholder has delivered written notice of his intention to make such
nomination in accordance with the By-Laws. Such notice must be delivered to or
mailed, postage prepaid, and received by the Secretary of the Company at
212-12th Avenue, N.E., Hickory, North Carolina 28601, in the case of an annual
meeting, not later than 90 days prior to the anniversary date of the immediately
preceding Annual Meeting. However, if the Annual Meeting is to be held more than
30 days before or after the anniversary date of the immediately preceding Annual
Meeting, and in the case of any special meeting, such notice must be delivered
or received not later than the close of business on the 10th day following the
first public disclosure by the Company of the date of such meeting. Each such
notice must state: (i) the name and address of the stockholder who intends to
make the nomination and of the person(s) to be nominated; (ii) a representation
that the stockholder is a holder of record of stock entitled to vote at such
meeting (or if the record date for such meeting is subsequent to the date
required for notice, a representation that the stockholder is a holder of record
at the time of such notice and intends to be a holder of record on the record
date for such meeting), specifying the number and class of shares so held, and
that the stockholder intends to appear in person or by proxy at the meeting to
nominate the person(s) specified in the notice; (iii) a description of all
arrangements or understandings between the stockholder and each nominee and any
other person(s) (naming such person(s)) pursuant to which the nomination(s) are
to me made; (iv) such other information regarding each nominee as would have
been required to be included in a proxy statement filed pursuant to the proxy
rules of the SEC had each nominee been nominated, or intended to be nominated,
by the Board of Directors; and (v) the consent of each nominee to serve as a
director of the Company if so elected.
The By-Laws of the Company also provide that no business may be brought
before an Annual Meeting except such business as shall be specified in the
notice of the meeting (or any supplement thereto) given by or at the direction
of the Board of Directors, other business brought before the meeting by or at
the direction of the Board of Directors or the Chairman of the Board or business
brought before the meeting by a stockholder entitled to vote thereon, provided
such stockholder has given written notice of such stockholder's intention to
bring such business before the Annual Meeting in accordance with the By-Laws.
Such notice must be delivered to, or mailed, postage prepaid, and received by,
the Secretary of the Company at the address specified above within the time
period described above. Each such notice must state: (i) a brief description of
the business desired to be brought before the meeting and the reasons for
conducting such business at the meeting; (ii) the name and address of the
stockholder who intends to propose such business; (iii) a representation that
the stockholder is a holder of record of stock of the Company entitled to vote
at such meeting (or if the record date for such meeting is subsequent to the
date required for such stockholder notice, a representation that the stockholder
is a holder of record at the time of such notice and intends to be a holder of
record on the record date for such meeting), and that the stockholder intends to
appear in person or by proxy at such meeting to propose such business; and (iv)
any material interest of the stockholder in such business.
A copy of the By-Laws of the Company is available by written request to
the Secretary of the Company at the above address or by oral request at (828)
328-5381.
In the event that any stockholder desires to present a proposal to be
reflected in the Company's form of proxy and proxy statement for the 1999 Annual
Meeting of Stockholders, that proposal must be received at the Company's
principal offices on or before December 16, 1998. Timely receipt of a
stockholder proposal satisfies only one of the various requirements for
inclusion of such a proposal in the Company's proxy materials.
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<PAGE> 21
DISCRETIONARY AUTHORITY
Management has no knowledge of any matters to be presented for action by
the stockholders other than as set forth above. The accompanying form of proxy
gives discretionary authority, however, in the event that any additional matters
should be presented.
By Order of the Board of Directors,
MITCHELL R. SETZER
Secretary
April 14, 1998
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<PAGE> 22
APPENDIX A
WORLDTEX, INC.
1992 STOCK INCENTIVE PLAN
(AS AMENDED AND RESTATED EFFECTIVE MAY 14, 1998)
SECTION 1. PURPOSES
The purposes of the Worldtex, Inc. 1992 Stock Incentive Plan
(the "Plan") are (i) to enable Worldtex, Inc. (the "Company") and Related
Companies (as defined below) to attract and retain employees who contribute to
the Company's success by their ability, ingenuity and industry, and to enable
such employees to participate in the long-term success and growth of the Company
by giving them an equity interest in the Company, and (ii) to enable the Company
to pay part of the compensation of its Outside Directors ( as defined in Section
5.2) in options to purchase the Company's Common Stock ("Stock"), thereby
increasing such directors' proprietary interest in the Company. For purposes of
the Plan, a "Related Company" means any corporation, partnership, joint venture
or other entity in which the company owns, directly or indirectly, at least a
20% beneficial ownership interest.
