<PAGE>
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:
[_] 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
POLYMER GROUP, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
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Notes:
<PAGE>
Notice of
1997 Annual Meeting
of Stockholders
and
Proxy Statement
Polymer Group, Inc.
<PAGE>
POLYMER GROUP, INC.
4838 JENKINS AVENUE
NORTH CHARLESTON, SOUTH CAROLINA 29405
March 20, 1997
Dear Stockholder:
You are cordially invited to attend the 1997 Annual Meeting of Stockholders
which will be held on Friday, April 25, 1997, at 11:00 a.m., local time, at
the Charleston Hilton, 4770 Goer Drive, North Charleston, South Carolina
29406.
The Notice of Meeting, Proxy Statement and Proxy are included with this
letter. The matters listed in the Notice of Meeting are more fully described
in the Proxy Statement.
It is important that your shares are represented and voted at the Annual
Meeting, regardless of the size of your holdings. Accordingly, please mark,
sign and date the enclosed Proxy and return it promptly in the enclosed
envelope. If you attend the Annual Meeting, you may, of course, withdraw your
Proxy should you wish to vote in person.
Sincerely,
/s/ Jerry Zucker
Jerry Zucker
Chairman, President and Chief
Executive Officer
<PAGE>
POLYMER GROUP, INC.
4838 JENKINS AVENUE
NORTH CHARLESTON, SOUTH CAROLINA 29405
NOTICE OF 1997 ANNUAL MEETING OF STOCKHOLDERS
The 1997 annual meeting (the "Annual Meeting") of stockholders of Polymer
Group, Inc. (the "Corporation") will be held on Friday, April 25, 1997, at
11:00 a.m., local time, at the Charleston Hilton, 4770 Goer Drive, North
Charleston, South Carolina 29406, to consider and take action with respect to
the following matters:
(1) The election of two directors for three-year terms or until their
successors are duly elected and qualified.
(2) The ratification of the appointment of Ernst & Young LLP as
independent auditors for the year ending January 3, 1998.
(3) The transaction of such other business as may properly come before
the Annual Meeting and any adjournments or postponements thereof.
Holders of record of the Corporation's Common Stock at the close of business
on March 5, 1997, are entitled to receive notice of and to vote on all matters
presented at the Annual Meeting and at any adjournments or postponements
thereof.
By order of the Board of Directors
/s/ James G. Boyd
James G. Boyd
Secretary
March 20, 1997
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON AND
REGARDLESS OF THE NUMBER OF SHARES YOU OWN, PLEASE MARK, SIGN AND DATE THE
ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENVELOPE PROVIDED TO ENSURE THAT
YOUR SHARES WILL BE REPRESENTED. YOU MAY NEVERTHELESS VOTE IN PERSON IF YOU
ATTEND THE ANNUAL MEETING.
<PAGE>
POLYMER GROUP, INC.
4838 JENKINS AVENUE
NORTH CHARLESTON, SOUTH CAROLINA 29405
----------------
PROXY STATEMENT
----------------
ANNUAL MEETING OF STOCKHOLDERS
APRIL 25, 1997
----------------
This proxy statement (the "Proxy Statement") is being furnished to the
holders of common stock, par value $0.01 per share (the "Common Stock"), of
Polymer Group, Inc. (the "Corporation") in connection with the solicitation of
proxies on behalf of the Board of Directors of the Corporation (the "Board of
Directors" or "Board") for the 1997 annual meeting (the "Annual Meeting") of
stockholders to be held on April 25, 1997 at the Charleston Hilton, 4770 Goer
Drive, North Charleston, South Carolina 29406, and at any adjournments or
postponements thereof. Proxy Statements and proxies are being mailed to
stockholders on or about March 21, 1997.
When you sign and return the enclosed proxy, the shares represented thereby
will be voted FOR the slate of directors described herein, FOR the proposal
set forth in Item 2 of the Notice of Meeting and, as to any other business as
may properly be brought before the Annual Meeting and any adjournments or
postponements thereof, in accordance with the judgment of the person or
persons voting on such matter or matters.
Returning your completed proxy will not prevent you from voting in person at
the Annual Meeting should you be present and wish to do so. In addition, you
may revoke your proxy any time before it is voted by written notice to the
Secretary of the Corporation prior to the Annual Meeting or by submission of a
later-dated proxy.
Each outstanding share of Common Stock entitles the holder thereof to one
vote. Holders are not entitled to vote fractional shares. On March 5, 1997,
the record date, there were 32,000,000 shares of Common Stock outstanding. The
presence in person or by proxy of a majority of such shares of Common Stock
shall constitute a quorum. Under Delaware law, abstentions are treated as
present and entitled to vote and therefore have the effect of a vote against
the matter. A broker non-vote on a matter is considered not entitled to vote
on that matter and thus is not counted in determining whether a matter
requiring approval of a majority of the shares present and entitled to vote
has been approved.
ELECTION OF DIRECTORS
The Board of Directors is currently comprised of six directors divided into
three classes. The term of each class expires in different years. The two
nominees for election to the Board of Directors this year to serve for three-
year terms or until their successors are duly elected and qualified are: David
A. Donnini and L. Glenn Orr, Jr. Messrs. Donnini and Orr are currently
directors of the Corporation. The Board of Directors expects all nominees
named herein to be available for election. In case any nominee is not
available, the proxy holders may vote for a substitute, unless the Board of
Directors reduces the number of directors.
Directors will be elected at the Annual Meeting by a plurality of the votes
cast at the Annual Meeting by the holders of shares represented in person or
by proxy. There is no right to cumulate voting as to any matter, including the
election of directors.
<PAGE>
The following sets forth information as to each director and nominee for
director, including age, as of March 5, 1997, principal occupation and
employment during the past five years, directorships in other publicly held
companies, membership on committees of the Board of Directors and period of
service as a director of the Corporation.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RE-ELECTION OF MESSRS.
DONNINI AND ORR TO THE BOARD OF DIRECTORS.
NOMINEES FOR BOARD OF DIRECTORS
David A. Donnini, Director, 31, has been a Director of the Corporation since
its inception. Mr. Donnini has been a Principal of Golder, Thoma, Cressey,
Rauner, Inc. ("Golder, Thoma") since 1993. From 1991 to 1993, Mr. Donnini was
an Associate with Golder, Thoma. Prior to joining Golder, Thoma in 1991, Mr.
Donnini attended The Stanford Graduate School of Business. Mr. Donnini is also
a director of Coinmach Laundry Corporation.
