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 ( )
Filed by a Party other than the Registrant ( )
Check the appropriate box:
( ) Preliminary Proxy Statement ( ) Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
(X) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
CONSO PRODUCTS COMPANY
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
( ) $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
( ) $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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>
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 15, 1996
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
Conso Products Company (the "Company") will be held at the Harry M.
Arthur National Guard Armory, 165 Industrial Park Road, Union, South
Carolina, on Tuesday, October 15, 1996, at 11:00 a.m., local time, for
the purpose of considering and acting upon the following:
1. The election of seven Directors.
2. Ratification of the selection of Deloitte & Touche LLP as
independent public accountants for the fiscal year ending
June 28, 1997.
3. Any and all other matters that may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on August 23,
1996 as the record date for determining the shareholders entitled to
notice of and to vote at the meeting and any adjournment thereof, and
only holders of Common Stock of the Company of record at such date will
be entitled to notice of or to vote at the meeting.
THE BOARD OF DIRECTORS WILL APPRECIATE THE PROMPT RETURN OF THE
ENCLOSED PROXY, DATED AND SIGNED. THE PROXY MAY BE REVOKED BY YOU AT
ANY TIME BEFORE IT IS EXERCISED AND WILL NOT BE EXERCISED IF YOU ATTEND
THE MEETING AND VOTE IN PERSON.
By Order of the Board of Directors
J. Cary Findlay
Chairman
Union, South Carolina
September 11, 1996
<PAGE>
CONSO PRODUCTS COMPANY
P. O. Box 326
513 N. Duncan Bypass
Union, South Carolina 29379
PROXY STATEMENT
General
This Proxy Statement is furnished in connection with the
solicitation by the Board of Directors of proxies to be used at the
Annual Meeting of Shareholders of Conso Products Company (the "Company")
to be held at the Harry M. Arthur National Guard Armory, 165 Industrial
Park Road, Union, South Carolina, at 11:00 a.m., local time, on Tuesday,
October 15, 1996. This Proxy Statement and accompanying proxy are first
being sent to the shareholders of the Company on or about September 11,
1996.
Solicitation other than by mail may be made personally and by
telephone by regularly employed officers and employees of the Company
who will not be additionally compensated therefor. The Company will
request brokers, dealers, banks or voting trustees, or their nominees,
who hold stock in their names for others or hold stock for others who
have the right to give voting instructions, to forward proxy materials
to their principals and request authority for the execution of the proxy
and will reimburse such institutions for their reasonable expenses in so
doing. The total cost of soliciting proxies will be borne by the
Company.
Any proxy delivered in the accompanying form may be revoked by the
person executing the proxy at any time before the authority thereby
granted is exercised by written request addressed to Secretary, Conso
Products Company, P. O. Box 326, Union, South Carolina 29379 or by
attending the meeting and electing to vote in person. Proxies received
in such form will be voted as therein set forth at the meeting or any
adjournment thereof.
The only matters to be considered at the meeting, so far as known
to the Board of Directors, are the matters set forth in the Notice of
Annual Meeting of Shareholders, and routine matters incidental to the
conduct of the meeting. However, if any other matters should come
before the meeting or any adjournment thereof, it is the intention of
the persons named in the accompanying form of proxy, or their
substitutes, to vote the proxy in accordance with their judgment on such
matters.
Shareholders present or represented and entitled to vote on a
matter at the meeting or any adjournment thereof will be entitled to one
vote on such matter for each share of Common Stock of the Company held
by them of record at the close of business on August 23, 1996, which is
the record date for determining the shareholders entitled to notice of
and to vote at the meeting or any adjournment thereof. Voting on all
matters, including the election of Directors, will be by voice vote or
by show of hands, unless the holders of at least 25% of the shares
represented at the meeting and entitled to vote on such matter demand a
vote by ballot prior to the vote. The number of shares of Common Stock
of the Company outstanding on August 23, 1996 was 4,987,793.