SECTION 2. TYPES OF AWARDS
2.1 Awards under the Plan may be in the form of (i) Stock
Options; (ii) Stock Appreciation Rights; (iii) Restricted Stock; (iv) Deferred
Stock; (v) Loans; and/or (vi) Tax Offset Payments.
2.2 An eligible employee may be granted one or more types of
awards, which may be independent or granted in tandem. If two awards are granted
in tandem, the employee may exercise (or otherwise receive the benefit of) one
award only to the extent he or she relinquishes the tandem award.
2.3 Outside Directors may receive only grants of Stock
Options, as provided in section 14.
SECTION 3. ADMINISTRATION
3.1 The Plan shall be administered by the Executive
Compensation Committee of the Company's Board of Directors (the "Board") or such
other committee of directors as the Board shall designate (the "Committee"),
which shall consist of not less than two directors. Committee members shall
serve at the pleasure of the Board. Notwithstanding the foregoing, grants of
Stock Options to Outside Directors under Section 14 shall only be made by the
Board.
3.2 The Committee shall have the following authority with
respect to awards under the Plan other than awards to Outside Directors: to
grant awards to eligible
<PAGE> 23
employees under the Plan; to adopt, alter and repeal such administrative rules,
guidelines and practices governing the Plan as it shall deem advisable; to
interpret the terms and provisions of the Plan and any award granted under the
Plan; and to otherwise supervise the administration of the Plan. In particular,
and without limiting its authority and powers, except with respect to awards to
Outside Directors, the Committee shall have the authority:
(a) to determine whether and to what extent any award
or combination of awards will be granted hereunder, including whether any awards
will be granted in tandem with each other;
(b) to select the employees to whom awards will be
granted;
(c) to determine the number of shares of the common
stock of the Company (the "Stock") to be covered by each award granted
hereunder;
(d) to determine the terms and conditions of any
award granted hereunder, including, but not limited to, any vesting or
other restrictions based on performance and such other factors as the Committee
may determine, and to determine whether the terms and conditions of the award
are satisfied;
(e) to determine the treatment of awards upon an
employee's retirement, disability, death, termination for cause or other
termination of employment;
(f) to determine pursuant to a formula or otherwise
the fair market value of the Stock on a given date; provided, however,
that if the Committee fails to make such a determination, fair market value
shall mean the closing sale price of the Stock on a given date (or, if no sale
of Stock occurs on such date, the closing sale price on the nearest trading date
before such date);
(g) to determine that the amounts equal to the amount
of any dividends declared with respect to the number of shares
covered by an award (i) will be paid to the employee currently or (ii) will be
deferred and deemed to be reinvested or (iii) will be otherwise credited to the
employee, or that the employee has no rights with respect to such dividends;
(h) to determine whether, to what extent, and under
what circumstances Stock and other amounts payable with respect to an
award will be deferred either automatically or at the election of an employee,
including providing for and determining the amount (if any) of deemed earnings
on any deferred amount during any deferral period;
(i) to provide that the shares of Stock received as a
result of an award shall be subject to a right of first refusal, pursuant to
which the employee shall be required to offer to the Company any shares that the
employee wishes to sell, subject to such terms and conditions as the Committee
may specify;
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(j) to amend the terms of any award, prospectively or
retroactively; provided, however, that no amendment shall impair the
rights of the award holder without his or her consent; and
(k) to substitute new Stock Options for previously
granted Stock Options, or for options granted under other plans or
agreements, in each case including previously granted options having higher
option prices.
3.3 With respect to awards to Outside Directors, the Committee
shall have authority to interpret the Plan and the terms of any Stock Options
granted to Outside Directors; to adopt, amend, and rescind administrative
regulations to further the purposes of the Plan; and to take any other action
necessary to the proper operation of the Plan. However, the Committee shall have
no discretion to vary the amount or terms of awards granted to Outside
Directors, except as provided in section 4.4. The Board shall have the power to
make grants of Stock Options to Outside Directors, pursuant to Section 14, and
to amend such awards prospectively or retroactively; provided, however, that no
amendment shall impair the rights of the award holder without his or her written
consent.
