<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>
SPRINGS INDUSTRIES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
[SPRINGS LOGO]
March 3, 1999
To Our Shareholders:
On behalf of your Company's Board of Directors, we extend to you an
invitation to attend the Annual Shareholders' Meeting to be held at the Baxter
Hood Center at York Technical College, Rock Hill, South Carolina, on Monday,
April 19, 1999. Directions are provided by the map on the reverse side of this
statement.
The accompanying Notice of Meeting and Proxy Statement cover the details of
the matters to be presented. These matters include the election of Directors,
ratification of the appointment of the Company's auditors, and adoption of the
Company's 1999 Incentive Stock Plan.
A copy of the 1998 Annual Report is included with this mailing.
REGARDLESS OF WHETHER YOU PLAN TO ATTEND THE MEETING, WE URGE THAT YOU
PARTICIPATE BY COMPLETING AND RETURNING YOUR PROXY AS SOON AS POSSIBLE. YOUR
VOTE IS IMPORTANT AND WILL BE GREATLY APPRECIATED.
/S/ Crandall C. Bowles
Crandall C. Bowles
Chairman and Chief Executive Officer
Springs Industries, Inc.
205 North White Street, Fort Mill, South Carolina 29715
<PAGE> 3
SPRINGS INDUSTRIES, INC.
205 North White Street
Fort Mill, South Carolina 29715
------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
------------------------------------------------------------------
TIME....................... 9:30 a.m. E.D.T. on Monday, April 19, 1999.
PLACE...................... The Baxter Hood Center at York Technical College
Rock Hill, South Carolina.
ITEMS OF BUSINESS.......... (1) To elect a Board of ten Directors.
(2) To vote upon a resolution ratifying the
appointment of Deloitte & Touche LLP as
independent public accountants for the Company
and its subsidiaries for fiscal year 1999.
(3) To vote upon adoption of the Company's 1999
Incentive Stock Plan.
(4) To transact such other business as may properly
come before the Meeting and any adjournment
thereof.
RECORD DATE................ Holders of Class A Common Stock and Class B Common
Stock of record at the close of business, March 1,
1999, are entitled to vote at the Meeting.
ANNUAL REPORT.............. The Annual Report of the Company for 1998, which is
not a part of the proxy soliciting material, is
enclosed.
PROXY VOTING............... It is important that your shares be represented and
voted at the Meeting. Please MARK, SIGN, DATE, AND
RETURN PROMPTLY the enclosed proxy card in the
envelope furnished for that purpose. Any proxy may
be revoked in the manner described in the
accompanying Proxy Statement at any time prior to
its exercise at the Meeting.
By order of the Board of Directors,
C. POWERS DORSETT
Senior Vice President-General Counsel
& Secretary
March 3, 1999
<PAGE> 4
PROXY STATEMENT
MARCH 3, 1999
PROXY SOLICITATION AND GENERAL INFORMATION
The accompanying proxy is solicited by the Board of Directors of Springs
Industries, Inc., (the Company) for use at the Annual Meeting of Shareholders
(the Meeting) to be held on April 19, 1999, and at any adjournment thereof, at
which shareholders of record at the close of business on March 1, 1999, shall be
entitled to vote. This proxy statement and the proxy card are being mailed to
shareholders on or about March 3, 1999.
On the record date, 10,636,111 shares of Class A Common Stock and 7,196,864
shares of Class B Common Stock were outstanding (collectively referred to as
Common Stock). The Class A Common Stock, which is entitled to one vote per
share, and the Class B Common Stock, which is entitled to four votes per share,
shall be voted together as a single class upon the items scheduled to come
before the Meeting.
In certain situations not expected to come before the Meeting, each class
of Common Stock votes as a separate class. These situations include proposals to
amend the Company's Articles of Incorporation that would change the number of
authorized shares of Class A or Class B Common Stock, change the par value of
either class, adversely alter or change powers, preferences or special rights of
either class, or require class voting under South Carolina law. Also, in the
case of certain business combinations involving the Company and persons or
entities controlling or under common control with the Company, holders of Class
B Common Stock would be entitled to cast only one vote per share.
Solicitation of proxies other than by mail may be made by telephone,
telegraph, or personal interview by officers and employees of the Company who
will not be additionally compensated. The Company has engaged Corporate Investor
Communications, Inc., (CIC) to make arrangements with brokers, nominees,
fiduciaries, and other custodians for distribution of proxy materials to their
principals and to solicit return of proxies from these institutions. The Company
will reimburse these institutions for their expenses in accordance with the
rules of the New York Stock Exchange and will pay CIC a fee of $4,500 plus
reimbursement of reasonable expenses for its services. The cost of soliciting
proxies for the Meeting will be borne by the Company.
If a shareholder directs that a proxy be voted in a specific manner or
specifies a choice with respect to a voting matter, the shares will be voted
accordingly. If no such specifications are made, shares represented by each
proxy will be voted FOR the nominees for directors, FOR ratification of the
appointment of Deloitte & Touche LLP, and FOR adoption of the 1999 Incentive
Stock Plan. If any other matters or business should properly come before the
Meeting (or any adjournment), the person or persons acting under the proxy will
vote in accordance with his or their judgment. The Company is not aware of any
other matters or business to be presented to the Meeting.
Shareholders are reminded that they may, if qualified, present resolutions
which, if proper for inclusion in next year's proxy statement, may be considered
at the 2000 Annual Meeting. Any shareholder proposals so submitted must be
received by the Company by November 3, 1999.
Under South Carolina law and the Company's Articles of Incorporation, a
quorum is required to conduct business at the Meeting. A quorum is the presence,
in person or by proxy, of a majority of the votes entitled to be cast at the
meeting. Abstentions, votes withheld from director nominees, and broker
non-votes are counted for purposes of determining a quorum. If a quorum is
present, the ten nominees receiving the highest number of votes will be elected
directors, and any other matter being voted on at the meeting will be approved
if a majority of the votes cast by shareholders are voted in favor of approving
or adopting such matter. Abstentions and broker non-votes are disregarded in
tabulating voting results.
It is important that your shares be represented at the Meeting. Therefore,
please mark, sign, date, and return the enclosed proxy card promptly to ensure
your shares will be voted. Your proxy may be revoked at any
1
<PAGE> 5
time prior to its exercise by filing with the Secretary of the Company an
instrument of revocation or a duly executed proxy bearing a later date, or by
voting in person at the Meeting.
DIRECTORS, NOMINEES, AND ELECTION OF DIRECTORS
Pursuant to the Company's bylaws, the Board has established the number of
directors of the Company to be ten as of the date of the Meeting. Each of the
ten nominees named below was elected as a director of the Company at last year's
Annual Meeting. Each person has been nominated for election as a director to
hold office until the next Annual Meeting of Shareholders and until a successor
is duly elected and qualified.
Shares represented by the enclosed proxy will be voted FOR the election of
the nominees unless authority is withheld for all or any of the nominees.
Although the Board of Directors does not contemplate that any of the ten
nominees named will be unavailable for election, if a vacancy should occur, the
proxy will be voted for such substitute nominee or nominees as the Board of
Directors may recommend, or the Board of Directors may reduce the size of the
Board.
Cumulative voting is permitted in the election of directors whereby each
shareholder is entitled to cast the number of votes equal to (i) the number of
votes to which his shares are entitled multiplied by (ii) the number of
directors to be elected. A shareholder may give one nominee all of such votes or
may distribute such votes among the nominees to be elected in such manner as he
may desire.
The following information is submitted respecting the nominees for
election:
<TABLE>
<S> <C>
(PHOTO) JOHN F. AKERS, AGE 64, RETIRED CHAIRMAN AND CHIEF EXECUTIVE
OFFICER OF INTERNATIONAL BUSINESS MACHINES CORPORATION. Mr.
Akers served as chairman and chief executive officer of IBM
from 1986 until his retirement in May 1993. A director of
the Company since December 1993, Mr. Akers is also a
director of Hallmark Cards, Inc., Lehman Brothers Holdings,
Inc. (New York), The New York Times Company, PepsiCo., Inc.,
and W. R. Grace & Co., and a member of the U.S. Advisory
Board of Zurich Insurance Company.
(PHOTO) CRANDALL CLOSE BOWLES, AGE 51, CHAIRMAN, PRESIDENT, AND
CHIEF EXECUTIVE OFFICER OF THE COMPANY. Mrs. Bowles served
as executive vice president of the Company from April 1992
until January 1997, when she became president and chief
operating officer. She served in these positions until
January 1, 1998, when she became chief executive officer.
She was elected to the additional position of Chairman of
the Board in April 1998. A director of the Company since
1978, Mrs. Bowles served as president of The Springs Company
from 1982 to April 1992. The Springs Company is owned by
Mrs. Bowles and members of her family and provides
management services to certain of its affiliates.
(PHOTO) JOHN L. CLENDENIN, AGE 64, CHAIRMAN EMERITUS OF BELLSOUTH
CORPORATION. Mr. Clendenin served as chairman and chief
executive officer of BellSouth from 1984 until December 1996
and as chairman through December 1997. A director of Springs
since 1990, Mr. Clendenin is also a director of Coca-Cola
Enterprises Inc., Equifax Inc., Home Depot Inc., The Kroger
Company, National Service Industries, Inc., Powerwave
Technologies Inc., RJR Nabisco, Inc., and Wachovia
Corporation.
</TABLE>
2
<PAGE> 6
<TABLE>
<S> <C>
(PHOTO) LEROY S. CLOSE, AGE 48, PRESIDENT AND CHIEF EXECUTIVE
OFFICER OF SANDLAPPER FABRICS, INC., A PRINTER AND CONVERTER
OF TEXTILE FABRICS, SINCE 1986. A director of the Company
since 1991, Mr. Close was a vice president of the Company's
former Apparel Fabrics Division from 1983 to 1986. Mr. Close
is a brother of Mrs. Bowles.
(PHOTO) CHARLES W. COKER, AGE 65, CHAIRMAN OF SONOCO PRODUCTS
COMPANY SINCE 1990. A director of Springs since 1977, Mr.
Coker served as chief executive officer of Sonoco from 1976
to 1998. Mr. Coker is also a director of BankAmerica
Corporation, Carolina Power & Light Company and Sara Lee
Corporation.
(PHOTO) JOHN H. MCARTHUR, AGE 64, DEAN OF THE FACULTY, HARVARD
UNIVERSITY GRADUATE SCHOOL OF BUSINESS ADMINISTRATION, FROM
1980 UNTIL HIS RETIREMENT IN 1995. Mr. McArthur presently
serves as senior advisor to the president of the World Bank.
A director of the Company since 1989, Mr. McArthur is also a
director of AES Corporation, BCE Inc., Cabot Corporation,
Columbia/HCA Healthcare Corporation, Glaxo Wellcome plc,
Rohm and Haas Company, and The Vincam Group, Inc.
(PHOTO) ALDO PAPONE, AGE 66, SENIOR ADVISOR, AMERICAN EXPRESS
COMPANY, 1991 TO PRESENT. A director of Springs since April
1993, Mr. Papone served as chairman and chief executive
officer from 1989 to 1990, and as president and chief
operating officer from 1985 to 1989, of American Express
Travel Related Services Company, Inc. Mr. Papone served as a
director of American Express Company from 1990 to 1998. Mr.
Papone is also a director of Guess ?, Inc., Hyperion
Software Corp., and The Body Shop International plc.
(PHOTO) ROBIN B. SMITH, AGE 59, CHAIRMAN AND CHIEF EXECUTIVE OFFICER
OF PUBLISHERS CLEARING HOUSE. Ms. Smith served as president
of Publishers Clearing House from 1981 to August 1996, when
she was elected Chairman, and has served as its chief
executive officer since 1988. Ms. Smith has served as a
director of Springs since 1993 and is also a director of
BellSouth Corporation, Kmart Corporation, Texaco, Inc., and
two clusters of mutual funds administered by Prudential
Investments Mutual Fund Management LLC.
</TABLE>
3
<PAGE> 7
<TABLE>
<S> <C>
(PHOTO) SHERWOOD H. SMITH, JR., AGE 64, CHAIRMAN AND A DIRECTOR OF
CAROLINA POWER & LIGHT COMPANY SINCE 1980. Mr. Smith served
as chief executive officer of Carolina Power & Light from
September 1979 until October 1996 and as president from 1976
to 1992. A director of Springs since 1991, Mr. Smith is also
a director of Wachovia Corporation and Northern Telecom,
Ltd., and a trustee of Northwestern Mutual Life Insurance
Company.
(PHOTO) STEWART TURLEY, AGE 64, RETIRED CHAIRMAN OF ECKERD
CORPORATION (RETAIL DRUG STORES). Mr. Turley served as chief
executive officer of Eckerd Corporation from 1974 to
February 1996, as its chairman from 1975 until February
1997, and as its president from 1974 to 1993. A director of
Springs since 1984, Mr. Turley is also a director of
MarineMax, Inc., Sprint Corp., and Watermark Communities,
Inc.
</TABLE>
INFORMATION REGARDING THE BOARD OF DIRECTORS
During 1998, the Company's Board of Directors held six meetings. Beginning
in October 1998 the Directors restructured the committees of the Board. As a
result of the restructuring, the Executive Committee and the Springs of
Achievement Committee of the Board of Directors were abolished and a new
committee on directors and corporate governance was established. Also, as a
result of the restructuring, the Company's ten non-employee Directors now serve
as the committee members of all committees with the exception of Messrs. Close
and Papone who are not members of the Audit Committee. All Directors attended at
least 75% of the total number of meetings of the Board and committees of the
Board on which they serve. Except for the Audit Committee, the committees do not
meet on a regular basis but only as circumstances require. The Audit Committee,
which is responsible for review of the integrity of the Company's financial
reporting, review of its internal controls and recommendation of independent
auditors, met three times during 1998. The Management Compensation and
Organization Committee also met three times. This Committee recommends to the
full Board the base salary of the Chief Executive Officer and has responsibility
for approval of compensation arrangements for key executives, approval of
executive compensation plans, ensuring management continuity and succession, and
for recommending a successor to the Chief Executive Officer in the event of a
vacancy. During 1998, the Finance Committee, which is responsible for review of
the Company's financial policies and planning, review of methods of financing
and recommendations with respect to acquisitions and divestitures, and which has
certain fiduciary responsibilities under benefit plans, met two times. The
Committee on Directors and Corporate Governance, which was created in October
1998 and which is responsible for making recommendations to the Board of
Directors with respect to the governance of the Company and the Board,
director's compensation, nomination of candidates for directors, and evaluation
of the chief executive officer's performance and the Board's performance, did
not meet in 1998. This Committee will consider any recommendations made in
writing by shareholders respecting possible candidates for the Board of
Directors. Such recommendations should be directed to the Secretary of the
Company.
Mr. Donald S. Perkins, who, except for a period in 1995 when he resigned to
avoid any appearance of a conflict of interest when he served as Chairman of
Kmart Corporation, has been a director since 1984, is retiring pursuant to the
Company's retirement policy for Directors. On behalf of the Company, the Board
expresses its appreciation for the valued advice, counsel, and dedication to the
Company of Mr. Perkins.
4
<PAGE> 8
EXECUTIVE OFFICER COMPENSATION AND RELATED INFORMATION
SUMMARY COMPENSATION TABLE
The following table sets forth a summary of compensation for the Chief
Executive Officer and each of the four other most highly compensated executive
officers of the Company and for Mr. Elisha who retired in April 1998.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION(1) LONG-TERM COMPENSATION
------------------------------- -------------------------------------
AWARDS
OTHER ------------------------- LONG-TERM ALL
PRINCIPAL ANNUAL RESTRICTED INCENTIVE OTHER
NAME POSITION YEAR SALARY BONUS COMP STOCK(2) OPTIONS/SARS PAYOUTS COMP(3)
- ---- --------- ---- ------ ----- ------ ---------- ------------ --------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Bowles, C.C. Chief Executive 1998 $540,000 $ 137,700 0 0 0 $ 0 $53,572
Officer(4) 1997 373,751 150,000 0 0 25,000 0 47,184
1996 260,004 70,000 0 0 0 34,306 39,706
Dorsett, C.P. Senior Vice 1998 $244,728 $ 45,000 0 0 9,000 $ 0 $21,525
President -- 1997 233,004 69,000 0 0 10,000 0 37,508
General 1996 225,006 80,000 0 0 0 26,712 36,896
Counsel &
Secretary
Elisha, W.Y. Retired 1998 $240,000 91,800 64,679(6) 0 50,000 $ 0 $31,508
Chairman of 1997 693,756 1,030,000(5) 65,935(6) 0 35,000 0 29,278
the Board and 1996 667,506 525,000 60,600(6) 0 0 171,617 27,189
Chief Executive
Officer(4)
Kelbley, S.P. Executive Vice 1998 $328,008 73,500 0 0 20,000 $ 0 $32,355
President 1997 314,086 125,000 0 0 15,000 0 54,058
1996 290,004 175,000 0 0 0 41,967 52,263
Moser, R.W. Executive Vice 1998 $293,628 235,000 0 0 15,000 $ 0 $24,992
President 1997 283,254 70,000 0 0 15,000 0 55,339
1996 275,502 68,000 0 0 0 39,696 49,882
O'Connor, T.P. Executive Vice 1998 $296,679 70,000 0 0 20,000 $ 0 $28,672
President 1997 283,257 100,000 0 0 15,000 0 45,858
1996 275,004 75,000 0 0 0 39,696 45,221
</TABLE>
- ---------------
(1) Includes amounts earned in fiscal year, regardless of whether deferred.