L. Glenn Orr, Jr., Director, 56, has been a Director of the Corporation
since February 1997. Mr. Orr has been Chairman, President and Chief Executive
Officer of Orr Management Company, a management consulting company, since
February 1995. Prior thereto, from October 1990 until February 1995, Mr. Orr
was Chairman, President and Chief Executive Officer of Southern National
Corporation, a bank holding company. Mr. Orr is also a director of Southern
National Corporation, Ladd Furniture Company and Highwood Properties.
CURRENT DIRECTORS
Jerry Zucker, Chairman, President, Chief Executive Officer and Director of
the Corporation, 47, has been Chairman, President, Chief Executive Officer and
a Director of the Corporation since its inception. In addition to his duties
with the Corporation, Mr. Zucker presently serves as Chairman, Chief Executive
Officer and President of The InterTech Group, Inc. ("InterTech"), one of the
Corporation's principal stockholders, and has served in this capacity since
1983.
James G. Boyd, Executive Vice President, Treasurer, Secretary and Director
of the Corporation, 52, has been Executive Vice President, Treasurer,
Secretary and a Director of the Corporation since its inception. In 1986, Mr.
Boyd joined InterTech where he currently serves as Executive Vice President,
Treasurer, Secretary and Director and performs various treasury, financial and
legal functions for the Corporation and its affiliates.
Bruce V. Rauner, Director, 41, has been a Director of the Corporation since
its inception. Mr. Rauner has been a Principal and General Partner with
Golder, Thoma since 1984, where he is responsible for originating and making
new investments, monitoring portfolio companies and recruiting and training
associates. Mr. Rauner is also a Director of ERO, Inc., Lason, Inc., Coinmach
Laundry Corporation and COREStaff, Inc.
Michael J. McGovern, Director, 34, has been a director of the Corporation
since May 1996. Mr. McGovern has served as Managing Director in the Global
Investment Banking Division of Chase Securities, Inc. since April 1996. Prior
thereto, Mr. McGovern was a Managing Director in Global Corporate Finance for
The Chase Manhattan Bank, N.A. from January 1996 until April 1996. Mr.
McGovern was a Vice President in Global Corporate Finance for The Chase
Manhattan Bank, N.A. from December 1990 until January 1996.
There are no family relationships among the foregoing persons.
BOARD AND COMMITTEE MEETINGS
The Board of Directors held three meetings (exclusive of committee meetings)
during the preceding fiscal year. The Board of Directors has established the
following committees, the functions and current members of which are noted
below. Each current director attended 75% or more of the number of meetings
held during the preceding fiscal year of the Board of Directors and any
committees on which such director served.
2
<PAGE>
Compensation Committee. The Compensation Committee of the Board of Directors
consists of Messrs. Donnini and Rauner. The Compensation Committee reviews and
makes recommendations to the Board of Directors regarding salaries,
compensation and benefits of executive officers and key employees of the
Corporation. The Compensation Committee met once during the preceding fiscal
year.
Stock Option Committee. The 1996 Key Employee Stock Option Plan Committee
(the "Stock Option Committee") of the Board of Directors consists of Messrs.
Donnini and Rauner. The Stock Option Committee is empowered to grant options
to purchase Common Stock of the Corporation. The Stock Option Committee met
once during the preceding fiscal year.
Audit Committee. The Audit Committee of the Board of Directors consists of
Messrs. Donnini, McGovern and Rauner. The Audit Committee, among other duties,
reviews the internal and external financial reporting of the Corporation,
reviews the scope of the independent audit and considers comments by the
auditors regarding internal controls and accounting procedures and
management's response to those comments. The Audit Committee met once during
the preceding fiscal year.
The Corporation does not have a nominating committee.
COMPENSATION OF DIRECTORS
Management directors are not entitled to receive any fees for their service
on the Board of Directors. Non-management directors are reimbursed for out-of-
pocket expenses incurred in connection with attending meetings. In addition,
all non-management directors received $1,250 per meeting attended for service
on the Board of Directors during 1996 and $500 for any committee meetings
attended on a day other than a Board meeting.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Corporation's officers, directors and persons
who beneficially own more than ten percent of a registered class of the
Corporation's equity securities to file reports of securities ownership and
changes in such ownership with the Securities and Exchange Commission (the
"SEC"). Officers, directors and greater than ten-percent beneficial owners
also are required by rules promulgated by the SEC to furnish the Corporation
with copies of all Section 16(a) forms they file.
Based solely upon a review of the copies of such forms furnished to the
Corporation, or written representations that no Form 5 filings were required,
the Corporation believes that during the period from May 9, 1996 through
December 28, 1996 all Section 16(a) filing requirements applicable to its
officers, directors and greater than ten-percent beneficial owners were
complied with, except that each of Messrs. Phillips, Schaeffer, Reeves and
Wilkinson filed one Form 4 late, reflecting one transaction for each report,
and Mr. McGovern filed his Form 3 late, reflecting his initial statement of
beneficial ownership of the Corporation's securities.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors, upon recommendation by the Audit Committee, has
appointed Ernst & Young LLP as independent auditors to examine the financial
statements of the Corporation for the year ending January 3, 1998 and to
perform other appropriate accounting services.
A proposal will be presented at the Annual Meeting to ratify the appointment
of Ernst & Young LLP as the Corporation's independent auditors. One or more
members of that firm are expected to be present at the Annual Meeting to
respond to questions and to make a statement if they desire to do so. If the
stockholders do not ratify this appointment by the affirmative vote of a
majority of the shares represented in person or by proxy at the Annual
Meeting, other independent auditors will be considered by the Board of
Directors upon recommendation by the Audit Committee.
3
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" RATIFICATION OF THE
APPOINTMENT OF ERNST & YOUNG LLP AS THE CORPORATION'S INDEPENDENT AUDITORS.
OTHER BUSINESS
At the date of this Proxy Statement, the Corporation has no knowledge of any
business other than that described above that will be presented at the Annual
Meeting. If any other business should come before the Annual Meeting, the
proxies will be voted in the discretion of the proxy holders.
SECURITY OWNERSHIP
The following information with respect to the outstanding shares of Common
Stock beneficially owned by each director and nominee for director of the
Corporation, the chief executive officer and the four other most highly
compensated executive officers, all beneficial owners of more than five
percent of the Common Stock known to the Corporation and the directors and
executive officers as a group is furnished as of March 5, 1997, except as
otherwise indicated.