<PAGE>
Principal Shareholders
At August 15, 1996, the only persons known to the Company to be the
beneficial owners of more than 5% of the Common Stock of the Company
were as follows:
Name and Address of Beneficial Number of Shares and Percentage of Common
Owner Nature of Beneficial Stock Outstanding
- ------------------------------ Ownership(1)
---------------------- --------------------
J. Cary Findlay 2,013,150(2) 40.4%
513 N. Duncan Bypass
Union, SC 29379
Quest Advisory Corp. 338,250(3) 6.8%
Quest Management Company
1414 Avenue of the Americas
New York, NY 10019
IDS Diversified Equity Income 271,500(4) 5.4%
Fund
IDS Tower 10
Minneapolis, MN 55440
__________________
(1) Unless otherwise indicated, each shareholder has sole voting and
sole investment power with respect to all shares beneficially
owned.
(2) Excludes 2,950 shares (which includes 1,600 shares subject to
options which are exercisable within 60 days) held by Mr. Findlay's
wife, as to which he disclaims beneficial ownership.
(3) The information concerning beneficial ownership is derived from a
Schedule 13G dated February 13, 1996. Quest Advisory Corp.
("QAC"), Quest Management Company ("QMC") and Charles M. Royce, as
a group, are the beneficial owners of 338,250 shares of the
Company's Common Stock. Mr. Royce may be deemed to be a
controlling person of QAC and QMC. QAC has sole voting and
dispositive power with respect to 290,100 shares and QMC has sole
voting and dispositive power with respect to 48,150 shares. Mr.
Royce disclaims beneficial ownership of all such shares.
(4) The information concerning beneficial ownership is derived from an
Amendment to Schedule 13G dated August 31, 1995. American Express
Financial Corporation, a registered investment advisor, has
reported that such shares are held by IDS Diversified Equity Income
Fund, an investment company advised by it. American Express
Financial Corporation is a subsidiary of American Express Company,
which disclaims beneficial ownership of all such shares.
The following table sets forth, as of August 15, 1996, information
as to the beneficial ownership of the Common Stock by all Directors and
executive officers of the Company as a group and by C.V. Balakrishnan
and David Sears (the executive officers named in the Summary
Compensation Table who are not also Directors or nominees). Information
with respect to the beneficial ownership of the Common Stock by J. Cary
Findlay, Antony W. Laughton, S. Duane Southerland, Jr. and the other
Directors is contained in the table under "Election of Directors."
2
<PAGE>
Name and Address of Beneficial Number of Shares and Percentage of Common
Owner Nature of Beneficial Stock Outstanding
- ------------------------------ Ownership(1) ---------------------
--------------------
Directors and executive 2,185,586(2) 43.7%
officers as a group
(12 persons)
David Sears 5,450(3) (4)
C. V. Balakrishnan 60,050(5) 1.2%
__________________
(1) Except as otherwise indicated, all shares are currently issued and
outstanding and each Shareholder has sole voting and investment
power with respect to all shares beneficially owned. Share amounts
are rounded to the nearest whole share.
(2) Includes 10,200 shares subject to options which are exercisable
within 60 days.
(3) Includes 1,850 shares subject to options which are exercisable
within 60 days.
(4) Less than 1%.
(5) Includes 1,600 shares subject to options which are exercisable
within 60 days.
Election of Directors
The Bylaws of the Company provide that the number of directors
shall not be less than one nor more than nine, as determined from time
to time by resolution of the shareholders or the Board of Directors.
The Board of Directors has fixed the number of Directors to be elected
at the meeting at seven.
At the meeting, seven Directors will be elected to serve, subject
to the provisions of the Bylaws, until the 1997 Annual Meeting of
Shareholders and until their successors are duly elected and qualified.
