<PAGE> 1
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>
Thomaston Mills, 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/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
THOMASTON MILLS, INC.
LOGO
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 3, 1996
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Thomaston
Mills, Inc. (the "Company") will be held in the Employee Relations Office of the
Company, 207 East Gordon Street, Thomaston, Georgia 30286 on October 3, 1996 at
11:00 A.M., Eastern Daylight Saving Time, for the following purposes:
(1) To elect a Board of eleven Directors;
(2) To approve the selection of Ernst & Young LLP, certified public
accounts, as independent auditors for the Company for the fiscal year 1997;
and
(3) To transact such other business as may properly come before the
meeting or any adjournment thereof;
all as set forth in the Proxy Statement accompanying this notice.
The stock transfer books of the Company will not be closed. Only
shareholders of record of Class B Common Stock at the close of business on
August 22, 1996 will be entitled to notice of, and to vote at, the meeting or
any adjournment thereof.
By Order of the Board of Directors,
NEIL H. HIGHTOWER
President and Chief
Executive Officer
Dated: August 28, 1996
SHAREHOLDERS ARE URGED TO FILL IN AND EXECUTE THE ENCLOSED PROXY AND MAIL IT
PROMPTLY IN THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE
UNITED STATES. YOUR ATTENDANCE AT THE MEETING IS URGED. IF YOU ATTEND THE
MEETING AND DECIDE YOU WANT TO VOTE IN PERSON YOU MAY, IF YOU WISH, WITHDRAW
YOUR PROXY.
<PAGE> 3
THOMASTON MILLS, INC.
------------------------------
PROXY STATEMENT
FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 3, 1996
This statement is furnished in connection with the solicitation by the
Board of Directors of Thomaston Mills, Inc. (the "Company") of proxies to be
used at the Annual Meeting of Shareholders to be held in the Employee Relations
Office of the Company, 207 East Gordon Street, Thomaston, Georgia 30286 on
October 3, 1996 at 11:00 A.M., Eastern Daylight Saving Time. A form of proxy is
enclosed herewith. Any shareholder who executes and delivers a proxy may revoke
it at any time before it is voted by (i) giving written notice to the Secretary
of the Company, 115 E. Main Street, P.O. Box 311, Thomaston, Georgia 30286; (ii)
delivering a duly executed proxy bearing a later date to the Secretary of the
Company at said address; or (iii) appearing at the meeting and voting in person.
As of the date hereof, the only business that management intends to present
or knows that others will present at the annual meeting is the election of
eleven directors; and a proposal to approve the selection of Ernst & Young LLP,
certified public accountants, as independent auditors of the Company for the
fiscal year ending June 28, 1997.
All shares of the Company's Class B Common Stock represented by effective
proxies will be voted as specified in connection with each of the matters to be
voted upon at the Annual Meeting. Unless otherwise specified, proxies will be
voted in favor of the slate of eleven nominees for director; and in favor of the
selection of Ernst & Young LLP as independent auditors of the Company for the
fiscal year ending June 28, 1997.
The cost of soliciting proxies will be borne by the Company. Officers,
directors and employees of the Company may solicit proxies by telephone,
telegram or personal interview. Only holders of issued and outstanding shares of
Class B Common Stock of the Company of record at the close of business on August
22, 1996 are entitled to notice of, and to vote at, the meeting. Each
shareholder is entitled to one vote per share of Class B Common Stock held on
such record date. At the close of business on August 28, 1996, there were
1,630,366 shares of Class B Common Stock issued, outstanding and entitled to be
voted, and 4,909,630 shares of Class A Common Stock issued and outstanding,
which have no voting rights other than those provided by law. Unless the context
indicates otherwise, all amounts set forth herein have been adjusted to reflect
all stock dividends previously distributed.