(2) Aggregate holdings and value of restricted stock at the end of the Company's
last completed fiscal year for the named executive officers are as follows
based on the Class A Common Stock closing price of $41.4375 at December 31,
1998: Mr. Elisha held 25,449 shares of restricted Class B Common Stock
valued at $1,054,543. At the same time and rate as dividends are paid to
shareholders of unrestricted Class B common stock dividends are paid on the
restricted stock.
(3) Includes company contributions to the Springs of Achievement Partnership
Plan, which is a tax qualified profit sharing and savings plan in which a
majority of the Company's associates participate. Amounts credited for 1998
are as follows:
<TABLE>
<CAPTION>
PROFIT SHARING
SAVINGS FUND RETIREMENT FUND
------------ ---------------
<S> <C> <C>
Mrs. Bowles.................. $4,800 $6,632
Mr. Dorsett.................. 4,132 6,632
Mr. Elisha................... 3,200 6,632
Mr. Kelbley.................. 4,267 6,632
Mr. Moser.................... 4,106 6,632
Mr. O'Connor................. 4,800 6,632
</TABLE>
5
<PAGE> 9
Also included for 1996 and 1997 are credits to a contingent compensation
plan. In this plan, amounts credited to the participant's account are
contingent upon continued employment with the Company and vest at a rate of
10 percent per year until termination of employment. A participant's entire
account is fully vested upon retirement on or after age 65, death, or total
disability. The account balance may be adjusted each year by an adjustment
factor selected by the Board's Management Compensation and Organization
Committee. No amounts were credited during 1998 under this plan.
Also included are credits to an excess benefit plan and a deferred
compensation plan, which provide for credits equivalent to contributions
under the Springs of Achievement Partnership Plan for deferred compensation
and compensation in excess of limitations provided under the Internal
Revenue Code. Amounts credited for 1998 are as follows:
<TABLE>
<S> <C>
Mrs. Bowles................................................ $42,140
Mr. Dorsett................................................ 10,761
Mr. Elisha................................................. 21,676
Mr. Kelbley................................................ 21,456
Mr. Moser.................................................. 14,254
Mr. O'Connor............................................... 17,240
</TABLE>
(4) Mrs. Bowles became Chief Executive Officer on January 1, 1998, and was
appointed Chairman of the Board following the annual meeting of shareholders
in April 1998. Mr. Elisha served as Chief Executive Officer until December
31, 1997, and as Chairman of the Board until the annual meeting of
shareholders in April 1998, when he retired.
(5) Of this amount, $550,000 represents Mr. Elisha's bonus under the Company's
Achievement Incentive Plan, and $480,000 represents a supplement to his
bonus.
(6) This amount represents Company-provided transportation, the value of which
is taxable compensation in accordance with federal income tax regulations.
OPTION TABLES
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS(1)
-----------------------------
NUMBER OF % OF TOTAL GRANT DATE
SECURITIES OPTIONS/SARS VALUE(3)
UNDERLYING GRANTED TO EXERCISE OR GRANT DATE
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION PRESENT
NAME GRANTED(#) FISCAL YEAR(2) ($/SH) DATE VALUE $
- ---- ------------ -------------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C>
C.C. Bowles......................... 0 N/A N/A N/A N/A
C.P. Dorsett........................ 9,000 1.4% $33.125 10/15/2008 $ 69,120
W.Y. Elisha......................... 50,000 7.9 56.1875 02/12/2008 771,000
S.P. Kelbley........................ 20,000 3.2 33.125 10/15/2008 153,600
R.W. Moser.......................... 15,000 2.4 33.125 10/15/2008 115,200
T.P. O'Connor....................... 20,000 3.2 33.125 10/15/2008 153,600
</TABLE>
- ---------------
(1) All of the options were nonqualified options, were granted at the market
value on the date of grant, and have a term of ten years. The options
generally become exercisable on the third anniversary of the date of grant.
(2) Based on options for 627,300 shares granted during 1998.
6
<PAGE> 10
(3) The estimated grant date present values reflected in the above table are
determined using the Black-Scholes model. The material assumptions and
adjustments incorporated in the Black-Scholes model in estimating the values
of the options include the following:
- An exercise price on the options of $56.1875 and $33.125, equal to the
fair market value of the underlying stock on the date of grant.
- An option term of 10 years.
- An interest rate of 5.57% as to the options with a base price of $56.1875
and 4.53% as to the options with a base price of $33.125 representing the
interest rates on U.S. Treasury securities with a maturity date
corresponding to that of the option terms.
- Volatility of 23.77% as to the options with a base price of $56.1875 and
33.95% as to the options with a base price of $33.125 calculated using
daily stock prices for the one-year period prior to the grant date.
- Dividends at the rate of $1.32 per share representing the annualized
dividends paid with respect to a share of Class A Common Stock at the date
of grant.
- Reductions of approximately 4% as to the options with a base price of
$56.1875 and 11.53% as to the option with a base price of $33.125 to
reflect the probability of forfeiture due to termination of employment
prior to vesting, and approximately 11.75% as to the options with a base
price of $56.1875 and 7.52% as to the options with a base price of $33.125
to reflect the probability of a shortened option term due to termination
of employment prior to the option expiration date.
The ultimate values of the options will depend on the future market price
of the Company's stock which cannot be forecast with reasonable accuracy. The
actual value, if any, an optionee will realize upon exercise of an option will
depend on the excess of the market value of the Company's Class A Common Stock
over the exercise price on the date the option is exercised.
7
<PAGE> 11
The following table provides information about options and incremental
stock equivalents, which are similar to stock appreciation rights, held by the
named executive officers.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL-YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF VALUE OF
UNEXERCISED OPTIONS/ UNEXERCISED, IN-THE-MONEY
SHARES SARS AT OPTIONS/SARS AT
ACQUIRED FISCAL YEAR END FISCAL YEAR END (1)
ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- --------- ---------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Bowles, C.C.................. 0 $ 0 37,500 31,000 $ 19,996 $ 18,670
Dorsett, C.P................. 0 0 51,167 23,833 327,411 89,983
Elisha, W.Y.(2).............. 0 9,448,299 153,833 15,167 50,183 47,061
Kelbley, S.P................. 0 0 62,500 41,000 393,121 184,920
Moser, R.W................... 24,000 633,750 38,500 36,000 94,621 143,358
O'Connor, T.P................ 0 0 62,500 41,000 393,121 184,920
</TABLE>
- ---------------
(1) Value is based on the difference between the closing market price of the
underlying Class A Common Stock at December 31, 1998 ($41.4375) and the
exercise or base price.
(2) Mr. Elisha converted the value, based on the average of the closing market
prices of the underlying Class A Common Stock at February 9, 10, and 11,
1998 ($55.4792), of 274,000 incremental stock equivalents, which are
comparable to freestanding stock appreciation rights, to a credit to a
deferred compensation account in an amount of $9,448,299.
LONG-TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR
The following table provides information about awards of performance units
under the Company's Incentive Stock Plan to the named executive officers.
LONG-TERM INCENTIVE PLANS -- AWARDS IN FISCAL YEAR
<TABLE>
<CAPTION>
PERFORMANCE OR ESTIMATED FUTURE PAYOUTS
OTHER PERIOD UNDER NON-STOCK PRICE-BASED
NUMBER OF UNTIL PLANS(2)
SHARES, UNITS, MATURATION -------------------------------
NAME OR RIGHTS(1) OR PAYOUT THRESHOLD TARGET MAXIMUM
---- ----------------- ---------------- --------- -------- --------
<S> <C> <C> <C> <C> <C>
Bowles, C.C...................... 5,169 3 Years $64,257 $214,190 $428,381
Dorsett, C.P..................... 1,622 3 Years 20,163 67,212 134,423
Kelbley, S.P..................... 2,512 3 Years 31,227 104,091 208,182
Moser, R.W....................... 2,221 3 Years 27,610 92,033 184,065
O'Connor, T.P.................... 2,224 3 Years 27,896 92,986 185,972
</TABLE>
- ---------------
(1) The number of performance units stated in the table is based on achievement
of target. The number of performance units earned is based on total
shareholder return over a three-year performance cycle as compared to the
Standard & Poor's 500. Achievement at the 30th percentile of these companies
will result in payment of the threshold amount. The number increases
proportionately up to a maximum award at the 90th percentile. No payment is
made if achievement is less than the 30th percentile.
(2) The value of units earned is based on the fair market value of the Company's
Class A Common Stock at the last day of the performance period, which is
December 30, 2000, or, if greater, at the first day of the performance
period, which is January 4, 1998. The amount of estimated future payout is
based on the Class A Common Stock closing price at December 31, 1998, of
$41.4375.
8
<PAGE> 12
RETIREMENT PLANS
In 1996 the Board of Directors adopted a Supplemental Executive Retirement
Income Plan for certain executives who are designated as participants by the
Management Compensation and Organization Committee. Target benefit amounts
payable under the Plan are reduced by one half of social security benefits and
by the equivalent value of (i) profit-sharing and Company matching benefits
payable under the Company's Springs of Achievement Partnership Plan and Deferred
Compensation Plan, (ii) benefits under the Company's Excess Benefit Plan and
Contingent Compensation Plan, and (iii) certain deferred compensation
attributable to a defined benefit plan previously maintained by the Company. The
years of credited service as of January 1, 1999, for the named executive
officers who participate in this Plan are as follows: Mrs. Bowles, seven years;
Mr. Dorsett, eight years; Mr. Kelbley, seven years; Mr. Moser, 37 years; and Mr.
O'Connor, 30 years. The following table sets forth target benefit amounts
payable at age 65 for various levels of final average compensation and years of
service:
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
FINAL AVERAGE -----------------------------------------
COMPENSATION(1) 10 15 20 25
- --------------- -----------------------------------------
<S> <C> <C> <C> <C>
$250,000 $ 60,000 $ 90,000 $120,000 $150,000
300,000 72,000 108,000 144,000 180,000
400,000 96,000 144,000 192,000 240,000
450,000 108,000 162,000 216,000 270,000
500,000 120,000 180,000 240,000 300,000
600,000 144,000 216,000 288,000 360,000
</TABLE>
- ---------------
(1) Final average compensation means the average of salary and bonus paid or
earned for the five years of the last ten years of employment that provide
the highest average.
The Company's Senior Executive Supplemental Retirement Plan provides for
target retirement benefits and a death benefit after retirement to Mr. Elisha,
who retired in April 1998. Mr. Elisha's annual target benefit is $558,577. The
annual target benefit is offset by amounts payable under the profit-sharing fund
of the Company's Springs of Achievement Partnership Plan, by one-half of the
participant's Primary Social Security benefit, and by certain credits to
deferred compensation plan accounts. The benefits payable under this plan are
payable for the life of the participant with a 50% survivor's benefit being
payable for the life of a survivor's spouse.
MANAGEMENT COMPENSATION AND ORGANIZATION COMMITTEE REPORT
This report describes the compensation policies of the Management
Compensation and Organization Committee (the Compensation Committee) applicable
to the executive officers of the Company named in the Summary Compensation
Table, including the specific relationship of corporate performance to
compensation of executive officers for 1998. The report also discusses the 1998
compensation of Mrs. Bowles, the Company's Chief Executive Officer.
Compensation Philosophy
The Company's executive compensation program is linked to corporate
performance and return to shareholders. To this end, the Company has developed
an overall compensation strategy and specific compensation plans that tie a
significant portion of executive compensation to the Company's success in
meeting specified performance goals and to appreciation in the Company's stock
price. To allow monitoring of the strategy, a benchmark of median compensation
levels for median performance is used. The overall objectives of this strategy
are to attract and retain the best possible executive talent, to motivate these
executives to achieve the goals inherent in the Company's business strategy, to
link executive and shareholder interests through equity based plans, and to
provide a compensation program that recognizes individual contributions as well
as overall business results.
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<PAGE> 13
Management Compensation and Organization Committee
The Compensation Committee is composed of the Company's ten non-employee
directors and is responsible for approval of compensation arrangements for key
executives and executive compensation plans. The Compensation Committee reviews
base salary recommendations from the chief executive officer for executive
officers who report to the chief executive officer, including those officers
named in the Summary Compensation Table. Mrs. Bowles' base salary was approved
by the board of directors upon recommendation by the Compensation Committee. A
formal process has been established for reviewing Mrs. Bowles' performance at
the same time her salary is reviewed.
The Compensation Committee periodically conducts reviews of the Company's
executive compensation program. The last review was completed in August 1997.
These reviews have included reports from independent compensation consultants
assessing the effectiveness of the Company's compensation program and comparing
the Company's executive compensation to peer groups of public corporations
recommended by the consultants. A peer group of 33 companies having revenues of
$1.1 billion to $4.8 billion with a median of $2.2 billion is used for
comparison purposes. This peer group is smaller than the peer group used for the
performance graph. In making comparisons, the primary consideration is the
competitiveness of the Company's annual and long term components of
compensation. The compensation reviews permit an ongoing evaluation of the link
between the Company's performance and its executive compensation as compared to
the compensation programs of other similarly positioned companies. Additionally,
in 1998, the Committee met with an independent compensation consultant to review
the Company's annual incentive program.
Compensation Program
The Company's compensation program reflects a weighting of annual base
salary and bonuses (the Annual Component) and equity-based incentives (the
Long-Term Component). For 1998, annual bonuses were weighted toward the
achievement of specific corporate financial targets, but individual performance
was also considered. To reflect longer term objectives, the program also
includes strategic equity-based components based on increases in shareholder
value which provide incentives to motivate executive behavior over the long
term.
(1) Annual Component: Base Salary and Annual Bonus
Base Salary: Base salaries for executive officers are determined with
reference to a salary grade level for each job. These levels are determined by
evaluating the responsibilities of each position and comparing it with other
comparable executive officer positions in the marketplace. Salary adjustments
for executive officers are currently made in twelve-month intervals under the
Company's compensation policy. The amount of adjustment is determined by the
Compensation Committee for all executive officers who report to the Chief
Executive Officer, upon recommendation by the Chief Executive officer, within
specified limits adopted for all Company associates, based on an evaluation of
personal performance. The base salaries of the named executive officers
generally are at or less than the midpoint of comparable positions at those
companies within the compensation peer group. Increases in base salary for the
named executive officers in 1998 were based on subjective evaluations of
individual performance as well as the need to maintain salaries at, or move
salaries closer to, the midpoint of comparable positions at the peer group
companies.
Annual Bonus: Executive bonuses in 1998 were earned pursuant to the
Company's Achievement Incentive Plan (the AIP). The AIP for 1998 links
compensation to the performance of the Company. Under this plan, a bonus pool is
established based on achievement of return on assets employed for each of the
Company's divisions and subsidiaries relative to a targeted return. In addition,
the bonus pool may be increased based on improvement in return on assets
employed over the previous year. A bonus pool based on the combined achievement
of the Company's divisions and subsidiaries is established for corporate
executives. For 1998, 75.9% of the corporate bonus pool was based on achievement
of targeted return on assets employed and the balance was based on improvement
in return on assets employed over the previous year. Key executives of the
Company receive discretionary bonuses from this pool based on individual
performance. The maximum bonuses range from 50% to 100% of annual base salary
depending on the executives' salary grades.
10
<PAGE> 14
(2) Long-Term Component
To align shareholders' and executive officers' interests, the Company's
compensation program includes long-term compensation in the form of performance
unit awards and stock options. The value of these awards is related to the value
of Company common shares. These awards are made under the Company's Incentive
Stock Plan.