Directors are elected by a plurality of the votes cast by the holders of
the shares entitled to vote in the election of Directors at a meeting at
which a quorum is present. Provided a quorum is present, abstentions
and shares not voted are not taken into account in determining a
plurality. A quorum consists of a majority of votes entitled to be
cast. It is the intention of the persons named in the accompanying
proxy to vote all proxies solicited by the Board of Directors FOR the
seven nominees listed below unless authority to vote for the nominees or
any individual nominee is withheld by a shareholder in such
shareholder's proxy. If for any reason any nominee shall not become a
candidate for election as a Director at the meeting, an event not now
anticipated, the proxies will be voted for seven nominees including such
substitutes as shall be designated by the Board of Directors.
The seven nominees for election as Directors are listed below.
Each of the nominees other than Mr. Southerland is currently a member of
the Board of Directors. Mr. Findlay has been a Director of the Company
since 1986. Messrs. Laughton, Maxheim and Shaw were first elected
Directors on January 6, 1994. Ms. Findlay was elected Director on May
15, 1995. Mr. Hickman was elected Director on February 9, 1996. Mr.
Southerland was nominated to fill the position resulting from the
increase in the size of the Board to seven.
3
<PAGE>
<TABLE>
<CAPTION>
Number of
Shares and Percentage of
Nature of Common
Name and Address of Information About Beneficial Stock
Director or Nominee (1) Age Director or Nominee Ownership(2) Outstanding
- ----------------------- ---- -------------------- ------------ -----------
<S> <C> <C> <C> <C>
J. Cary Findlay 57 Chairman of the Board since 2,013,150(3) 40.4%
1986; President and Chief
Executive Officer of the
Company from December
1987 to May 1995
Antony W. Laughton 63 Managing Director of British 54,250(4) 1.1%
Trimmings Limited, a wholly-
owned subsidiary of the
Company ("British Trim-
mings"), since 1974
John H. Maxheim 61 Chairman, President, Chief 3,750 (5)
Executive Officer and a
Director of Piedmont Natural
Gas Company (a utility com-
pany) since 1984
James H. Shaw 67 Retired; Chairman of Consol- 2,500 (5)
idated Ivey's (department
store chain) from 1986 to
1989; Chief Executive Offi-
cer of Consolidated Ivey's
from 1986 to 1988; Direc-
tor of The Cato Corporation
(apparel retailer)
Konstance J. K. Findlay 49 Senior Vice President-Busi- 2,950(6) (5)
ness Development of the
Company since May 1995;
Vice President-International
Sales of the Company from
January 1993 to May 1995;
Vice President-Production of
the Company from January
1992 to January 1993;
Production Manager of the
Company from November
1988 to January 1992
4
<PAGE>
Marcus T. Hickman 73 Of Counsel to Kennedy 1,875(7) (5)
Covington Lobdell &
Hickman, L.L.P. (attorneys)
since January 1995; Partner
in Kennedy Covington
Lobdell & Hickman, L.L.P.
from 1957, when he co-
founded the firm, through
1994
S. Duane Southerland, Jr. 47 President and Chief Execu- 37,500 (5)
tive Officer of the Company
since May 1995; President
of Kirsch Division (drapery
hardware and custom win-
dow coverings) of Cooper
Industries, Inc. (a manufac-
turer of electrical products,
tools and hardware, and
automotive products) from
1988 to May 1995
</TABLE>
_________________
(1) The information about the Directors was furnished by them to
the Company.
(2) Except as otherwise indicated, all shares are currently issued
and outstanding and each shareholder has sole voting and
investment power with respect to all shares beneficially owned.
Common Stock ownership information is as of August 15, 1996.
(3) Excludes 2,950 shares (which includes 1,600 shares subject to
options which are exercisable within 60 days) held by Mr.
Findlay's wife, Konstance J. K. Findlay, as to which he
disclaims beneficial ownership.
(4) Includes 46,500 shares which are held in trusts for the benefit
of Mr. Laughton's children, of which Mr. Laughton and his wife
are trustees, and 1,750 shares subject to options which are
exercisable within 60 days. The remaining 6,000 shares are
owned by Mr. Laughton jointly with his wife.