<TABLE>
<CAPTION>
COMMON STOCK
---------------------
NUMBER OF PERCENT OF
NAME SHARES (1) CLASS (2)
---- ---------- ----------
<S> <C> <C>
Jerry Zucker(3)(4)(5).................................. 5,357,037 16.7%
4838 Jenkins Avenue
North Charleston, SC 29405
James G. Boyd(4)(5)(6)................................. 4,337,979 13.6
4838 Jenkins Avenue
North Charleston, SC 29405
The InterTech Group, Inc.(5)(7)........................ 3,861,208 12.1
4838 Jenkins Avenue
North Charleston, SC 29405
Golder, Thoma, Cressey Fund III
Limited Partnership(4)(5)(8) ......................... 7,109,096 22.2
c/o Golder, Thoma, Cressey, Rauner, Inc.
6100 Sears Tower
Chicago, IL 60606-6402
Bruce V. Rauner(8)..................................... 7,109,096 22.2
c/o Golder, Thoma, Cressey, Rauner, Inc.
6100 Sears Tower
Chicago, IL 60606-6402
David A. Donnini....................................... 0 *
c/o Golder, Thoma, Cressey, Rauner, Inc.
6100 Sears Tower
Chicago, IL 60606-6402
Michael J. McGovern.................................... 0 *
c/o Chase Securities, Inc.
270 Park Avenue
New York, NY 10017
L. Glenn Orr, Jr....................................... 0 *
P.O. Box 5176
Winston-Salem, NC 27113-5176
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
COMMON STOCK
---------------------
NUMBER OF PERCENT OF
NAME SHARES (1) CLASS (2)
---- ---------- ----------
<S> <C> <C>
Thomas E. Phillips ................................... 1,500 *
4838 Jenkins Avenue
North Charleston, SC 29405
James L. Schaeffer.................................... 2,000 *
4838 Jenkins Avenue
North Charleston, SC 29405
Gregg Wilkinson....................................... 0 *
4838 Jenkins Avenue
North Charleston, SC 29405
Chase Manhattan Investment Holdings, Inc.(4)(5)....... 1,404,068 4.4%
One Chase Manhattan Plaza
New York, NY 10081
Leeway & Co.(5)....................................... 965,911 3.0
c/o State Street Bank and Trust Co.
Master Trust Division--Q4W
P.O. Box 1992
Boston, MA 02110
Alliance Capital Management L.P.(9)................... 4,134,289 12.9
The Capital Group Companies, Inc.(10)................. 2,042,700 6.4
All directors and executive officers as a group (7 12,949,404 40.5
persons)(11).........................................
</TABLE>
- --------
(1) Each holder has sole voting and investment power with respect to the
shares listed unless otherwise indicated.
(2) Percentages less than one percent are denoted by an asterisk.
(3) Includes 1,495,829 shares held by Mr. Zucker, 3,599,557 shares held by
InterTech, and 261,651 shares held by FTG. Mr. Zucker is Chairman, Chief
Executive Officer and President of InterTech and FTG, and as a result may
be deemed to have voting and dispositive power over the shares held by
InterTech and FTG.
(4) Each of these Stockholders has entered into an agreement pursuant to
which, upon the occurrence of certain events, Messrs. Zucker and Boyd and
CMIHI would acquire additional shares of Common Stock from GTC Fund III,
which would result in an increase in the ownership of Common Stock by
Messrs. Zucker and Boyd and CMIHI and a corresponding decrease in the
ownership of Common Stock by GTC Fund III.
(5) Each of these parties has entered into an agreement providing for the
election of directors. Each such party disclaims beneficial ownership of
shares of Common Stock owned by each other party.
(6) Includes 476,771 shares held by Mr. Boyd, 3,599,557 shares held by
InterTech and 261,651 shares held by FTG. Mr. Boyd is Executive Vice
President, Secretary and Treasurer of InterTech and FTG.
(7) Includes 3,599,557 shares held by InterTech and 261,651 shares held by
FTG.
(8) All of the reported shares are held by GTC Fund III, of which Golder,
Thoma, Cressey & Rauner, L.P. is the general partner. Mr. Rauner is a
general partner of Golder, Thoma, Cressey & Rauner, L.P., but disclaims
beneficial ownership of such shares. The address for Mr. Rauner is c/o
Golder, Thoma, Cressey, Rauner, Inc., 6100 Sears Tower, Chicago, Illinois
60606-6402.
(9) Alliance Capital Management L.P. reported as of December 31, 1996, sole
voting power of 3,639,289 shares of Common Stock and sole dispositive
power of 3,827,689 shares of Common Stock. The Equitable Life Assurance
Society of the United States reported sole voting and dispositive power
of 304,600 shares of Common Stock. Donaldson, Lufkin & Jenrette
Securities Corporation reported shared voting and
5
<PAGE>
dispositive power of 2,000 shares of Common Stock. In addition, AXA
Assurances I.A.R.D. Mutuelle, AXA Assurances Vie Mutuelle, Alpha
Assurances I.A.R.D. Mutuelle, Alpha Assurances Vie Mutuelle, AXA Courtage
Assurance Mutuelle, AXA and The Equitable Companies Incorporated each
reported sole voting power over 3,943,889 shares of Common Stock, sole
dispositive power over 4,132,289 shares of Common Stock and shared
dispositive power over 2,000 shares of Common Stock. The information set
forth herein is based solely on a Form 13G filed by such entities for the
year ended December 31, 1996. The addresses for such entities, as so
reported, were: Alpha Assurances I.A.R.D. Mutuelle and Alpha Assurances
Vie Mutuelle, 100-101 Terrasse Boieldieu, 92042 Paris La Defense, France;
AXA Assurances I.A.R.D. Mutuelle and AXA Assurances Vie Mutuelle, 21, rue
de Chateaudun, 75009 Paris, France; AXA Courtage Assurance Mutuelle, 26,
rue Louis le Grand, 75002 Paris, France; AXA, 23, Avenue Matignon, 75008
Paris, France; and The Equitable Companies Incorporated, 787 Seventh
Avenue, New York, New York 10019.
(10) The Capital Group Companies reported as of December 31, 1996, sole voting
power over 654,400 shares of Common Stock and sole dispositive power over
2,042,700 shares of Common Stock. The Capital Group Companies indicated
that such shares are held by either Capital Research and Management
Company or Capital Guardian Trust Company. The information set forth
herein is based solely on a Form 13G filed by such entities for the year
ended December 31, 1996. The address for such entities, as so reported,
was 333 South Hope Street, Los Angeles, California 90071.