The Company's officers and directors, and certain of their affiliates, own
in the aggregate a sufficient number of shares of the Company's Class B Common
Stock to approve each of the matters to be presented at the Annual Meeting of
Shareholders (see "Principal Holders of Class A and Class B Common Stock") and
it is anticipated that such persons will vote their shares in favor of each of
the proposals.
It is anticipated that this proxy statement and the accompanying form of
proxy will be mailed to shareholders on or about August 28, 1996.
<PAGE> 4
PRINCIPAL HOLDERS OF CLASS A AND CLASS B COMMON STOCK
The following table sets forth certain information with respect to the
beneficial ownership of the Company's Class A Common Stock and Class B Common
Stock as of August 28, 1996 by (i) each director of the Company, (ii) each
executive officer of the Company named in the Summary Compensation Table on page
8, (iii) all directors and executive officers of the Company as a group and (iv)
each person known by the Company to own beneficially more than 5% of the
outstanding Class A Common Stock or Class B Common Stock. The numbers and
percentages set forth below include shares which are not presently outstanding,
but which are subject to presently exercisable options and thus may be deemed
outstanding by virtue of Rule 13d-3(d)(1) under the Securities Exchange Act of
1934. Pursuant to Rule 13d-3(d)(1), shares subject to presently exercisable
options held by each director and executive officer are deemed outstanding for
purposes of calculating the percentage of total outstanding shares held by such
person or by the group, but are not deemed to be outstanding for purposes of
calculating the percentage of total outstanding shares held by any other
individual.
<TABLE>
<CAPTION>
CLASS A COMMON STOCK CLASS B COMMON STOCK
-------------------------- --------------------------
SHARES PERCENT SHARES PERCENT
NAME OF BENEFICIALLY OF CLASS BENEFICIALLY OF CLASS
BENEFICIAL OWNER OWNED OUTSTANDING OWNED OUTSTANDING
----------------------------------------------- ------------ ----------- ------------ -----------
<S> <C> <C> <C> <C>
Thomas D. Adams, Jr.(1)........................ 44,168 0.86 116,610 6.75
C. Ronald Barfield(2).......................... 28,494 0.56 13,952 0.81
John R. Carson(3)(11).......................... 15,514 * 2,110 *
Archie H. Davis................................ 900 * 100 *
H. Stewart Davis(3)(4)......................... 83,167 1.68 254,581 15.32
George H. Hightower(3)(5)...................... 335,332 6.56 129,519 7.50
George H. Hightower, Jr.(3)(6)................. 163,708 3.31 221,234 13.31
Neil H. Hightower(3)(7)........................ 395,691 8.01 258,083 16.85
William H. Hightower, Jr.(3)(8)................ 376,014 7.35 97,968 5.68
Rosser R. Raines(3)(9)......................... 10,000 * 2,276 *
Dr. Jerry M. Williamson........................ 1,100 * 200 *
Dom H. Wyant................................... 600 * 200 *
All directors and executive officers as a group
(20 persons)(10)............................. 1,147,420 22.44 1,050,143 60.83
Mount Vernon Mills, Inc.(12)................... 758,234 15.44 157,718 9.67
Quest Advisory Corporation and Quest Management
Company(13).................................. 517,900 10.55 0 *
</TABLE>
- ---------------
* Less than 1/2 of 1% of class
(1) Mr. Adams' business address is 614 N. Church Street, Thomaston, Georgia
30286. Includes 44,168 shares of Class A Common Stock and 30,990 shares of
Class B Common Stock owned of record by Mr. Adams. He is an income
beneficiary of a trust holding 190,188 shares of Class A Common Stock and
90,198 shares of Class B Common Stock. Mr. Adams holds voting rights from
family members for 85,620 shares of Class B Common Stock.
(2) Includes 660 shares of Class A Common Stock and 320 shares of Class B
Common Stock owned of record by Mr. Barfield and 27,834 shares of Class A
Common Stock and 13,632 shares of Class B Common Stock owned by Upson
County Hospital Trust Fund, a charitable trust (the "Upson Trust"). Mr.
