[SHAW LOGO]
To the Shareholders:
You are cordially invited to attend the 1997 Annual Meeting of
Shareholders to be held at the administrative offices of the Company,
616 East Walnut Avenue, Dalton, Georgia, on Thursday, April 24, 1997,
at 11:00 a.m., local time.
The principal business of the meeting will be to elect
directors and to approve a stock incentive plan for the employees of
Shaw Industries. The plan is set forth in its entirety in this proxy
statement. During the meeting we will review the results of the past
year and report on significant aspects of our operations during the
first quarter of fiscal 1997.
We would appreciate your completing, signing, dating and
returning the enclosed proxy card in the envelope provided at your
earliest convenience. If you choose to attend the meeting, you may, of
course, revoke your proxy and personally cast your votes.
Sincerely yours,
/s/Robert E. Shaw
ROBERT E. SHAW
Chairman of the Board of Directors
and Chief Executive Officer
March 28, 1997
<PAGE>
SHAW INDUSTRIES, INC.
616 East Walnut Avenue
Dalton, Georgia 30720
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
April 24, 1997
The 1997 Annual Meeting of Shareholders of Shaw Industries,
Inc. will be held on Thursday, April 24, 1997, at 11:00 a.m., at the
principal administrative offices of the Company, 616 East Walnut
Avenue, Dalton, Georgia.
The meeting is called for the following purposes:
1. To elect three directors to Class III of the Board of
Directors for a three-year term and one director in
Class I for a two-year term.
2. To consider and vote upon a proposed stock incentive
plan.
3. To consider and act upon such other business as may
properly come before the meeting or any adjournment(s).
The Board of Directors has fixed the close of business on
March 21, 1997 as the record date for the determination of
shareholders entitled to notice of and to vote at the meeting.
By order of the Board of Directors,
/s/Bennie M. Laughter
BENNIE M. LAUGHTER
Secretary
March 28, 1997
IF YOU ARE UNABLE TO BE PRESENT AT THE MEETING, YOU ARE
REQUESTED TO SIGN, COMPLETE AND RETURN THE ENCLOSED PROXY SO THAT YOUR
STOCK WILL BE REPRESENTED.
<PAGE>
PROXY STATEMENT
SHAW INDUSTRIES, INC.
616 East Walnut Avenue
Dalton, Georgia 30720
The enclosed proxy is solicited by the Board of Directors of
Shaw Industries, Inc. (the "Company") for use at the 1997 Annual
Meeting of Shareholders to be held on April 24, 1997, at 11:00 a.m.,
local time, at the administrative offices of the Company, 616 East
Walnut Avenue, Dalton, Georgia. Any shareholder giving a proxy has the
power to revoke it at any time before it is voted by filing with the
Secretary either an instrument revoking the proxy or a duly executed
proxy bearing a later date. Proxies may also be revoked by any
shareholder present at the meeting who expresses a desire to vote his
or her shares in person. Proxies in the accompanying form which are
properly executed by shareholders, duly returned and not revoked
will be voted. Such proxies will be voted in accordance with the
directions, if any, given by such shareholders, and if directions are
not given, will be voted in favor of the proposal to elect as
directors the persons specified herein.
This proxy statement and proxy and the accompanying notice
were first mailed to shareholders on or about March 28, 1997.
VOTING RIGHTS AND PRINCIPAL SHAREHOLDERS
March 21, 1997 has been fixed as the record date for the
determination of shareholders entitled to notice of and to vote at the
meeting or any adjournment(s). As of the record date, the Company had
outstanding and entitled to vote at the meeting 133,248,201 shares of
Common Stock, each share being entitled to one vote (the "Common
Stock"). The holders of a majority of the shares entitled to be voted
must be present or represented by proxy to constitute a quorum. Shares
as to which authority to vote is withheld, abstentions and broker
non-votes are counted in determining whether a quorum exists.
Under Georgia law, directors are elected by a plurality of
the votes cast by holders of share entitled to vote in the election at
a meeting at which a quorum is present. Only votes actually cast will
be counted for the purpose of determining whether a particular nominee
received more votes than the persons, if any, nominated for the same
seat on the Board of Directors. Accordingly, if authority to vote for
one or more nominees is withheld on a proxy card, no vote will be cast
with respect to the shares represented by that proxy card and the
outcome of the election will not be affected. Shareholder approval of
the proposed stock incentive plan requires the affirmative vote of the
majority of the shares of Common Stock represented at the meeting and
entitled to vote. Therefore, for purposes of determining whether
Proposal 2 is approved by the shareholders, abstentions will have the
same effect as votes against Proposal 2, but broker non-votes
will have no effect.
The following table sets forth information concerning those
persons known by management of the Company to own beneficially more
than 5% of the Common Stock, the directors and director nominees of
the Company, the executive officers named in the Summary Compensation
Table included elsewhere herein and all directors and executive
officers as a group. Such information is given as of March 15, 1997.
According to rules adopted by the Securities and Exchange Commission,
a person is the "beneficial owner" of securities if he or she has or
shares the power to vote them or to direct their investment. Except as
otherwise noted, the indicated owners have sole voting and investment
power with respect to shares beneficially owned. An asterisk in the
percent of class column indicates beneficial ownership of less than 1%
of the outstanding Common Stock.
<PAGE>
<TABLE>
Name and Address of Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership Class
------------------- -------------------- ----------
<S> <C> <C>
Oppenheimer Group, Inc. (1) 25,082,419 18.8
INVESCO PLC (2) 9,790,500 7.3
Robert E. Shaw (3) 7,281,188(4) 5.5
J. C. Shaw (5) 8,232,556(6) 6.2
Clifford M. Kirtland, Jr.(7) 20,500 *
J. Hicks Lanier 9,000 *
R. Julian McCamy 3,166,019(8) 2.4
Thomas G. Cousins 41,000 *
S. Tucker Grigg 2,448,552(9) 1.8
William C. Lusk, Jr. 603,160(10) *
W. Norris Little 426,355 *
Robert R. Harlin 508 *
Robert J. Lunn -- *
Vance D. Bell 80,484 *
Kenneth G. Jackson 3,000 *
All executive officers and
directors as a group (16 persons) 22,457,161 16.9
</TABLE>
- - - -------------------
(1) Oppenheimer Group, Inc.'s address is Oppenheimer Tower,
World Financial Center, New York, New York 10281. Based on
Schedule 13G, as amended, filed by the indicated person,
which reported beneficial ownership as of December 31,
1996.
(2) INVESCO PLC's address is 1315 Peachtree Street, NE, Atlanta,
Georgia 30309. Based on Schedule 13G, as amended, filed by
the indicated person, which reported beneficial ownership as
of December 31, 1996.
(3) Mr. Shaw's address is 203 Goose Hill Road, Rocky
Face,Georgia 30740.
(4) Includes 567,840 shares owned by Mr. Shaw's spouse.
(5) Mr. Shaw's address is 721 West Avenue, Cartersville, Georgia
30120.
(6) Includes 66,572 shares owned by Mr. Shaw's spouse, 43,765
held in trust for Mr. Shaw's grandchildren, and 3,999,050
shares held in a grantor retained annuity trust. Mr. Shaw
has sole voting power with respect to the shares held in the
annuity trust.
(7) Mr. Kirtland has resigned from his position as a director of
the Company effective April 24, 1997.
(8) Includes 1,369,119 shares owned by Mr. McCamy's spouse and
427,236 shares held in trust for Mr. McCamy's children. Mr.
McCamy disclaims beneficial ownership of the shares held by
his spouse and in trust for his children.
(9) Includes 1,798,480 shares owned by the estate of Mr. Grigg's
deceased spouse and 58,520 shares held in trust for his
children. Mr. Grigg disclaims beneficial ownership of the
shares held by the estate of his spouse and in trust for his
children.
(10) Includes 8,528 shares owned by Mr. Lusk's spouse, as to
which Mr. Lusk shares voting and investment powers, and
8,400 shares held for Mr. Lusk's grandchildren.
<PAGE>
PROPOSAL 1. ELECTION OF CLASS OF DIRECTORS
Nominees
The Board of Directors of the Company is divided into three
classes of directors with staggered terms of office. Upon the
expiration of the term of office for a class of directors, the
nominees for that class are elected for a term of three years to serve
until the election and qualification of their successors. At the
Annual Meeting of Shareholders this year, there are three nominees in
Class III and one nominee in Class I. The Class II and other Class I
directors have one year and two years, respectively, remaining
on their terms of office.
It is the intention of the persons named as proxies to vote
their proxies for the election of William C. Lusk, Jr., W. Norris
Little and Robert R. Harlin as Class III directors and for the
election of Robert J. Lunn as a Class I director. All of the Class III
nominees currently serve as directors. Mr. Lunn has been nominated to
fill the vacancy created in Class I upon the effectiveness of Mr.
Kirtland's resignation. In the event any of the nominees refuses or is
unable to serve as a director (which is not now anticipated),
the persons named as proxies reserve full discretion to vote for such
other person or persons as may be nominated.
The Board of Directors recommends a vote FOR the election of
the nominees named below as Class III directors and the nominee named
below as a Class I director.
The following section sets forth the names, ages,
occupations and employment during the last five years of each of the
nominees and the directors in Class I and Class II, the period during
which each has served as a director of the Company and other
directorships held.
Nominees for Class III
(Term Expiring 2000)
W. NORRIS LITTLE
Director since 1979 Age: 65
Mr. Little has been President and Chief Operating Officer of the
Company since January 24, 1996, and served as Senior Vice President,
Operations of the Company for more than five years prior thereto.
WILLIAM C. LUSK, JR.
Director since 1973 Age: 61
Mr. Lusk is Senior Vice President and Treasurer of the Company.