(11) Includes shares held by GTC Fund III, InterTech and FTG.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following summary compensation table specifies the components of the
Corporation's chief executive officer and four other most highly compensated
executive officers (the "Named Executives") compensation packages for the
years ended December 28, 1996, December 30, 1995 and December 31, 1994. The
Corporation does not maintain any long-term compensation plans.
<TABLE>
<CAPTION>
ANNUAL LONG TERM
COMPENSATION COMPENSATION
----------------- ------------------
STOCK RESTRICTED ALL OTHER
NAME AND FISCAL SALARY BONUS OPTIONS STOCK COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) (#) AWARDS ($) ($)(1)
------------------ ------ ------ -------- ------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Jerry Zucker............ 1996 $858,836 $722,056 -- -- $32,246
Chairman, President 1995 649,791 604,000 -- -- 29,835
and Chief Executive 1994 379,462 0 -- -- 14,024
Officer
James G. Boyd........... 1996 505,294 470,694 -- -- 21,922
Executive Vice 1995 350,000 321,000 -- -- 20,343
President, Treasurer 1994 237,048 0 -- -- 12,494
and Secretary
Thomas E. Phillips...... 1996 148,484 115,000 5,555 -- 10,614
Group Vice President-- 1995 126,410 75,000 -- -- 8,917
Finance, Nonwovens 1994 104,400 76,000 -- -- 7,690
James L. Schaeffer...... 1996 148,484 115,000 5,555 -- 10,633
Group Vice President-- 1995 126,410 75,000 -- -- 8,917
Operations/ 1994 104,400 66,000 -- -- 7,980
Engineering, Nonwovens
Gregg Wilkinson......... 1996 148,484 115,000 5,555 -- 10,595
Group Vice President-- 1995 126,410 75,000 -- -- 8,917
Marketing, Sales and 1994 86,247 36,000 -- -- 6,900
Technology, Nonwovens
</TABLE>
- -------
(1) The Following table identifies and quantifies the amount of All Other
Compensation for each named executive officer.
6
<PAGE>
<TABLE>
<CAPTION>
MONEY
PURCHASE 401(K) 401(H)
FISCAL PENSION CORPORATION CORPORATION
NAME YEAR PLAN CONTRIBUTION CONTRIBUTION
---- ------ -------- ------------ ------------
<S> <C> <C> <C> <C>
Jerry Zucker......................... 1996 $26,423 $1,941 $3,882
1995 24,087 1,866 3,882
1994 12,919 1,105 0
James G. Boyd........................ 1996 14,480 4,613 2,829
1995 13,357 4,657 2,329
1994 7,822 4,672 0
Thomas E. Phillips................... 1996 5,647 4,517 450
1995 5,125 3,792 0
1994 5,020 2,670 0
James L. Schaeffer................... 1996 5,647 4,536 450
1995 5,125 3,792 0
1994 5,220 2,760 0
Gregg Wilkinson...................... 1996 5,647 4,498 450
1995 5,125 3,792 0
1994 4,312 2,588 0
</TABLE>
The amounts included under the column entitled "Money Purchase Pension Plan"
are amounts paid by the Corporation into a trust fund which provides
retirement benefits and, under certain circumstances, death or disability
benefits or benefits upon termination of employment.
The following tables disclose, for the named executive officers, information
regarding stock options granted or exercised during, or held at the end of,
1996.
OPTION GRANT TABLE
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
% OF TOTAL AT ASSUMED ANNUAL RATES
OPTIONS OF STOCK PRICE APPRECIATION
OPTIONS GRANTED TO EXERCISE FOR OPTION TERM
GRANTED EMPLOYEES IN PRICE EXPIRATION -----------------------------
NAME (#) FISCAL YEAR ($/SH) DATE 5%($)(1) 10%($)(1)
- ---- ------- ------------ -------- ---------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Jerry Zucker............ -- -- -- -- -- --
James G. Boyd........... -- -- -- -- -- --
Thomas E. Phillips...... 5,555 4.26% $18.00 Variable(2) $34,006 $77,148
James L. Schaeffer...... 5,555 4.26 18.00 Variable(2) 34,006 77,148
Gregg Wilkinson......... 5,555 4.26 18.00 Variable(2) 34,006 77,148
</TABLE>
- --------
(1) Amounts reflect certain assumed rates of appreciation set forth in the
SEC's executive compensation disclosure rules. Actual gains, if any, on
stock option exercises depend on future performance of the Common Stock
and overall stock market conditions. No assurance can be made that the
amounts reflected in these columns will be achieved.
(2) Options vest equally over 5 years. Each incremental portion expires on the
third anniversary of the date on which such portion became vested.
7
<PAGE>
OPTION EXERCISES AND YEAR-END OPTION VALUE TABLE
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR, AND YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT FY-END (#) AT FY-END ($)
ACQUIRED VALUE ------------------------- -------------------------
NAME ON EXERCISE(1) REALIZED ($)(1) UNEXERCISABLE EXERCISABLE UNEXERCISABLE EXERCISABLE
- ---- -------------- --------------- ------------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Jerry Zucker............ -- -- -- -- -- --
James G. Boyd........... -- -- -- -- -- --
Thomas E. Phillips...... -- -- 5,555 -- $ 0 --
James L. Schaeffer...... -- -- 5,555 -- 0 --
Gregg Wilkinson......... -- -- 5,555 -- 0 --
</TABLE>
- --------
(1) None of the options which were granted to the named executives has been
exercised.
THE 1996 KEY EMPLOYEE STOCK OPTION PLAN
In March 1996, the Board of Directors of the Corporation approved the 1996
Key Employee Stock Option Plan (the "Key Employee Plan" or "Plan"). The Key
Employee Plan was approved by the stockholders of the Corporation in April
1996. The Key Employee Plan is administered by the Stock Option Committee. Any
person who is a full-time, salaried employee of the Corporation (excluding
non-management directors) is eligible to participate in the Plan (a
"Participant"). Approximately 723 persons are currently eligible to
participate in the Key Employee Plan. The Stock Option Committee selects the
Participants and determines the terms and conditions of the options. In April
1996, the Board of Directors approved the Plan providing for up to 1,500,000
shares to be issued thereunder, subject to certain adjustments reflecting
changes in the Corporation's capitalization. On March 5, 1997, the market
value of the Common Stock underlying the 1,500,000 options was $23,812,500.