Barfield serves as a trustee of the Upson Trust, the shares of which are
voted in accordance with the
2
<PAGE> 5
wishes of the majority of the trustees. Mr. Barfield disclaims beneficial
ownership with respect to shares owned by the Upson Trust.
(3) The business address of this beneficial shareholder is c/o Thomaston Mills,
Inc., 115 East Main Street, P.O. Box 311, Thomaston, Georgia 30286.
(4) Includes 53,167 shares of Class A Common Stock and 96,603 shares of Class B
Common Stock owned of record by Mr. Davis. Mr. Davis holds voting rights
from family members for 126,338 shares of Class B Common Stock. Also
includes 30,000 shares of Class A Common Stock and 31,640 shares of Class B
Common Stock which Mr. Davis could acquire upon the exercise of options
within 60 days of August 28, 1996.
(5) Includes 76,450 shares of Class A Common Stock and 38,871 shares of Class B
Common Stock owned of record by Mr. George H. Hightower; 231,048 shares of
Class A Common Stock and 77,016 shares of Class B Common Stock owned by
Community Enterprises, Inc., a charitable foundation (the "Community
Foundation"); and 27,834 shares of Class A Common Stock and 13,632 shares
of Class B Common Stock owned by the Upson Trust. Mr. Hightower serves as a
trustee of the Community Foundation and the Upson Trust, the shares of
which are voted in accordance with the wishes of the majority of the
trustees. Mr. Hightower disclaims beneficial ownership with respect to
shares owned by the Community Foundation and the Upson Trust.
(6) Includes 133,708 shares of Class A Common Stock and 189,584 shares of Class
B Common Stock owned of record by Mr. George H. Hightower, Jr. Also
includes 30,000 shares of Class A Common Stock and 31,640 shares of Class B
Common Stock that Mr. Hightower could acquire upon the exercise of options
within 60 days of August 28, 1996.
(7) Includes 100,449 shares of Class A Common Stock and 157,195 shares of Class
B Common Stock owned of record by Mr. Neil H. Hightower; 6,360 shares of
Class A Common Stock and 600 shares of Class B Common Stock owned of record
by Mr. Hightower's wife; 231,048 shares of Class A Common Stock and 77,016
shares of Class B Common Stock owned of record by the Community Foundation
and 27,834 shares of Class A Common Stock and 13,632 shares of Class B
Common Stock owned of record by the Upson Trust. Mr. Hightower serves as a
trustee of the Community Foundation and the Upson Trust, the shares of
which are voted in accordance with the wishes of the majority of the
trustees. Mr. Hightower disclaims beneficial ownership with respect to
shares owned by his wife, the Community Foundation and the Upson Trust.
Also includes 30,000 shares of Class A Common Stock and 31,640 shares of
Class B Common Stock that Mr. Hightower could acquire upon the exercise of
options within 60 days of August 28, 1996.
(8) Includes 144,966 shares of Class A Common Stock and 20,952 shares of Class
B Common Stock owned of record by Mr. William H. Hightower, Jr. and 231,048
shares of Class A Common Stock and 77,016 shares of Class B Common Stock
owned of record by the Community Foundation. Mr. Hightower serves as a
trustee of the Community Foundation, the shares of which are voted in
accordance with the wishes of the majority of the trustees. Mr. Hightower
disclaims beneficial ownership with respect to shares owned by the
Community Foundation.
(9) Includes 2,276 shares of Class B Common Stock owned of record by Mr. Rosser
R. Raines. Also includes 10,000 shares of Class A Common Stock which Mr.
Raines could acquire upon the exercise of options within 60 days of August
28, 1996.
3
<PAGE> 6
(10) Includes 113,000 shares of Class A Common Stock and 1,000 shares of Class B
Common Stock that officers, other than Mr. Neil Hightower, Mr. Stewart
Davis and Mr. George Hightower, Jr. could acquire upon the exercise of
options within 60 days of August 28, 1996, in addition to the shares listed
above as beneficially owned by Mr. Neil H. Hightower, Mr. H. Stewart Davis
and Mr. George H. Hightower, Jr.