Performance units are granted in three-year cycles. If the value of the
units earned by all participants is less than $500,000, then the amount earned
is paid in cash; otherwise one-half of any units earned are paid in cash based
on the higher of the fair market value, as defined in the Incentive Stock Plan,
of the Class A Common Stock on (i) the first day of the performance cycle or
(ii) the last day of the performance cycle and the other one-half is credited as
deferred stock, which is subject to an additional two-year vesting period. To
determine the number of units earned, performance is measured by ranking the
Company's total shareholder return over the three-year cycle within the total
shareholder returns of the companies included in the Standard & Poor's 500
Index. No payment is made for performance below the 30th percentile of the S&P
500 group, and the maximum payment is made at the 90th percentile. The Company's
total shareholder return for the three-year period ending in 1998 did not reach
the 30th percentile, and consequently no payment was made for that cycle.
As a result of a review of the long-term compensation component of the
compensation peer group which revealed that the value of the long-term incentive
compensation of the Company's executive officers was generally below the median
of the compensation peer group, a program of option grants was established in
1993 in addition to grants of performance units. Option grants were made in 1998
pursuant to this program.
CEO Compensation
Under the Compensation Committee's policy regarding CEO compensation, over
one-half of Mrs. Bowles' compensation opportunity is at risk based on the
Company's performance and the Committee's evaluation of her performance. Mrs.
Bowles' salary rate was increased in January 1998 to reflect her broader
responsibilities as Chief Executive Officer and her low base compensation
relative to the median of her peer group. The Committee also considered her
performance in prior years. With respect to the Long-Term Component of the
compensation program, the Compensation Committee granted performance unit awards
in 1998 to Mrs. Bowles under the Incentive Stock Plan as disclosed in the table
on page 8.
The Committee's decision relating to Mrs. Bowles' AIP bonus for 1998 was
based primarily on the Company's achievements in 1998 relative to the
performance criteria set forth in the AIP, which is described on page 10; but
the Committee also considered, without assigning any relative weighting, the
performance of the business and her actions in reorganizing the Company, in
beginning a strategic initiative to position the Company for the years ahead, in
moving forward on acquisitions of home furnishings businesses, and in divesting
three divisions which do not fit with the Company's strategy.
The Compensation Committee has concluded that Mrs. Bowles' performance
warrants the compensation for 1998 as reflected in the Summary Compensation
Table on page 5.
11
<PAGE> 15
The Compensation Committee has considered the limitations on deductibility
of certain compensation under Section 162(m) of the Internal Revenue Code. The
Compensation Committee's current policy is to assure that all compensation is
deductible under Section 162(m) when paid.
Management Compensation and Organization Committee
C. W. Coker, Chairman
J. F. Akers
J. L. Clendenin
L. S. Close
J. H. McArthur
A. Papone
D. S. Perkins
R. B. Smith
S. H. Smith, Jr.
S. Turley
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Akers, Coker, Clendenin, and Smith, and Ms. Smith served as members
of the Compensation Committee in 1998. In addition, Messrs. Close, McArthur,
Papone, Perkins, and Turley became members of the Committee in October 1998. Mr.
Close is president and chief executive officer of Sandlapper Fabrics, Inc.,
which received payments from the Company in 1998 totaling $195,986 for printed
fabric and printing services. Additionally, Mr. Close was a divisional officer
of the Company from 1983 to 1986 and is affiliated with Kanawha Insurance
Company, which received $4.65 million in 1998 for administrative services
provided to the Company's self-funded medical plan and for group life insurance
premiums, and with The Springs Company and affiliated or related entities, which
received $44,239 from the Company for rent, railroad track maintenance, and
miscellaneous goods and services, and which paid the Company $37,169 in 1998 for
administrative, maintenance, and other services.
EMPLOYMENT AND RETIREMENT AGREEMENTS
Mr. Elisha was employed pursuant to an employment agreement which expired
on March 31, 1990. Certain death benefits provided under the agreement and a
non-competition provision survive the termination of this agreement, except that
the death benefits terminated upon his retirement in April 1998. In addition,
Mr. Elisha entered into a new agreement under which he agreed to be available to
render advisory services as may be requested by the Board of Directors for a
period of five years following his retirement, and he has agreed not to compete
with the Company during the term of the new agreement. The Company is providing
Mr. Elisha administrative support and office facilities in connection with such
services and the right to use certain private aircraft as a cost to the Company
not to exceed a total of $150,000.
12
<PAGE> 16
PERFORMANCE GRAPH
Comparative Five-Year Total Returns*
Springs Industries, Inc., S&P 500, Peer Group
(PERFORMANCE GRAPH)
<TABLE>
<CAPTION>
Springs
Measurement Period Industries- S&P 500
(Fiscal Year Covered) Class A Index Peer Group
<S> <C> <C> <C>
Dec 93 100 100 100
Dec 94 101.51 101.32 100.08
Dec 95 117.24 139.40 106.62
Dec 96 125.39 171.40 111.58
Dec 97 155.66 228.59 111.79
Dec 98 127.88 293.91 100.77
</TABLE>
Assumes $100 invested at the close of trading on the last trading day
preceding the first day of the fifth preceding fiscal year in the Company's
Class A Common Stock, S&P 500, and Peer Group.
- ---------------
* Cumulative total return assumes reinvestment of dividends.
The peer group is composed of those fifty S&P 500 companies with market
capitalizations closest to the Company's as of the beginning of the Company's
1998 fiscal year, which the Compensation Committee believes is the most
representative group for purposes of comparing the Company's shareholders'
return. The Compensation Committee believes a representative group of reporting
companies cannot be identified in the same industry or lines of business as the
Company and that published industry indexes are not representative of the
Company and its lines of business. See Exhibit A for a list of companies in the
Peer Group and for a list of companies in last year's Peer Group which are not
included in this year's Peer Group.
DIRECTORS' COMPENSATION
Directors who are not employees of the Company (Outside Directors) receive
an annual cash retainer of $24,000 and, as described below, restricted shares of
the Company's Class A Common Stock under the Company's Restricted Stock Plan for
Outside Directors (the Directors' Restricted Stock Plan). In addition, each
Outside Director receives a fee of $2,500 for attendance at each special meeting
of the Board and $1,000 for each special meeting conducted by telephone.
Chairmen of Board Committees each receive an additional annual fee of $3,000.
Under the terms of the Directors' Restricted Stock Plan, each Outside
Director receives an annual grant of shares of Class A Common Stock (Restricted
Shares) as of the day before each annual meeting of shareholders having a market
value equal to the annual cash retainer fee earned by the director for the
preceding year. The shares are subject to forfeiture and restrictions on
transfer and become vested, upon the termination of the Outside Director's
service on the Board on account of (i) retirement in compliance with the Board's
mandatory retirement policy; (ii) failure to be reelected; or (iii) death or
disability. In addition, the Restriction Period may end with the approval of the
Board on a case-by-case basis if an Outside Director terminates his or her
service as a member of the Board (i) for reasons of personal or financial
hardship; (ii) to
13
<PAGE> 17
serve in any governmental, diplomatic or any other public service position or
capacity; (iii) to avoid or protect against a conflict of interest; (iv) on the
advice of legal counsel; or (v) as a result of any other extraordinary
circumstances that the Board determines to be comparable to the foregoing.
Upon the completion of the Restriction Period, all Restricted Shares
granted to an Outside Director and any distributions thereon retained by the
Company during the Restriction Period become vested. If an Outside Director
leaves the Board for any reason other than as set forth above, then all
Restricted Shares issued to such Outside Director would be forfeited to the
Company.
An Outside Director may elect deferral of compensation under the Company's
Deferred Compensation Plan for Outside Directors. Under this plan, amounts
deferred are (i) held as units equivalent to the Company's Class A Common Stock
and credited with dividend equivalents on which interest is credited at the
prime rate, (ii) credited to a measuring fund account consisting of a managed
portfolio of investments that are assets of the Company and adjusted quarterly
for income and appreciation or depreciation, or (iii) credited to an interest
account which is credited quarterly with interest at the prime rate.
Four directors have a deferral account under an Outside Directors COLI
Deferred Compensation Plan related to fees earned during the four-year period
ending April 1990. Those accounts are credited with interest at an annualized
rate equal to Moody's Seasoned Corporate Bond Yield Index, plus 2% to age 55 and
plus 4% thereafter and are paid out when Board service ends.
Credits under the COLI Plan and the Deferred Compensation Plan are only
contractual obligations of the Company and create no rights superior to other
unsecured, general creditors.
During 1998, Mr. Papone provided consulting services to the Company for
which he was paid $50,000. These services included meetings and consultations
with the Company's Market Strategy Group regarding consumer advertising and
contacts with the Company's primary advertising agency. In addition, Mr. Papone
reviewed certain of the Company's advertising programs and consumer packaging.
Mr. Papone will provide similar services in 1999 and has been paid a retainer of
$50,000. The retainer may be adjusted depending on the extent of consulting
services provided in 1999.
RATIFICATION OF APPOINTMENT OF PUBLIC ACCOUNTANTS
Upon the recommendation of the Audit Committee of the Board of Directors,
the Board has appointed Deloitte & Touche LLP (Deloitte) as independent
certified public accountants for the Company to audit the consolidated financial
statements of the Company and its subsidiaries for the 1999 fiscal year.
Deloitte has acted for the Company in this capacity since 1940. Its
representatives will attend the Meeting, will be given the opportunity to make a
statement if they desire, and will respond to questions directed to them
relating to their audit or to the Company's financial statements.
The Company's Board of Directors recommends ratification of the appointment
of Deloitte as independent certified public accountants for the Company to audit
the consolidated financial statements of the Company and its subsidiaries for
the 1999 fiscal year. If a majority of the votes cast at the Meeting, in person
or by proxy, should not approve such appointment, the Audit Committee and the
Board of Directors of the Company will reconsider the appointment of independent
certified public accountants.
ADOPTION OF THE 1999 INCENTIVE STOCK PLAN
A new Incentive Stock Plan is proposed to be approved by the stockholders.
The Plan was approved by the Board of Directors of the Company in February 1999,
subject to adoption by the Company's shareholders. The Plan provides for the
award of Stock Options, Stock Appreciation Rights, Restricted Stock,
Unrestricted Stock, Deferred Stock, Performance Units, Other Stock-based Awards
and certain Supplemental Grants. The Plan will be effective for a term of ten
years. The maximum number of shares of Class A Common Stock reserved and
available for distribution pursuant to the Plan shall be 1,750,000 shares. This
Plan is intended by the Company to replace the 1991 Incentive Stock Plan.
Approximately 30,000 shares remain available under
14
<PAGE> 18
the 1991 Incentive Stock Plan and will not be used if the 1999 Incentive Stock
Plan is approved by the shareholders.
The purpose of the Plan is to enhance the ability of the Company to attract
and retain key employees and is intended to stimulate the efforts of key
employees by providing an opportunity for capital appreciation and recognition
of outstanding service to the Company, all of which management believes will
contribute to the long-term growth and profitability of the Company.
The full text of the 1999 Incentive Plan is set forth in Exhibit B to this
Proxy Statement. The following description of certain features of the Plan is
qualified in its entirety by the full text of the Plan.
Administration; Eligible Employees; Limitations on Awards; Performance Goals
The Plan is administered by the Compensation Committee. Members of the
Compensation Committee and other Outside Directors are not eligible for awards.
The Compensation Committee has full power to select, from among the employees
eligible for awards, the individuals to whom awards will be granted, to make any
combination of awards to any participants, and to determine the specific terms
of each grant, subject to the provisions of the Plan. The Compensation Committee
may authorize the chief executive officer or other officers of the Company to
designate persons, who are not subject to Section 16 of the Securities Exchange
Act of 1934, as participants in the Plan.
Persons eligible to participate in the Plan will be those officers and
other key employees of the Company and its subsidiaries and affiliates (expected
to be approximately 175 persons) who are responsible for or contribute to the
management, growth or profitability of the business of the Company and its
subsidiaries and affiliates, as selected from time to time. The Plan limits the
number of shares that may be awarded to any participant in any fiscal year to
250,000 shares.
Awards under the Plan having performance-based vesting or exercise
restrictions will be based on specific performance goals that are expressed as
an objectively determined level of performance of the individual participant, a
business unit or subsidiary of the Company, or the Company as a whole, based on
one or more of the following: price of the Class A Common Stock, market share,
sales, earnings, earnings per share, return on equity or assets, costs and total
shareholder return, as determined by the Compensation Committee at the time of
establishing the performance goal.
Stock Options
The Plan permits the granting of stock options that qualify as incentive
stock options under Section 422(b) of the Internal Revenue Code ("incentive
options" or "ISOs") and stock options that do not qualify ("nonstatutory
options"). The exercise price of each option shall be determined by the
Compensation Committee in its discretion but may not be less than the fair
market value of the Class A Common Stock on the date the option is granted. On
February 26, 1999, the closing price of the Class A Common Stock on the NYSE
(composite tape), as reported in The Wall Street Journal, was $33 5/16.
The term of each option will be fixed by the Compensation Committee but may
not exceed ten years from the date of grant. The Compensation Committee will
determine at what time or times each option may be exercised. Options may be
made exercisable in installments, and the exercisability of options may be
accelerated by the Compensation Committee. The exercise price of options granted
under the Plan must be paid in cash or by delivery of shares of unrestricted
Common Stock or a combination of cash and shares. Options are nontransferable
other than by will or the laws of descent and distribution except that the
Compensation Committee may authorize transfer of options to an immediate family
member.
In the event of termination of employment for normal retirement, disability
or death, an option may thereafter be exercised to the extent it was then
exercisable for a period of one year unless the Compensation Committee specifies
another period, subject to the stated term of the option. In case of death after
normal retirement or disability while the option is still exercisable, the
option will in general be exercisable for one year following death, or other
period specified by the Compensation Committee, subject to the stated term of
15
<PAGE> 19
the option. If an optionee terminates employment for any reason other than
normal retirement, disability or death, generally his or her options will
terminate, unless provided otherwise by the Compensation Committee.
To qualify as incentive options, options must currently meet additional
federal tax requirements, including limits on the value of shares subject to
incentive options first exercisable annually to any participant and a shorter
exercise period and higher minimum exercise price in the case of certain large
shareholders. To the extent these special requirements are changed or
eliminated, the Plan may be amended accordingly.
Stock Appreciation Rights
The Compensation Committee may also grant nontransferable (other than by
will or the laws of descent and distribution) rights, alone or in conjunction
with options, entitling the holder upon exercise to receive an amount in any
combination of cash or shares of unrestricted Class A Common Stock, Restricted
Stock, or Deferred Stock awards equal to (or if determined by the Compensation
Committee at the time of grant, less than) the increase since the date of grant
in the market value of the shares covered by such right ("stock appreciation
right"). Each tandem stock appreciation right would terminate upon the
termination or exercise of any accompanying option.
Restricted Stock and Unrestricted Stock
The Compensation Committee may also award shares of Class A Common Stock
subject to such conditions and restrictions as the Compensation Committee may
determine ("Restricted Stock").
Recipients of Restricted Stock must enter into a Restricted Stock award
agreement with the Company, in such form as the Compensation Committee
determines, setting forth the restrictions and conditions to which the shares
are subject and the date or dates on which the restrictions and conditions will
lapse. The Compensation Committee may at any time waive such restrictions or
accelerate such dates.
Shares of Restricted Stock are nontransferable (other than by will or the
laws of descent and distribution). If a participant who holds shares of
Restricted Stock terminates employment for any reason (including death) prior to
the lapse or waiver of the restrictions, then, unless otherwise provided in the
award agreement or otherwise determined by the Compensation Committee, the
shares will be forfeited and the Company shall pay the participant any cash
consideration paid by the participant. Prior to the lapse of restrictions on
shares of Restricted Stock, the participant will have all rights of a
shareholder with respect to the shares, including voting and dividend rights,
subject only to the conditions and restrictions generally applicable to
Restricted Stock or specifically set forth in the Restricted Stock award
agreement.
The Compensation Committee may also grant shares which are free from any
restrictions under the Plan ("Unrestricted Stock"). Unrestricted Stock may be
issued (at no cost or for par value) in recognition of past services or in other
circumstances where the Compensation Committee determines the grant to be in the
best interests of the Company.