The description of the Key Employee Plan set forth herein is qualified in its
entirety by reference to the complete text of such Plan, which is filed as an
Exhibit to the Corporation's Registration Statement on Form S-1 (Reg. No. 333-
2424), and incorporated herein by reference.
OPTION GRANTS
The following table sets forth the number of options which have been granted
during the past fiscal year under the Key Employee Plan to the Corporation's
chief executive officer ("CEO"), the four other most highly compensated
executive officers, all executive officers as a group, each other person who
received or is to receive five percent of such options and all employees,
including all current officers who are not executive officers, as a group.
<TABLE>
<CAPTION>
NAME AND POSITION OPTIONS GRANTED (#)
----------------- -------------------
<S> <C>
Jerry Zucker............................................ --
Chairman, President and Chief Executive Officer
James G. Boyd........................................... --
Executive Vice President, Treasurer and Secretary
Thomas E. Phillips...................................... 5,555
Group Vice President-Finance, Nonwovens
James L. Schaeffer...................................... 5,555
Group Vice President-Operations/Engineering,
Nonwovens
Gregg Wilkinson......................................... 5,555
Group Vice President-Marketing, Sales and Technology,
Nonwovens
All executive officers as a group (6 persons)........... 27,775
All employees, including officers who are not executive
officers, as a group................................. 130,330
</TABLE>
8
<PAGE>
TERMS OF THE KEY EMPLOYEE PLAN
Options granted under the Key Employee Plan may be either incentive stock
options ("ISOs") or such other forms of nonqualified stock options ("NQOs") as
the Compensation Committee may determine. ISOs are intended to qualify as
"incentive stock options" within the meaning of Section 422 of the Code. The
exercise price of the options will be at least 100% of the fair market value
of a share of Common Stock on the date of grant, except that the exercise
price of an ISO granted to an individual who directly (or by attribution under
Section 424(d) of the Code) owns shares possessing more than 10% of the total
combined voting power of all classes of stock of the Corporation will be at
least 110% of the fair market value of a share of Common Stock on the date of
grant.
Options granted under the Key Employee Plan may be subject to time vesting
and certain other restrictions at the Stock Option Committee's sole
discretion. Subject to certain exceptions and unless otherwise provided in the
Option Agreement, the right to exercise an option generally terminates at the
earlier of (i) the first date on which the initial grantee of such option is
not employed by either the Corporation or any subsidiary for any reason other
than termination without cause, death or permanent disability or (ii) the
expiration date of the option. If the holder of an option dies or suffers a
permanent disability while still employed by the Corporation or any
subsidiary, the right to exercise all unexpired installments of such option
shall be accelerated and shall accrue as of the date of such death or the
later of the date of such permanent disability or the discovery of such
permanent disability, and such option shall be exercisable, subject to certain
exceptions, for 90 days after such date. If the holders of an option are
terminated without cause, to the extent the option has vested, such option
shall be exercisable for 30 days after such date.
The Board of Directors has the power and authority to amend the Plan at any
time without approval of the Corporation's stockholders; provided, that the
Board of Directors shall not amend the Plan to cause any outstanding ISOs to
no longer qualify as ISOs or materially increase the benefits or number of
shares under the Plan or modify the eligibility requirements without the
affirmative approval of the Corporation's stockholders. In addition, the Board
of Directors shall not amend the Plan to materially and adversely affect the
rights of an option holder under such option without the consent of such
option holder.
Supplemental cash payments may also be made in conjunction with options
granted under the Key Employee Plan.
FEDERAL INCOME TAX CONSEQUENCES RELEVANT TO THE KEY EMPLOYEE PLAN
The following is intended only as a brief summary of the federal income tax
rules relevant to stock options issued and supplemental cash payments made
under the Key Employee Plan. These rules are highly technical and subject to
change in the future. In particular, the discussion of ISOs is based, in part,
on proposed regulations which may be amended substantially before they are
adopted in final form. The discussion of Section 16(b) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), is based on amendments
that are effective as of March 1, 1993 and August 15, 1996. Optionees should
consult their personal tax advisors with respect to the tax consequences
(including those under state and local tax laws) associated with stock
options.
Nonqualified Stock Options. An optionee does not recognize any taxable
income, and the Corporation is not entitled to a deduction, upon the grant on
an NQO. Upon the exercise of an NQO, the optionee recognizes compensation
income (subject to wage and employment tax withholding) equal to the excess of
the fair market value of the shares acquired as of the exercise date over the
option exercise price, provided that such shares are not subject to a
"substantial risk of forfeiture" (an "SRF") within the meaning of Section 83
of the Internal Revenue Code of 1986, as amended (the "Code"). An example of
an SRF is a requirement that, unless the optionee remains employed by the
Corporation for a set period of time, the Corporation is entitled to
repurchase the stock for an amount that is less than the fair market value of
the stock at the time of such repurchase. The Corporation is generally
entitled to a deduction equal to the compensation income recognized by the
optionee.
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An optionee will not recognize any taxable income on the exercise of an NQO
if the stock received by such optionee is subject to an SRF and the optionee
does not make an election under Section 83(b) of the Code to recognize income
on the exercise date (a "Section 83(b) Election"). In such case, the optionee
recognizes compensation income on the date the SRF expires equal to the excess
of the fair market value of the stock on such date over the option exercise
price. However, if the optionee makes a Section 83(b) Election with respect to
stock subject to an SRF, the optionee recognizes compensation income on the
exercise date (and not on the date the SRF lapses) equal to the excess of the
fair market value of such stock on the exercise date (determined without
regard to the SRF) over the exercise price.
In the case of an optionee subject to six month short-swing profit liability
under Section 16(b) of the Exchange Act (a "16(b) person") (typically,
officers, directors and major shareholders of the Corporation), compensation
income is generally recognized on the later of the exercise date or the date
six months after the grant date. However, if such optionee makes a Section
83(b) Election, the optionee recognizes compensation income on the exercise
date even if such date occurs within six months of the grant date. The amount
of compensation income recognized is equal to the excess of the fair market
value of the shares acquired (determined as of the date the optionee
recognizes compensation income) over the option exercise price.
An optionee's basis in the stock acquired pursuant to the exercise of an NQO
is equal to such stock's fair market value on the date compensation income is
recognized with respect to such stock. If an optionee sells such shares, such
optionee will recognize capital gain or loss equal to the difference between
the selling price of the shares and the optionee's basis in the shares. Such
capital gain or loss will be long- or short-term, depending on whether the
optionee has held the shares for more than one year from the date compensation
income is recognized with respect to the shares. The Corporation is not
entitled to any deduction with respect to any capital gain recognized by the
optionee.