(5) Less than 1%.
(6) Includes 1,600 shares subject to options which are exercisable
within 60 days and excludes 2,013,150 shares held by Ms.
Findlay's husband, J. Cary Findlay, as to which she disclaims
beneficial ownership.
(7) Includes 300 shares held by Mr. Hickman's wife and 75 shares
held by Mr. Hickman's son who resides in his household, as to
which he disclaims beneficial ownership.
5
<PAGE>
The Board of Directors and its Committees
The Board of Directors met four times during the past fiscal year
ended June 29, 1996. Each Director attended at least 75% of the
meetings of the Board of Directors and any Committees on which such
Director served during the period that he or she was a Director in the
last fiscal year. The Board of Directors of the Company has Executive,
Compensation and Audit Committees. The Company does not have a
Nominating Committee.
The Executive Committee is composed of Messrs. Findlay and Maxheim
and is authorized to exercise all the powers and authority of the Board
of Directors that can be delegated to a committee under the South
Carolina Business Corporation Act. The Executive Committee did not meet
during the past fiscal year, although from time to time it meets
informally and acts by unanimous written consent.
The Compensation Committee is composed of Messrs. Maxheim, Shaw and
Hickman and is responsible for making recommendations with respect to
compensation of executive officers and for other compensation matters
and for administering the Company's 1993 Stock Option Plan. The
Compensation Committee met four times during the past fiscal year.
The Audit Committee is composed of Messrs. Maxheim, Shaw and Hickman
and is responsible for reviewing the Company's financial statements,
audit reports, internal financial controls, internal audit procedures
and the services performed by the Company's independent public
accountants, and for making recommendations with respect to those
matters to the Board of Directors. The Audit Committee met four times
during the past fiscal year.
Peter G. Scotese was a member of the Board of Directors and served on
the Compensation and Audit Committees until December 31, 1995. Mr.
Scotese's position on the Board of Directors and the Compensation and
Audit Committees was filled by the appointment of Mr. Hickman on
February 9, 1996.
Executive Officers
Mr. Findlay, Chairman of the Company, Mr. Laughton, Managing Director
of British Trimmings, Ms. Findlay, Senior Vice President-Business
Development of the Company, and Mr. Southerland, President and Chief
Executive Officer of the Company, are each nominees for election as
Directors. Information about the Company's executive officers who are
not also nominees for election as Directors follows:
C. V. Balakrishnan, age 57, is Vice President and Chief Operating
Officer of British Trimmings. Mr. Balakrishnan, who joined British
Trimmings in 1973, was Financial Director from 1981 to 1983 and has
served as its Chief Operating Officer since 1983.
Gilbert G. Bartell, age 63, has been Vice President-Finance, Chief
Financial Officer and Treasurer of the Company since October 1986. From
1979 to 1986, Mr. Bartell served Springs Industries, Inc. as Controller
of its Conso Division.
David B. Dechant, age 32, joined the Company in April 1989 and has
served as Chief Accounting Officer since 1990. Prior to joining the
Company, Mr. Dechant was employed by Deloitte, Haskins & Sells (now
Deloitte & Touche LLP) from April 1987 to April 1989 and Arthur Andersen
& Co. from June 1985 to April 1987.
6
<PAGE>
David Sears, age 63, has been Vice President-Sales of the Company
since October 1986. From 1979 to 1986, Mr. Sears was employed by
Springs Industries, Inc. as sales manager of its Conso Division.
William M. Stewart, age 47, has served as Vice
President-Manufacturing since joining the Company in July 1988.
Officers are appointed by the Board of Directors and serve at its
pleasure.