ROBERT R. HARLIN
Director since 1967 Age: 64
Mr. Harlin is a member of the law firm of Powell, Goldstein, Frazer &
Murphy LLP.
Nominee for Class I
(Term Expiring 1999)
ROBERTJ. LUNN Age: 50
Mr. Lunn is Managing Director of Lunn Partners, LLC, in Chicago,
Illinois. Previously, he had been a Managing Director of Lehman
Brothers from 1994 to 1996 and a Managing Director with Morgan Stanley
for more than five years previous to that.
Members of the Board of Directors Continuing in Office
Class II
(Term Expiring 1998)
J. HICKS LANIER
Director since 1986 Age: 56
Mr. Lanier is Chairman of the Board, President and Chief Executive
Officer of Oxford Industries, Inc., an apparel manufacturer. Mr.
Lanier also serves as a director of SunTrust Banks of Georgia, Inc.,
Genuine Parts Company and Crawford & Company.
<PAGE>
R. JULIAN McCAMY
Director since 1986 Age: 65
Mr. McCamy is President of McCamy Properties, Inc., a real estate
development company.
THOMAS G. COUSINS
Director since 1992 Age: 65
Mr. Cousins is Chairman of the Board and Chief Executive Officer of
Cousins Properties Incorporated, a real estate development company.
Mr. Cousins also serves as a director of NationsBank Corporation.
S. TUCKER GRIGG
Director since 1992 Age: 60
Mr. Grigg is self-employed as a manufacturer of advertising and
marketing displays, furniture and bedding.
Class I
(Term Expiring 1999)
J. C. SHAW
Director since 1967 Age: 67
Mr. Shaw has been Chairman Emeritus of the Board of the Company since
April 27, 1995, and served as Chairman of the Board of the Company for
more than five years prior thereto.
ROBERT E. SHAW
Director since 1967 Age: 65
Mr. Shaw has been Chairman of the Board and Chief Executive Officer of
the Company since April 27, 1995, and served as President and Chief
Executive Officer of the Company for more than five years prior
thereto. He is also a director of Oxford Industries, Inc., an apparel
manufacturer.
Certain Relationships
Messrs. J. C. Shaw and Robert E. Shaw are brothers. Messrs.
McCamy and Grigg are brothers-in-law of Messrs. J. C. Shaw and Robert
E. Shaw.
Mr. Harlin is a member of the law firm of Powell, Goldstein,
Frazer & Murphy LLP, which has served as counsel for the Company since
its inception.
Meetings and Committees
During the past fiscal year, the Board of Directors met six
times. The executive committee consisted of Messrs. J. C. Shaw, Robert
E. Shaw, Harlin, Kirtland and Lanier and did not meet during the past
fiscal year. The executive committee functions with substantially all
of the powers and duties of the Board of Directors; however, the
committee lacks authority to amend the Articles of Incorporation or
Bylaws of the Company, fill vacancies on the Board of Directors,
approve or propose to shareholders action for which shareholder
approval is required by law or approve mergers that do not require
shareholder approval. The executive committee recommends individuals
to the Board of Directors for consideration as nominees to the Board
of Directors. No formal procedure for shareholder recommendations
regarding nominees to the Board of Directors has been adopted. The
executive committee would consider any such shareholder
recommendations if submitted in writing, addressed to the chairman of
the executive committee at the Company's principal offices.
The audit committee consists of Messrs. Lanier, McCamy and
Cousins. The audit committee met twice during the past fiscal year.
The audit committee is responsible for reviewing the financial
statements of the Company, for evaluating the Company's internal
control systems and procedures and for coordinating and approving the
activities of the Company's auditors. This committee also approves
services other than normal audit services performed by the Company's
auditors.
The compensation committee consists of Messrs. Kirtland,
Grigg and Harlin. The compensation committee met three times during
the past fiscal year. This committee is responsible for setting and
reviewing the compensation, including fringe benefits, of the
executive officers and directors of the Company and administering the
Company's stock option plans.
<PAGE>
Director Compensation
During fiscal 1996, each nonmanagement director received an
annual fee of $24,000, half of which was received in the form of
Common Stock of the Company, a fee of $1,000 for each board meeting
attended and a fee of $750 for each committee meeting attended. Each
management director received a fee of $1,000 for each board meeting
attended. The Company paid ordinary and necessary travel expenses for
directors to attend board and committee meetings.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934
requires the Company's directors and officers and persons who own
beneficially more than 10% of a registered class of the Company's
equity securities to file with the Securities and Exchange Commission
(the "SEC") and the New York Stock Exchange initial reports of
ownership and reports of changes in ownership of Common Stock and
other equity securities of the Company. Officers, directors
and greater than 10% shareholders are required by SEC regulations to
furnish the Company with copies of all such forms they file.
To the Company's knowledge, based solely on a review of the
copies of such reports furnished to the Company and written
representations that no other reports were required, its officers,
directors and greater than 10% shareholders complied during fiscal
1996 with all applicable Section 16(a) filing requirements.
EXECUTIVE COMPENSATION
This section of the proxy statement discloses the
compensation awarded or paid to, or earned by, the Company's Chief
Executive Officer and its four other most highly compensated executive
officers with respect to the fiscal year ended December 28, 1996
(together, these persons are sometimes referred to as the "named
executives").
Summary Compensation Table
<TABLE>
Annual Long-Term
Compensation Compensation
Options/ All Other
Fiscal Salary Bonus SARs Compensation
Name and Position Year ($) ($) (1) (#) ($) (2)
----------------- ------ --------- ---------
<S> <C> <C> <C>
Robert E. Shaw 1996 1,000,000 1,000,000 8,000 4,750
Chairman and 1995 1,000,000 750,000 6,000 4,620
Chief Executive Officer 1994 975,000 1,060,000 0 4,558
W. Norris Little 1996 588,000 625,000 8,000 4,750
President and Chief 1995 588,000 315,000 6,000 4,620
Operating Officer 1994 574,000 420,000 0 4,558
William C. Lusk, Jr. 1996 588,000 441,000 8,000 4,750
Senior Vice President 1995 588,000 315,000 6,000 4,620
and Treasurer 1994 574,000 420,000 0 4,558
Vance D. Bell 1996 450,000 334,000 8,000 4,750
Vice President, 1995 446,000 250,000 6,000 4,620
Marketing 1994 435,500 212,500 0 4,558
Kenneth G. Jackson(3) 1996 295,000 150,000 0 0
Vice President,
Chief Financial Officer
</TABLE>
- - - ------------------
(1) Annual bonus compensation is reported with regard to the
respective fiscal year in which the bonus is earned.
(2) The amounts in this column represent the Company's matching
contributions to the retirement savings plan accounts of the
named executives.
(3) Mr. Jackson joined the Company in February, 1996, as Vice
President and Chief Financial Officer. Previously, he had been a
partner with Arthur Andersen LLP for more than five years.
<PAGE>
This table presents information regarding options granted
during fiscal 1996 to purchase shares of the Company's Common Stock.
The Company has no outstanding SARs and granted no SARs during fiscal
1996. In accordance with SEC rules, the table shows the hypothetical
"gains" or "option spreads" that would exist for the respective
options based on assumed rates of annual compound stock price
appreciation of 5% and 10% from the date the options were granted over
the full option term.
<TABLE>
Option Grants in Fiscal 1996
Individual Grants Potential Realizable
Value at Assumed
% of Total Annual Rates of Stock
Options Price Appreciation for
Options Granted to Exercise Option Term
Granted Employees in Price Expiration 5% 10%
Name ($)(1) Fiscal Year ($/Sh) Date ($) ($)
---- ------- ------------ -------- ---------- ----------------------
<S> <C> <C> <C> <C> <C> <C>
Mr. R.E. Shaw 8,000 0.32 12.125 7/24/06 60,150 152,520
Mr. Little 8,000 0.32 12.125 7/24/06 60,150 152,520
Mr. Lusk 8,000 0.32 12.125 7/24/06 60,150 152,520
Mr. Bell 8,000 0.32 12.125 7/24/06 60,150 152,520
Mr. Jackson 0 -- -- -- -- --
</TABLE>
(1) The options were granted at fair market value as of the date of
grant.
This table presents information regarding options exercised
for shares of the Company's Common Stock during fiscal 1996 and the
value of unexercised options held at December 30, 1996. There were no
SARs outstanding during fiscal 1996.
<TABLE>
Aggregated Option Exercises in Fiscal 1996 and 1996 Fiscal Year-End Option Value
Number of Value of Unexercised
Unexercised In-the-Money Options
Options at FY- at FY-End
Shares Acquired End (#) ($)(1)
on Exercise Value Realized Exercisable/ Exercisable/
Name (#) ($) Unexercisable Unexercisable
---- --------------- -------------- ------------- --------------------
<S> <C> <C> <C> <C>
Mr. R.E. Shaw 0 0 14,000/8,000 0/0
Mr. Little 0 0 14,000/8,000 0/0
Mr. Lusk 0 0 14,000/8,000 0/0
Mr. Bell 0 0 14,000/8,000 0/0
Mr. Jackson 0 0 0 0
</TABLE>
(1) Value of Unexercised, In-the-Money Options at 12/28/96 is
calculated as follows: [(Per Share Closing Sale Price on
12/27/96) - (Per Share Exercise Price)] x Number of Shares
Subject to Unexercised Options. The per share closing sale price
reported by The New York Stock Exchange on December 27, 1996 was
$11.75. The closing sale price for December 27, 1996 was used in
this calculation because the Company's fiscal year ended on a
Saturday. At December 28, 1996, none of the options then
outstanding was In-the-Money Options.