Incentive Stock Options. An optionee does not recognize taxable income on
the grant or exercise of an ISO. However, the excess of the stock's fair
market value on the exercise date (or in the case of a 16(b) person, the fair
market value on the exercise date or six months after the date of grant,
whichever is later) over the option exercise price will be included in the
optionee's alternative minimum taxable income and thereby may subject the
optionee to an alternative minimum tax. Such alternative minimum tax may be
payable even though the optionee receives no cash upon the exercise of his or
her ISO with which to pay such tax. Upon the disposition of shares of
Corporation Common Stock acquired pursuant to the exercise of an ISO (i) more
than one year after the date of exercise and (ii) more than two years after
the date of grant (the "Required Holding Periods"), the optionee recognizes
long-term capital gain or loss, as the case may be, measured by the difference
between the stock's selling price and the exercise price. The Corporation is
not entitled to any tax deduction by reason of the grant or exercise of an
ISO, or a disposition of stock received upon the exercise of an ISO after the
Required Holding Periods have been satisfied.
If an optionee disposes of the shares of stock acquired pursuant to the
exercise of an ISO before the expiration of the Required Holding Periods (a
"Disqualifying Disposition"), the difference between the exercise price paid
for such shares and the lesser of (i) the fair market value of the shares upon
the date of exercise (or in the case of a 16(b) person, the fair market value
on the exercise date or six months after the date of grant, whichever is
later) or (ii) the selling price, will constitute compensation taxable to the
optionee as ordinary income. The Corporation is allowed a corresponding tax
deduction equal to the amount of compensation taxable to the optionee. If the
selling price of the stock exceeds the fair market value on the exercise date
(or six months after the date of grant, if later, in the case of a 16(b)
Person), the excess will be taxable to the optionee as capital gain (long-term
or short-term, depending upon whether the optionee held the stock for more
than one year). The Corporation is not allowed a deduction with respect to any
such capital gain recognized by the optionee.
Use of Common Stock to Pay Option Price. If an optionee delivers previously-
acquired Corporation Common Stock, however acquired, in payment of all or part
of the option exercise price of an NQO, the optionee will not, as a result of
such delivery, recognize taxable income or loss with respect to any
appreciation or depreciation in the value of the previously-acquired
Corporation Common Stock after its acquisition date. The
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<PAGE>
optionee's tax basis in, and holding period for, the previously-acquired stock
surrendered carries over to an equal number of option shares received on a
share-for-share basis. The fair market value of the shares received in excess
of the shares surrendered, less the amount of the option price, if any, paid
with cash or property other than shares of Corporation Common Stock,
constitutes compensation taxable to the optionee as ordinary income (subject
to wage and employment tax withholding). Such fair market value is determined
on the date of exercise, except in the case of 16(b) Persons as discussed
above. The tax basis for such shares is equal to their fair market value as so
determined, and such shares' holding period begins on the date on which the
fair market value of such shares is determined. The Corporation generally is
entitled to a tax deduction equal to the compensation income recognized by the
optionee.
Proposed regulations provide that if an optionee delivers previously-
acquired Corporation Common Stock (other than stock acquired upon exercise of
an ISO and not held for the Required Holding Periods) in payment of all or
part of the option price of an ISO, the optionee will not recognize as taxable
income or loss with respect to any appreciation or depreciation in the value
of the previously-acquired Corporation Common Stock after its acquisition
date. The optionee's tax basis in, and holding period (for capital gain, but
not Disqualifying Disposition, purposes) for the previously-acquired stock
surrendered carries over to an equal number of the option shares received on a
share-for-share basis. The optionee's tax basis in shares received in excess
of the shares used to pay the exercise price will equal the amount of the
option price paid, if any, in the form of cash or property other than shares
of Corporation Common Stock, and such shares' holding period will begin on the
date of exercise (with the possible exception of 16(b) Persons). When an ISO
is exercised using previously-acquired stock, a later Disqualifying
Disposition of the shares received will be deemed to have been a disposition
of the shares having the lowest basis first.
If an optionee pays the exercise price of an ISO in whole or in part with
previously-acquired Corporation Common Stock that was acquired upon the
exercise of an ISO and that has not been held for the Required Holding
Periods, the optionee will recognize ordinary income (but not capital gain)
under the rules applicable to Disqualifying Dispositions. The Corporation
generally will be entitled to a corresponding deduction. The optionee's basis
in the shares received in exchange for the shares surrendered will be
increased by the amount of ordinary income the optionee recognizes.
Supplemental Cash Payments. An optionee recognizes ordinary income, subject
to income and employment tax withholding, equal to any supplemental cash
payment the Corporation makes to the optionee. The Corporation generally is
entitled to a corresponding tax deduction.
EMPLOYMENT AND MANAGEMENT AGREEMENTS
Pursuant to management agreements originally entered into in October, 1992
(the "PGI Management Agreements"), Messrs. Zucker and Boyd (collectively, the
"Executives") have agreed to serve as President and Chief Executive Officer,
and Executive Vice President, Secretary and Treasurer, respectively, of PGI
and FiberTech. Pursuant to management agreements entered into in March, 1995
(the "Chicopee Management Agreements" and, together with the PGI Management
Agreements, the "Management Agreements"), the Executives have agreed to serve
in the same capacities for Chicopee. The Management Agreements provide that
the Executives' employment thereunder will continue until the Executive's
resignation, permanent disability, death or termination by PGI's or Chicopee's
Board of Directors, as the case may be.
The PGI Management Agreements provide for an annual base salary of $250,000
to be paid to Mr. Zucker and an annual base salary of $150,000 to be paid to
Mr. Boyd, while the Chicopee Management Agreements provide for an annual base
salary of $400,000 to be paid to Mr. Zucker and an annual base of $200,000 to
be paid to Mr. Boyd, all of which amounts may be increased as determined in
good faith by the Board of Directors of PGI and Chicopee, respectively. The
Management Agreements also provide for a bonus to be paid at the end of each
fiscal year to each of the Executives in an amount determined by PGI's or
Chicopee's Board of Directors, as the case may be, but not to exceed such
Executive's base salary.
11
<PAGE>
The Management Agreements provide that upon the termination of either
Executive's employment, such Executive is entitled to receive severance
payments equal to either one-half (in the case of death, disability,
resignation without good reason or termination for cause) or three times (in
all other cases) his annual salary.