3.4 All determinations made by the Committee or the Board
pursuant to the provisions of the Plan shall be final and binding on all
persons, including the Company and Plan participants.
3.5 The Committee may from time to time delegate to one or
more officers of the Company any or all of its authorities granted hereunder
except with respect to awards granted to persons subject to Section 16 of the
Securities Exchange Act of 1934. The Committee shall specify the maximum number
of shares that the officer or officers to whom such authority is delegated may
award.
SECTION 4. STOCK SUBJECT TO PLAN
4.1 The total number of shares of Stock reserved and available
for distribution under the Plan shall be 2,100,000 shares (subject to adjustment
as provided below). Such shares may consist of authorized but unissued shares or
treasury shares. The exercise of a Stock Appreciation Right for cash or the
payment of any other award in cash shall not count against this share limit.
4.2 To the extent a stock option terminates without having
been exercised, or an award terminates without the employee having received
payment of the award, or shares awarded are forfeited, the shares subject to
such award shall again be available for distribution in connection with future
awards under the Plan.
Shares of Stock equal in number to the shares surrendered or withheld in payment
of the option price and/or to satisfy federal, state or local tax liability with
respect to an award
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shall not count against the above share limit, and shall again be available for
grants under the plan.
4.3 No employee shall be granted Stock Options, Stock
Appreciation Rights, Restricted Stock, and/or Deferred Stock, or any combination
of the foregoing with respect to more than 500,000 shares of Stock in any fiscal
year (subject to adjustment as provided in section 4.4). No employee shall be
granted a Tax Offset Payment with respect to more than the number of shares
covered by awards granted to such employee.
4.4 In the event of any merger, reorganization, consolidation,
sales of substantially all assets, recapitalization, Stock dividend, Stock
split, spin-off, split-up, split-off, distribution of assets or other change in
corporate structure affecting the Stock, a substitution or adjustment, as may be
determined to be appropriate by the Committee in its sole discretion, shall be
made in the aggregate number of shares reserved for issuance under the Plan, the
number of shares as to which awards can be granted to any individual in any
fiscal year, the number of shares subject to outstanding awards and the amounts
to be paid by award holders or the Company, as the case may be, with respect to
outstanding awards; provided, however, that no such adjustment shall increase
the aggregate value of any outstanding award. In the event any change described
in this Section 4.4 occurs and an adjustment is made in the outstanding Stock
Options held by employees, a similar adjustment shall be made in the number and
terms of Stock Options held by Outside Directors under Section 14.
SECTION 5. ELIGIBILITY
5.1 Officers and other employees of the Company or a Related
Company are eligible to be granted awards under the Plan, other than under
Section 14. Except as provided in Section 5.2, Outside Directors are not
eligible to be granted awards under the Plan. The officer and employee
participants under the Plan shall be selected from time to time by the
Committee, in its sole discretion, from among those eligible.
5.2 Awards under Section 14 of the Plan shall be made solely
to Outside Directors, which term shall mean any director of the Company other
than one who is an officer or employee of the Company or a Related Company.
SECTION 6. STOCK OPTIONS
6.1 The Stock Options awarded to officers and employees under
the Plan may be of two types: (i) Incentive Stock Options within the meaning of
Section 422 of the Internal Revenue Code or any successor provision thereto; and
(ii) Non-Qualified Stock Options. To the extent that any Stock Option does not
qualify as an Incentive Stock Option, it shall constitute a Non-Qualified Stock
Option.
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6.2 Subject to the following provisions, Stock Options awarded
under the Plan shall be in such form and shall have such terms and conditions as
the Committee may determine.
(a) Option Price. The option price per share of Stock
purchasable under a Stock Option shall be determined by the Committee.
(b) Option Term. The term of each Stock Option shall
be fixed by the Committee at the time of grant.
(c) Exercisability. Stock Options shall be
exercisable at such time or times and subject to such terms and conditions as
shall be determined by the Committee. The Committee may waive such exercise
provisions or accelerate the exercisability of the Stock Option at any time in
whole or in part.