Compensation Committee Interlocks and Insider Participation
During the fiscal year ended June 29, 1996, the following Directors
served on the Compensation Committee: James H. Shaw, John H. Maxheim,
Peter G. Scotese and Marcus T. Hickman. Mr. Scotese retired from the
Board of Directors and its Committees on December 31, 1995, and his
position on both the Board of Directors and the Compensation Committee
was filled by the appointment of Mr. Hickman on February 9, 1996. Mr.
Hickman is Of Counsel to and a retired partner in the law firm of
Kennedy Covington Lobdell & Hickman, L.L.P., which regularly provides
legal services to the Company. During the fiscal year, no executive
officer of the Company served as a director or member of the
compensation committee (or committee performing similar functions) of
any other entity of which an executive officer served on the Board of
Directors or Compensation Committee of the Company.
Compensation Committee Report
The Compensation Committee of the Board of Directors of the Company,
whose current members are named below, provides overall guidance to the
Company's executive compensation process. The Committee's
recommendations regarding the compensation of the Chairman, the Chief
Executive Officer and the other executive officers of the Company are
subject to approval by the Board, except for decisions with respect to
grants under the Company's 1993 Stock Option Plan, which are made solely
by the Committee.
The Committee's compensation policies are designed to fairly
compensate the executive officers of the Company for the effective
exercise of their responsibilities, their management of the business
functions for which they are responsible, the motivation of those
officers and employees reporting to them, their extended period of
service to the Company and their dedication and diligence in carrying
out their responsibilities. In determining the compensation of
executive officers other than the Chairman and the Chief Executive
Officer (the "Senior Officers"), the Compensation Committee primarily
considers the recommendations of the Senior Officers in connection with
the annual reviews of the compensation and bonuses of all management
personnel, except that the compensation (including bonuses) of Messrs.
Laughton and Balakrishnan is determined by their employment agreements
that were entered into at the time British Trimmings was acquired by the
Company. See "Employment Agreements" below. In granting stock options,
the Compensation Committee also primarily considers the recommendations
of the Senior Officers. Such compensation recommendations by the Senior
Officers are not specifically related to corporate performance, but are
based primarily upon the Senior Officers' subjective assessments of the
individual performance and contributions of the respective employees in
light of the factors described above, which are discussed with the
Compensation Committee.
The compensation of Mr. Findlay, the Company's Chairman, has remained
unchanged from that determined at the time of the Company's initial
public offering in 1993. Although the Compensation Committee has been
of the view that the Company's performance and Mr. Findlay's individual
performance and contributions have merited consideration of increases in
Mr. Findlay's compensation
7
<PAGE>
(which has been a salary of $275,000 per year since the beginning of
1994), Mr. Findlay has heretofore declined any consideration of such
increases.
The compensation of Mr. Southerland as Chief Executive Officer
(including his bonus for the fiscal year ended June 29, 1996) is
determined by his employment agreement that was entered into at the time
he joined the Company as Chief Executive Officer in May 1995. See
"Employment Agreements" below. Such employment agreement was reviewed
by the Compensation Committee in connection with its approval by the
Board of Directors, and reflects terms negotiated at arms length with
Mr. Southerland to obtain his services and induce him to accept
employment with the Company. The compensation level specified by Mr.
Southerland's employment agreement was determined by the members of the
Compensation Committee to be appropriate to attract a Chief Executive
Officer with Mr. Southerland's background and experience. Mr.
Southerland's compensation is not specifically related to corporate
performance.
The above report is presented by the following members of the
Compensation Committee: James H. Shaw, John H. Maxheim and Marcus T.
Hickman.
Shareholder Return Performance Graph
Presented below is a line graph comparing the percentage change in
the cumulative total shareholder return on the Company's Common Stock
against the cumulative total return on Standard & Poor's Textile - Home
Furnishings Index (the "S&P Textile - Home Furnishings Index") and the
Total Return Index for The Nasdaq Stock Market (U.S. Companies) (the
"Nasdaq Composite Index") for the period commencing December 15, 1993
(the date the Company's Common Stock commenced trading on the Nasdaq
National Market) and ending June 29, 1996.