The Corporation has not entered into written employment contracts with any
of its other executive officers.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Corporation's Compensation Committee are Messrs. Donnini
and Rauner. Mr. Rauner, a director of the Corporation, is also a general
partner of Golder, Thoma, Cressey & Rauner, L.P. Golder, Thoma, Cressey &
Rauner, L.P. is the general partner of GTC Fund III, which owns 22.2% of the
Corporation's Common Stock. Messrs. Zucker, Rauner and Donnini served as
members of the Compensation Committee of the Board during fiscal year 1995.
Mr. Zucker was an officer and an employee of the Corporation during such
period.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the "Committee") is
pleased to present its report on executive compensation. The Committee reviews
and makes recommendations to the Board of Directors regarding salaries,
compensation and benefits of executive officers and key employees of the
Corporation. This Committee report documents the components of the
Corporation's executive officer compensation programs and describes the bases
upon which compensation will be determined by the Committee with respect to
the executive officers of the Corporation, including the Named Executives.
This Committee report shall not be deemed incorporated by reference by any
general statement incorporating by reference this Proxy Statement into any
filing under the Securities Act of 1933 or under the Exchange Act, except to
the extent that the Corporation specifically incorporates this information by
reference, and shall not otherwise be deemed filed under such Acts.
Compensation Philosophy. The compensation philosophy of the Corporation is
to endeavor to directly link executive compensation to continuous improvements
in corporate performance and increases in shareholder value. The Committee has
adopted the following objectives as guidelines for compensation decisions.
. Display a willingness to pay levels of compensation that are necessary
to attract and retain highly qualified executives.
. Be willing to compensate executive officers in recognition of superior
individual performance, new responsibilities or new positions within the
Corporation.
. Take into account historical levels of executive compensation and the
overall competitiveness of the market for high quality executive talent.
. Implement a balance between short- and long-term compensation to
complement the Corporation's annual and long-term business objectives
and strategy and encourage executive performance in furtherance of the
fulfillment of those objectives.
. Provide variable compensation opportunities based on the performance of
the Corporation, encourage stock ownership by executives and align
executive remuneration with the interests of stockholders.
Compensation Program Components. The Committee regularly reviews the
Corporation's compensation program to ensure that pay levels and incentive
opportunities are competitive with the market and reflect the performance of
the Corporation. The particular elements of the compensation program for
executive officers are further explained below.
Base Salary. The Corporation's base pay levels are largely determined by
evaluating the responsibilities of the position held and the experience of the
individual and by comparing the salary scale with companies of similar size
and complexity. Actual base salaries are kept within a competitive salary
range for each position that is established through job evaluation and market
comparisons and approved by the Committee as reasonable and necessary. Mr.
Zucker's salary has been set at $650,000 per year pursuant to the Management
Agreements,
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<PAGE>
which is comparable to salaries paid for executives holding positions with
comparable responsibilities. The Management Agreements provide that the
Compensation Committee may increase the base salary for each year at its
discretion. In 1996, Mr. Zucker's base salary was increased by the
Compensation Committee to $858,836.
Annual Incentives. The Management Agreements provide that Messrs. Zucker and
Boyd may also receive an annual bonus, determined by the Corporation's board
of directors, of up to their base salaries. In 1996, Mr. Zucker's annual bonus
was $722,056.
Stock Option Program. The Committee strongly believes that by providing
those persons who have substantial responsibility over the management and
growth of the Corporation with an opportunity to increase their ownership of
the Corporation's stock, the interests of stockholders and executives will be
closely aligned. Therefore, the Corporation's key employees (including the
Named Executives) are eligible to receive either incentive stock options or
nonqualified stock options as the Stock Option Committee may determine from
time to time, giving them the right to purchase shares of the Corporation's
Common Stock at an exercise price equal to 100% of the fair market value of
such Common Stock at the date of grant. The number of stock options granted to
executive officers is based on competitive practices. Currently, the
Corporation does not intend to grant any additional stock options to any Named
Executive in the next year, except in recognition of new responsibilities or
positions.
Certain Tax Considerations. Section 162(m) of the Code generally limits the
corporate tax deduction for compensation paid to the Named Executives to
$1,000,000 in any given taxable year, unless certain requirements are met. The
Compensation Committee has carefully considered the impact of this tax code
provision. The Committee currently believes that it has structured the
compensation plans for the Named Executives as necessary in order to maximize
the Corporation's corporate tax deduction without limiting the Corporation's
ability to attract and retain qualified executives.
Summary. After its review of all existing programs, the Committee continues
to believe that the total compensation program for executives of the
Corporation is focused on increasing values for stockholders and enhancing
corporate performance. The Committee currently believes that the compensation
of executive officers is properly tied to stock appreciation through their
significant ownership interests in the Corporation. The Committee believes
that executive compensation levels at the Corporation are competitive with the
compensation programs provided by other corporations with which the
Corporation competes. The foregoing report has been approved by all members of
the Committee.
COMPENSATION COMMITTEE
David A. Donnini
Bruce V. Rauner
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In June 1994, Messrs. Zucker and Boyd entered into an agreement with the
Corporation pursuant to which Messrs. Zucker and Boyd granted to the
Corporation the prior right to acquire any business identified by either of
them (while employed by the Corporation), or their affiliates, engaged in, or
planning to engage in, the manufacture and marketing of nonwoven and woven
polyolefin fabrics for industrial and consumer applications or any other
business then engaged in by the Corporation. To the extent the Corporation
does not elect to pursue any such acquisition, Messrs. Zucker and Boyd are
free to acquire such business.
In June 1995, the Corporation and certain of the stockholders entered into
an Amended and Restated Registration Agreement, pursuant to which such
stockholders have the right, in certain circumstances and subject to certain
conditions, to require the Corporation to register shares of the Corporation's
Common Stock held by them under the Securities Act of 1933. Under the
Registration Agreement, except in certain limited circumstances, the
Corporation is obligated to pay all expenses in connection with such
registration.
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<PAGE>
OTHER TRANSACTIONS
The Corporation's corporate headquarters are housed in space leased by
InterTech from an affiliate of InterTech. A portion of the payments and other
expenses, primarily insurance and allocated costs, are charged to the
Corporation. Such amounts approximated $2.1 million during 1996.