(d) Method of Exercise. Stock Options may be
exercised in whole or in part at any time during the option period by giving
written notice of exercise to the Company specifying the number of shares to be
purchased, accompanied by payment of the purchase price. Payment of the purchase
price shall be made in such manner as the Committee may provide in the award,
which may include cash (including cash equivalents), delivery of shares of Stock
already owned by the optionee or subject to awards hereunder, any other manner
permitted by law determined by the Committee, or any combination of the
foregoing. The Committee may provide that all or part of the shares received
upon exercise of a Stock Option which are paid for using Restricted Stock or
Deferred Stock shall be restricted or deferred in accordance with the original
terms of the award in question.
(e) No Stockholder Rights. An optionee shall have
neither rights to dividends or other rights of a stockholder with respect to
shares subject to Stock Option until the optionee has given written notice us
exercise and has paid for such shares.
(f) Surrender Rights. The Committee may provide that
options may be surrendered for cash upon any terms and conditions set by the
Committee.
(g) Non-transferability. Unless otherwise provided by
the Committee, no Stock Options shall be transferable by the optionee other than
by will or by the laws of decent and distribution, and (ii) during the
optionee's lifetime, all Stock Options shall be exercisable only by the optionee
or by his or her guardian or legal representative.
(h) Termination of Employment. Following the
termination of an optionee's employment with the Company or a Related
Company, the Stock Option shall be exercisable to the extent determined by the
Committee. The Committee may provide different post-termination exercise
provisions with respect to termination of employment for different reasons. The
Committee may provide that, notwithstanding the option term fixed pursuant to
Section 6.2(b), a Stock Option which is outstanding on the
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date of optionee's death shall remain outstanding for an additional period after
the date of such death.
6.3 Notwithstanding the provisions of Section 6.2, no
Incentive Stock Option shall (i) have an option price which is less than 100% of
the fair market value of the Stock on the date of the award of the Stock Option,
(ii) be exercisable more than ten years after the date such Incentive Stock
Option is awarded, or (iii) be awarded more than ten years after the effective
date of the Plan as most recently approved by stockholders.
SECTION 7. STOCK APPRECIATION RIGHTS
7.1 A Stock Appreciation Right shall entitle the holder
thereof to receive payment of an amount, in cash, shares of Stock or a
combination thereof, as determined by the Committee, equal in value to the
excess of the fair market value of the shares as to which the award is granted
on the date of exercise over an amount specified by the Committee. Any such
award shall be in such form and shall have such terms and conditions as the
Committee may determine.
7.2 The Committee may provide that a Stock Appreciation Right
may be exercised only within the 60-day period following occurrence of a Change
of Control (as defined in Section 16.2). The Committee may also provide that in
the event of a Change of Control the amount to be paid upon exercise of a Stock
Appreciation Right shall be based on the Change of Control Price (as defined in
Section 16.3).
SECTION 8. RESTRICTED STOCK
Subject to the following provisions, all awards of Restricted
Stock shall be in such form and shall have such terms and conditions as the
Committee shall determine:
(a) The Restricted Stock award shall specify the
number of shares of Restricted Stock to be awarded, the price, if any, to
be paid by the recipient of the Restricted Stock and the date or dates on which,
or the conditions upon the satisfaction of which, the Restricted Stock will
vest. The vesting of Restricted Stock may be conditioned upon the completion of
a specified period of service with the Company or a Related Company, upon the
attainment of specified performance goals or upon such other criteria as the
Committee may determine.
(b) Stock certificates representing the Restricted
Stock awarded to an employee shall be registered in the employee's name,
but the Committee may direct that such certificates be held by the Company on
behalf of the employee. Except as may be permitted by the Committee, no share of
Restricted Stock may be sold, transferred, assigned, pledged or otherwise
encumbered by the employee until such share has vested in accordance with the
terms of the Restricted Stock award. At the time Restricted Stock vests, a
certificate for such vested shares shall be delivered to the
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employee (or his or her designated beneficiary in the event of death), free of
all restrictions.
(c) The Committee may provide that the employee shall
have the right to vote or receive dividends on Restricted Stock. Unless the
Committee provides otherwise, the Stock received as a dividend on, or in
connection with a stock split of, Restricted Stock shall be subject to the same
restrictions as the Restricted Stock.