[GRAPH OMITTED]
<TABLE>
<CAPTION>
Dec. 15, 1993 July 2, 1994 July 1, 1995 June 29, 1996
<S> <C> <C> <C> <C>
Conso Products Company 100 128.83 124.37 216.55
S & P Textile - Home Furnishings 100 79.13 98.67 133.77
NASDAQ Composite Index 100 91.32 121.89 156.49
</TABLE>
This graph assumes that $100 was invested in the Company's Common
Stock, on the S&P Textile - Home Furnishings Index and on the Nasdaq
Composite Index on December 15, 1993, and that dividends were
reinvested.
8
<PAGE>
Executive Compensation
The table below shows the compensation paid or accrued by the Company
for the three fiscal years ended June 29, 1996 to or for the account of
the Company's Chief Executive Officer and its only other executive
officers whose total annual salary and bonus exceeded $100,000 during
the last fiscal year (collectively, the "Named Executive Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation
-------------------------------------- Awards
-------------
Other Annual
Name and Principal Salary Bonus Compensation Options
Position Year ($) ($) ($) (#)
- ------------------ ----- -------- ------- ------------- -------------
<S> <C> <C> <C> <C> <C>
J. Cary Findlay 1996 275,000 -- (1) --
Chairman 1995 275,000 -- (1) --
1994 214,615 -- (1) --
S. Duane Southerland, Jr. 1996 202,500 20,000 25,676(2) --
President and Chief 1995 26,923 -- (1) 37,500
Executive Officer -- -- -- --
Antony W. Laughton 1996 109,678 7,350 (1) 5,250
Managing Director of 1995 108,300 32,467 (1) --
British Trimmings 1994(3) 52,625 13,196 (1) --
C.V. Balakrishnan 1996 101,553 7,350 10,890(4) 4,800
Vice President and Chief 1995 100,277 32,467 (1) --
Operating Officer of 1994(3) 48,689 13,196 (1) --
British Trimmings
David Sears 1996 113,000 8,000 (1) 5,550
Vice President-Sales 1995 111,012 7,500 (1) --
1994 106,522 2,000 (1) --
</TABLE>
_____________________
(1) The Named Executive Officer did not receive personal benefits during
such year (valued at the aggregate incremental cost to the Company
and its subsidiaries) in excess of 10% of his salary and bonus.
(2) Includes $20,090 in moving and related expenses.
(3) Only includes amounts awarded, earned or paid after December 22,
1993, the date the Company acquired all of the issued and
outstanding share capital of British Trimmings.
(4) Includes an automobile allowance of $8,368.
The table below sets forth information relating to option grants
during the fiscal year ended June 29, 1996 to each Named Executive
Officer and the potential realizable value of each grant of options
assuming annualized appreciation in the Company's Common Stock at the
rate of 5% and 10% over the term of the option.
9
<PAGE>
OPTION GRANTS IN FISCAL YEAR 1996
<TABLE>
<CAPTION>
Individual Grants Potential Realizable
---------------------------------------------------------- Value at Assumed
Number of % of Total Annual Rates of Stock
Shares Options Price Appreciation for
Underlying Granted to Exercise or Option Term
Options Employees in Base Price Expiration -----------------------
Name Granted (1) Fiscal Year $/Share Date 5% 10%
-------- ------------ ------------ ------------- ----------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
J. Cary Findlay -- -- -- -- -- --
S. Duane Southerland, Jr. -- -- -- -- -- --
Antony W. Laughton 5,250 8.4 10.00 9/7/00 14,505 32,052
C.V. Balakrishnan 4,800 7.7 10.00 9/7/00 13,262 29,304
David Sears 5,550 8.9 10.00 9/7/00 15,334 33,883
</TABLE>
- ------------------
(1) Such options are exercisable, subject to continuing employment, in
three equal annual installments commencing September 7, 1996.