<PAGE>
Deferred Compensation Plan
The Company maintains a deferred compensation plan to
attract and retain key employees. Key employees selected by the Board
of Directors are entitled to receive upon death, retirement or the
onset of total disability an amount of cash compensation set by the
Board. The plan provides that the amount of deferred compensation will
be based upon the average of the three highest years of income over
the last five years prior to death, disability or retirement. The
amount of deferred compensation may not exceed, unless the Board
specifically approves, twice such average amount. Deferred
compensation will generally be paid monthly over a ten-year period.
All deferred compensation is forfeitable if the employee should
voluntarily resign or be terminated for cause. Each of the named
executives has centered into an agreement providing for deferred
compensation under this plan. Because the amount of deferred
compensation payable to a participant is contingent upon his future
employment and is based upon future earnings, it is not possible
to estimate future benefits.
COMPENSATION COMMITTEE REPORT
The compensation committee of the Board of Directors of the
Company has prepared the following report on executive compensation.
This report describes the Company's current executive compensation
program, including the underlying philosophy of the program and the
criteria on which executive compensation was based. This report also
discusses in detail the compensation paid to the Company's Chairman
and Chief Executive Officer, Mr. Robert E. Shaw, during the most
recent fiscal year.
The compensation committee of the Company's Board of
Directors (the "Committee") consists of three directors who are
neither employees nor officers of the Company. The Committee reviews
the Company's executive compensation program and policies each year
and determines the compensation of the executive officers. The
Committee's determinations are reviewed with and approved by all of
the Company's non-employee directors, who constitute a majority of the
Board.
The senior management compensation program is administered
by the Committee. The Committee consists of non-employee directors who
are not eligible to participate in any of the management compensation
programs. The Committee is responsible for the establishment, review
and oversight of all senior management compensation and benefit
policies, plans, programs and agreements. The Committee meets at least
semi-annually to evaluate, review and act on senior management
compensation and benefit matters.
The senior management compensation program consists of base
salary, annual incentive and stock-based awards based on the
performance of the Company and the responsibility, experience, skills
and performance of participating individuals. These plans utilize
competitive peer group information, maximum incentive pay levels, and
stock award guidelines are established and administered to reinforce
the alignment of the interests of senior management employees with the
performance of the Company and the interests of its shareholders. The
peer institutions used for comparison are other publicly held
companies of similar size, including but not limited to, household
furnishings companies of similar size, located in the Southeast and
elsewhere in the United States, some of which are included in the S &
P Household Furnishings Index used in the performance graph, below.
The Committee's policy regarding compensation of the
Company's officers is to provide generally competitive salary levels
and compensation incentives that attract and retain individuals of
outstanding ability; that recognize individual performance and the
performance of the Company relative to the performance of other
companies of comparable size and quality; and that support the
Company's primary goal, to increase shareholder value.
The executive compensation program includes three components
which, taken together, constitute a flexible and balanced method of
establishing total compensation for management. These components are
base salary, short-term incentive awards in the form of semi-annual
cash bonuses and long-term incentive awards in the form of stock
option grants, each of which is discussed in more detail below.
The Company submitted the Bonus Compensation Plan for
Executive Officers (the "Senior Management Incentive Plan") to the
shareholders for approval at the 1995 Annual Meeting of Shareholders
and is submitting the proposed stock incentive plan to the
shareholders for approval at the 1997 Annual Meeting of Shareholders
to qualify compensation that may be paid to executive officers under
such plans as performance-based incentive compensation for federal
income tax purposes and, therefore, maximize the tax deductibility of
compensation to executive officers. The shareholders approved the
Senior Management Incentive Plan at the 1995 Annual Meeting of
Shareholders.
<PAGE>
The Committee has determined that the Company's senior
management compensation programs, plans and awards are within
conventional standards of reasonableness and competitive necessity.
A description of each of the major elements of the senior
management compensation program and its specific relationship to
corporate performance, and a summary of the decisions and actions
taken by the Committee with regard to 1996 senior management
compensation and the Chief Executive Officer's compensation, are set
forth below.
Base Salaries
The Committee reviews various publicly available studies by
compensation consulting firms and public information from other
sources regarding compensation levels for publicly held companies of
similar size located in the Southeast and elsewhere in the United
States. The Committee establishes the salaries of the named executives
and, upon a review of the recommendations of the Company's senior
executives, approves the salaries of other executive officers.
Individual salaries are determined by the Committee's assessment of
the individual's experience level, the scope and complexity
of the position held and the range of salaries for similar positions
in publicly held companies of similar size. While the Committee does
not target executive officers' salaries at any particular point in the
range of salaries paid by the companies used for comparative purposes,
the 1996 salary levels for the Company's executive officers
corresponded to the middle of the comparative range. The Committee
believes that publicly held companies of similar size represent the
Company's competitors for executive talent and that a review of the
compensation practices of such companies is more relevant than a
review of the compensation practices of companies of various
sizes in the carpet industry, many of which are private, or of
companies of various sizes included in the Standard & Poor's Household
Furnishings Index.
Members of senior management receive base salaries
determined by the responsibilities, skills and experience related to
their respective positions. Other factors considered in salary
determination are individual performance, the success of each business
unit in the individual's area of responsibility in achieving
established profit and business plans and the Company's ability to pay
an appropriate and competitive salary. Members of senior management
are eligible for periodic increases in their base salary as
a result of individual performance or significant increases in their
duties and responsibilities. The amount and timing of an increase
depends upon the individual's performance, position of salary within
the salary range, and the time interval and any added responsibilities
since the last merit increase. The salary increases during 1996 for
certain executives, including the named executives, were based on an
evaluation by the Committee of the above described factors.
Short-Term Incentive Program
The goal of the short-term incentive, or discretionary
bonus, program is to place a portion of officers' total cash
compensation at risk to encourage and reward a continued high level of
performance each year and to further encourage a continued high level
of performance in future years. Individual incentive amounts are
determined by the Committee in its discretion based primarily upon its
assessment of the performance of the Company and, to a lesser extent,
the performance of the Company relative to the performance of other
companies in the carpet industry and the individual's organizational
responsibility and personal performance. In evaluating the Company's
performance, the Committee considers sales growth, return on equity,
return on assets, stock performance, total shareholder return and
growth in earnings per share. No specific weight is assigned to
any of such performance factors and no specific target levels with
respect to such performance factors must be attained before a bonus is
awarded under the program. Cash bonuses for all executive officers are
paid either annually or semi-annually. The maximum bonus payable to
executive officers participating in this program is 50% of base
salary.
Certain members of senior management participate in the
Company's Bonus Compensation Plan for Executive Officers (the "Senior
Management Incentive Plan"), which was approved by the shareholders at
the 1995 Annual Meeting. Executive officers selected for participation
in the Senior Management Incentive Plan do not participate in the
bonus program described above. Personal award opportunities pursuant
to this plan are based upon the performance criteria applicable to the
Company, the individual performance of each participant and related
business unit performances. The resulting individual performance
evaluation factor may reduce, but not increase, the employee's award.
<PAGE>
Long-Term Incentive Program
Incentive stock options are the basis for the Company's
long-term incentive program. The Committee periodically grants stock
options at no less than fair market value at the date of grant with a
vesting period of one to four years. The option program is designed to
link officer compensation to long-term shareholder value and focus
management attention on long-term Company performance. Stock options
are also granted to encourage and facilitate personal stock ownership
by the executive officers and thus strengthen both their personal
commitment to the Company and their longer term perspective. The size
of the grants is based on individual levels of responsibility and the
potential for the officer to contribute to the future success of the
Company. The Committee initially determines the aggregate number of
options to be granted to all officers and employees of the Company
during a particular fiscal year. Of that total, the Committee grants
options of identical size to groups of executive officers, other
officers and other employees having similar levels of responsibility.
Subject to the foregoing parameters, the number of options granted to
individual officers is determined by the Committee without regard to
the number of options previously granted. The Committee believes the
total compensation of officers, including the value of options, if
any, at the date of grant, is competitive with total compensation paid
by other major corporations. The amount of any gain that officers
ultimately realize from incentive options depends solely on the future
performance of the Company's Common Stock.
In 1996, the Committee awarded stock options to purchase
8,000 shares each, to the Chief Executive Officer and other members of
senior management, including the named executives.
As of February 28, 1997, approximately 2,019,800 shares of
Common Stock were available for issuance under the Company's existing
stock plan.
The Committee believes that the three components of
compensation described above provide total compensation that is
competitive with the total compensation paid by other publicly held
companies of similar size, effectively link officer and shareholder
interests through equity-based plans and provide incentives that are
consistent with the long-term investment horizons of the Company's
business.
1996 Chief Executive Officer Compensation
The Compensation Committee believes that Mr. R. E. Shaw's
compensation as Chief Executive Officer appropriately reflects
individual and Company performance in the short and longer term. The
Performance Graph following this report, which depicts the cumulative
total return to the Company's shareholders as compared to returns of
other market indices, illustrates the Company's performance over the
past five fiscal years.
In determining Mr. Shaw's base salary and bonus for fiscal
1996, the Committee considered both the Company's overall performance
and Mr. Shaw's individual performance using the same criteria as it
used for the other named executive officers as described above. It
also considered the compensation received by chief executive officers
of other publicly held companies of similar size, as well as incentive
levels considered appropriate by the Committee, in establishing Mr.
Shaw's total compensation.
The Chief Executive Officer's compensation is determined
pursuant to the same basic factors as described above for other
members of senior management. In establishing the base salary,
incentive and stock awards of the Chief Executive Officer for 1996,
the Committee considered the Company's overall performance, success in
meeting strategic objectives and the incumbent's personal leadership
and accomplishments. These factors were considered in conjunction with
the Company's financial results for 1996 in relation to the
established business plan and in comparison with the performance
of peer organizations. Mr. Shaw's 1996 management incentive plan award
was based on the above considerations and the Company's achieving and
surpassing its annual performance goals as described above in this
report.