Deferred Stock
The Compensation Committee may also make Deferred Stock awards under the
Plan. These are nontransferable awards entitling the recipient to receive shares
of Class A Common Stock without any payment in one or more installments at a
future date or dates, as determined by the Compensation Committee. Receipt of
Deferred Stock may be conditioned on such matters as the Compensation Committee
shall determine, including continued employment or attainment of performance
goals. Any deferral under a Deferred Stock award may be waived by the
Compensation Committee at any time prior to termination of employment.
Performance Units
The Compensation Committee may also award nontransferable Performance Units
entitling the recipient to receive shares of Class A Common Stock or cash in
such combinations as the Compensation Committee may determine. Payment of the
award may be conditioned on achievement of individual or Company
16
<PAGE> 20
performance goals over a fixed or determinable period and such other conditions
as the Compensation Committee shall determine. A recipient of the award must
enter into an agreement setting forth the applicable conditions, as determined
by the Compensation Committee. Except as otherwise determined by the
Compensation Committee, rights under a Performance Unit award will terminate
upon a participant's termination of employment. Any conditions in an award may
be waived or modified by the Compensation Committee at any time prior to
termination of employment.
Performance Units may be awarded independently or in connection with stock
options or other awards under the Plan and may provide for payment at specified
times or at times elected by the recipients. Unless otherwise determined by the
Compensation Committee, payment of Performance Units issued in connection with
stock options shall reduce the number of shares subject to the option on such
basis as is specified in the award agreement.
Other Stock-based Awards
The Compensation Committee may in its discretion grant other types of
awards of, or based on, Class A Common Stock ("Other Stock-based Awards"). Such
awards may include debt securities convertible into or exchangeable for shares
of Common Stock upon such conditions, including attainment of performance goals,
as the Compensation Committee shall determine. The Compensation Committee may
determine the amount and form of consideration, if any, payable upon the
issuance or exercise of an Other Stock-based Award. The Compensation Committee
may prescribe limitations or conditions requiring forfeiture by the participant,
or permitting repurchase by the Company, of Other Stock-based Awards or related
securities, and may at any time, if it determines such action to be in the best
interests of the Company, accelerate or waive any such limitations or
conditions.
Other Stock-based Awards may only be transferred by will or by the laws of
descent and distribution. The recipient of an Other Stock-based Award will have
rights of a shareholder only to the extent, if any, specified by the
Compensation Committee in the Other Stock-based Award agreement.
Supplemental Grants
In connection with awards granted or exercised under the Plan, the
Compensation Committee may authorize loans from the Company to the participant.
Loans, including extensions, may be for up to 10 years and may be either secured
or unsecured. Each loan shall be subject to such terms and conditions and shall
bear such rate of interest, if any, as the Compensation Committee shall
determine. However, any such loan shall not be used to pay the par value of any
shares issued to the borrower, and the amount of any such loan shall not exceed
the total exercise or purchase price paid by the borrower under an award or for
related stock plus an amount equal to the cash payment which could have been
paid to the borrower in respect of taxes as described in the next paragraph.
Loans may be made at any time, subject to such limitations as the Compensation
Committee shall prescribe.
The Compensation Committee may at any time also grant to a participant the
right to receive a cash payment in connection with taxable events (including the
lapse of restrictions) under grants or awards. The amount of any such payment
may not exceed the amount estimated to be necessary to cover the federal, state
and local income taxes due with respect to the award and cash payment.
Dividends and Deferrals; Nature of Company's Obligations Under the Plan
The Compensation Committee may require or permit the immediate payment or
deferral of dividends and amounts equal to dividends on awards under the Plan.
The Compensation Committee may also provide for the accrual of interest on
amounts deferred under the Plan on such terms as the Compensation Committee may
determine.
Unless the Compensation Committee expressly determines otherwise,
participants in the Plan will have no rights greater than those of a general
creditor of the Company. The Compensation Committee may
17
<PAGE> 21
authorize the creation of trusts and other arrangements to facilitate or ensure
the Company's obligations under the Plan, provided that such trusts and
arrangements are consistent with the foregoing provisions.
Adjustments
The Compensation Committee is required to make appropriate adjustments in
connection with outstanding awards to reflect stock dividends, stock splits and
similar events. In the event of a merger in which the Company is the surviving
corporation, recapitalization or similar reorganization, the Company shall make
appropriate adjustments to outstanding stock options and stock appreciation
rights and, in the Compensation Committee's discretion, may make other equitable
or appropriate adjustments to other outstanding awards. In the event of a
liquidation, dissolution or merger in which the Company is not the survivor, the
Compensation Committee in its discretion may provide for substitution or
adjustments or may accelerate or, upon payment of other consideration for the
vested portion of any award as the Compensation Committee deems equitable in the
circumstances, terminate such awards.
Amendment and Termination
The Board of Directors may at any time amend or discontinue the Plan and
the Compensation Committee may at any time amend or cancel awards or provide
substitute awards to satisfy changes in the law or for any other lawful purpose.
However, no such action shall adversely affect any rights under outstanding
awards without the holder's consent. Shareholder approval is required for any
Plan amendment if the Board considers such approval is necessary or desirable to
comply with any tax or regulatory requirement.
Federal Income Tax Consequences
The rules concerning the federal income tax consequences with respect to
grants made pursuant to the 1999 Incentive Stock Plan are technical, and
reasonable persons may differ on the proper interpretation of such rules.
Moreover, the applicable statutory and regulatory provisions and their
interpretations and applications are subject to change and may vary in
individual circumstances. Therefore, the following discussion is designed to
provide only a brief, general summary description of the federal income tax
consequences associated with such grants, based on a good faith interpretation
of the current federal income tax laws, regulations (including certain proposed
regulations) and judicial and administrative interpretations. The following
discussion does not set forth (i) any federal tax consequences other than income
tax consequences or (ii) any state, local or foreign tax consequences that may
apply.
Incentive Options
For regular income tax purposes, no taxable income is recognized by the
optionee upon the grant or exercise of an ISO, if no disposition of shares
issued upon exercise of the ISO is made by the optionee within two years from
the date of grant or within one year after the transfer of such shares to the
optionee. In such case, (a) upon sale of such shares, any amount recognized in
excess of the option price will generally be taxed to the optionee as a
long-term capital gain and any loss sustained will generally be a long-term
capital loss, and (b) no deductions will be allowed to the Company for federal
income tax purposes. However, the exercise of an ISO will give rise to an item
of tax preference that may result in alternative minimum tax liability for the
optionee.
If shares acquired upon the exercise of an ISO are disposed of prior to the
expiration of the holding periods described above (a "disqualifying
disposition"), generally (a) the optionee will recognize ordinary income in the
year of disposition in an amount equal to the excess (if any) of the fair market
value of the shares at exercise (or, if less, the amount realized on a sale of
such shares) over the option price thereof, and (b) the Company will be entitled
to deduct such amount. Any further gain realized will be taxed as short-term or
long-term capital gain and will not result in any deduction by the Company.
18
<PAGE> 22
Nonstatutory Options
No income is recognized by the optionee at the time a nonstatutory option
is granted. Generally, (a) at exercise, ordinary income is recognized by the
optionee in an amount equal to the difference between the option price and the
fair market value of the shares on the date of exercise and the Company receives
a tax deduction for the same amount and (b) at disposition, appreciation or
depreciation after the date of the exercise is treated as either short-term or
long-term capital gain or loss depending on how long the shares have been held.
Stock Appreciation Rights
No income will be recognized by a participant in connection with the grant
of a stock appreciation right. When the stock appreciation right is exercised,
or when a participant receives payment in cancellation of a right, the
participant will generally be required to include as taxable ordinary income in
the year of such exercise or payment an amount equal to the amount of cash
received and the fair market value of any stock received. The Company will
generally be entitled at the same time to a deduction for federal income tax
purposes equal to the amount includable as ordinary income by such participant.
Restricted Stock, Unrestricted Stock
The recipient of Restricted Stock is not subject to any federal income tax
upon the grant of Restricted Stock, nor does the grant of Restricted Stock
result in an income tax deduction for the Company, unless the restrictions on
the stock do not present a substantial risk of forfeiture as defined under
Section 83 of the Internal Revenue Code. In the year that the Restricted Stock
is no longer subject to a substantial risk for forfeiture, the recipient will
recognize ordinary income in an amount equal to the fair market value of the
shares of Class A Common Stock transferred to the recipient, generally
determined on the date the Restricted Stock is no longer subject to a
substantial risk of forfeiture. If a recipient is subject to Section 16(b) of
the Exchange Act and cannot sell the Class A Common Stock without being subject
to liability under such section, the stock will be treated as subject to a
substantial risk of forfeiture. If the Restricted Stock is forfeited, the
recipient will recognize no gain.
The recipient of Restricted Stock may make an election under Section 83(b)
of the Code to recognize the fair market value of the Class A Common Stock as
taxable income at the time of grant of the Restricted Stock. If an election is
made, (i) the recipient will not otherwise be taxed in the year that the
Restricted Stock is no longer subject to a substantial risk of forfeiture; and
(ii) if the Restricted Stock is subsequently forfeited, the recipient will be
allowed no deduction with respect to such forfeiture.
Cash dividends paid to a recipient on shares of Restricted Stock prior to
the date the Restricted Stock is no longer subject to a substantial risk of
forfeiture or is forfeited are treated as ordinary income of the recipient in
the year received. The Company generally will be entitled to a federal income
tax deduction equal to the amount of ordinary income recognized by the recipient
when such ordinary income is recognized by the recipient, provided the Company
satisfies applicable federal income tax reporting requirements. Depending on the
period shares of Common Stock are held after receipt by the recipient, the sale
or other taxable disposition of such shares will result in short-term or
long-term capital gain or loss equal to the difference between the amount
realized on such disposition and the fair market value of such shares generally
when the Restricted Stock is no longer subject to a substantial risk of
forfeiture.
The recipient of Unrestricted Stock will realize ordinary income equal to
the fair market value of the stock at the time the stock is transferred, minus
any amount paid for such stock. Where the recipient is subject to Section 16(b)
of the Securities Exchange Act of 1934, special rules may apply under which the
timing and the amount of ordinary income to the recipient and the timing and
amount of tax deduction available to the Company may be deferred.
Deferred Stock
The recipient of a Deferred Stock award generally will recognize ordinary
income equal to the fair market value of the stock on the date that the stock is
distributed to the participant. The capital gain or loss holding
19
<PAGE> 23
period of such stock will also commence on such date. The Company generally will
be entitled to a deduction equal to the amount taxable as ordinary income to the
employee.
Performance Units
The recipient of a Performance Unit award generally will recognize ordinary
income equal to any cash received and the fair market value of any Class A
Common Stock issued under the award, and the Company will generally be entitled
to a deduction equal to the amount of ordinary income realized by the recipient.
Any cash received under a Performance Unit award will be included in income at
the time of receipt. The fair market value of any Class A Common Stock received
will also generally be included in income (and a corresponding deduction will
generally be available to the Company) at time of receipt. The capital gain or
loss holding period for any Class A Common Stock distributed under a Performance
Unit award will begin when the recipient recognizes ordinary income in respect
of that distribution.
Other Stock-based Awards
The federal income tax consequences of Other Stock-based Awards will depend
on how such awards are structured. Generally, the Company will be entitled to a
deduction with respect to such awards only to the extent that the individual
recognizes compensation taxable as ordinary income in connection with such
awards. It is anticipated that Other Stock-based Awards will usually result in
compensation income to the participant in some amount. However, some forms of
Other Stock-based Awards may not result in any compensation income to the
participant or any income tax deduction for the Company.
Supplemental Grants
Generally, loans made at market interest rates under the Plan will not
result in taxable income to the recipient or in a deduction to the Company.
However, any such loan made at a rate of interest lower than certain rates
specified under the Internal Revenue Code may result in an amount (measured, in
general, by reference to the difference between the actual rate and the
specified rate) being included in the borrower's income and being deductible by
the Company. Forgiveness of all or a portion of a loan will also result in
ordinary income to the borrower and a deduction for the Company. If outright
cash grants are given in order to facilitate the payment of award-related taxes,
the grants will be includable as ordinary income by the recipient at the time of
receipt and will in general be deductible by the Company.
Dividends
Dividends paid on Class A Common Stock (including Restricted Stock), to the
extent includable in a participant's income under the Plan, will be taxed as
ordinary income. Generally, the Company will not be entitled to any deduction
for dividends. However, if dividends are paid with respect to shares that are
not transferable and are subject to a substantial risk of forfeiture, and if the
participant has not elected immediate recognition of income under Section 83(b)
of the Code with respect to those shares, the dividends will be treated as
additional compensation deductible by the Company at such time as the dividends
are included in the participant's income.
Outstanding Awards
There are no outstanding awards under the Plan.
THE AFFIRMATIVE VOTE OF PERSONS HOLDING AT LEAST A MAJORITY OF THE VOTES
CAST IS REQUIRED FOR ADOPTION OF THE 1999 INCENTIVE STOCK PLAN. THE BOARD OF
DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR ADOPTION OF THE PLAN. PROXIES
SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS SHAREHOLDERS SPECIFY
IN THEIR PROXIES A CONTRARY CHOICE.
20
<PAGE> 24
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AS OF FEBRUARY 11, 1999:
<TABLE>
<CAPTION>
CLASS A CLASS B PERCENT OF
NAME COMMON STOCK(1)(2)(3) COMMON STOCK CLASS B
- ---- --------------------- ------------ ----------
<S> <C> <C> <C>
DIRECTORS & NOMINEES
J. F. Akers................... 2,783
C. C. Bowles.................. 56,473(4) 135,600(5) 1.9%
J. L. Clendenin............... 3,219
L. S. Close................... 5,019 74,605(5) 1.0%
C. W. Coker................... 4,519
J. H. McArthur................ 3,019
A. Papone..................... 3,133
D. S. Perkins................. 4,341
R. B. Smith................... 2,333
S. H. Smith................... 3,203
S. Turley..................... 4,019
EXECUTIVE OFFICERS
C. P. Dorsett................. 54,650(4)
W. Y. Elisha.................. 165,295(4)(6) 40,201 0.5%
S. P. Kelbley................. 66,262(4)
R. W. Moser................... 49,057(4)
T. P. O'Connor................ 69,164(4)
All Directors, Nominees and
Executive Officers as a
Group....................... 583,283(4) 250,416 3.5%
</TABLE>
- ---------------
(1) Each of the persons named holds less than 1% of the Class A Common Stock
except for Mr. Elisha, who holds 1.6%. All Directors, Nominees, and
Executive Officers as a Group hold 5.5% of the Class A Common Stock.
(2) Includes shares held under the Outside Directors' Restricted Stock Plan as
follows: Mr. Akers, 1,783; Mrs. Bowles, 487; Messrs. Clendenin, Close,
Coker, McArthur, and Turley, 3,019 each; Mr. Papone and Ms. Smith, 2,133
each; Mr. Smith, 2,703; and Mr. Perkins, 929. The directors have sole voting
power as to these shares but do not have investment power until lapse of
restrictions on the restricted shares.
(3) Includes shares held in the Springs of Achievement Partnership Plan as
follows: Mrs. Bowles, 293; Mr. Elisha, 533; Mr. Dorsett, 571; Mr. Kelbley,
575; and Mr. O'Connor, 580. These persons have sole voting and investment
power as to these shares.
(4) Includes beneficial ownership of Class A Common Stock that may be acquired
within 60 days pursuant to stock options awarded under the Incentive Stock
Plan as follows: for Mrs. Bowles, 40,000; Mr. Elisha, 153,833; Mr. Dorsett,
53,166; Mr. Kelbley, 65,000; Mr. Moser, 41,000; and Mr. O'Connor, 65,000.
(5) See text under the caption "Close Family Ownership" on page 22 for
additional information about ownership of Class B Common Stock.
(6) Does not include 30,000 shares of Class A Common Stock held by a trust for
Mr. Elisha's children and grandchildren of which Mr. Elisha was the settlor.
Mr. Elisha disclaims beneficial ownership of these shares.
21
<PAGE> 25
Close Family Ownership
Mrs. Bowles and Mr. Close are members of the Close family which, together
with certain related entities, owns as of February 11, 1999, a total of 144,647
shares (1.4%) of the Company's Class A Common Stock and 7,150,591 shares (99.4%)
of the Company's Class B Common Stock. Excluding the shares owned by Mrs. Bowles
and Mr. Close described on page 21, the Close family and related entities'
ownership of Class A and Class B Common Stock is as follows:
<TABLE>
<CAPTION>
CLASS A CLASS B PERCENTAGE
NAME(1) COMMON STOCK COMMON STOCK OF CLASS B
- ------- ------------ ------------ ----------
<S> <C> <C> <C>
Close family trusts............... 5,020,158(2) 69.7
The Springs Company............... 1,401,930(3) 19.5
Central Reassurance Corporation... 175,000(4) 2.4
Close Foundation(5)............... 3,392
</TABLE>
- ---------------
(1) The address for the named parties is P.O. Drawer 460, Lancaster, South
Carolina 29721.