(d) Except as may be provided by the Committee, in
the event of an employee's termination of employment before all of his or her
Restricted Stock has vested, or in the event any conditions to the vesting of
Restricted Stock have not been satisfied prior to any deadline for the
satisfaction of such conditions set forth in the award, the shares of Restricted
Stock which have not vested shall be forfeited, and the Committee may provide
that (i) any purchase price paid by the employee shall be returned to the
employee or (ii) a cash payment equal to the Restricted Stock's fair market
value on the date of forfeiture, if lower, shall be paid to the employee.
(e) The Committee may waive, in whole or in part, any
or all of the conditions to receipt of, or restrictions with respect
to, any or all of the employee's Restricted Stock.
SECTION 9. DEFERRED STOCK AWARDS
Subject to the following provisions, all awards of Deferred
Stock shall be in such form and shall have such terms and conditions as the
Committee may determine:
(a) The Deferred Stock shall specify the number of
shares of Deferred Stock to be awarded to any employee and the duration of the
period (the "Deferral Period") during which, and the conditions under which,
receipt of the Stock will be deferred. The Committee may condition the award of
Deferred Stock, or receipt of Stock or cash at the end of the Deferral Period,
upon the attainment of specified performance goals or such other criteria as the
Committee may determine.
(b) Deferred Stock awards may not be sold, assigned,
transferred, pledged or otherwise encumbered during the Deferral
Period.
(c) At the expiration of the Deferral Period, the
employee ( or his or her designated beneficiary in the event of death) shall
receive (i) certificates for the number of shares of Stock equal to the number
of shares covered by the Deferred Stock award, (ii) cash equal to the fair
market value of such Stock, or (iii) a combination of shares and cash, as the
Committee may determine.
(d) Except as may be provided by the Committee, in
the event of an employee's termination of employment before the end of the
Deferral Period, his or her Deferred Stock award shall be forfeited.
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(e) The Committee may waive, in whole or in part, any
or all of the conditions to receipt of, or restrictions with respect to, Stock
or cash under a Deferred Stock award.
SECTION 10. LOANS
The Committee may provide that the Company shall make, or
arrange for, a loan or loans to an employee with respect to the exercise of any
Stock Option awarded under the Plan, with respect to the payment of the purchase
price, if any, of any Restricted Stock awarded hereunder or with respect to any
taxes arising from an award hereunder; provided, however, that the Company shall
not loan to an employee more than the sum of (i) the excess of the purchase or
exercise price of an award over the par value of any shares of Stock awarded
plus (ii) the amount of any taxes arising from such award. Any such loan shall
be made on terms that comply with all applicable legal requirements. The
Committee shall have full authority to decide whether a loan will be made
hereunder and to determine the amount, term and provisions of any such loan,
including the interest rate to be charged, whether the loan will be with or
without recourse against the borrower, any security for the loan, the terms on
which the loan is to be repaid and the conditions, if any, under which the loan
may be forgiven.
SECTION 11. TAX OFFSET PAYMENTS
The Committee may provide for a Tax Offset Payment by the
Company to an employee with respect to one or more awards granted under the
Plan, in an amount specified by the Committee, which shall not exceed the amount
necessary to pay the federal, state, local and other taxes payable with respect
to such award and the receipt of the Tax Offset Payment assuming that the
employee is taxed at the maximum tax rate applicable to such income.
The Tax Offset Payment shall be paid in cash.
SECTION 12. ELECTION TO DEFER AWARDS
The Committee may permit an officer or employee to elect to
defer receipt of an award for a specified period or until a specified event,
upon such terms as are determined by the Committee.
SECTION 13. TAX WITHHOLDING
13.1 Each participant shall, no later than the date as of
which the value of an award first becomes includable in his or her gross income
for applicable tax purposes, pay to the Company, or make arrangements
satisfactory to the Committee regarding payment of, any federal, state, local or
other taxes of any kind required by law to be withheld with respect to the
award. The obligations of the Company under the Plan shall be conditional on
such payment or arrangements, and the Company (and, where
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applicable, any Related Company), shall, to the extent permitted by law, have
the right to deduct any such taxes from any payment of any kind otherwise due to
the participant.