Deductibility of Executive Compensation
Section 162(m) of the Internal Revenue Code of 1986, as
amended (the "Code"), limits the amount of individual compensation for
certain executives that may be deducted by the employer for federal
tax purposes in any one fiscal year to $1 million unless such
compensation is "performance-based." The determination of whether
compensation is performance-based depends upon a number of factors,
including shareholder approval of the plan under which the
compensation is paid, the exercise price at which options or similar
awards are granted, the disclosure to and approval by the shareholders
of applicable performance standards, the composition of the Committee,
and certification by the Committee that performance standards were
satisfied. The Company's stock option plan and its Senior Management
Incentive Plan have been approved by the shareholders and it is the
Committee's understanding that all executive officers' compensation
paid or awarded by the Company will be deductible. The proposed stock
incen-
<PAGE>
tive plan is being submitted to the shareholders for approval to
ensure that compensation paid or awarded under such plan will also be
deductible. While it is possible for the Company to compensate or make
awards under incentive plans and otherwise that do not qualify as
performance-based compensation deductible under Section 162(m), the
Committee, in structuring compensation programs for its top executive
officers, intends to give strong consideration to the deductibility of
awards.
COMPENSATION COMMITTEE
BOARD OF DIRECTORS, SHAW INDUSTRIES, INC.
Clifford M. Kirtland, Jr. - Chairman
S. Tucker Grigg
Robert R. Harlin
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Robert E. Shaw, Chairman and Chief Executive Officer of
the Company, serves on the Stock Option and Compensation Committee of
the Board of Directors of Oxford Industries, Inc., a company whose
Chairman, President and Chief Executive Officer, Mr. J. Hicks Lanier,
serves on the Board of Directors of the Company.
PERFORMANCE GRAPH
The following graph indicates the Company's cumulative total
return to shareholders over the last five fiscal years, as compared to
cumulative total returns for the Standard and Poor's 500 Index and the
Standard and Poor's Household Furnishings Index.
[PERFORMANCE GRAPH HERE]
<TABLE>
Comparison of Five-Year Cumulative
Total Return*
1991 1992 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C> <C>
Shaw Industries, Inc. $100.00 $190.79 $297.51 $175.77 $177.74 $146.45
Standard and Poor's 500 Index $100.00 $107.61 $118.41 $120.01 $165.12 $203.04
Standard and Poor's Household $100.00 $112.59 $162.05 $131.55 $160.30 $148.27
Furnishings and Appliances Index
</TABLE>
*Assumes $100 invested on January 1, 1991 in Shaw Industries common
stock, the Standard and Poor's 500 Index and the Standard and Poor's
Household Furnishings Index
<PAGE>
PROPOSAL 2. ADOPTION OF THE SHAW INDUSTRIES, INC. 1997 INCENTIVE
STOCK INCENTIVE PLAN
On January 24, 1997, the Board of Directors unanimously
adopted, subject to the approval of the shareholders at the next
annual meeting, the SHAW INDUSTRIES, INC. INCENTIVE STOCK OPTION PLAN
(the "Plan"). A copy of the Plan is attached hereto as Exhibit A.
This Plan is intended to (a) promote incentive to officers
and key employees of the Company and its affiliates to stimulate their
efforts toward the continued success of the Company and to operate and
manage the business in a manner that will provide for the long-term
growth and profitability of the Company; (b) encourage stock ownership
by officers and key employees by providing them with a means to
acquire a proprietary interest in the Company, acquire shares of
Common Stock, or receive compensation which is based upon appreciation
in the value of the Common Stock; and (c) provide a means of
obtaining, rewarding and retaining key personnel and consultants.
Summary of the Plan
The following description of the Plan is qualified in its
entirety by reference to the copy of the Plan attached hereto as
Exhibit A. The Plan will be administered by the Compensation Committee
of the Board of Directors of the Company ("the Committee"). The
Committee will determine the persons to whom, and the times at which,
awards will be granted, the type of awards to be granted and all other
related terms and conditions of the awards, subject to the limitations
described below and as set forth in the Plan. The terms and conditions
of each award will be set forth in a written agreement with a
participant or a written program established by the Committee. All
officers and key employees of the Company and its affiliates are
eligible to participate in the Plan. It is currently estimated that
approximately 2,000 individuals are eligible to participate.
A total of 5,000,000 shares of the Company Common Stock is
reserved for issuance pursuant to the Plan. In the event that shares
of Common Stock subject to Stock Awards are forfeited, such shares of
Common Stock may again be subject to a new Stock Award under the Plan.
In no event shall any person be entitled to grants under the Plan in
any calendar year in excess of 100,000 shares. The number of shares of
the Company Common Stock reserved under the Plan is subject to
adjustment in the event of stock dividends, stock splits,
recapitalization and similar events.
The per share exercise price of any option may not be less
than the fair market value of a share of the Company Common Stock at
the time of grant. Once an option is granted, the exercise price may
not be reduced by amendment and an option may not be exchanged for a
new option with a lower exercise price. No incentive stock option may
be granted on or after the tenth anniversary of the date the Plan was
approved by the Board of Directors of the Company.
The Committee shall determine whether stock appreciation
rights, performance unit awards, dividend equivalent rights,
performance share awards and phantom stock awards shall be settled in
cash or in sharesof the Company Common Stock valued at fair market
value on the date of payment. The Committee also shall be authorized
to accelerate the vesting, exercisability and settlement of awards and
to permit the exercise price of an option to be paid in cash or by the
delivery or withholding of shares.
The Board of Directors of the Company may amend or terminate
the Plan without the approval of shareholders, but may condition any
amendment on shareholder approval if the Board believes it is
necessary or advisable to comply with any applicable tax or regulatory
requirement. No termination or amendment of the Plan without the
consent of the holder of an award shall adversely affect the rights of
that participant.
The Committee may provide with respect to any award that, in
the event of a Change in Control (as defined in the Plan) of the
Company, the award shall be cashed out in an amount based on the fair
market value of the Company Common Stock without regard to the
exercisability of the award or any other conditions or restrictions.
Federal Income Tax Consequences of the Plan
A participant will not recognize income upon the grant of an
option or at any time prior to the exercise of an option. At the time
the participant exercises a non-qualified option, he or she will
recognize compensation taxable as ordinary income in an amount equal
to the excess of the fair market value of the Company Common Stock on
the date the option is exercised over the price paid for the Company
Common Stock, and the Company will then be entitled to a corresponding
deduction.
<PAGE>
A participant who exercises an incentive stock option will
not be taxed at the time he or she exercises his or her option or a
portion thereof. Instead, he or she will be taxed at the time he or
she sells the Company Common Stock purchased pursuant to the option.
The participant will be taxed on the excess of the amount for which he
or she sells the stock over the price he or she had paid for the
stock. If the participant does not sell the stock prior to two years
from the date of grant of the option and one year from the date the
stock is transferred to him or her, the gain will be capital gain and
the Company will not get a corresponding deduction. If the participant
sells the stock prior to that time, the difference between the
amount the participant paid for the stock and the lesser of the fair
market value on the date of exercise, or the amount for which the
stock is sold, will be taxed as ordinary income and the Company will
be entitled to a corresponding deduction. If the participant sells the
stock for less than the amount he or she paid for the stock prior to
the one or two year periods indicated, no amount will be taxedas
ordinary income and the loss will be taxed as a capital loss. Exercise
of an incentive option may subject a participant to, or increase a
participant's liability for, the federal alternative minimum income
tax.
A participant generally will not recognize income upon the
grant of any stock appreciation right, dividend equivalent right,
performance unit award, performance share award or phantom share. At
the time a participant receives payment under any such award, he or
she generally will recognize compensation taxable as ordinary income
in an amount equal to the cash or the fair market value of the Company
Common Stock received, and the Company will then be entitled to a
corresponding deduction.
A participant will not be taxed upon the grant of a stock
award if such award is not transferable by the participant or is
subject to a "substantial risk of forfeiture," as defined in the Code.
However, when the shares of the Company Common Stock that are subject
to the stock award are transferable by the participant and are no
longer subject to a substantial risk of forfeiture, the participant
will recognize compensation taxable as ordinary income in an amount
equal to the fair market value of the stock subject to the stock
award, less any amount paid for such stock, and the Company will then
be entitled to a corresponding deduction.
The Plan is not qualified under Section 401(a) of the Code.
Awards Granted
No awards have been granted under the Plan. The Company
anticipates making award grants under the Plan during fiscal 1997.
Shareholder approval of the Plan requires the affirmative
vote of the majority of the shares of the Company's common stock
represented at the meeting and entitled to vote.
The Board of Directors Recommends a Vote FOR Proposal 2.
AUDITORS
The firm of Arthur Andersen LLP has served as the Company's
independent public accountants since its organization and the Board of
Directors intends to reappoint this firm for fiscal 1997. The
appointment of auditors is a matter of determination by the Board of
Directors and is not being submitted to the shareholders for approval
or ratification. A representative of this firm is expected to attend
the meeting to respond to questions from shareholders and to make a
statement if he so desires.
SHAREHOLDER PROPOSALS
Any proposals from shareholders to be considered for
presentation at the 1998 Annual Meeting of Shareholders, and inclusion
in the Company's 1998 proxy materials must be received at the
principal executive offices of the Company, Mail Drop 061-18, P.O.
Drawer 2128, Dalton, Georgia 30722-2128, a reasonable time before the
solicitation of proxies for such meeting is commenced by the Company,
but, in any event, not later than November 28, 1997.
MISCELLANEOUS
Management does not know of any other matters to be
presented at the meeting for action by shareholders. However, if any
other matters requiring a vote of the shareholders arise at the
meeting or any adjournment(s), it is intended that votes will be cast
pursuant to the proxies with respect to such matters in accordance
with the best judgment of the persons acting under the proxies.