(2) These shares are held in different trusts by Mrs. Anne Springs Close, and by
certain children of Mrs. Close, as trustees for the children of Mrs. Close.
While Mrs. Close, Mrs. Bowles, and Mr. Close each disclaim beneficial
ownership of these shares, they have shared voting and dispositive power
with respect to 4,115,156, 2,655,610, and 1,849,743 of these shares,
respectively.
(3) In addition to these shares, The Springs Company holds 343,298 shares (4.8%)
of the Class B shares and 78,763 shares (.7%) of the Class A shares as the
trustee of management trusts for certain members of the Close Family. All
outstanding shares of The Springs Company are owned by trusts for the
benefit of certain members of the Close Family. Mrs. Close and Mr. Close are
directors of The Springs Company.
(4) All outstanding shares of Central Reassurance Corporation are owned by
trusts for the benefit of certain members of the Close family.
(5) The Close Foundation is a nonprofit foundation established by the Close
family. Mrs. Close and Mrs. Bowles have shared voting and dispositive power
with respect to these shares.
Other Principal Holders of Common Stock
<TABLE>
<CAPTION>
PERCENTAGE
CLASS NAME & ADDRESS AMOUNT OF CLASS
----- ---------------------------------- --------- ----------
<S> <C> <C> <C>
Class A Common Stock Morgan Stanley, Dean Witter & Co. 1,264,289(1) 11.8%
1585 Broadway
New York, NY 10036
Miller Anderson & Sherrerd LLP 1,101,120 10.3%
MAS Funds Value Portfolio 610,918 5.7%
One Tower Bridge
West Conshohocken, PA 19428-2899
</TABLE>
- ---------------
(1) Based on a Schedule 13G filed jointly on February 15, 1999, by Morgan
Stanley, Dean Witter & Co., Miller Anderson & Sherrerd LLP, and MAS Funds
Value Portfolio, Morgan Stanley has shared voting power with respect to
1,096,469 (10.3% of the Class) and shared dispositive power with respect to
1,264,289 (11.8% of the Class) of these shares, Miller Anderson has shared
voting power with respect to 956,800 (10.0% of the Class) and shared
dispositive power with respect to 1,101,120 (10.3% of the Class) of these
shares, and MAS Funds Value Portfolio has shared voting and dispositive
power with respect to 610,918 of these shares (5.7% of the Class).
22
<PAGE> 26
TRANSACTIONS WITH CERTAIN PERSONS
For many years the Company has transacted business with certain companies
that are controlled by members of the Close Family. Mrs. Bowles and Mr. Close
are affiliated with these companies. The amounts paid or received by the Company
for these transactions are set forth below.
The Company paid The Springs Company and certain of its affiliates $44,239
for rent, railroad track maintenance, and miscellaneous goods and services in
1998.
Kanawha Insurance Company writes certain group insurance policies for the
Company and provides administrative services under certain of the Company's
self-funded medical benefit programs. Premiums paid to Kanawha for the group
policies totaled approximately $2.5 million in 1998. The Company also paid
Kanawha approximately $2.1 million in 1998 for administrative services under
certain of the Company's medical benefit programs.
Payments by the Company to Sandlapper Fabrics, Inc. for printed fabric and
printing services totaled $195,986 in 1998. Mr. Close is president and chief
executive officer of Sandlapper Fabrics, Inc.
The services, property, and facilities described in the foregoing
paragraphs, which have been reviewed by the Audit Committee, have been obtained
by the Company on terms as favorable as those available from unaffiliated
parties.
Charges by the Company for services in 1998 to affiliates or related
interests were approximately $37,169 to The Springs Company, its affiliated or
related entities, and to the Close family. These services consisted primarily of
recordkeeping, administrative, maintenance, and courier services.
The Company, as a service to its employees and pursuant to individual
authorization, provides at no charge a payroll deduction program for payment of
premiums on individual insurance policies purchased directly from Kanawha
Insurance Company.
In 1987 the Company entered into a 50-year agreement with Springland, Inc.,
a wholly-owned subsidiary of The Springs Company, to lease the Founder's House
in Fort Mill, South Carolina, which is listed in the National Register of
Historic Structures. The Company uses the Founder's House to provide quarters
for visiting directors, associates, and guests of the Company. The Founder's
House is also used for meetings by the Company.
The Company is obligated to pay rent of $1 per year under the lease and to
pay for all utilities, insurance, maintenance, and taxes on the Founder's House.
Springland has the right to terminate the lease upon six months' notice after
the year 2019. If Springland elects to terminate the lease, it must pay the
Company the unamortized book value of improvements made by the Company computed
on a straight line amortization basis over a forty-year useful life.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The rules of the Securities and Exchange Commission require disclosure of
late Section 16 filings by Company directors and executive officers. The
automatic conversion of deferred shares to Class A Common Stock of the Company
in connection with the Company's performance unit awards was inadvertently
reported one month late on Form 4s filed by Mrs. Bowles and Messrs. C. P.
Dorsett, W. K. Easley, S. P. Kelbley, R. W. Moser, T. P. O'Connor, and R. L.
Thompson. Also, the purchase of shares by a family member of Mr. Easley was
inadvertently reported ten days late.
OTHER MATTERS
The minutes of the Annual Meeting of Shareholders held April 20, 1998, will
be presented at the Meeting, but it is not intended that action taken under the
proxy will constitute approval of matters referred to in such minutes.
23
<PAGE> 27
The Company's management is not aware of any other matters to be presented
at the Meeting. If other matters should arise, however, it is intended that the
shares represented by the proxies will be voted, in the absence of contrary
instructions, in the discretion of the persons named in the proxy.
ANNUAL REPORT AND FORM 10-K
The Annual Report to Shareholders, including financial statements of the
Company for the fiscal year ended January 2, 1999, is included with these proxy
materials. The Annual Report is not a part of the proxy soliciting material.
A copy of the Company's annual report on Form 10-K to the Securities and
Exchange Commission may be obtained by shareholders without charge by writing:
Springs Industries, Inc., P. O. Box 70, Fort Mill, South Carolina 29716,
Attention: Secretary.
BY ORDER OF THE BOARD OF DIRECTORS
C. POWERS DORSETT
Senior Vice President-General Counsel
& Secretary
March 3, 1999
24
<PAGE> 28
EXHIBIT A
PEER GROUP COMPANIES
Aeroquip-Vickers, Inc.
Alberto-Culver Company
Armco Inc.
Asarco Incorporated
Autodesk, Inc.
Ball Corporation
C.R. Bard, Inc.
Battle Mountain Gold Company
Bethlehem Steel Corp.
Boise Cascade Corporation
Briggs & Stratton Corporation
Charming Shoppes, Inc.
Adolph Coors Company
Cyprus Amax Minerals Co.
Data General Corporation
Eastern Enterprises
EG&G, Inc.
Fleetwood Enterprises, Inc.
Foster Wheeler Corporation
Fruit of the Loom, Inc.
The Great Atlantic & Pacific Tea
Company, Inc.
John H. Harland Company
Harnischfeger Industries, Inc.
Helmerich & Payne, Inc.
Homestake Mining
Inland Steel Industries, Inc.
Jostens, Inc.
Kaufman and Broad Home
Corporation
Longs Drug Stores Corporation
McDermott International, Inc.
Milicron, Inc.
Millipore Corp.
Moore Corp. Ltd.
Nacco Industries, Inc.
Niagara Mohawk Power
Corporation
Oneok, Inc.
Owens Corning
Peoples Energy Corporation
Pep Boys-Manny, Moe & Jack
Polaroid Corporation
Potlatch Corporation
Pulte Corporation
Reebok International Ltd.
Russell Corporation
Safety-Kleen Corp.
Scientific-Atlanta, Inc.
Shared Medical Systems
Corporation
Stone Container Corporation
Tupperware Corporation
Worthington Industries, Inc.
COMPANIES IN LAST YEAR'S PEER GROUP THAT ARE NOT INCLUDED IN THE CURRENT PEER
GROUP
Caliber System, Inc.
Centex Corporation
Cincinnati Milacron, Inc.
Cooper Tire & Rubber Company
Crane Co.
Darden Restaurants, Inc.
Echo Bay Mines Ltd.
King World Productions, Inc.
Meredith Corporation
Navistar International Corporation
Tektronix, Inc.
Unisys Corporation
US Airways Group, Inc.
A-1
<PAGE> 29
EXHIBIT B
SPRINGS INDUSTRIES, INC.
1999 INCENTIVE STOCK PLAN
1. Purpose. The purpose of the Springs Industries, Inc. 1999 Incentive
Stock Plan is to promote the interests of the Company and it shareholders by
enabling selected key employees of the Company and its subsidiaries to
participate in the long-term growth of the Company by receiving the opportunity
to acquire shares of the Company's Stock and to provide for additional
compensation based on appreciation in the Company's Stock. The Plan provides a
means to attract and retain key employees of merit and is intended to stimulate
the efforts of such employees by providing an opportunity for capital
appreciation and by recognizing outstanding service to the Company, thus
contributing to the long-term growth and profitability of the Company.
2. Defined Terms. The following defined terms have the meanings set forth
below:
(a) "Act" means the Securities Exchange Act of 1934, as amended from
time to time.
(b) "Affiliate" means any organization (other than a Subsidiary) that
would be treated as under common control with the Company under Section
414(c) of the Code if "50 percent" were substituted for "80 percent" in the
income tax regulations under Section 414(c) of the Code.
(c) "Award" or "Awards" except where referring to a particular
category of grant under the Plan shall include Incentive Stock Options,
Non-Qualified Stock Options, Stock Appreciation Rights, Restricted Stock
Awards, Unrestricted Stock Awards, Deferred Stock Awards, Performance Unit
Awards and Other Stock-Based Awards.
(d) "Board" means the Board of Directors of the Company.
(e) "Code" means the Internal Revenue Code of 1986, as amended, and
any successor code and related rules, regulations and interpretations.
(f) "Committee" means the Management Compensation and Organization
Committee of the Board (or a subcommittee or other committee as described
in Section 5 below); such committee or subcommittee shall consist of at
least three members of the Board.
(g) "Company" means Springs Industries, Inc.
(h) "Deferred Stock Award" is defined in Section 11(a).
(i) "Disability" means permanent and total disability as determined
under procedures established by the Committee for purposes of the Plan.
(j) "Fair Market Value" on a specified date shall be the closing price
of the Stock on the New York Stock Exchange on the last trading day prior
to the specified date.
(k) "Incentive Stock Option" means any Stock Option intended to be and
designated as an "incentive stock option" within the meaning of Section 422
of the Code.
(l) "Non-Qualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.
(m) "Other Stock-Based Award" is defined in Section 13(a).
(n) "Performance Unit Award" is defined in Section 12(a).
(o) "Plan" means the Springs Industries, Inc. 1999 Incentive Stock
Plan, as amended from time to time.
(p) "Restricted Stock Award" is defined in Section 9(a).
(q) "Retirement" means a severance from the active employment of the
Company or its Subsidiaries or Affiliates by reason of retirement pursuant
to the provisions of any profit sharing, pension or other
B-1
<PAGE> 30
retirement plan of the Company or its Subsidiaries or Affiliates, or any
contract between the Company or any of its Subsidiaries or Affiliates and
the participant.
(r) "Stock" means the Class A Common Stock, $.25 par value, of the
Company.
(s) "Stock Appreciation Right" means a right described in Section
8(a).
(t) "Stock Option" means any option to purchase shares of Stock
granted pursuant to Section 7.
(u) "Stock Surrender Withholding Election" shall have the meaning set
forth in Section 15.
(v) "Subsidiary" shall mean a corporation which is a subsidiary
corporation (within the meaning of Section 424(f) of the Code) of the
Company.
(w) "Unrestricted Stock Award" is defined in Section 10.
(x) "Tax Date" shall have the meaning set forth in Section 15.
3. Stock Subject to the Plan. (a) Shares Issuable. The maximum number of
shares of Stock reserved and available for distribution pursuant to Awards under
the Plan shall be 1,750,000 shares. Such shares of Stock may consist, in whole
or in part, of authorized and unissued shares or treasury shares. If (i) an
Award expires or terminates for any reason without being exercised in full or is
satisfied without the distribution of Stock, or (ii) Stock distributed pursuant
to an Award is forfeited or reacquired by the Company, or is surrendered upon
exercise of an Award, the Stock subject to such Award or so forfeited,
reacquired or surrendered shall again be available for distribution for purposes
of the Plan.
(b) Changes in Capitalization. In the event of a stock dividend, stock
split or any increase or decrease in the number of issued shares of Stock
resulting from a subdivision or combination of shares effected without receipt
of consideration by the Company, the Committee shall make appropriate
adjustments in (i) the number of and kind of shares of stock or securities on
which Awards may thereafter be granted, (ii) the number and kind of shares
remaining subject to outstanding Awards and (iii) the option or purchase price
in respect of such shares. In the event of any such change in capitalization of
the Company, the Committee may make such additional adjustments in the number
and class of shares of Stock or other securities with respect to which
outstanding Awards are exercisable and with respect to which future Awards may
be granted as the Committee in its sole discretion shall deem equitable or
appropriate, subject to the provisions of Section 18 below. In the event the
Stock is changed into the same number of shares with a different par value or
without par value, the shares resulting from any such change shall be deemed to
be the Stock within the meaning of the Plan. Except (i) as expressly provided in
the preceding sentences or (ii) for any distribution or adjustment made with
respect to outstanding shares of Restricted Stock in connection with a
distribution or adjustment made with respect to all other outstanding shares of
Stock, any issue by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall not affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares of Stock subject to any Award. The existence of the Plan and the
Awards granted pursuant to the Plan shall not affect in any way the right or
power of the Company to make or authorize any adjustment, reclassification,
reorganization or other change in its capital or business structure, any merger
or consolidation of the Company, any issue of debt or equity securities having
preferences or priorities as to the Stock or the rights thereof, the dissolution
or liquidation of the Company, any sale or transfer of all or any part of its
business or assets, or any other corporate act or proceeding.
(c) Substitute Awards. The Company may grant Awards under the Plan in
substitution for stock and stock-based awards held by employees of another
corporation who concurrently become employees of the Company, a Subsidiary or an
Affiliate as the result of a merger or consolidation of the employing
corporation with the Company, a Subsidiary or an Affiliate or the acquisition by
the Company, a Subsidiary or an Affiliate of property or stock of the employing
corporation. The Committee may direct that the substitute Awards be granted on
such terms and conditions as the Committee considers appropriate in the
circumstances.
4. Eligibility. Participants in the Plan will be such officers and other
key employees of the Company, its Subsidiaries and Affiliates (but excluding any
person who serves only as a director) who are responsible for or
B-2
<PAGE> 31
contribute to the management, growth, or profitability of the Company, its
Subsidiaries and Affiliates and who are selected from time to time by the
Committee, in its sole discretion, provided that only employees who are employed
by the Company or a Subsidiary shall be eligible for the grant of incentive
stock options under the Plan.. No participant shall be granted during any fiscal
year the right to acquire pursuant to Awards granted under the Plan more than
250,000 shares of Stock. If, during any fiscal year, a Stock Option or Stock
Appreciation Right is granted to a participant and, during the same fiscal year,
such Option or Stock Appreciation Right is canceled or terminated either by the
Company or by the participant, the shares of Stock issuable pursuant to such an
Option or Stock Appreciation Right shall continue to be applied to reduce the
maximum number of shares issuable to the participant for such fiscal year.