On September 1, 1993, ConX, Inc. ("ConX"), a subsidiary of InterTech,
acquired a manufacturing facility in Vineland, New Jersey for the benefit of
Technetics Group, Inc. ("Technetics"), a wholly owned subsidiary of FiberTech,
and entered into a lease of the facility to Technetics at a base rate of $2.50
per square foot, subject to adjustment to account for inflation, which is
comparable to similar properties in the area. The lease terminates on August
31, 2008 and is subject to a purchase option at termination. The leased
facility consists of 83,500 square feet of manufacturing space and was
acquired by ConX for $1,250,000.
Fabrene and PGI have entered into a Technical Services Agreement pursuant to
which PGI provides certain services for the benefit of Fabrene, including
strategic and operational management services, risk management (including the
issuance of comprehensive and general liability and property insurance),
environmental and safety assessment, and engineering support. Fabrene pays PGI
a monthly payment of $25,000, as well as the direct out-of-pocket cost of PGI
to provide these services.
On January 11, 1996, the Corporation authorized and issued 10,000 shares of
the Corporation's Redeemable Preferred Stock to ConX II for $10.0 million in
cash. Of the $10.0 million purchase price, an aggregate of $4.0 million was
loaned to ConX II by InterTech, ZB Holdings and Mr. Zucker, while $6.0 million
was advanced to ConX II by a third-party lender (the repayment of which was
guaranteed by GTC Fund III). The Redeemable Preferred Stock was redeemed by
the Corporation in May 1996, at a price of $10 million, plus accrued but
unpaid interest of $500,000.
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PERFORMANCE GRAPH
The following graph compares the Corporation's cumulative total stockholder
return since the Common Stock became publicly traded on May 9, 1996 with the
Standard & Poor's 400 Stock Index and with the Standard & Poor's Specialty
Manufacturing Index. The Corporation believes that the S&P Specialty
Manufacturing Index is composed of companies that are comparable to the
Corporation.
COMPARISON OF TOTAL RETURN*
POLYMER GROUP, INC., STANDARD & POOR'S 400 STOCK INDEX
AND STANDARD & POOR'S SPECIALTY MANUFACTURING INDEX
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
POLYMER S&P SPECIALTY S&P
Measurement Period GROUP MANUFACTURING INDEX 400 INDEX
- ------------------- ---------- ------------------- ---------
<S> <C> <C> <C>
Measurement Pt-
5/9/96 $100.00 $100.00 $100.00
6/28/96 $ 92.22 $ 94.73 $102.91
7/31/96 $ 70.83 $ 84.76 $ 98.10
8/30/96 $ 77.78 $ 89.64 $ 99.92
9/30/96 $ 77.78 $ 97.63 $105.62
10/31/96 $ 70.83 $ 94.80 $107.54
11/29/96 $ 71.56 $101.19 $115.56
12/28/96 $ 77.11 $100.96 $113.57
</TABLE>
- --------
*Total Return assumes reinvestment of dividends.
STOCKHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
Proposals of stockholders intended to be presented at the annual meeting in
1998 must be received by the Secretary of Corporation, at the address below,
not later than November 20, 1997 to be considered for inclusion in the
Corporation's 1998 proxy materials.
ADDITIONAL INFORMATION
This solicitation is being made by the Corporation. All expenses of the
Corporation in connection with this solicitation will be borne by the
Corporation. In addition to the solicitation by mail, proxies may be solicited
by directors, officers and other employees of the Corporation by telephone,
telex, in person or otherwise, without additional compensation. The
Corporation will request brokerage firms, nominees, custodians and fiduciaries
to forward proxy materials to the beneficial owners of shares held of record
by such persons and will reimburse such persons and the Corporation's transfer
agent for their reasonable out-of-pocket expenses in forwarding such
materials.
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<PAGE>
The Corporation will furnish without charge to each person whose proxy is
being solicited, upon the written request of any such person, a copy of the
Corporation's Annual Report on Form 10-K for the fiscal year ended December
28, 1996, as filed with the Securities and Exchange Commission, including the
financial statements and the schedule thereto. Requests for copies of such
Annual Report on Form 10-K should be directed to the Secretary of the
Corporation at the address below. A list of shareholders entitled to vote on
matters at the Annual Meeting will be available for inspection at the
Corporation's headquarters beginning on April 15, 1997.
PLEASE COMPLETE THE ENCLOSED PROXY AND MAIL IT IN THE ENCLOSED POSTAGE-PAID
ENVELOPE AS SOON AS POSSIBLE.
By order of the Board of Directors
/s/ James G. Boyd
James G. Boyd
Secretary
Polymer Group, Inc.
4838 Jenkins Avenue
North Charleston, SC 29405
March 20, 1997
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PROXY SOLICITED BY THE BOARD OF DIRECTORS
POLYMER GROUP, INC.
4838 JENKINS AVENUE
NORTH CHARLESTON, SOUTH CAROLINA 29405
1997 ANNUAL MEETING OF STOCKHOLDERS
The undersigned hereby appoints Jerry Zucker and James G. Boyd, and each of
them, proxies, with power of substitution and revocation, acting by a majority
of those present and voting or if only one is present and voting then that one,
to vote the stock of Polymer Group, Inc. which the undersigned is entitled to
vote, at the Annual Meeting of stockholders to be held April 25, 1997 and at
any adjournment or postponements thereof, with all the powers the undersigned
would possess if present, with respect to the following:
1. Election of directors: [_] FOR the nominees [_] WITHHOLD AUTHORITY
David A. Donnini L. Glenn Orr, Jr.
TO WITHHOLD AUTHORITY FOR AN INDIVIDUAL NOMINEE, DRAW A LINE THROUGH HIS NAME.
2. Ratification of the appointment of Ernst & Young LLP as the Corporation's
independent public accountants:
[_] FOR [_] AGAINST [_] ABSTAIN
(Continued and to be signed and dated on the reverse side.)
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- --------------------------------------------------------------------------------
This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned. If signed and no direction is given for any item,
this proxy will be voted for all nominees and for Item 2.
Please return your executed form as soon as possible in the envelope provided
to First Union National Bank of North Carolina, Shareholder Services Group, 230
South Tryon St., 11th Floor, Charlotte, North Carolina, 28288-1154, Attention:
Patty McCool
PLEASE SIGN EXACTLY AS NAME
APPEARS ON THIS PROXY. JOINT
OWNERS SHOULD EACH SIGN.
TRUSTEES, EXECUTORS, ETC.
SHOULD INDICATE THE CAPACITY
IN WHICH THEY ARE SIGNING.
------------------------------
Signature Date
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Signature Date
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