<PAGE>
The Company will pay the cost of soliciting proxies in the
accompanying form. In addition to solicitation by use of the mails,
certain officers and regular employees of the Company may solicit the
return of proxies by telephone, telegram or personal interview. The
Company may request brokerage houses and custodians, nominees and
fiduciaries to forward soliciting material to their principals, the
beneficial owners of Common Stock, and will reimburse them for their
reasonable out-of-pocket expenses.
ANNUAL REPORT
The Annual Report (which is not part of the proxy soliciting
material) of the Company for fiscal 1996 is being mailed to the
Company's shareholders with this proxy statement.
/s/Bennie M. Laughter
BENNIE M. LAUGHTER
Secretary
Dalton, Georgia
March 29, 1996
<PAGE>
SHAW INDUSTRIES, INC.
1997 STOCK INCENTIVE PLAN
A-1
<PAGE>
SHAW INDUSTRIES, INC.
1997 STOCK INCENTIVE PLAN
TABLE OF CONTENTS
Page
SECTION 1 DEFINITIONS.......................................A-3
1.1 Definitions.......................................A-3
SECTION 2 THE STOCK INCENTIVE PLAN..........................A-4
2.1 Purpose of the Plan...............................A-4
2.2 Stock Subject to the Plan.........................A-4
2.3 Administration of the Plan........................A-5
2.4 Eligibility and Limits............................A-5
SECTION 3 TERMS OF STOCK INCENTIVES.........................A-5
3.1 Terms and Conditions of All Stock Incentives......A-5
3.2 Terms and Conditions of Options...................A-6
(a) Option Price..................................A-6
(b) Option Term...................................A-6
(c) Payment.......................................A-6
(d) Conditions to the Exercise of an Option.......A-6
(e) Termination of Incentive Stock Option.........A-7
(f) Special Provisions for Certain
Substitute Options............................A-7
3.3 Terms and Conditions of Stock Appreciation Rights A-7
(a) Settlement....................................A-7
(b) Conditions to Exercise........................A-7
3.4 Terms and Conditions of Stock Awards..............A-7
3.5 Terms and Conditions of Dividend Equivalent
Rights............................................A-7
(a) Payment.......................................A-8
(b) Conditions to Payment.........................A-8
3.6 Terms and Conditions of Phantom Shares............A-8
(a) Payment.......................................A-8
(b) Conditions to Payment.........................A-8
3.7 Treatment of Awards Upon Termination of
Employment........................................A-8
SECTION 4 RESTRICTIONS ON STOCK.............................A-8
4.1 Escrow of Shares..................................A-8
4.2 Forfeiture of Shares..............................A-8
4.3 Restrictions on Transfer..........................A-9
SECTION 5 GENERAL PROVISIONS................................A-9
5.1 Withholding.......................................A-9
5.2 Changes in Capitalization; Merger; Liquidation....A-9
5.3 Cash Awards......................................A-10
5.4 Compliance with Code.............................A-10
5.5 Right to Terminate Employment....................A-10
5.6 Non-alienation of Benefits.......................A-10
5.7 Listing and Legal Compliance.....................A-10
5.8 Termination and Amendment of the Plan............A-10
5.9 Stockholder Approval.............................A-10
5.10 Choice of Law....................................A-10
5.11 Effective Date of Plan...........................A-10
A-2
<PAGE>
SHAW INDUSTRIES, INC.
1997 STOCK INCENTIVE PLAN
SECTION 1 DEFINITIONS
1.1 DEFINITIONS. Whenever used herein, the masculine
pronoun shall be deemed to include the feminine, and the singular to
include the plural, unless the context clearly indicates otherwise,
and the following capitalized words and phrases are used herein with
the meaning thereafter ascribed:
(a) "AFFILIATE" means (a) an entity that directly or
through one or more intermediaries is controlled by the Company, and
(b) any entity in which the Company has a significant equity
interest, as determined by the Company.
(b) "BOARD OF DIRECTORS" means the board of directors
of the Company.
(c) "CHANGE IN CONTROL" means the first to occur of the
following events:
(i) any person (as defined in Section 3(a)(9) of
the Exchange Act and as used in Sections 13(d) and 14(d) thereof),
excluding the Company, any Subsidiary and any employee benefit plan
sponsored or maintained by the Company or any Subsidiary (including
any trustee of such plan acting as trustee) (the Company, all
Subsidiaries, and such employee benefit plans and trustees acting as
trustees being hereafter referred to as the "Company Group"), but
including a 'group' as defined in Section 13(d)(3) of the Exchange Act
(a "Person"), becomes the beneficial owner of shares of the Company
having at least thirty percent (30%) of the total number of votes that
may be cast for the election of directors of the Company (the "Voting
Shares"); provided that no Change of Control will occur as a result of
an acquisition of stock by the Company Group which increases,
proportionately, the stock representing the voting power of the
Company beneficially owned by such Person above thirty percent (30%)
of the voting power of the Company, and provided further that if such
Person acquires beneficial ownership of stock representing more than
thirty percent (30%) of the voting power of the Company by reason of
share purchases by the Company Group, and after such share purchases
by the Company Group acquires any additional shares representing
voting power of the Company, then a Change of Control shall occur;
(ii) the shareholders of the Company shall approve
any merger or other business combination of the Company, sale
of the Company's assets or combination of the foregoing transactions
(a "Transaction") other than a Transaction involving only the Company
and one or more of its Subsidiaries, or a Transaction immediately
following which the shareholders of the Company immediately prior to
the Transaction continue to have a majority of the voting power in the
resulting entity excluding for this purpose any shareholder owning
directly or indirectly more than ten percent (10%) of the shares of
the other company involved in the merger; or
(iii) within any 24-month period, the persons who
were directors of the Company immediately before the beginning of such
period (the "Incumbent Directors") shall cease (for any reason other
than death) to constitute at least a majority of the Board of Dir
ectors or the board of directors of any successor to the Company,
provided that any director who was not a director as of the effective
date of this Plan shall be deemed to be an Incumbent Director if such
director was elected to the Board of Directors by, or on the
recommendation of or with the approval of, at least two-thirds of the
directors who then qualified as Incumbent Directors either actually or
by prior operation of this clause (iii); and provided further that any
director elected to the Board of Directors to avoid or settle a
threatened or actual proxy contest shall in no event be deemed to be
an Incumbent Director.
(d) "CODE" means the Internal Revenue Code of 1986, as
amended.
(e) "COMMITTEE" means the Compensation Committee
appointed by the Board of Directors to administer the Plan. The Board
of Directors shall consider the advisability of whether the members of
the Committee shall consist solely of at least two members of the
Board of Directors who are both "outside directors" as defined in
Treas. Reg. 1.162-27(e) as promulgated by the Internal Revenue
Service and "non-employee directors" as defined in Rule 16b-3(b)(3) as
promulgated under the Exchange Act.
(f) "COMPANY" means Shaw Industries, Inc., a Georgia
corporation.
(g) "DISABILITY" has the same meaning as provided in
the long-term disability plan or policy maintained or, if applicable,
most recently maintained, by the Company or, if applicable, any
Affiliate of the Company for the Participant. If no long-term
disability plan or policy was ever maintained on behalf of the
Participant or, if the determination of Disability relates to an
Incentive Stock Option, Disability shall mean that condition described
in Code
A-3
<PAGE>
Section 22(e)(3), as amended from time to time. In the event of a
dispute, the determination of Disability shall be made by the
Committee and shall be supported by advice of a physician competent in
the area to which such Disability relates.
(h) "EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended from time to time.
(i) "FAIR MARKET VALUE" with regard to a date means the
closing price at which Stock shall have been sold on the last trading
date prior to that date as reported by the National Association of
Securities Dealers Automated Quotation System (or, if applicable, as
reported by a national securities exchange selected by the Committee
on which the shares of Stock are then actively traded) and published
in The Wall Street Journal; provided that, for purposes of granting
awards other than Incentive Stock Options, Fair Market Value of the
shares of Stock may be determined by the Committee by reference to the
average market value determined over a period certain or as of
specified dates, to a tender offer price for the shares of Stock (if
settlement of an award is triggered by such an event) or to any other
reasonable measure of fair market value.
(j) "OPTION" means a non-qualified stock option or an
incentive stock option.
(k) "OVER 10% OWNER" means an individual who at the
time an Incentive Stock Option is granted owns Stock possessing more
than 10% of the total combined voting power of the Company or
one of its Subsidiaries, determined by applying the attribution rules
of Code Section 424(d).
(l) "PARTICIPANT" means an individual who receives a
Stock Incentive hereunder.
(m) "PLAN" means the Shaw Industries, Inc. 1997 Stock
Incentive Plan.
(n) "STOCK" means the Company's common stock.
(o) "STOCK INCENTIVE AGREEMENT" means an agreement
between the Company and a Participant or other documentation
evidencing an award of a Stock Incentive.
(p) "STOCK INCENTIVE PROGRAM" means a written program
established by the Committee, pursuant to which Stock Incentives are
awarded under the Plan under uniform terms, conditions and
restrictions set forth in such written program.
(q) "STOCK INCENTIVES" means, collectively, Dividend
Equivalent Rights, Incentive Stock Options, Non-Qualified Stock
Options, Phantom Shares, Stock Appreciation Rights and Stock Awards.
(r) "SUBSIDIARY" means any corporation (other than the
Company) in an unbroken chain of corporations beginning with the
Company if, with respect to Incentive Stock Options, at the time of
the granting of the Option, each of the corporations other than
the last corporation in the unbroken chain owns stock possessing 50%
or more of the total combined voting power of all classes of stock in
one of the other corporations in the chain.