5. Administration of the Plan. The Plan shall be administered by the
Committee, a subcommittee of the Committee or other committee of the Board, in
any case composed of not less than three Directors. The Committee shall have the
power and authority to grant Awards consistent with the terms of the Plan,
including the power and authority:
(i) to select the officers and other key employees of the Company, its
Subsidiaries and Affiliates to whom Awards may from time to time be
granted;
(ii) to determine the time or times of grant, and the extent, if any,
of Incentive Stock Options, Non-Qualified Stock Options, Stock Appreciation
Rights, Restricted Stock Awards, Unrestricted Stock Awards, Deferred Stock
Awards, Performance Units Awards, and any Other Stock-Based Awards, or any
combination of the foregoing, granted to any one or more participants;
(iii) to determine the number of shares to be covered by any Award;
(iv) to establish the terms and conditions of any Award, including,
but not limited to:
(A) the share price;
(B) any restriction or limitation on the grant vesting or exercise
of any Award (including but not limited to, the attainment (and
certification of the attainment) of one or more performance goals based
on one or more (or any combination) of the following business criteria
that may apply to the individual participant, a Company business unit,
including a Subsidiary or an Affiliate, or the Company as a whole: (1)
Stock price, (2) market share, (3) sales, (4) earnings, (5) earnings per
share, (6) return on equity or assets, (7) costs, and (8) total
shareholder return based on stock price and dividends paid assuming
dividend reinvestment); and
(C) any waiver of vesting, acceleration or forfeiture provisions
regarding any Stock Option or other Award and the Stock relating
thereto, based on such factors as the Committee shall determine; and
(v) to determine whether, to what extent and under what circumstances
Stock and other amounts payable with respect to an Award shall be deferred
either automatically or at the election of the Participant, and whether and
to what extent the Company shall pay or credit amounts equal to interest
(at rates determined by the Committee), dividends or deemed dividends on
such deferrals.
Subject to the provisions of the Plan, the Committee shall have full and
conclusive authority to interpret the Plan; to prescribe, amend and rescind
rules and regulations relating to the Plan; to determine the terms and
provisions of the respective Award agreements and to make all other
determinations necessary or advisable for the proper administration of the Plan.
The Committee's determinations under the Plan need not be uniform and may be
made by it selectively among persons who receive, or are eligible to receive,
Awards under the Plan (whether or not such persons are similarly situated). Any
determination made by the Committee pursuant to the provisions of the Plan with
respect to any Award shall be made in its sole discretion at the time of the
grant of the Award or, unless in contravention of any express term of the Plan,
at any time thereafter. All decisions by the Committee made pursuant to the
provisions of the Plan shall be final and binding on all persons, including the
Company and Plan participants. To the extent permitted by applicable law, the
Committee may delegate its authorities under this Section 5 only as they pertain
to individuals or entities who are not subject to Section 16 of the Act, to the
chief executive officer or other officers of the Company;
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provided, however, that the Committee will in all cases authorize the aggregate
number of shares to be subject to awards granted during any period.
6. Award Agreements and Limitations on Term and Date of Awards. (a) A
participant who is granted an Award shall have no rights with respect to such
Award unless within ninety days of the grant of such Award (or such shorter
period as the Committee may specify) the Participant shall have accepted the
Award by executing and delivering to the Company an Award agreement.
(b) Duration of Awards. Subject to Section 19(c) below, no restrictions or
limitations on any Award shall extend beyond ten years from the grant date,
except that deferrals of the receipt of Stock or other benefits under the Plan
elected by participants may extend beyond such date.
(c) Term. No Award shall be granted more than ten years after the
effective date of the Plan as specified in Section 20 below, but then
outstanding Awards may extend beyond such date.
7. Stock Options. Stock Options may be granted alone or in addition to
other Awards and may be of two types: Incentive Stock Options and Non-Qualified
Stock Options. Each Stock Option shall be clearly identified as to its status as
an Incentive Stock Option or a Non-Qualified Stock Option at the date of grant.
To the extent that any Stock Option denominated as an Incentive Stock Option
does not qualify as an "incentive stock option" within the meaning of Section
422 of the Code, it shall constitute a separate Non-Qualified Stock Option.
Stock Options granted under the Plan shall be subject to the following terms and
conditions and shall be evidenced by option agreements, which shall contain such
additional terms and conditions, not inconsistent with the terms of the Plan, as
the Committee shall deem desirable:
(a) Option Price. The option price per share of Stock purchasable
under a Stock Option shall be determined by the Committee at the time of
grant and set forth in the option agreement but shall be not less than 100%
of the Fair Market Value on the date of grant. If an officer or key
employee owns or is deemed to own (by reason of the attribution rules
applicable under Section 424(d) of the Code) more than 10% of the combined
voting power of all classes of stock of the Company or any Subsidiary or
parent corporation (within the meaning of Section 424(e) of the Code), and
an Incentive Stock Option is granted to such officer or key employee, the
option price shall be no less than 110% of the Fair Market Value on the
date of grant. The grant of a Stock Option shall occur on the date the
Committee by resolution selects an officer or employee as a participant in
any grant of Stock Options, determines the number of shares of Stock
covered by the Stock Option and specifies the terms and provisions of the
option agreement or on such future date as may be determined by the
Committee.
(b) Option Term. Unless an option agreement provides for a shorter
exercise period, any Stock Option shall be exercisable not later than ten
years after the Stock Option is granted; provided, however, that if an
Incentive Stock Option is granted to an employee who owns or is deemed to
own (by reason of the attribution rules of Section 424(d) of the Code) more
than 10% of the combined voting power of all classes of stock of the
Company or any Subsidiary or parent corporation (within the meaning of
Section 424(e) of the Code), the term of such Incentive Stock Option shall
be no more than five years from the date of grant.
(c) Exercisability. Stock Options shall be exercisable at such time
or times and subject to such terms and conditions, and in such amounts, as
the Committee shall specify in the option agreement, except that no Stock
Option when initially granted shall provide that it may be exercisable to
any extent during the first six months following the date of grant.
Notwithstanding the foregoing, subsequent to the grant of a Stock Option,
the Committee, at any time before the complete expiration of such Stock
Option, may accelerate the time or times at which such Stock Option may be
exercised in whole or in part; provided, however, that if any Stock Option
is exercised within the first six months following the date of grant, the
shares of Stock received upon such exercise may not be sold within the
first six months following the date of grant. Except as provided in
subsections (f), (g), (h) and (i) below, a Stock Option may not be
exercised by the holder unless the holder is then, and continually after
the grant of the Stock Option has been, an employee of the Company or one
of its Subsidiaries or Affiliates.
(d) Method of Exercise. Stock Options may be exercised at any time
during the option period by giving written notice of exercise to the
Company specifying the number of shares to be purchased. Except
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as provided in subsection (k) below, such notice shall be accompanied by
payment in full of the purchase price, either by certified or bank check or
other instrument acceptable to the Company, or by delivery of shares of
Stock as provided in this subsection. As determined by the Committee, in
its discretion, at (or, in the case of Non-Qualified Stock Options, at or
after) the time of grant, payment in full or part may also be made in the
form of shares of Stock not then subject to restrictions under any Company
plan (but which may include shares the disposition of which constitutes a
disqualifying disposition for purposes of obtaining incentive stock option
treatment under the Code). Shares of Stock so surrendered shall be valued
at Fair Market Value on the exercise date. Except as provided in subsection
(k) below, no shares of Stock shall be issued until full payment therefor
has been made. An optionee shall have all of the rights of a shareholder of
the Company, including the right to vote the shares and the right to
receive dividends, with respect to shares subject to the Stock Option when
the optionee has given written notice of exercise, has paid in full for
such shares and, if requested, has given the representation described in
Section 19(c) below.
(e) Transferability. Except as otherwise provided in this Section
7(e), no Stock Option shall be transferable by the optionee other than by
will or by the laws of descent and distribution, and all Stock Options
shall be exercisable, during the optionee's lifetime, only by the optionee
or the guardian or legal representative of the optionee. The Committee may,
in its discretion, authorize all or a portion of Non-Qualified Stock
Options to be granted to an optionee to be on terms which permit transfer
by such optionee to (i) the spouse, parents, children, grandchildren,
stepchildren, stepgrandchildren, siblings, mothers- and fathers-in-law,
sons- and daughters-in-law, or brothers- and sisters-in-law, including
relationships arising from legal adoption, of the optionee ("Immediate
Family Members"), or (ii) a trust or trusts for the exclusive benefit of
such Immediate Family Members; provided that (x) there may be no payment of
consideration for any such transfer, (y) the stock option agreement
pursuant to which such options are granted must be approved by the
Committee and must expressly provide for transferability in a manner
consistent with this Section, and (z) subsequent transfer of transferred
options shall be prohibited other than by will or the laws of descent and
distribution. The Committee may also amend outstanding Non-Qualified Stock
Options to provide for such transferability. A transfer of a Non-Qualified
Option pursuant to this Section may only be effected by the Company at the
written request of an optionee and shall become effective only when
recorded in the Company's record of outstanding Non-Qualified Options. In
the event a Non-Qualified Option is transferred as contemplated hereby,
such Non-Qualified Option will continue to be governed by and subject to
the terms of this Plan and the relevant grant, and the transferee shall be
entitled to the same rights as the optionee thereunder, as if no transfer
had taken place.
(f) Termination by Death. If an optionee's employment with the
Company or any Subsidiary or Affiliate terminates by reason of death, any
Stock Option held by such optionee may thereafter be exercised, to the
extent exercisable at the time of death (or on such accelerated basis as
the Committee shall at any time determine), by the legal representative or
legatee of the optionee, for a period of one year (or such other period as
the Committee shall specify at or after the time of grant) from the date of
death or until the expiration of the stated term of the Stock Option,
whichever period is the shorter.
(g) Termination by Disability. If an optionee's employment with the
Company or any Subsidiary or Affiliate terminates by reason of Disability,
any Stock Option held by such optionee may thereafter be exercised by the
optionee, to the extent it was exercisable at the time of termination (or
on such accelerated basis as the Committee may at any time determine) for a
period of one year (or such other period as the Committee shall specify at
or after the time of grant) from the date of such termination or until the
expiration of the stated term of the Stock Option, whichever period is the
shorter. Except as otherwise provided by the Committee at the time of
grant, the death of an optionee during such exercise period shall extend
such period for one year following death, or until the expiration of the
stated term of the Stock Option, whichever period is the shorter.
(h) Termination by Retirement. If an optionee's employment with the
Company or any Subsidiary or Affiliate terminates by reason of Retirement,
any Stock Option held by such optionee may thereafter be exercised by the
optionee, to the extent it was exercisable at the time of Retirement (or on
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such accelerated basis as the Committee may at any time determine) for a
period of one year (or such other period as the Committee shall specify at
or after the time of grant), provided, however, that the option agreement
for any Incentive Stock Option granted under the plan shall state that the
failure to exercise an Incentive Stock Option within the three-month period
that starts on the date optionee's employment terminates shall result in
loss of "incentive stock option" treatment under Section 422 of the Code
from the date of Retirement or until the expiration of the stated term of
the Stock Option, whichever period is the shorter. Except as otherwise
provided by the Committee at the time of grant, the death of an optionee
during such exercise period shall extend such period for one year following
death, or until the expiration of the stated term of the Stock Option,
whichever period is the shorter.
(i) Other Termination. Unless otherwise determined by the Committee
at or after the time of grant, if an employee's employment with the Company
or any Subsidiary or Affiliate terminates for any reason other than death,
Disability or Retirement, the Stock Option shall thereupon terminate.
(j) Form of Settlement. The Committee may provide in the option
agreement that upon receipt of written notice of exercise, the Committee
may elect to settle all or a part of the portion of any Stock Option so
exercised by paying the optionee an amount, in cash or Stock, equal to the
excess of the Fair Market Value of the Stock over the exercise price
(determined on the date the Stock Option is exercised).
(k) Certain Procedure for Certain Credit Assisted Transactions. Any
optionee desiring to obtain credit from a broker, dealer or other
"creditor" as defined in Regulation T issued by the Board of Governors of
the Federal Reserve System (provided such broker, dealer or creditor has
been approved by the Company) to assist in exercising a Stock Option may
deliver to such creditor an exercise notice properly executed by such
optionee with respect to such Stock Option, together with instructions to
the Company to deliver the resulting Stock to the creditor for deposit into
a designated account. Upon receipt of such exercise notice and related
instructions in a form acceptable to the Company, the Company shall confirm
to the creditor that it will deliver to the creditor the Stock covered by
such exercise notice and instructions promptly following receipt of the
exercise price from the creditor. Upon request the Company may in its
discretion, but shall not be obligated to, deliver to the creditor shares
of Stock resulting from an assisted exercise prior to receipt of the option
price for such shares. The credit assistance contemplated hereby may
include a margin loan by the creditor secured by the Stock purchased upon
exercise of a Stock Option or an immediate sale of some or all of such
Stock by the creditor to obtain or recover the option price which the
creditor has committed to pay to the Company.
(l) Special Provisions Relating to Incentive Stock Options. At the
time any Incentive Stock Option granted under the Plan is exercised, the
Company shall be entitled to legend the certificates representing the
shares of Stock purchased pursuant to such Incentive Stock Option to
clearly identify them as representing shares purchased upon exercise of an
Incentive Stock Option that may be subject to income tax withholding
requirements as set forth in Section 15 below. Anything in the Plan to the
contrary notwithstanding, no term of the Plan relating to Incentive Stock
Options shall be interpreted, amended or altered, nor shall any discretion
or authority granted under the Plan be exercised so as to disqualify the
Plan under Section 422 of the Code or, without the consent of the affected
optionee, to disqualify any Incentive Stock Option under Section 422 of the
Code.
8. Stock Appreciation Rights. (a) General. A Stock Appreciation Right is
an Award entitling the recipient to receive an amount in cash or shares of Stock
(or forms of payment permitted under subsection (d) below) or a combination
thereof having a value equal to (or if the Committee shall so determine at time
of grant, less than) the excess of the Fair Market Value of a share of Stock on
the date of exercise over the Fair Market Value of a share of Stock on the date
of grant (or over the Option exercise price, if the Stock Appreciation Right was
granted in tandem with a Stock Option) multiplied by the number of shares with
respect to which the Stock Appreciation Right shall have been exercised, with
the Committee having the right to determine the form of payment.
(b) Grant and Exercise. Stock Appreciation Rights may be granted in tandem
with, or independently of, any Stock Option granted under the Plan. In the case
of a Stock Appreciation Right granted in tandem
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with a Non-Qualified Stock Option, such Stock Appreciation Right may be granted
either at or after the time of grant of such option. In the case of a Stock
Appreciation Right granted in tandem with an Incentive Stock Option, such Stock
Appreciation Right may be granted only at the time of the grant of such option.
A Stock Appreciation Right or applicable portion thereof granted in tandem with
a Stock Option shall terminate and no longer be exercisable upon the termination
or exercise of the related Stock Option, except that a Stock Appreciation Right
granted with respect to less than the full number of shares covered by a related
Stock Option shall not be reduced until the exercise or termination of the
related Stock Option exceeds the number of shares not covered by the Stock
Appreciation Right.
(c) Terms and Conditions. Stock Appreciation Rights shall be subject to
such terms and conditions as shall be determined from time to time by the
Committee, including the following:
(i) No Stock Appreciation Right shall be exercisable in whole or in
part during the first six months of its term.
(ii) Stock Appreciation Rights granted in tandem with Stock Options
shall be exercisable only at such time or times and to the extent that the
related Stock Option shall be exercisable. Upon the exercise of a Stock
Appreciation Right, the applicable portion of any related Stock Option
shall be surrendered.
(iii) Stock Appreciation Rights granted in tandem with a Stock Option
shall be transferable only with such Stock Option. Stock Appreciation
Rights shall not be transferable otherwise than by will or the laws of
descent and distribution. All Stock Appreciation Rights shall be
exercisable during the participant's lifetime only by the participant or
the participant's legal representative or guardian.
(iv) A Stock Appreciation Right granted in tandem with an Incentive
Stock Option may be exercised only when the market price of the Stock
subject to the Incentive Stock Option exceeds the exercise price of such
option.
(d) Form of Settlement. Subject to Section 19(c) below, shares of Stock
issued upon exercise of a Stock Appreciation Right shall be free of all
restrictions under the Plan, except as otherwise provided in this subsection
(d). The Committee may provide at time of grant of a Stock Appreciation Right
that such shares shall be in the form of Restricted Stock or rights to acquire
Deferred Stock, or may reserve the right to provide so at any time after the
date of grant. Any such shares and any shares subject to rights to acquire
Deferred Stock shall be valued at Fair Market Value on the date of exercise of
the Stock Appreciation Right without regard to any restrictions or deferral
limitations.
9. Restricted Stock. (a) General. A Restricted Stock Award is an Award
entitling the recipient to acquire shares of Stock, subject to such conditions,
including the right of the Company during a specified period or periods to
repurchase such shares at their original price or to require forfeiture of such
shares (if no cash consideration was paid) upon the participant's termination of
employment, as the Committee may determine at the time of grant. The Committee
may award shares of Restricted Stock at no cost to the recipient or at such
other cost as it shall determine. Shares of Restricted Stock may be granted or
sold in respect of past services or other valid consideration.