The table below sets forth information relating to the exercise of
stock options during the fiscal year ended June 29, 1996 by each Named
Executive Officer and the fiscal year-end value of unexercised stock
options.
AGGREGATED OPTION EXERCISES IN
FISCAL 1996 AND FY-END OPTION VALUES
<TABLE>
<CAPTION
Value of
Number of Unexercised
Unexercised In-the-Money
Options Options
at FY-End(#) at FY-End($)
Shares ----------- -------------
Acquired on Value Exercisable/ Exercisable/
Name Exercise Realized($) Unexercisable Unexercisable
- ------- ------------- ----------- ------------- -------------
<S> <C> <C> <C> <C>
J. Cary Findlay -- -- 0/0 0/0
S. Duane Southerland, Jr. 37,500 219,531 0/0 0/0
Antony W. Laughton -- -- 0/5,250 0/32,813
C. V. Balakrishnan -- -- 0/4,800 0/30,000
David Sears -- -- 0/5,550 0/34,688
</TABLE>
No tables showing awards under long-term incentive plans are presented
because no Named Executive Officer received any such compensation during
the listed years.
Director Compensation
Directors who are officers or employees of the Company receive no
additional compensation for serving as Directors. Directors who are not
compensated as officers or employees of the Company are paid a quarterly
retainer fee of $1,000, a fee of $1,400 for each meeting of the Board of
Directors and a fee of $300 for each meeting of any Committee thereof
attended. All Directors are reimbursed for out-of-pocket expenses
incurred in attending meetings of the Board of Directors and any of its
Committees.
10
<PAGE>
Employment Agreements
The Company has entered into an employment agreement with Mr.
Southerland. The agreement, which is terminable at any time by either
party except as to any severance payments, provides for an annual salary
at an initial rate of $200,000 (which is subject to annual review) and
certain other benefits. Mr. Southerland is to be considered for annual
bonuses in accordance with Company policies, and was guaranteed a bonus
of $20,000 for fiscal 1996. The agreement also provides for certain
severance payments and the continuation of certain benefits to Mr.
Southerland in the event that his employment is terminated by the
Company (other than by reason of his death or termination by the Company
for cause). The maximum amount of such severance payments is equal to
his compensation for up to 18 months (two years in the case of a
termination within one year after a "Change of Control"). "Change of
Control" is defined as the ownership by any person, entity or group of a
greater percentage of Common Stock than Mr. Findlay or his estate or the
beneficiaries of his estate, or the transfer of substantially all of the
business and assets of the Company to another corporation or entity of
which another person or group owns a greater percentage of the common
stock or other voting equity interests thereof than does Mr. Findlay or
his estate or the beneficiaries of his estate.
In connection with the Company's acquisition of all of the issued and
outstanding share capital of British Trimmings in December 1993, Messrs.
Laughton and Balakrishnan entered into employment agreements with
British Trimmings for the five-year period following the acquisition.
The employment agreements provide for annual compensation of (pound)67,500 and
(pound)62,500 for Mr. Laughton and Mr. Balakrishnan, respectively, to be
adjusted annually for inflation. The employment agreements also provide
for an annual bonus for each of Messrs. Laughton and Balakrishnan based
on British Trimmings' operating profits, and certain other benefits. Mr.
Laughton's agreement provides for a reduction in his services in the
fourth and fifth year with a commensurate reduction in compensation. Mr.
Balakrishnan's agreement provides for the Company to continue funding
annually a pension arrangement whereby Mr. Balakrishnan can retire at
age 60 (May 2000) at two-thirds of his salary.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's Directors and executive officers and persons who own more than
10% of the Company's Common Stock to file with the Securities Exchange
Commission initial reports of ownership and reports of changes in
ownership of the Common Stock and other equity securities. Executive
officers, Directors and greater than 10% shareholders are required to
furnish the Company copies of all such reports 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, during the fiscal year ended June 29, 1996,
all Section 16(a) filing requirements applicable to its executive
officers, Directors and greater than 10% shareholders were complied with
on a timely basis, except that James H. Shaw failed to report one
transaction in a timely manner. Such transaction has since been
reported.