SECTION 2 THE STOCK INCENTIVE PLAN
2.1 PURPOSE OF THE PLAN. The Plan is intended to (a)
provide incentive to officers and key employees of the Company and its
Affiliates to stimulate their efforts toward the continued success of
the Company and to operate and manage the business in a manner that
will provide for the long-term growth and profitability of the
Company; (b) encourage stock ownership by officers and key employees
by providing them with a means to acquire a proprietary interest in
the Company, acquire shares of Stock, or to receive compensation which
is based upon appreciation in the value of Stock; and (c) provide a
means of obtaining, rewarding and retaining key personnel and
consultants.
2.2 STOCK SUBJECT TO THE PLAN. Subject to adjustment in
accordance with Section 5.2, 5,000,000 shares of Stock (the "Maximum
Plan Shares") are hereby reserved exclusively for issuance pursuant to
Stock Incentives. At no time shall the Company have outstanding under
the Plan, Stock Incentives subject to Section 16 of the Exchange Act
and shares of Stock issued in respect of Stock Incentives under the
Plan in excess of the Maximum Plan Shares. The shares of Stock
attributable to the nonvested, unpaid, unexercised, unconverted or
otherwise unsettled portion of any Stock Incentive that is forfeited
or cancelled or expires or terminates for any reason without becoming
vested, paid, exercised, converted or otherwise settled in full shall
again be available for purposes of the Plan.
A-4
<PAGE>
2.3 ADMINISTRATION OF THE PLAN. The Plan shall be
administered by the Committee. The Committee shall have full
authority in its discretion to determine the officers and key
employees of the Company or its Affiliates to whom Stock Incentives
shall be granted and the terms and provisions of Stock Incentives,
subject to the Plan; provided, however, that any award of a Stock
Incentive to any employee who is also a member of the Board of
Directors shall be approved by the majority of the "disinterested
persons," as defined in Rule 16b-3 as promulgated under the Exchange
Act, then serving as members of the Board of Directors, upon the
recommendation of the Committee. Subject to the provisions of the
Plan, the Committee shall have full and conclusive authority to
interpret the Plan; to prescribe, amend and rescind rules and
regulations relating to the Plan; to determine the terms and
provisions of the respective Stock Incentive Agreements and to make
all other determinations necessary or advisable for the proper
administration of the Plan. The Committee's determinations under
the Plan need not be uniform and may be made by it selectively among
persons who receive, or are eligible to receive, awards under the Plan
(whether or not such persons are similarly situated). The Committee's
decisions shall be final and binding on all Participants.
2.4 ELIGIBILITY AND LIMITS. Stock Incentives may be
granted only to officers and key employees of the Company, or any
Affiliate of the Company. In the case of incentive stock options, the
aggregate Fair Market Value (determined as at the date an incentive
stock option is granted) of stock with respect to which stock options
intended to meet the requirements of Code Section 422 become
exercisable for the first time by an individual during any calendar
year under all plans of the Company and its Subsidiaries shall not
exceed $100,000; provided further, that if the limitation is
exceeded, the incentive stock option(s) which cause the limitation to
be exceeded shall be treated as non-qualified stock option(s). In no
event shall any person be entitled to grants under the Plan in any
calendar year in excess of 100,000 shares.
SECTION 3 TERMS OF STOCK INCENTIVES
3.1 TERMS AND CONDITIONS OF ALL STOCK INCENTIVES.
(a) The number of shares of Stock as to which a Stock
Incentive shall be granted shall be determined by the Committee in its
sole discretion, subject to the provisions of Section 2.2 as to the
total number of shares available for grants under the Plan.
(b) Each Stock Incentive shall either be evidenced by a
Stock Incentive Agreement in such form and containing such terms,
conditions and restrictions as the Committee may determine to be
appropriate, or be made subject to the terms of a Stock Incentive
Program, containing such terms, conditions and restrictions as the
Committee may determine to be appropriate. Each Stock Incentive
Agreement or Stock Incentive Program shall be subject to the terms of
the Plan and any provisions contained in the Stock Incentive Agreement
or Stock Incentive Program that are inconsistent with the Plan shall
be null and void.
(c) The date a Stock Incentive is granted shall be the
date on which the Committee has approved the terms and conditions of
the Stock Incentive and has determined the recipient of the Stock
Incentive and the number of shares covered by the Stock Incentive.
(d) Each Stock Incentive Agreement or Stock Incentive
Program may provide that, in the event of a Change in Control, the
Stock Incentive shall be cashed out on the basis of any price not
greater than the highest price paid for a share of Stock in any
transaction reported by the National Association of Securities Dealers
Automated Quotation System or any national securities exchange
selected by the Committee on which the shares of Stock are then
actively traded during a specified period immediately preceding or
ending on the date of the Change in Control or offered for a share of
Stock in any tender offer occurring during a specified period
immediately preceding or ending on the date the tender offer
commences; provided that, in no case shall any such specified period
exceed one (1) year (the "Change in Control Price"). For purposes of
this Subsection, the cash-out of a Stock Incentive shall be determined
as follows:
(i) Options shall be cashed out on the basis of the
excess, if any, of the Change in Control Price (but not more than the
Fair Market Value of the Stock on the date of the cash-out in
the case of Incentive Stock Options) over the Exercise Price with or
without regard to whether the Option may otherwise be exercisable only
in part;
A-5
<PAGE>
(ii) Stock Awards and Phantom Shares shall be cashed out
in an amount equal to the Change in Control Price with or without
regard to any conditions or restrictions otherwise applicable to
any such Stock Incentive; and
(iii)Stock Appreciation Rights, Dividend Equivalent
Rights and Performance Unit Awards shall be cashed out with or without
regard to any conditions or restrictions otherwise applicable
to any such Stock Incentive and the amount of the cash out shall be
determined by reference to the number of shares of Stock that would be
required to pay the Participant in kind for the value of the Stock
Incentive as of the date of the Change in Control multiplied by the
Change in Control Price.
(e) Any Stock Incentive may be granted in connection
with all or any portion of a previously or contemporaneously granted
Stock Incentive. Exercise or vesting of a Stock Incentive granted in
connection with another Stock Incentive may result in a pro rata
surrender or cancellation of any related Stock Incentive, as specified
in the applicable Stock Incentive Agreement or Stock Incentive
Program.
(f) Stock Incentives shall not be transferable or
assignable except by will or by the laws of descent and distribution
and shall be exercisable, during the Participant's lifetime, only by
the Participant, or in the event of the Disability of the Participant,
by the legal representative of the Participant.
3.2 TERMS AND CONDITIONS OF OPTIONS. Each Option
granted under the Plan shall be evidenced by a Stock Incentive
Agreement. At the time any Option is granted, the Committee shall
determine whether the Option is to be an incentive stock option
described in Code Section 422 or a non-qualified stock option, and the
Option shall be clearly identified as to its status as an incentive
stock option or a non-qualified stock option. An incentive stock
option may only be granted within ten (10) years from the earlier of
the date the Plan is adopted or approved by the Company's
stockholders.
(a) OPTION PRICE. Subject to adjustment in accordance
with Section 5.2 and the other provisions of this Section 3.2, the
exercise price (the "Exercise Price") per share of Stock purchasable
under any Option shall be as set forth in the applicable Stock
Incentive Agreement, but in no event shall it be less than the Fair
Market Value on the date the Option is granted. With respect to each
grant of an incentive stock option to a Participant who is an Over 10%
Owner, the Exercise Price shall not be less than 110% of the Fair
Market Value on the date the Option is granted. The Exercise Price of
an Option may not be amended or modified after the grant of the
Option, and an Option may not be surrendered in consideration of or
exchanged for a grant of a new Option having an Exercise Price below
that of the Option which was surrendered or exchanged.
(b) OPTION TERM. Any incentive stock option granted to
a Participant who is not an Over 10% Owner shall not be exercisable
after the expiration of ten (10) years after the date the Option is
granted. Any incentive stock option granted to an Over 10% Owner
shall not be exercisable after the expiration of five (5) years after
the date the Option is granted. The term of any Non-Qualified Stock
Option shall be as specified in the applicable Stock Incentive
Agreement.
(c) PAYMENT. Payment for all shares of Stock purchased
pursuant to exercise of an Option shall be made in any form or manner
authorized by the Committee in the Stock Incentive Agreement or by
amendment thereto, including, but not limited to, cash or, if the
Stock Incentive Agreement provides, (i) by delivery to the Company of
a number of shares of Stock which have been owned by the holder for at
least six (6) months prior to the date of exercise having an aggregate
Fair Market Value of not less than the product of the Exercise Price
multiplied by the number of shares the Participant intends to purchase
upon exercise of the Option on the date of delivery; (ii) in a
cashless exercise through a broker; or (iii) by having a number of
shares of Stock withheld, the Fair Market Value of which as of the
date of exercise is sufficient to satisfy the Exercise Price. In its
discretion, the Committee also may authorize (at the time an Option is
granted or thereafter) Company financing to assist the Participant as
to payment of the Exercise Price on such terms as may be offered by
the Committee in its discretion. Any such financing shall require
the payment by the Participant of interest on the amount financed at a
rate not less than the "applicable federal rate" under the Code.
Payment shall be made at the time that the Option or any part thereof
is exercised, and no shares shall be issued or delivered upon exercise
of an option until full payment has been made by the Participant. The
holder of an Option, as such, shall have none of the rights of a
stockholder.