(b) Award Agreement and Certificates. A participant who is granted a
Restricted Stock Award shall have no rights with respect to such Award unless
the participant shall have accepted the Award and made payment to the Company by
certified or bank check or instrument acceptable to the Company of any cash
consideration required to be paid in connection with such Restricted Stock
Award. Each participant receiving a Restricted Stock Award shall be issued a
certificate in respect of such shares of Restricted Stock. Such certificate
shall be registered in the name of the participant and deposited with the
Company or its designee, and shall bear an appropriate legend referring to the
terms, conditions and restrictions applicable to such Award, substantially in
the following form:
"This certificate and the shares of stock represented hereby are
subject to the terms and conditions (including forfeiture and restrictions
against transfer) contained in the Springs Industries, Inc. 1999 Incentive
Stock Plan and an agreement entered into between the registered owner and
Springs Industries, Inc. Release from such terms and conditions shall be
obtained only in accordance with the provisions of
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the Plan and the Agreement, copies of which are on file in the office of
the Secretary of Springs Industries, Inc., Fort Mill, South Carolina
29715."
The Committee may require that, as a condition of any Restricted Stock Award,
the participant shall have delivered to the Company a stock power, endorsed in
blank, relating to the Stock covered by such Award.
(c) Rights as a Shareholder. Upon complying with subsection (b) above, a
participant shall have all the rights of a shareholder with respect to the
Restricted Stock including voting and dividend rights, subject to
nontransferability restrictions, Company repurchase or forfeiture rights and any
other condition described in this Section 9 or contained in the Restricted Stock
Award agreement. The Restricted Stock Award agreement may require or permit the
immediate payment, waiver, deferral, or investment of dividends paid on the
Restricted Stock.
(d) Restrictions. Shares of Restricted Stock may not be sold, assigned,
transferred, pledged, or otherwise encumbered or disposed of except as
specifically provided herein and in the Restricted Stock Award agreement. Unless
the Committee in its discretion provides otherwise, all shares of Restricted
Stock shall be subject to the restrictions against transfer and to the Company's
right to repurchase or require forfeiture set forth in this subsection (d) for a
period of six months from the date of grant. The Committee shall specify the
date or dates (which may depend upon or be related to the attainment of
performance goals or such other factors or criteria as the Committee shall
determine) on which the nontransferability of the Restricted Stock and the
obligation to forfeit or resell such shares to the Company shall lapse. The
Committee may provide for the lapse of such restrictions in installments and at
any time may accelerate such date or dates and otherwise waive or, subject to
Section 18 below, amend any terms and conditions of the Award. Except as
otherwise may be provided in the Award agreement or determined by the Committee
at any time after the date of grant, in the event of termination of employment
of a participant with the Company and its Subsidiaries and Affiliates for any
reason (including death), the participant or the participant's legal
representative shall resell to the Company, at the cash consideration paid
therefor, all Restricted Stock, and the Company shall purchase such shares at
that price, or if no cash consideration was paid, all shares of Restricted Stock
awarded to the participant shall automatically be forfeited to the Company. Any
shares of Stock or other securities of the Company or any other entity which are
issued as a distribution on, or in exchange for, Restricted Stock or into which
Restricted Stock is converted as a result of a recapitalization, stock dividend,
distribution of securities, stock split or combination of shares or a merger,
consolidation or sale of substantially all of the assets of the Company shall be
subject to the restrictions set forth in the Restricted Stock Award agreement,
which shall inure to the benefit of any surviving or successor corporation which
is the issuer of such securities. Upon the lapse of the restrictions applicable
to a participant's Restricted Stock, certificates for shares of Stock free of
any restrictive legend shall be delivered to the participant or his legal
representative or guardian.
10. Unrestricted Stock. The Committee may, in its sole discretion, grant
(or sell at a purchase price not to exceed the par value of the shares of Stock
at the time of sale) to any participant shares of Stock free of restrictions
under the Plan ("Unrestricted Stock"). Shares of Unrestricted Stock may be
granted or sold as described in the preceding sentence in respect of past
services or other valid consideration. Any purchase of Unrestricted Stock by a
recipient must take place within ninety days after the time of grant of the
right to purchase such shares. Notwithstanding the foregoing, any shares of
Unrestricted Stock granted to a participant subject to Section 16(b) of the Act
may not be sold or otherwise disposed of for value for a period of six months
from the date of grant.
11. Deferred Stock Awards. (a) General. A Deferred Stock Award is an
Award entitling the recipient to acquire shares of Stock without payment in one
or more installments at a future date or dates, all as determined by the
Committee. The Committee may also condition such acquisition on the attainment
of specified performance goals or such other factors or criteria as the
Committee shall determine. Unless the Committee in its discretion provides
otherwise, the deferral period with respect to any Deferred Stock Award shall be
no less than six months from the date of grant.
(b) Restriction on Transfer. Deferred Stock Awards and rights with respect
to such Awards may not be sold, assigned, transferred, pledged or otherwise
encumbered. Rights with respect to such Awards shall be
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exercisable during the participant's lifetime only by the participant or the
participant's legal representative or guardian.
(c) Rights as a Shareholder. A participant receiving a Deferred Stock
Award will have rights of a shareholder only as to shares actually received by
the participant under the Plan and not with respect to shares subject to the
Award but not actually received by the participant. A participant shall be
entitled to receive a certificate for shares of Stock only upon satisfaction of
all conditions specified in the Deferred Stock Award agreement.
(d) Elective Deferral. A participant may elect to further defer receipt of
the Stock payable under a Deferred Stock Award (or an installment of the Award)
for a specified period or until a specified event, subject in each case to the
Committee's approval and under such terms as determined by the Committee.
Subject to any exceptions adopted by the Committee, such election must generally
be made at least 12 months prior to completion of the deferral period for the
Award (or for such installment of the Award).
(e) Termination. Except as may otherwise be provided in the Deferred Stock
Award agreement, a participant's rights in all Deferred Stock Awards shall
automatically terminate upon the participant's termination of employment with
the Company and its Subsidiaries and Affiliates for any reason (including
death). At any time prior to the participant's termination of employment, the
Committee may in its discretion accelerate, waive, or, subject to Section 18
below, amend any or all of the restrictions or conditions imposed under any
Deferred Stock Award.
(f) Payments in Respect of Deferred Stock. Without limiting the right of
the Committee to specify different terms, the Deferred Stock Award agreement may
either make no provisions for, or may require or permit the immediate payment,
deferral, or investment of amounts equal to, or less than, any cash dividends
which would have been payable on the Deferred Stock had such Stock been
outstanding, all as determined by the Committee in its sole discretion.
12. Performance Unit Awards. (a) General. A Performance Unit Award is an
Award entitling the recipient to acquire cash or shares of Stock, or a
combination of cash and Stock, upon the attainment of specified performance
goals. The Committee in its sole discretion shall determine whether and to whom
Performance Unit Awards shall be made, the performance goals applicable under
each such Award in accordance with the provisions of Section 5 above, the
periods during which performance is to be measured, and all other limitations
and conditions applicable to the Performance Unit Award.
Notwithstanding the foregoing, no Performance Unit Award shall be exercisable in
whole or in part during the first six months following the date of grant.
Performance goals may vary from participant to participant and between groups of
participants and shall be based upon such Company, business unit, including a
Subsidiary or an Affiliate, or individual performance factors or criteria as the
Committee may deem appropriate. Performance periods may overlap and participants
may participate simultaneously with respect to Performance Unit Awards that are
subject to different performance periods and different performance goals. The
Committee may adjust the performance goals and periods applicable to a
Performance Unit Award to take into account changes in law and accounting and
tax rules, and to make such adjustments as the Committee deems necessary or
appropriate to reflect the inclusion or exclusion of the impact of extraordinary
or unusual items, events or circumstances in order to avoid windfalls or
hardships. Performance Units may be awarded independent of or in connection with
the grant of any other Award under the Plan.
(b) Restrictions on Transfer. Performance Unit Awards and all rights with
respect to such Awards may not be sold, assigned, transferred, pledged or
otherwise encumbered, and if exercisable over a specified period, shall be
exercisable during the participant's lifetime only by the participant or the
participant's legal representative or guardian.
(c) Rights as a Shareholder. A participant receiving a Performance Unit
Award will have rights of a shareholder only as to shares of Stock actually
received by the participant under the Plan and not with respect to shares
subject to the Award but not actually received by the participant. A participant
shall be entitled to receive a certificate evidencing the acquisition of shares
of Stock under a Performance Unit Award only upon satisfaction of all conditions
specified in the Performance Unit Award agreement.
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(d) Termination. Except as may otherwise be provided by the Committee at
any time prior to the termination of employment, a participant's rights and all
Performance Unit Awards shall automatically terminate upon the participant's
termination of employment by the Company and its Subsidiaries and Affiliates for
any reason (including death).
(e) Acceleration; Waiver. At any time prior to the participant's
termination of employment with the Company and its Subsidiaries and Affiliates,
the Committee may in its sole discretion accelerate, waive, or, subject to
Section 18 below, amend any or all of the goals, restrictions or conditions
imposed under any Performance Unit Award.
(f) Exercise. The Committee in its sole discretion shall establish
procedures to be followed in exercising any Performance Unit Award, which
procedure shall be set forth in the Performance Unit Award agreement. The
Committee may at any time provide that payment under a Performance Unit Award
shall be made, upon satisfaction of the applicable performance goals, without
any exercise by the participant. Except as otherwise specified by the Committee,
(i) a Performance Unit granted in tandem with a Stock Option may be exercised
only while the Stock Option is exercisable, and (ii) the exercise of a
Performance Unit granted in tandem with any Award shall reduce the number of
shares of Stock subject to the related Award on such basis as is specified in
the Performance Unit Award agreement.
13. Other Stock-Based Awards. (a) General. The Committee may grant other
Awards under which Stock is or may in the future be acquired ("Other Stock-Based
Awards"). Such Awards may include, without limitation, debt securities
convertible into or exchangeable for shares of Stock upon such conditions,
including attainment of performance goals, as the Committee shall determine. No
Other Stock-Based Award shall be exercisable in whole or in part during the
first six months following the date of grant or, if shares of Stock are awarded
to a participant on the date of grant, such Stock shall be subject to
restrictions against transfer for a period of no less than six months from the
date of grant. Subject to the purchase price limitations in subsection (b)
below, such convertible or exchangeable securities may have such terms and
conditions as the Committee may determine at the time of grant. However, no
convertible or exchangeable debt shall be issued unless the Committee shall have
provided (by the Company's right of repurchase, right to require conversion or
exchange, or other means deemed appropriate by the Committee) a means of
avoiding any right of the holders of such debt to prevent a Company transaction
by reason of covenants in such debt.
(b) Purchase Price; Form of Payment. The Committee may determine the
consideration, if any, payable upon the issuance or exercise of an Other
Stock-Based Award. The Committee may permit payment by certified check or bank
check or other instrument acceptable to the Committee or by surrender of other
shares of Stock (excluding shares then subject to restrictions under the Plan).
(c) Forfeiture of Awards; Repurchase of Stock; Acceleration or Waiver of
Restrictions. The Committee may determine the conditions under which an Other
Stock-Based Award shall be forfeited or, in the case of an Award involving a
payment by the recipient, the conditions under which the Company may or must
repurchase such Award or related Stock. At any time the Committee may in its
sole discretion accelerate, waive, or, subject to Section 18 below, amend any or
all of the limitations or conditions imposed under any Other Stock-Based Award.
(d) Restrictions on Transfer. Other Stock-Based Awards may not be sold,
assigned, transferred, pledged, or encumbered except as may be provided in the
Other Stock-Based Award agreement. However, in no event shall any Other
Stock-Based Award be transferred other than by will or by the laws of descent
and distribution or be exercisable during the participant's lifetime by other
than the participant or the participant's legal representative or guardian.
(e) Rights as a Shareholder. A recipient of any Other Stock-Based Award
will have rights of a shareholder only at the time and to the extent, if any,
specified by the Committee in the Other Stock-Based Award agreement.
(f) Deemed Dividend Payments; Deferrals. Without limiting the right of the
Committee to specify different terms, an Other Stock-Based Award agreement may
require or permit the immediate payment,
B-10
<PAGE> 39
waiver, deferral, or investment of dividends or deemed dividends payable or
deemed payable on Stock subject to the Award.
14. Supplemental Grants. (a) Loans. The Company may in its sole
discretion make a loan to the recipient of an Award hereunder, either on or
after the date of grant of such Award. Such loans may be either in connection
with exercise of a Stock Option, a Stock Appreciation Right or an Other
Stock-Based Award, in connection with the purchase of shares under any Award, or
in connection with the payment of any federal, state and local income taxes in
respect of income recognized under an Award. The Committee shall have full
authority to decide whether to make a loan hereunder and to determine the
amount, term, and provisions of any such loan, including the interest rate
(which may be zero) charged in respect of any such loan, whether the loan is to
be secured or unsecured, the terms on which the loan is to be repaid and the
conditions, if any, under which it may be forgiven. However, no loan hereunder
shall provide or reimburse to the borrower the amount used by him for the
payment of the par value of any shares of Stock issued, have a term (including
extensions) exceeding ten years in duration, or be in amount exceeding the total
exercise or purchase price paid by the borrower under an Award or for related
Stock under the Plan plus an amount equal to the cash payment permitted in
subsection (b) below.
(b) Cash Payments. The Committee may, at any time and in its discretion,
authorize a cash payment, in respect of the grant or exercise of an Award under
the Plan or the lapse or waiver of restrictions under an Award, which shall not
exceed the amount which would be required in order to pay in full the federal,
state and local income taxes due as a result of income recognized by the
recipient as a consequence of (i) the receipt of an Award or the exercise of
rights thereunder and (ii) the receipt of such cash payment. The Committee shall
have complete authority to decide whether to make such cash payments in any
case, to make provisions for such payments either simultaneously with or after
the grant of the associated Award, and to determine the amount of any such
payment.
15. Withholding. Whenever the Company proposes or is required to issue or
transfer shares of Stock under the Plan, the Company shall have the right to
require the recipient to remit to the Company an amount sufficient to satisfy
any federal, state and local withholding tax requirements prior to the delivery
of any certificate or certificates for such shares. If a participant surrenders
shares of Stock acquired pursuant to the exercise of an Incentive Stock Option
in payment of the option price of a Stock Option or the purchase price under
another Award, and such surrender constitutes a disqualifying disposition for
purposes of obtaining incentive stock option treatment under the Code, the
Company shall have the right to require the participant to remit to the Company
an amount sufficient to satisfy any federal, state and local withholding tax
requirements prior to the delivery of any certificate or certificates for such
shares. Whenever under the Plan payments are to be made in cash, such payments
shall be net of an amount sufficient to satisfy any federal, state and local
withholding tax requirements. A recipient may elect with respect to any
Non-Qualified Stock Option, Stock Appreciation Right, Restricted Stock Award,
Unrestricted Stock Award, Deferred Stock Award, Performance Unit Award or Other
Stock-Based Award which is paid in whole or in part in Stock, to surrender or
authorize the Company to withhold shares of Stock (valued at Fair Market Value
on the date of surrender or withholding of the shares) in satisfaction of all
such withholding requirements (the "Stock Surrender Withholding Election") in
accordance with the following:
(i) Any Stock Surrender Withholding Election shall be made by written
notice to the Company and thereafter shall be irrevocable by the recipient.
(ii) Any Stock Surrender Withholding Election must be made prior to
the date on which the recipient recognizes taxable income with respect to
the receipt of such shares (the "Tax Date").
(iii) If a recipient is subject to Section 16 of the Act, or any
successor law, such person must make any Stock Surrender Withholding
Election more than six months after the date of grant of the Award with
respect to which such election is made (except whenever such election is
made by a disabled recipient or the estate or personal representative of a
deceased recipient).
(iv) When the Tax Date falls after the exercise of a Stock Option or
issuance of shares pursuant to any other Award and the recipient makes a
Stock Surrender Withholding Election, the full number of
B-11
<PAGE> 40
shares of Stock subject to the Stock Option being exercised or issuable
pursuant to the Award will be issued, but the recipient will be
unconditionally obligated to deliver to the Company on the Tax Date the
number of shares of Stock having a value on the Tax Date equal to the
recipient's federal, state and local withholding tax requirements.