(11) Includes 5,914 shares of Class A Common Stock and 2,110 shares of Class B
Common Stock owned of record by Mr. John R. Carson. Also includes 9,600
shares of Class A Common Stock which Mr. Carson could acquire upon the
exercise of options within 60 days of August 28, 1996.
(12) Includes 435,839 shares of Class A Common Stock and 151,656 shares of Class
B Common Stock owned of record by Mount Vernon Mills, Inc., which has sole
voting and investment power with respect to such shares, 49,000 shares of
Class A Common Stock owned of record by Pamplin Foundation, 172,350 shares
of Class A Common Stock and 6,062 shares of Class B Common Stock owned of
record by Robert B. Pamplin, and 101,045 shares of Class A Common Stock
owned of record by Christ Community Church for which Robert Pamplin, Jr.
has sole voting and investment power. R. B. Pamplin Corporation, a private
family-owned corporation of which Mr. Robert B. Pamplin is chairman, owns
Mount Vernon Mills, Inc., a textile company based in Greenville, South
Carolina.
(13) Based solely on a Schedule 13G filed with the Commission as of February 15,
1996, on behalf of Quest Advisory Corporation, Quest Management Company and
Charles M. Royce, these reporting persons have sole voting and investment
power with respect to 517,900 shares of Class A Common Stock.
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Commission and to provide copies of
such reports to the Company. Based solely on the Company's review of the copies
of such reports provided to the Company or written representations from certain
reporting persons that no annual reports were required for such persons, these
filing requirements were satisfied for the year ended June 29, 1996. The Company
has no knowledge of any reports filed under Section 16 on behalf of Mount Vernon
Mills, Inc. or any affiliates thereof.
4
<PAGE> 7
ELECTION OF DIRECTORS (PROXY ITEM 1)
Proxies in the accompanying form will be voted as indicated for the
election of the eleven nominees for director listed below to serve for one year
or until their successors are elected and shall have qualified. In the event
that any such nominees and for such other person or persons, if any, as the
present Board of Directors may designate.
<TABLE>
<CAPTION>
COMMON STOCK OWNED BENEFICIALLY
------------------------------------------------------
YEAR CLASS A NON-VOTING
FIRST COMMON STOCK CLASS B VOTING
ELECTED ----------------------- COMMON STOCK
PROPOSED DIRECTORS, 5 YEAR A DIRECTOR --------------------------
EMPLOYMENT HISTORIES AND OF THE NUMBER PERCENT NUMBER PERCENT
CERTAIN OTHER DIRECTORSHIPS AGE COMPANY OF SHARES OF CLASS OF SHARES OF CLASS
- ------------------------------- --- ---------- --------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Thomas D. Adams, Jr. 52 1976 44,168(1) 0.86 116,610(1) 6.75
President, Adams Realty
Company,
Thomaston, Georgia
C. Ronald Barfield 59 1989 28,494(1) 0.56 13,952(1) 0.81
Partner, Adams, Barfield,
Dunaway
& Hankinson
Thomaston, Georgia
Archie H. Davis 54 1993 900 * 100 *
President, CEO and Director
The Savannah Bank, N.A.