(d) CONDITIONS TO THE EXERCISE OF AN OPTION. Each
Option granted under the Plan shall be exercisable by whom, at such
time or times, or upon the occurrence of such event or events, and in
such amounts, as the Committee shall specify in the Stock Incentive
Agreement; provided, however, that subsequent to the grant of an
Option, the
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Committee, at any time before complete termination of such Option,
may accelerate the time or times at which such Option may be exercised
in whole or in part, including, without limitation, upon a Change in
Control and may permit the Participant or any other designated person
to exercise the Option, or any portion thereof, for all or part of the
remaining Option term, notwithstanding any provision of the Stock
Incentive Agreement to the contrary.
(e) TERMINATION OF INCENTIVE STOCK OPTION. With respect
to an incentive stock option, in the event of termination of
employment of a Participant, the Option or portion thereof held by the
Participant which is unexercised shall expire, terminate, and
become unexercisable no later than the expiration of three (3) months
after the date of termination of employment; provided, however, that
in the case of a holder whose termination of employment is due to
death or Disability, one (1) year shall be substituted for such three
(3) month period. For purposes of this Subsection (e), termination of
employment of the Participant shall not be deemed to have occurred if
the Participant is employed by another corporation (or a parent or
subsidiary corporation of such other corporation) which has assumed
the incentive stock option of the Participant in a transaction to
which Code Section 424(a) is applicable.
(f) SPECIAL PROVISIONS FOR CERTAIN SUBSTITUTE OPTIONS.
Notwithstanding anything to the contrary in this Section 3.2, any
Option issued in substitution for an option previously issued by
another entity, which substitution occurs in connection with a
transaction to which Code Section 424(a) is applicable, may provide
for an exercise price computed in accordance with such Code Section
and the regulations thereunder and may contain such other terms and
conditions as the Committee may prescribe to cause such substitute
Option to contain as nearly as possible the same terms and conditions
(including the applicable vesting and termination provisions) as those
contained in the previously issued option being replaced thereby.
3.3 TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS.
Each Stock Appreciation Right granted under the Plan shall be
evidenced by a Stock Incentive Agreement. A Stock Appreciation Right
shall entitle the Participant to receive the excess of (1) the Fair
Market Value of a specified or determinable number of shares of the
Stock at the time of payment or exercise over (2) a specified or
determinable price which, in the case of a Stock Appreciation Right
granted in connection with an Option, shall be not less than the
Exercise Price for that number of shares subject to that Option. A
Stock Appreciation Right granted in connection with a Stock Incentive
may only be exercised to the extent that the related Stock Incentive
has not been exercised, paid or otherwise settled.
(a) SETTLEMENT. Upon settlement of a Stock Appreciation
Right, the Company shall pay to the Participant the appreciation in
cash or shares of Stock (valued at the aggregate Fair Market
Value on the date of payment or exercise) as provided in the Stock
Incentive Agreement or, in the absence of such provision, as the
Committee may determine.
(b) CONDITIONS TO EXERCISE. Each Stock Appreciation
Right granted under the Plan shall be exercisable or payable at such
time or times, or upon the occurrence of such event or events, and in
such amounts, as the Committee shall specify in the Stock Incentive
Agreement; provided, however, that subsequent to the grant of a
Stock Appreciation Right, the Committee, at any time before complete
termination of such Stock Appreciation Right, may accelerate the time
or times at which such Stock Appreciation Right may be exercised or
paid in whole or in part.
3.4 TERMS AND CONDITIONS OF STOCK AWARDS. The number of
shares of Stock subject to a Stock Award and restrictions or
conditions on such shares, if any, shall be as the Committee
determines, and the certificate for such shares shall bear evidence of
any restrictions or conditions. Subsequent to the date of the grant of
the Stock Award, the Committee shall have the power to permit, in its
discretion, an acceleration of the expiration of an applicable
restriction period with respect to any part or all of the shares
awarded to a Participant. The Committee may require a cash payment
from the Participant in an amount no greater than the aggregate Fair
Market Value of the shares of Stock awarded determined at the date of
grant in exchange for the grant of a Stock Award or may grant a Stock
Award without the requirement of a cash payment. In the event that
shares of Stock subject to Stock Awards are forfeited by a Participant
such shares of Stock may again be subject to a new Stock Award under
the Plan.
3.5 TERMS AND CONDITIONS OF DIVIDEND EQUIVALENT RIGHTS.
A Dividend Equivalent Right shall entitle the Participant to receive
payments from the Company in an amount determined by reference to any
cash dividends paid on a specified number of shares of Stock to
Company stockholders of record during the period such rights are
effective. The Committee may impose such restrictions and conditions
on any Dividend Equivalent Right as the Committee in its discretion
shall determine, including the date any such right shall terminate and
may reserve the right to terminate, amend or suspend any such right at
any time.
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(a) PAYMENT. Payment in respect of a Dividend
Equivalent Right may be made by the Company in cash or shares
of Stock (valued at Fair Market Value on the date of payment) as
provided in the Stock Incentive Agreement or Stock Incentive Program,
or, in the absence of such provision, as the Committee may determine.
(b) CONDITIONS TO PAYMENT. Each Dividend Equivalent
Right granted under the Plan shall be payable at such time or times,
or upon the occurrence of such event or events, and in such amounts,
as the Committee shall specify in the applicable Stock Incentive
Agreement or Stock Incentive Program; provided, however, that
subsequent to the grant of a Dividend Equivalent Right, the Committee,
at any time before complete termination of such Dividend Equivalent
Right, may accelerate the time or times at which such Dividend
Equivalent Right may be paid in whole or in part.
3.6 TERMS AND CONDITIONS OF PHANTOM SHARES. Phantom
Shares shall entitle the Participant to receive, at a specified future
date, payment of an amount equal to all or a portion of the Fair
Market Value of a specified number of shares of Stock at the end of a
specified period. At the time of the grant, the Committee shall
determine the factors which will govern the portion of the rights so
payable, including, at the discretion of the Committee, any
performance criteria that must be satisfied as a condition
to payment. Phantom Share awards containing performance criteria may
be designated as Performance Share Awards.
(a) PAYMENT. Payment in respect of Phantom Shares may
be made by the Company in cash or shares of Stock (valued at Fair
Market Value on the date of payment) as provided in the applicable
Stock Incentive Agreement or Stock Incentive Program, or, in the
absence of such provision, as the Committee may determine.
(b) CONDITIONS TO PAYMENT. Each Phantom Share granted
under the Plan shall be payable at such time or times, or upon the
occurrence of such event or events, and in such amounts, as the
Committee shall specify in the applicable Stock Incentive Agreement or
Stock Incentive Program; provided, however, that subsequent to the
grant of a Phantom Share, the Committee, at any time before complete
termination of such Phantom Share, may accelerate the time or times at
which such Phantom Share may be paid in whole or in part.
3.7 TREATMENT OF AWARDS UPON TERMINATION OF EMPLOYMENT.
Except as otherwise provided by Plan Section 3.2(e), any award under
this Plan to a Participant who has terminated employment may be
cancelled, accelerated, paid or continued, as provided in the
applicable Stock Incentive Agreement or Stock Incentive Program, or,
in the absence of such provision, as the Committee may determine. The
portion of any award exercisable in the event of continuation or the
amount of any payment due under a continued award may be adjusted by
the Committee to reflect the Participant's period of service from
the date of grant through the date of the Participant's termination of
employment or such other factors as the Committee determines are
relevant to its decision to continue the award.
SECTION 4 RESTRICTIONS ON STOCK
4.1 ESCROW OF SHARES. Any certificates representing the
shares of Stock issued under the Plan shall be issued in the
Participant's name, but, if the applicable Stock Incentive Agreement
or Stock Incentive Program so provides, the shares of Stock shall be
held by a custodian designated by the Committee (the "Custodian").
Each applicable Stock Incentive Agreement or Stock Incentive Program
providing for transfer of shares of Stock to the Custodian shall
appoint the Custodian as the attorney-in-fact for the Participant for
the term specified in the applicable Stock Incentive Agreement or
Stock Incentive Program, with full power and authority in the
Participant's name, place and stead to transfer, assign and convey to
the Company any shares of Stock held by the Custodian for such
Participant, if the Participant forfeits the shares under the terms of
the applicable Stock Incentive Agreement or Stock Incentive Program.
During the period that the Custodian holds the shares subject to this
Section, the Participant shall be entitled to all rights, except as
provided in the applicable Stock Incentive Agreement or Stock
Incentive Program, applicable to shares of Stock not so held. Any
dividends declared on shares of Stock held by the Custodian shall,
as the Committee may provide in the applicable Stock Incentive
Agreement or Stock Incentive Program, be paid directly to the
Participant or, in the alternative, be retained by the Custodian or by
the Company until the expiration of the term specified in the
applicable Stock Incentive Agreement or Stock Incentive Program and
shall then be delivered, together with any proceeds, with the shares
of Stock to the Participant or to the Company, as applicable.
4.2 FORFEITURE OF SHARES. Notwithstanding any vesting
schedule set forth in any Stock Incentive Agreement or Stock Incentive
Program, in the event that the Committee determines that a Participant
violated a noncompetition agreement as set forth in the Stock
Incentive Agreement or Stock Incentive Program, all Stock Incentives
and shares of Stock issued to the holder pursuant to the Plan shall be
forfeited; provided, however, that the Company shall return to the
holder the lesser of any consideration paid by the Participant in
exchange for Stock issued to the Participant pursuant to the Plan or
the then Fair Market Value of the Stock forfeited hereunder.
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<PAGE>
4.3 RESTRICTIONS ON TRANSFER. The Participant shall not
have the right to make or permit to exist any disposition of the
shares of Stock issued pursuant to the Plan except as provided in the
Plan or the applicable Stock Incentive Agreement or Stock Incentive
Program. Any disposition of the shares of Stock issued under the Plan
by the Participant not made in accordance with the Plan or the
applicable Stock Incentive Agreement or Stock Incentive Program shall
be void. The Company shall not recognize, or have the duty to
recognize, any disposition not made in accordance with the Plan and
the applicable Stock Incentive Agreement or Stock Incentive Program,
and the shares so transferred shall continue to be bound by the Plan
and the applicable Stock Incentive Agreement or Stock Incentive
Program.