13.2 To the extent permitted by the Committee, and subject to
such terms and conditions as the Committee may provide, an employee may elect,
or the Company may require, that the employee have the withholding tax
obligation, or any additional tax obligation with respect to any awards
hereunder, satisfied by (i) having the Company withhold shares of Stock
otherwise deliverable to the employee with respect to the award or (ii)
delivering to the Company shares of unrestricted Stock.
SECTION 14. STOCK OPTIONS FOR OUTSIDE DIRECTORS
14.1 Each person who is an Outside Director at the close of
the 1994 Annual Meeting of Stockholders shall be granted as of such date a Stock
Option to purchase 10,000 shares of common stock of the Company. Each person who
becomes an Outside Director after such date shall be granted, as of the date of
his or her election as an Outside Director, a Stock Option to purchase 10,000
shares of common stock of the Company.
14.2 Stock Options granted under this Section 14 shall be
Non-Qualified Stock Options and shall have such terms and conditions as the
Board may determine. The provisions of Section 6.2 shall apply to Stock Options
granted to Outside Directors under this Section 14, except that, with respect to
such Stock Options, all references in Section 6.2 to the Committee shall be
deemed to refer to the Board.
SECTION 15. AMENDMENTS AND TERMINATION
The Board may discontinue the Plan at any time and may amend
it from time to time. No amendment or discontinuation of the Plan shall
adversely affect any award previously granted without the award holder's written
consent. Amendments may be made without stockholder approval except as required
to comply with exchange or regulatory requirements.
SECTION 16. CHANGE OF CONTROL
16.1 In the event of a Change of Control, unless otherwise
determined by the Committee (or, in the case of Stock Options granted under
Section 14, the Board) at the time of grant or by amendment (with the holder's
consent) of such grant:
(a) all outstanding Stock Options and all outstanding
Stock Appreciation Rights awarded under the Plan shall become fully
exercisable and vested;
(b) the restrictions and deferral limitations
applicable to any outstanding Restricted Stock and Deferred Stock awards under
the Plan shall lapse and such shares and awards shall be deemed fully vested,
and;
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(c) to the extent the cash payment of any award is
based on the fair market value of Stock, such fair market value shall be the
Change of Control Price.
16.2 A "Change of Control" shall be deemed to occur on:
(a) the date that person or group deemed a person
under Sections 3(a)(9) and 13(d)(3) of the Securities Exchange Act of 1934,
other than the Company and its subsidiaries as determined immediately prior to
that date (or an employee benefit plan of the Company or its subsidiaries), in a
transaction or series of transactions has become the beneficial owner, directly
or indirectly (with beneficial ownership determined as provided in Rule 13d-3,
or any successor rule, under such Act) of 25% or more of the outstanding
securities of the Company having the right under ordinary circumstances to vote
at an election of the Board;
(b) the date on which one-third or more of the
members of the Board shall consist of persons other than Current Directors
(for these purposes, a "Current Director" shall mean any member of the Board as
of the effective date of the Plan and any successor of a Current Director whose
nomination or election has been approved by a majority of the Current Directors
on the Board); or
(c) the date of approval by the stockholders of the
Company of an agreement providing for (A) the merger or consolidation
of the Company with another corporation where the stockholders of the Company,
immediately prior to the merger or consolidation, would not beneficially own,
immediately after the merger or consolidation, shares entitling such
stockholders to 50% or more of all votes (without consideration of the rights of
any class of stock to elect directors by a separate class vote) to which all
stockholders of the corporation issuing cash or securities in the merger or
consolidation would be entitled in the election of directors or where the
members of the Board, immediately prior to the merger or consolidation, would
not, immediately after the merger or consolidation, constitute a majority of the
Board of Directors of the corporation issuing cash or securities in the merger
or consolidation or (B) the sale or other disposition of all or substantially
all the assets of the Company.
16.3 "Change of Control Price" means the highest price per
share paid in any transaction reported on the New York Stock Exchange Composite
Index (or if the Stock is not then listed on such Exchange, the highest price
per share paid in any open market transaction), or paid or offered in any
transaction related to a Change of Control at any time during the 90-day period
ending with the Change of Control. Notwithstanding the foregoing sentence, in
the case of Stock Appreciation Rights granted in tandem with Incentive Stock
Options, the Change of Control Price shall be the highest price paid on the date
on which the Stock Appreciation Right is exercised.