Selection of Independent Public Accountants
The Board of Directors has selected Deloitte & Touche LLP as
independent public accountants to audit the financial statements of the
Company for the fiscal year ending June 28, 1997. This selection is
being presented to the shareholders for their ratification at the Annual
Meeting of Shareholders. Deloitte & Touche LLP audited the Company's
financial statements for the fiscal year ended June 29, 1996 and prior
years and is considered well qualified.
11
<PAGE>
Representatives of Deloitte & Touche LLP are expected to be present at
the Annual Meeting of Shareholders with an opportunity to make a
statement if they desire to do so, and they are expected to be available
to respond to appropriate questions.
The Board of Directors recommends a vote FOR ratification of the
selection of Deloitte & Touche LLP as independent public accountants to
audit the financial statements of the Company for the fiscal year ending
June 28, 1997, and proxies solicited by the Board of Directors will be
so voted unless shareholders specify a different choice.
If the shareholders do not ratify the selection of Deloitte & Touche
LLP, the selection of independent public accounts will be reconsidered
by the Board of Directors.
Shareholder Proposals
Any proposal that a shareholder intends to present for action at the
1997 Annual Meeting of Shareholders, currently scheduled for October 14,
1997, must be received by the Company no later than May 14, 1997, in
order for the proposal to be included in the proxy statement and form of
proxy for the 1997 Annual Meeting of Shareholders. The proposal should
be sent to Secretary, Conso Products Company, P.O. Box 326, Union, South
Carolina 29379.
Annual Report to Securities and Exchange Commission
Upon written request of a shareholder, the Company will furnish without
charge a copy of its Annual Report on Form 10-K for the fiscal year
ended June 29, 1996 to be filed with the Securities and Exchange
Commission on or before September 27, 1996. Such request should be
submitted to Gilbert G. Bartell, Treasurer, Conso Products Company,
P.O. Box 326, Union, South Carolina 29379.
12
<PAGE>
*******************************************************************************
APPENDIX
CONSO PRODUCTS COMPANY PROXY
Proxy solicited by the Board of Directors for the
Annual Meeting to be held October 15, 1996
The undersigned hereby appoints J. Cary Findlay and Gilbert G.
Bartell, and each or either of them, proxies, with full power of
substitution, with the powers the undersigned would possess if
personally present, to vote, as designated below, all shares of Common
Stock of the undersigned in Conso Products Company at the Annual Meeting
of Shareholders to be held on October 15, 1996, and at any adjournment
thereof.
This proxy will be voted as specified herein and, unless otherwise
directed, will be voted FOR the election of all nominees as Directors.
The Board of Directors recommends voting FOR the election of all such
nominees as Directors.
1. ELECTION OF DIRECTORS: Nominees are J. Cary Findlay, Antony W.
Laughton, John H. Maxheim, James H. Shaw, Konstance J. K. Findlay,
Marcus T. Hickman and S. Duane Southerland, Jr.
FOR all listed nominees (except do not vote for the
nominee(s) whose name(s) I have written below)
WITHHOLD AUTHORITY to vote for the listed nominees
(Continued and to be signed on the reverse)
<PAGE>
(Continued from other side)
2. RATIFICATION OF SELECTION OF DELOITTE & TOUCHE LLP AS INDEPENDENT
PUBLIC ACCOUNTANTS
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
Receipt of Notice of Annual Meeting of Shareholders and accompanying
Proxy Statement is hereby acknowledged.
Please date and sign exactly as printed below and return promptly in the
enclosed postage paid envelope.
Dated: __________________________, 1996.
(When signing as attorney, executor,
administrator, trustee, guardian, etc.,
give title as such. If joint account,
each joint owner should sign.)
<PAGE>