SECTION 5 GENERAL PROVISIONS
5.1 WITHHOLDING. The Company shall deduct from all cash
distributions under the Plan any taxes required to be withheld by
federal, state or local government. Whenever the Company proposes or
is required to issue or transfer shares of Stock under the Plan or
upon the vesting of any Stock Award, the Company shall have the right
to require the recipient to remit to the Company an amount sufficient
to satisfy any federal, state and local withholding tax requirements
prior to the delivery of any certificate or certificates for such
shares or the vesting of such Stock Award. A Participant may pay the
withholding tax in cash, or, if the applicable Stock Incentive
Agreement or Stock Incentive Program provides, a Participant may
elect to have the number of shares of Stock he is to receive reduced
by, or with respect to a Stock Award, tender back to the Company, the
smallest number of whole shares of Stock which, when multiplied by the
Fair Market Value of the shares of Stock determined as of the Tax Date
(defined below), is sufficient to satisfy federal, state and local, if
any, withholding taxes arising from exercise or payment of a Stock
Incentive (a "Withholding Election"). A Participant may make a
Withholding Election only if both of the following conditions are met:
(a) The Withholding Election must be made on or prior
to the date on which the amount of tax required to be withheld is
determined (the "Tax Date") by executing and delivering to the
Company a properly completed notice of Withholding Election as
prescribed by the Committee; and
(b) Any Withholding Election made will be irrevocable
except on six months advance written notice delivered to the Company;
however, the Committee may in its sole discretion disapprove and give
no effect to the Withholding Election.
5.2 CHANGES IN CAPITALIZATION; MERGER; LIQUIDATION.
(a) The number of shares of Stock reserved for the
grant of Options, Dividend Equivalent Rights, Performance Unit Awards,
Phantom Shares, Stock Appreciation Rights and Stock Awards; the number
of shares of Stock reserved for issuance upon the exercise or payment,
as applicable, of each outstanding Option, Dividend Equivalent
Right, Phantom Share and Stock Appreciation Right and upon vesting or
grant, as applicable, of each Stock Award; the Exercise Price of each
outstanding Option and the specified number of shares of Stock to
which each outstanding Dividend Equivalent Right, Phantom Share and
Stock Appreciation Right pertains shall be proportionately adjusted
for any increase or decrease in the number of issued shares of Stock
resulting from a subdivision or combination of shares or the payment
of a stock dividend in shares of Stock to holders of outstanding
shares of Stock or any other increase or decrease in the number of
shares of Stock outstanding effected without receipt of consideration
by the Company.
(b) In the event of a merger, consolidation or other
reorganization of the Company or tender offer for shares of Stock, the
Committee may make such adjustments with respect to awards and take
such other action as it deems necessary or appropriate to refl
ect such merger, consolidation, reorganization or tender offer,
including, without limitation, the substitution of new awards, or the
adjustment of outstanding awards, the acceleration of awards or the
removal of restrictions on outstanding awards. Any adjustment pursuant
to this Section 5.2 may provide, in the Committee's discretion, for
the elimination without payment therefor of any fractional shares that
might otherwise become subject to any Stock Incentive, but shall not
otherwise diminish the then value of the Stock Incentive.
(c) The existence of the Plan and the Stock Incentives
granted pursuant to the Plan shall not affect in any way the right or
power of the Company to make or authorize any adjustment,
reclassification, reorganization or other change in its capital or
business structure, any merger or consolidation of the Company, any
issue of debt or equity securities having preferences or priorities as
to the Stock or the rights thereof, the dissolution or liquidation of
the Company, any sale or transfer of all or any part of its business
or assets, or any other corporate act or proceeding.
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<PAGE>
5.3 CASH AWARDS. The Committee may, at any time and in
its discretion, grant to any holder of a Stock Incentive the right to
receive, at such times and in such amounts as determined by the
Committee in its discretion, a cash amount which is intended to
reimburse such person for all or a portion of the federal, state and
local income taxes imposed upon such person as a consequence of the
receipt of the Stock Incentive or the exercise of rights thereunder.
5.4 COMPLIANCE WITH CODE. All incentive stock options
to be granted hereunder are intended to comply with Code Section 422,
and all provisions of the Plan and all incentive stock options granted
hereunder shall be construed in such manner as to effectuate that
intent.
5.5 RIGHT TO TERMINATE EMPLOYMENT. Nothing in the Plan
or in any Stock Incentive shall confer upon any Participant the right
to continue as an employee or officer of the Company or any of its
Affiliates or affect the right of the Company or any of its Affiliates
to terminate the Participant's employment at any time.
5.6 NON-ALIENATION OF BENEFITS. Other than as
specifically provided with regard to the death of a Participant, no
benefit under the Plan shall be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance or charge;
and any attempt to do so shall be void. No such benefit shall, prior
to receipt by the Participant, be in any manner liable for or subject
to the debts, contracts, liabilities, engagements or torts of the
Participant.
5.7 LISTING AND LEGAL COMPLIANCE. The Committee may
suspend the exercise or payment of any Stock Incentive so long as it
determines that securities exchange listing or registration or
qualification under any securities laws is required in connection
therewith and has not been completed on terms acceptable to the
Committee.
5.8 TERMINATION AND AMENDMENT OF THE PLAN. The Board of
Directors at any time may amend or terminate the Plan without
stockholder approval; provided, however, that the Board of Directors
may condition any amendment on the approval of stockholders of the
Company if such approval is necessary or advisable with respect to
tax, securities or other applicable laws. No such termination or
amendment without the consent of the holder of a Stock Incentive shall
adversely affect the rights of the Participant under such Stock
Incentive.
5.9 STOCKHOLDER APPROVAL. The Plan shall be submitted
to the stockholders of the Company for their approval within twelve
(12) months before or after the adoption of the Plan by the Board of
Directors of the Company. If such approval is not obtained, any Stock
Incentive granted hereunder shall be void.
5.10 CHOICE OF LAW. The laws of the State of Georgia
shall govern the Plan, to the extent not preempted by federal law,
without reference to the principles of conflict of laws.
5.11 EFFECTIVE DATE OF PLAN. The Plan shall become
effective upon the date the Plan is approved by the stockholders of
the Company.
SHAW INDUSTRIES, INC.
By:
Title:
ATTEST:
Title:
[CORPORATE SEAL]
A-10
[ATTACHMENT -- PROXY CARD]
X PLEASE MARK VOTES
AS IN THIS EXAMPLE
[SHAW LOGO]
RECORD DATE SHARES:
With- For All
For hold Except
1. Election of three Class III Directors [BOX] [BOX] [BOX]
and one Class I Director:
WILLIAM C. LUSK, JR., W. NORRIS LITTLE,
ROBERT R. HARLIN, ROBERT J. LUNN
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE,
MARK THE "FOR ALLEXCEPT" BOX AND STRIKE A LINE THROUGH THE NOMINEE'S
NAME IN E LIST PROVIDED ABOVE.)
2. Proposal to adopt 1997 stock incentive plan: For Against Abstain
[BOX] [BOX] [BOX]
3. In their discretion, the Proxies are authorized to vote on such
other business as may properly come before the meeting or any
adjournment(s). This Proxy may be revoked at any time prior to
the voting thereof.
Mark box at right if address change has been noted on the reverse
side of this card. [BOX]
Please be sure to sign and date this Proxy. Date: April ,1997
Shareholder sign here Co-owner sign here
DETACH CARD
SHAW INDUSTRIES, INC.
Dear Shareholder:
Please take note of the important information enclosed with this Proxy
Card. There are a number of issues related to the management and
operation of your Company that require your immediateattention and
approval. These are discussed in detail in the enclosed proxy
materials.
Your vote counts, and you are strongly encouraged to exercise your
right to vote your shares.
Please mark the boxes on the proxy card to indicate how your shares
should be voted. Then sign and date the card, detach it and return
your proxy vote in the enclosed postage paid envelope.
Your vote must be received prior to the Annual Meeting of
Shareholders, April 24, 1997.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
/s/Robert E. Shaw
Robert E. Shaw
Chairman of the Board of Directors and Chief Executive Officer
<PAGE>
PROXY PROXY
SHAW INDUSTRIES, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby acknowledges receipt of the Notice of the 1997
Annual Meeting of Shareholders and Proxy Statement and does hereby
appoint Robert E. Shaw and J.C. Shaw and either of them, with full
power of substitution, as proxy or proxies of the undersigned to
represent the undersigned and to vote all shares of Shaw Industries,
Inc. Common Stock which the undersigned would be entitled to vote if
personally present at the Annual Meeting of Shareholders of Shaw
Industries, Inc., to be held at the administrative offices of the
Company, 616 East Walnut Avenue, Dalton, Georgia at 11:00 o'clock
a.m., on April 24, 1997 and at any adjournment(s) thereof:
IF NO PREFERENCE IS INDICATED, THIS PROXY WILL BE VOTED "FOR" ALL OF
THE NOMINEES AND "FOR" PROPOSAL 2.
IMPORTANT:PLEASE SIGN THIS PROXY EXACTLY AS YOUR NAME OR NAMES APPEAR
THEREON. IF SHARES ARE HELD BY MORE THAN ONE OWNER, EACH MUST SIGN.
EXECUTORS, ADMINISTRATORS, TRUSTEES, GUARDIANS, AND OTHERS SIGNING IN
A REPRESENTATIVE CAPACITY SHOULD GIVE THEIR FULL TITLES.
HAS YOUR ADDRESS CHANGED?