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SECTION 17. GENERAL PROVISIONS
17.1 Each award under the Plan shall be subject to the
requirement that, if at any time the Committee shall determine that (i) the
listing, registration or qualification of the Stock subject or related thereto
upon any securities exchange or under any state or federal law, or (ii) the
consent or approval of any government regulatory body or (iii) an agreement by
the recipient of an award with respect to the disposition of Stock is necessary
or desirable as a condition of , or in connection with, the granting of such
award or the issuance, purchase or delivery of Stock thereunder, such award
shall not be granted or exercised, in whole or in part, unless such listing,
registration, qualification, consent, approval or agreement shall have been
effected or obtained free of any conditions not acceptable to the Committee.
17.2 Nothing set forth in this Plan shall prevent the Board
from adopting other or additional compensation arrangements. Neither the
adoption of the Plan nor any award hereunder shall confer upon any employee of
the Company, or of a Related Company, any right to continued employment. No
award under Section 14 shall confer upon any Outside Director any right to
continued service as a director.
17.3 Determinations by the Board or the Committee under the
Plan relating to the form, amount, and terms and conditions of awards need not
be uniform, and may be made selectively among persons who receive or are
eligible to receive awards under the Plan, whether or not such persons are
similarly situated.
17.4 No member of the Board or the Committee, nor any officer
or employee of the Company acting on behalf of the Board or the Committee, shall
be personally liable for any action, determination or interpretation taken or
made with respect to the Plan, and all members of the Board and the Committee
and all officers and employees of the Company acting on their behalf, shall, to
the extent permitted by law, be fully indemnified and protected by the Company
in respect of any such action, determination or interpretation.
SECTION 18. EFFECTIVE DATE OF PLAN
The Plan became effective immediately after the Closing (as
defined in the Purchase Agreement, dated April 22, 1992, among Willcox & Gibbs,
Inc., Compagnie de Distribution de Materiel Electrique, International Technical
Distributors, Inc., and Southern Electric Supply Company, Inc.). The Plan was
amended and restated effective January 24, 1994 subject to approval by the
Company's stockholders, which was obtained on May 12, 1994, and was amended and
restated by the Board effective March 25, 1997. This amendment and restatement
of the Plan shall be effective May 14, 1998, subject to approval by the
Company's shareholders.
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APPENDIX B
The Board of Directors Recommends a vote "FOR all" in Item 1 and "FOR" in
Item 2.
#### ########## ________________ Please mark
COMMON [X] your votes
as this
Item 1. Election of Messrs. Egler, Mackey and Ziegler as Class III Directors.
FOR all Withheld for all
[ ] [ ]
Withheld for the following only: (Write the name of nominee(s) in the space
below)
___________________________________________________________________________
Item 2. Approval of the 1992 Stock Incentive Plan as amended.
FOR WITHHELD
[ ] [ ]
In their discretion, the proxies are authorized to vote upon other business as
may properly come before the meeting.
WILL
ATTEND
MEETING
[ ]
The shares represented by this proxy will be voted as directed by the
stockholder. If no direction is given when the duly executed proxy is returned
such shares will be voted "FOR all" in Item 1 and "FOR" in Item 2.
Signature(s) ______________________________________________ Date ______________
Note: Please sign as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WORLDTEX, INC.
Solicited by the Board of Directors for use at the Annual Meeting of
Stockholders of Worldtex, Inc. - May 14, 1998, at 11:00 a.m., Bank of America
Plaza, 335 Madison Avenue, Fifth Floor, Room 5A, New York, New York.
The undersigned hereby appoints Richard J. Mackey and Barry D. Setzer, and
any one of them, attorneys and proxies, with full power of substitution and
revocation in each, for and on behalf of the undersigned, and with all the
powers the undersigned would possess if personally present, to vote at the above
Annual Meeting and any adjournment thereof all shares of stock that the
undersigned would be entitled to vote at such meeting.
THIS PROXY IS CONTINUED ON THE REVERSE SIDE
PLEASE SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY
