CONSO PRODUCTS CO, DEF 14A, 1997-09-18

CONSO PRODUCTS CO
DEF 14A, 1997-09-18
TEXTILE MILL PRODUCTS

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<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the Registrant [X]

Filed by a Party other than the Registrant [ ]

Check the appropriate box:

<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>

CONSO PRODUCTS COMPANY
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

(1) Title of each class of securities to which transaction applies:

(2) Aggregate number of securities to which transaction applies:

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):

(4) Proposed maximum aggregate value of transaction:

(5) Total fee paid:

[ ] Fee paid previously with preliminary materials:

[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

(2) Form, Schedule or Registration Statement No.:

(3) Filing Party:

(4) Date Filed:
<PAGE> 2
[Conso Logo]

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 14, 1997

NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Conso
Products Company (the "Company") will be held at the Company's Annex Plant, 228
Industrial Park Road, Union, South Carolina, on Tuesday, October 14, 1997, 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 27, 1998.

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 22, 1997
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 16, 1997

<PAGE> 3
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, a South Carolina corporation (the
"Company"), to be held at the Company's Annex Plant, 228 Industrial Park Road,
Union, South Carolina, at 11:00 a.m., local time, on Tuesday, October 14, 1997.
This Proxy Statement and accompanying proxy are first being sent to the
shareholders of the Company on or about September 17, 1997.

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 22, 1997, 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 22, 1997 was 7,492,365.

<PAGE> 4

PRINCIPAL SHAREHOLDERS

At August 15, 1997, 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:

<TABLE>
<CAPTION>
NUMBER OF SHARES AND
NAME AND ADDRESS OF NATURE OF BENEFICIAL PERCENTAGE OF COMMON
BENEFICIAL OWNER OWNERSHIP(1) STOCK OUTSTANDING
- ------------------------------ -------------------- --------------------

<S> <C> <C>
J. Cary Findlay 3,019,725(2) 40.3%
513 N. Duncan Bypass
Union, SC 29379

Quest Advisory Corp. 507,375(3) 6.8%
Quest Management Company
1414 Avenue of the Americas
New York, NY 10019

FMR Corp. 478,350(4) 6.4%
82 Devonshire Street
Boston, MA 02109

IDS Diversified Equity Income 407,250(5) 5.4%
Fund
IDS Tower 10
Minneapolis, MN 55440
</TABLE>

- ------------------

(1) Unless otherwise indicated, each shareholder has sole voting and sole
investment power with respect to all shares beneficially owned.

(2) Includes 77,000 shares held by the Findlay Charitable Foundation, of
which Mr. Findlay is a director and officer, and 77,000 shares held by
the Findlay-Conso Education Foundation, of which Mr. Findlay is a
director and officer. Excludes 7,960 shares (which includes 5,800
shares subject to options that are presently exercisable or exercisable
within 60 days) held by Mr. Findlay's wife, Konstance J. K. Findlay, as
to which shares Mr. Findlay disclaims beneficial ownership.

(3) The information concerning beneficial ownership set forth above and in
this note 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 507,375 shares of the
Company's Common Stock. Mr. Royce may be deemed to be a controlling
person of QAC and QMC and to have shared voting and dispositive power
with respect to all shares owned by them. QAC has sole voting and
dispositive power with respect to 435,150 shares and QMC has sole
voting and dispositive power with respect to 72,225 shares. Mr. Royce
disclaims beneficial ownership of all such shares.

(4) The information concerning beneficial ownership set forth above and in
this note is derived from a Schedule 13G dated February 14, 1997. FMR
Corp. ("FMR") may be deemed to have sole dispositive power with respect
to all of such shares because its wholly-owned subsidiary, Fidelity
Management & Research Company ("Fidelity"), acts as investment adviser
to the Fidelity Low-Priced Stock Fund (the "Fund"). The Schedule 13G
reported that (a) the Fund owned all of such shares, (b) each of Edward
C. Johnson III (a shareholder of FMR), FMR, Fidelity and the Fund has
sole dispositive power with respect to such shares, (c) the Board of

<PAGE> 5

Trustees of the Fund has sole voting power with respect to such shares,
(d) neither Mr. Johnson, FMR nor Fidelity has voting power with respect
to such shares and (e) through ownership of FMR and a shareholders'
agreement, members of Mr. Johnson's family and trusts for their benefit
may be deemed to form a controlling group with respect to FMR.

(5) The information concerning beneficial ownership set forth above and in
this note is derived from an Amendment No. 1 to Schedule 13G dated
August 31, 1995. American Express Financial Corporation, a registered
investment adviser, 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, 1997, information as
to the beneficial ownership of the Common Stock by all Directors and executive
officers of the Company as a group and by David Sears and William M. Stewart
(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."

<TABLE>
<CAPTION>
NUMBER OF SHARES AND
NAME OF NATURE OF BENEFICIAL PERCENTAGE OF COMMON
BENEFICIAL OWNER OWNERSHIP(1) STOCK OUTSTANDING
- ----------------------- -------------------- --------------------

<S> <C> <C>
Directors and executive 3,259,429(2) 43.5%
officers as a group
(12 persons)

David Sears 6,550(3) (4)

William M. Stewart 6,675(5) (4)

</TABLE>
- -----------------

(1) Except as otherwise indicated in this Proxy Statement, all shares are
currently issued and outstanding and each Director and executive
officer has sole voting and investment power with respect to all shares
beneficially owned. Share amounts are rounded to the nearest whole
share.

(2) Includes an aggregate of 32,000 shares subject to options that are
presently exercisable or exercisable within 60 days. Includes 27,000
shares held by the wife of C.V. Balakrishnan, Vice-President and Chief
Operating Officer of British Trimmings Limited, a wholly-owned
subsidiary of the Company ("British Trimmings"), as to which shares Mr.
Balakrishnan disclaims beneficial ownership.

(3) Includes 3,775 shares subject to options that are presently exercisable
or exercisable within 60 days.

(4) Less than 1%.

(5) Includes 6,450 shares subject to options that are presently exercisable
or exercisable within 60 days.

<PAGE> 6

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 1998 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 up to seven nominees
including any substitutes that may be designated by the Board of Directors.

The seven nominees for election as Directors are listed below. Each of
the nominees 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 elected Director on October 15, 1996.

Antony W. Laughton 64 Managing Director of British 52,700(4) (5)
Trimmings since 1974

John H. Maxheim 62 Chairman, President, Chief 6,259 (5)
Executive Officer and a
Director of Piedmont Natural
Gas Company (a utility com-
pany) since 1984

James H. Shaw 68 Retired; Chairman of Consol- 3,750 (5)
idated Ivey's (department
store chain) from 1986 to
1989; Chief Executive Officer
of Consolidated Ivey's from
1986 to 1988; Director of The
Cato Corporation (apparel
retailer)

</TABLE>

<PAGE> 7

NUMBER OF
SHARES AND PERCENTAGE OF
NATURE OF COMMON
NAME OF INFORMATION ABOUT BENEFICIAL STOCK
DIRECTOR OR NOMINEE (1) AGE DIRECTOR OR NOMINEE OWNERSHIP(2) OUTSTANDING
- ----------------------- --- ----------------------------- ------------ -----------
<S> <C> <C> <C> <C>
Konstance J. K. Findlay 50 Senior Vice President-Busi- 161,960(6) 2.2%
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

Marcus T. Hickman 74 Of Counsel to Kennedy 3,446(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. 48 President and Chief Execu- 57,750(8) (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, 1997.

(3) Includes 77,000 shares held by the Findlay Charitable Foundation,
of which Mr. Findlay is a director and officer, and 77,000 shares held
by the Findlay-Conso Education Foundation, of which Mr. Findlay is a
director and officer. Excludes 7,960 shares (which includes 5,800 shares
subject to options that are presently exercisable or exercisable within
60 days) held by Mr.

<PAGE> 8

Findlay's wife, Konstance J. K. Findlay, as to which shares Mr. Findlay
disclaims beneficial ownership.

(4) Includes 42,750 shares held in trusts for the benefit of Mr. Laughton's
children, of which Mr. Laughton and his wife are trustees, and 2,625
shares subject to options that are presently exercisable or exercisable
within 60 days.

(5) Less than 1%.

(6) Includes 5,800 shares subject to options that are presently exercisable
or exercisable within 60 days, 77,000 shares held by the Findlay
Charitable Foundation, of which Ms. Findlay is a director and officer,
and 77,000 shares held by the Findlay-Conso Education Foundation, of
which Ms. Findlay is a director and officer. Excludes 3,019,725 shares
held by Ms. Findlay's husband, J. Cary Findlay, as to which shares Ms.
Findlay disclaims beneficial ownership.

(7) Includes 450 shares held by Mr. Hickman's wife and 112 shares held by
Mr. Hickman's son who resides in his household, as to which shares Mr.
Hickman disclaims beneficial ownership.

(8) Includes 1,500 shares subject to options that are presently exercisable
or exercisable within 60 days.

THE BOARD OF DIRECTORS AND ITS COMMITTEES

The Board of Directors met six times during the past fiscal year ended
June 28, 1997. 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 Board of
Directors of 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.

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:

<PAGE> 9

C. V. Balakrishnan, age 58, 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 64, 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. (a manufacturer of textile and
home furnishings products) as Controller of its Conso Division.

David B. Dechant, age 33, 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.

David Sears, age 64, 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 48, 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 28, 1997, the following Directors
served on the Compensation Committee of the Board of Directors of the Company:
James H. Shaw, John H. Maxheim, and Marcus T. Hickman. 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 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

<PAGE> 10

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 (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 was
initially 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
initial 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.

<PAGE> 11

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 28, 1997.

[GRAPH]

<TABLE>
<CAPTION>
Dec. 15, 1993 July 2, 1994 July 1, 1995 June 29, 1996 June 28, 1997
------------- ------------ ------------ ------------- -------------
<S> <C> <C> <C> <C> <C>
CONSO PRODUCTS COMPANY 100 128.83 124.37 216.55 245.00

S & P TEXTILE - HOME FURNISHINGS 100 79.13 98.67 133.77 143.79

NASDAQ COMPOSITE INDEX 100 91.32 121.89 156.49 190.30
</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.

<PAGE> 12

EXECUTIVE COMPENSATION

The table below shows the compensation paid or accrued by the Company for the
three fiscal years ended June 28, 1997 to or for the account of the Company's
Chief Executive Officer and its four other most highly compensated 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>

ANNUAL COMPENSATION
------------------------------------------- LONG TERM
COMPENSATION
AWARDS
OTHER ANNUAL ------------
NAME AND PRINCIPAL FISCAL SALARY BONUS COMPENSATION OPTIONS
POSITION YEAR ($) ($) ($) (#)
- -------------------------- -------- ------ ------ ------------ ------------
<S> <C> <C> <C>
J. Cary Findlay(1) 1997 275,000 -- (2) --
Chairman 1996 275,000 -- (2) --
1995 275,000 -- (2) --

S. Duane Southerland, Jr. 1997 212,500 20,000 31,867(3) 4,500
President and Chief 1996 202,500 -- 25,676(3) --
Executive Officer 1995 26,923 -- (2) 56,250

Antony W. Laughton 1997 117,638 13,732 (2) --
Managing Director of 1996 109,678 7,350 (2) 7,875
British Trimmings 1995 108,300 32,467 (2) --

David Sears 1997 117,250 8,000 (2) 3,000
Vice President-Sales 1996 113,000 8,000 (2) 8,325
1995 111,012 7,500 (2) --

William M. Stewart 1997 114,500 10,000 (2) 4,500
Vice President- 1996 101,500 7,500 (2) 7,425
Manufacturing 1995 88,300 3,000 (2) --
</TABLE>

- -------------------

(1) Excludes all compensation paid or awarded to Mr. Findlay's wife,
Konstance J. K. Findlay.

(2) 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.

(3) Includes (a) $16,728 in relocation expenses and $9,132 in country
club membership expenses for fiscal 1997 and (b) $20,090 in moving and
related expenses for fiscal 1996.

<PAGE> 13

The table below sets forth information relating to option grants during
the fiscal year ended June 28, 1997 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 rates of 5% and 10% over the
term of the option.

OPTION GRANTS IN FISCAL 1997
<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 (2) -- -- -- -- -- --
S. Duane Southerland, Jr. 4,500 5.7 11.00 9/5/01 13,676 30,220
Antony W. Laughton -- -- -- -- -- --
David Sears 3,000 3.8 11.00 9/5/01 9,117 20,147
William M. Stewart 4,500 5.7 11.00 9/5/01 13,676 30,220
</TABLE>
- -----------------

(1) Such options are exercisable, subject to continuing employment, in
three equal annual installments commencing September 5, 1997.

(2) Excludes options granted to Mr. Findlay's wife, Konstance J. K. Findlay.

The table below sets forth information relating to the exercise of stock
options during the fiscal year ended June 28, 1997 by each Named Executive
Officer and the fiscal year-end value of unexercised stock options.

AGGREGATED OPTION EXERCISES IN
FISCAL 1997 AND FY-END OPTION VALUES
<TABLE>
<CAPTION>

NUMBER OF VALUE OF
SHARES UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS OPTIONS
SHARES AT FY-END(#) AT FY-END($)
ACQUIRED ----------------- -------------
ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE REALIZED($) UNEXERCISABLE UNEXERCISABLE
---- -------- ----------- ------------- -------------
<S> <C> <C>
J. Cary Findlay -- -- 0/0 0/0
S. Duane Southerland, Jr. -- -- 0/4,500 0/4,219
Antony W. Laughton 2,625 16,288 0/5,250 0/27,654
David Sears 2,775 16,419 0/8,550 0/32,047
William M. Stewart -- -- 2,475/9,450 13,307/30,293
</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 attended and a fee of $300 for each meeting of any Committee thereof
attended. All Directors are also reimbursed for out-of-pocket expenses incurred
in attending meetings of the Board of Directors and any of its Committees.

<PAGE> 14

Under the Company's Stock Election Plan for Non-Employee Directors (the
"Director Stock Plan"), Directors of the Company who are not regular employees
of the Company or its subsidiaries may elect to receive all or a portion of the
cash compensation to which they would otherwise be entitled in the form of
shares of the Company's Common Stock. The number of shares of Common Stock to be
issued to a Director upon such an election is determined based upon 90% of the
fair market value of the Common Stock on the date of issuance. The Director
Stock Plan was adopted and approved by the Board of Directors on January 28,
1997. During the fiscal year ended June 28, 1997, Messrs. Maxheim and Hickman
were each issued 634 shares of Common Stock pursuant to the Director Stock Plan.

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, provided for an annual salary at an initial
rate of $200,000 (which is subject to annual review) and certain other benefits.
Mr. Southerland is also to be considered for annual bonuses in accordance with
Company policies. The agreement 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 provided for initial annual compensation of (Pounds)67,500 and
(Pounds)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 certain persons who own more than
10% of the Company's Common Stock to file with the Securities and Exchange
Commission initial reports of ownership and reports of changes in ownership of
the Common Stock and other equity securities. Directors, executive officers and
such 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 28, 1997, all Section 16(a) filing requirements applicable to
Directors, executive officers and greater than 10% shareholders were complied
with on a timely basis, except that Antony W. Laughton failed to report one
transaction in a timely manner. Such transaction has since been reported.

<PAGE> 15

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 27, 1998. 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 28, 1997 and prior years and is considered well qualified.

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 27,
1998, 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
1998 Annual Meeting of Shareholders, currently scheduled for October 13, 1998,
must be received by the Company no later than May 15, 1998, in order for the
proposal to be included in the proxy statement and form of proxy for the 1998
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
28, 1997 TO BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OR BEFORE
SEPTEMBER 29, 1997. SUCH REQUEST SHOULD BE SUBMITTED TO GILBERT G. BARTELL,
TREASURER, CONSO PRODUCTS COMPANY, P. O. BOX 326, UNION, SOUTH CAROLINA 29379.

<PAGE> 16

APPENDIX A

CONSO PRODUCTS COMPANY PROXY
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE
(LOGO) ANNUAL MEETING TO BE HELD OCTOBER 14, 1997

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 14,
1997, 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.

<TABLE>
<S> <C> <C>
[ ] FOR all listed nominees (except do not vote for [ ] WITHHOLD AUTHORITY to vote for the listed
the nominee(s) whose name(s) I have written below) nominees

------------------------------------------------------------------------------------------------------------------
</TABLE>

2. RATIFICATION OF SELECTION OF DELOITTE & TOUCHE LLP AS INDEPENDENT PUBLIC
ACCOUNTANTS

FOR [ ] AGAINST [ ] ABSTAIN [ ]

(Continued and to be signed on the reverse)

(Continued from other side)

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: , 1997.
----------------------

-----------------------------------

-----------------------------------
(When signing as attorney, executor,
administrator, trustee, guardian,
etc., give title as such. If joint
account, each joint owner should
sign.)