(v) For purposes of this Section 15, the Committee shall have the
discretion to provide (by general rule or a provision in the specific Award
agreement) that, at the election of the recipient, "federal, state and
local withholding tax requirements" shall be deemed to be any amount
designated by the recipient which does not exceed his estimated federal,
state and local tax obligations associated with the transaction, including
FICA taxes to the extent applicable.
16. Merger; Liquidation. If the Company shall be the surviving corporation
in any merger, recapitalization or similar reorganization, the optionee of each
outstanding Stock Option shall be entitled to purchase, at the same times and
upon the same terms and conditions as are then provided in the Stock Option, the
number and class of shares of Stock or other securities to which a holder of the
number of shares of Stock subject to the Stock Option at the time of such
transaction would have been entitled to receive as a result of such transaction,
and a corresponding adjustment shall be made in connection with determining the
value of any related Stock Appreciation Right. In the event of any such change
in capitalization of the Company, the Committee may such additional adjustments
in the number and class of shares of stock or other securities with respect to
which outstanding Awards are exercisable and with respect to which future Awards
may be granted as the Committee in its sole discretion shall deem equitable or
appropriate, subject to the provisions of Section 18 below. In the event of
dissolution or liquidation of the Company or a merger in which the Company is
not the surviving corporation, the Committee in its sole discretion may, as to
any outstanding Awards, make such substitution or adjustment in the aggregate
number of shares reserved for issuance under the Plan and in the number or
purchase price (if any) of shares subject to such Awards as it may determine, or
accelerate, amend, or terminate such Awards upon such terms and conditions as it
shall provide, which, in the case of the termination of the vested portion of
any Award, shall require payment or other consideration which the Committee
deems equitable in the circumstances.
17. Unfunded Status of Plan. With respect to the portion of any Award
which has not been exercised and any payments in cash, Stock or other
consideration not received by a participant, a participant shall have no rights
greater than those of a general creditor of the Company unless the Committee
shall otherwise expressly determine in connection with any Award or Awards. In
its sole discretion, the Committee may authorize the creation of trusts or other
arrangements to meet the Company's obligations to deliver Stock or make payments
with respect to Awards, provided that the existence of such trusts or other
arrangements is consistent with the "unfunded" status of the Plan.
18. Amendments and Termination. The Board may amend or discontinue the
Plan, but no amendment or discontinuance shall be made which would impair the
rights of a recipient of an Award theretofore granted without the recipient's
consent; provided, however, that no amendment shall be made without shareholder
approval if the Board considers such approval is necessary or desirable to
comply with any tax or regulatory requirement, including for these purposes any
approval requirement that is a prerequisite for exemptive relief from Section
16(b) of the Act. The Committee may at any time amend or cancel any outstanding
Award for the purpose of satisfying changes in law or for any other lawful
purpose, but no such action shall adversely affect rights under any outstanding
Award without the recipient's consent.
19. General Provisions. (a) Transfers. For purposes of the Plan, the
transfer to the employment by the Company from a Subsidiary or Affiliate or from
the Company to a Subsidiary or Affiliate, or from one Subsidiary or Affiliate to
another, shall not be deemed a termination of employment.
(b) Leaves of Absence. The Committee may in its discretion determine
whether a leave of absence constitutes a termination of employment for purposes
of the Plan and the impact, if any, of such leave of absence on Awards
previously granted to a holder who takes a leave of absence.
(c) Restrictions on Delivery and Sale of Shares. Each Award granted under
the Plan is subject to the condition that if at any time the Committee, in its
discretion, shall determine that the listing, registration or
B-12
<PAGE> 41
qualification of the Stock covered by such Award upon any securities exchange or
under any state or federal law is necessary or desirable as a condition of or in
connection with the granting of such Award or the purchase or delivery of Stock
thereunder, the delivery of any or all shares pursuant to such Award may be
withheld unless and until such listing, registration or qualification shall have
been effected. If a registration statement is not in effect under the Securities
Act of 1933 or any applicable state securities laws with respect to the shares
of Stock purchasable or otherwise deliverable under Awards then outstanding, the
Committee may require, as a condition of any delivery of Stock pursuant to an
Award, that the recipient of Stock represent, in writing, that the shares
received pursuant to the Award are being acquired for investment and not with a
view to distribution and agree that the Stock will not be disposed of except
pursuant to an effective registration statement, unless the Company shall have
received an opinion of counsel that such disposition is exempt from such
requirement under the Securities Act of 1933 and any applicable state securities
laws. The Company may endorse on certificates representing shares delivered
pursuant to an Award such legends referring to the foregoing representations or
restrictions or any applicable restrictions applicable on resale as the Company,
in its discretion, shall deem appropriate.
(d) Other Compensation Arrangements; No Employment Rights. Nothing
contained in this Plan shall prevent the Board from adopting other or additional
compensation arrangements, subject to shareholder approval if such approval is
required; and such arrangements may be either generally applicable or applicable
only in specific cases. The adoption of the Plan does not confer upon any
employee any right to continued employment with the Company or a Subsidiary or
Affiliate, or affect the right of the Company or any Subsidiary or Affiliate to
terminate the employment of any of its employees at any time.
(e) Governing Law. The Plan and all Awards made and actions taken
thereunder shall be governed by and construed in accordance with laws of the
State of South Carolina.
20. Effective Date. The Plan shall become effective on the date of its
adoption by the shareholders of the Company.
B-13
<PAGE> 42
(MAP)
(SPRINGS LOGO)
DIRECTIONS TO MEETING SITE
YORK TECHNICAL COLLEGE
ROCK HILL, S.C.
<PAGE> 43
CLASS A COMMON CLASS A COMMON
SPRINGS INDUSTRIES, INC.
205 NORTH WHITE STREET
FORT MILL, SC 29715
SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS ON APRIL 19, 1999
The undersigned hereby appoints as Proxies Crandall C. Bowles and Charles W.
Coker, with the power of substitution to each, and hereby authorizes each to
represent and to vote all shares of Class A common stock of Springs Industries,
Inc. (the "Company") held of record by the undersigned on March 1, 1999, at the
Annual Meeting of Shareholders to be held on April 19, 1999, and any
adjournments thereof, subject to any directions indicated on the reverse side of
this card. IF NO DIRECTIONS ARE GIVEN, THE PROXIES WILL VOTE FOR THE PROPOSALS
LISTED ON THE REVERSE SIDE AND AT THEIR DISCRETION WITH RESPECT TO ANY OTHER
MATTER THAT WILL COME BEFORE THE MEETING.
PLEASE MARK, DATE, SIGN, AND RETURN THIS PROXY CARD PROMPTLY, USING THE ENCLOSED
ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES OF AMERICA.
HAS YOUR ADDRESS CHANGED?
- ---------------------------------------------------------
- ---------------------------------------------------------
- ---------------------------------------------------------
DO YOU HAVE ANY COMMENTS?
- ---------------------------------------------------------
- ---------------------------------------------------------
- ---------------------------------------------------------
<PAGE> 44
SPRINGS INDUSTRIES, INC.
CLASS A COMMON STOCK
1. ELECTION OF DIRECTORS.
John F. Akers, Crandall C. Bowles, John L. Clendenin, Leroy S. Close, Charles
W. Coker, John H. McArthur,
Aldo Papone, Robin B. Smith, Sherwood H. Smith, Jr., and Stewart Turley
NOTE: If you do not wish your shares voted "FOR" a particular nominee, mark
the "FOR ALL EXCEPT" box and strike a line through that nominee's name. Your
shares shall be voted for the remaining nominees.
<TABLE>
<C> <S> <C> <C> <C> <C>
FOR [ ] WITHHOLD [ ] FOR ALL EXCEPT [ ]
</TABLE>
2. Ratification of the appointment of Deloitte & Touche LLP as independent
auditors.
<TABLE>
<C> <S> <C> <C> <C> <C>
FOR [ ] AGAINST [ ] ABSTAIN [ ]
</TABLE>
3. Adoption of the Company's 1999 Incentive Stock Plan.
<TABLE>
<C> <S> <C> <C> <C> <C>
FOR [ ] AGAINST [ ] ABSTAIN [ ]
</TABLE>
<TABLE>
<S> <C>
Mark box at right if comments or address change have been [ ]
noted on the reverse side of this card.
</TABLE>
Please be sure to sign and date this
Proxy.
Date:
---------------------------------------
---------------------------------------
Shareholder sign here
---------------------------------------
Co-owner sign here
Sign exactly as your name or names
appear. When signing in a
representative capacity, give title
such as Trustee, Executor or President.
- --------------------------------------------------------------------------------
DETACH CARD
SPRINGS INDUSTRIES, INC.
Dear Shareholder:
Please take note of the important information enclosed with this Proxy Ballot
regarding our Annual Meeting of Shareholders.
Your vote counts, and you are encouraged to exercise your right to vote your
shares.
Please mark the boxes on the proxy card to indicate how your shares shall be
voted. Then sign the card, detach it and return your proxy vote in the enclosed
postage paid envelope.
Your vote must be received prior to the Annual Meeting of Shareholders, April
19, 1999.
Thank you in advance for your prompt consideration of these matters.
Sincerely yours,
/s/ Crandall Bowles
Chairman and Chief Executive Officer
<PAGE> 45
CLASS B COMMON CLASS B COMMON
SPRINGS INDUSTRIES, INC.
205 NORTH WHITE STREET
FORT MILL, SC 29715
SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS ON APRIL 19, 1999
The undersigned hereby appoints as Proxies Crandall C. Bowles and Charles W.
Coker, with the power of substitution to each, and hereby authorizes each to
represent and to vote all shares of Class B common stock of Springs Industries,
Inc. (the "Company") held of record by the undersigned on March 1, 1999, at the
Annual Meeting of Shareholders to be held on April 19, 1999, and any
adjournments thereof, subject to any directions indicated on the reverse side of
this card. IF NO DIRECTIONS ARE GIVEN, THE PROXIES WILL VOTE FOR THE PROPOSALS
LISTED ON THE REVERSE SIDE AND AT THEIR DISCRETION WITH RESPECT TO ANY OTHER
MATTER THAT WILL COME BEFORE THE MEETING.
PLEASE MARK, DATE, SIGN, AND RETURN THIS PROXY CARD PROMPTLY, USING THE ENCLOSED
ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES OF AMERICA.
HAS YOUR ADDRESS CHANGED?
- ---------------------------------------------------------
- ---------------------------------------------------------
- ---------------------------------------------------------
DO YOU HAVE ANY COMMENTS?
- ---------------------------------------------------------
- ---------------------------------------------------------
- ---------------------------------------------------------
<PAGE> 46
SPRINGS INDUSTRIES, INC.
CLASS B COMMON STOCK
1. ELECTION OF DIRECTORS.
John F. Akers, Crandall C. Bowles, John L. Clendenin, Leroy S. Close, Charles
W. Coker, John H. McArthur,
Aldo Papone, Robin B. Smith, Sherwood H. Smith, Jr., and Stewart Turley
NOTE: If you do not wish your shares voted "FOR" a particular nominee, mark
the "FOR ALL EXCEPT" box and strike a line through that nominee's name. Your
shares shall be voted for the remaining nominees.
<TABLE>
<C> <S> <C> <C> <C> <C>
FOR [ ] WITHHOLD [ ] FOR ALL EXCEPT [ ]
</TABLE>
2. Ratification of the appointment of Deloitte & Touche LLP as independent
auditors.
<TABLE>
<C> <S> <C> <C> <C> <C>
FOR [ ] AGAINST [ ] ABSTAIN [ ]
</TABLE>
3. Adoption of the Company's 1999 Incentive Stock Plan.
<TABLE>
<C> <S> <C> <C> <C> <C>
FOR [ ] AGAINST [ ] ABSTAIN [ ]
</TABLE>
<TABLE>
<S> <C>
Mark box at right if comments or address change have been [ ]
noted on the reverse side of this card.
</TABLE>
Please be sure to sign and date this
Proxy.
Date:
---------------------------------------
---------------------------------------
Shareholder sign here
---------------------------------------
Co-owner sign here
Sign exactly as your name or names
appear. When signing in a
representative capacity, give title
such as Trustee, Executor or President.
- --------------------------------------------------------------------------------
DETACH CARD
SPRINGS INDUSTRIES, INC.
Dear Shareholder:
Please take note of the important information enclosed with this Proxy Ballot
regarding our Annual Meeting of Shareholders.
Your vote counts, and you are encouraged to exercise your right to vote your
shares.
Please mark the boxes on the proxy card to indicate how your shares shall be
voted. Then sign the card, detach it and return your proxy vote in the enclosed
postage paid envelope.
Your vote must be received prior to the Annual Meeting of Shareholders, April
19, 1999.
Thank you in advance for your prompt consideration of these matters.
Sincerely yours,
/s/ Crandall Bowles
Chairman and Chief Executive Officer
<PAGE> 47
SPRINGS OF ACHIEVEMENT SPRINGS OF ACHIEVEMENT
PARTNERSHIP PLAN PARTNERSHIP PLAN
CLASS A COMMON CLASS A COMMON
SPRINGS INDUSTRIES, INC.
205 NORTH WHITE STREET
FORT MILL, SC 29715
SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS ON APRIL 19, 1999
The undersigned hereby directs Bankers Trust Company, or its proxy, to vote
shares of Springs Class A common stock allocated to my account under the Springs
of Achievement Partnership Plan at the Annual Meeting of Shareholders to be held
on April 19, 1999, and any adjournments thereof, subject to any directions
indicated on the reverse side of this card. IF NO DIRECTIONS ARE GIVEN, THE
PROXIES WILL VOTE FOR THE PROPOSALS LISTED ON THE REVERSE SIDE AND AT THEIR
DISCRETION WITH RESPECT TO ANY OTHER MATTER THAT WILL COME BEFORE THE MEETING.
PLEASE MARK, DATE, SIGN, AND RETURN THIS PROXY CARD PROMPTLY, USING THE ENCLOSED
ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES OF AMERICA.
HAS YOUR ADDRESS CHANGED?
- ---------------------------------------------------------
- ---------------------------------------------------------
- ---------------------------------------------------------
DO YOU HAVE ANY COMMENTS?
- ---------------------------------------------------------
- ---------------------------------------------------------
- ---------------------------------------------------------
<PAGE> 48
SPRINGS INDUSTRIES, INC.
SPRINGS OF ACHIEVEMENT PARTNERSHIP PLAN
CLASS A COMMON STOCK
1. ELECTION OF DIRECTORS.
John F. Akers, Crandall C. Bowles, John L. Clendenin, Leroy S. Close, Charles
W. Coker, John H. McArthur,
Aldo Papone, Robin B. Smith, Sherwood H. Smith, Jr., and Stewart Turley
NOTE: If you do not wish your shares voted "FOR" a particular nominee, mark
the "FOR ALL EXCEPT" box and strike a line through that nominee's name. Your
shares shall be voted for the remaining nominees.
<TABLE>
<C> <S> <C> <C> <C> <C>
FOR [ ] WITHHOLD [ ] FOR ALL EXCEPT [ ]
</TABLE>
2. Ratification of the appointment of Deloitte & Touche LLP as independent
auditors.
<TABLE>
<C> <S> <C> <C> <C> <C>
FOR [ ] AGAINST [ ] ABSTAIN [ ]
</TABLE>
3. Adoption of the Company's 1999 Incentive Stock Plan.
<TABLE>
<C> <S> <C> <C> <C> <C>
FOR [ ] AGAINST [ ] ABSTAIN [ ]
</TABLE>
<TABLE>
<S> <C>
Mark box at right if comments or address change [ ]
have been noted on the reverse side of this card.
</TABLE>
Please be sure to sign and date
this Proxy.
Date:
-----------------------------------
<TABLE>
<S> <C>
-----------------------------------------------------
Shareholder sign here
</TABLE>
- --------------------------------------------------------------------------------
DETACH CARD
SPRINGS INDUSTRIES, INC.
Dear Shareholder:
Please take note of the important information enclosed with this Voting
Instruction Card regarding our Annual Meeting of Shareholders.
Your vote counts, and you are encouraged to exercise your right to vote your
shares.
Please mark the boxes on the card to indicate how your shares shall be voted.
Then sign the card, detach it and return your proxy vote in the enclosed postage
paid envelope.
Your vote must be received prior to the Annual Meeting of Shareholders, April
19, 1999.
Thank you in advance for your prompt consideration of these matters.
Sincerely yours,
/s/ Crandall Bowles
Chairman and Chief Executive Officer