Savannah, Georgia
Formerly Senior Vice President
of Interstate/Johnson Lane
also serves as a Director of
The Savannah Bancorp
Savannah, Georgia
H. Stewart Davis 53 1981 83,167(1)(2) 1.68 254,581(1)(2) 15.32
Executive Vice President of the
Company, Thomaston, Georgia
George H. Hightower 80 1945 335,332(1)(2) 6.56 129,519(1)(2) 7.50
Retired; formerly Chairman of
the Board of the Company,
Thomaston, Georgia
George H. Hightower, Jr. 47 1981 163,708(1)(2) 3.31 221,234(1)(2) 13.31
Executive Vice President of the
Company
Thomaston, Georgia
also serves as a
Director of Thomaston Federal
Savings and Loan Association,
Thomaston, Georgia
Neil H. Hightower 55 1980 395,691(1)(2) 8.01 280,083(1)(2) 16.85
President of the Company,
Thomaston, Georgia
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
COMMON STOCK OWNED BENEFICIALLY
------------------------------------------------------
YEAR CLASS A NON-VOTING
FIRST COMMON STOCK CLASS B VOTING
ELECTED ----------------------- COMMON STOCK
PROPOSED DIRECTORS, 5 YEAR A DIRECTOR --------------------------
EMPLOYMENT HISTORIES AND OF THE NUMBER PERCENT NUMBER PERCENT
CERTAIN OTHER DIRECTORSHIPS AGE COMPANY OF SHARES OF CLASS OF SHARES OF CLASS
- ------------------------------- --- ---------- --------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
William H. Hightower, Jr. 84 1939 376,014(1)(2) 7.35 97,968(1)(2) 5.68
Retired, formerly Chairman of
the Board of the Company,
Thomaston, Georgia
Rosser R. Raines 58 1993 10,000(1) * 2,276(1) *
Treasurer of the Company
Thomaston, Georgia
Dr. Jerry M. Williamson 60 1981 1,100 * 200 *
President, Gordon College,
University System of Georgia,
Barnesville, Georgia
Dom H. Wyant 69 1983 600 * 200 *
Of Counsel, Formerly Partner
Jones, Day, Reavis & Pogue
Atlanta, Georgia;
also serves as a Director of
Atlantic American Corporation
</TABLE>
- ---------------
* Less than 1/2 of 1% of class.
(1) See footnotes to "Principal Holders of Class A and Class B Common Stock," on
Pages 2 through 4 for detailed listing of shares beneficially owned.
(2) The family relationships existing among certain of the nominees are as
follows: William H. Hightower, Jr. and George H. Hightower are brothers.
Neil H. Hightower is the son of William H. Hightower, Jr.; George H.
Hightower, Jr. is the son of George H. Hightower; H. Stewart Davis is the
nephew of William H. Hightower, Jr. and George H. Hightower.
6
<PAGE> 9
DIRECTORS COMMITTEES AND MEETINGS
The Board of Directors held six meetings during fiscal 1996. The following
table sets forth information regarding certain Committees of the Board of
Directors:
<TABLE>
<CAPTION>
COMMITTEE NUMBER OF
DESCRIPTION OF COMMITTEE MEMBERS MEETINGS HELD
- ---------------------------------------------------------- --------------------- -------------
<S> <C> <C>
Executive -- purpose of which is to act on behalf of Board G. H. Hightower 11
during the intervals between formal meetings of the full N. H. Hightower
Board, in accordance with the policies of the Company W. H. Hightower, Jr.
and its Articles of Incorporation and Bylaws.
Audit -- purpose of which is to recommend the selection of T. D. Adams, Jr. 2
an independent public accounting firm to audit the books C. R. Barfield
and records of the Company; consult with both the A. H. Davis
independent and internal accountants concerning the J. M. Williamson
scope of their work and review with them their findings; D. H. Wyant
and to monitor the internal controls of the Company.
Stock Option -- purpose of which is to administer the T. D. Adams, Jr. 1
stock option plans of the Company. C. R. Barfield
A. H. Davis
J. M. Williamson
D. H. Wyant
</TABLE>
During fiscal 1996, the Board of Directors and its committees held a total
of 19 meetings. Overall attendance at Board and Committee meetings was over 99%.
The standard arrangement for Directors fees is as follows:
<TABLE>
<S> <C>
Annual Directors Retainer Fee.............................................. $8,000
Directors Fee Per Meeting.................................................. 600
Monthly Executive Committee Fee............................................ 300
Audit Committee Per Meeting................................................ 600
</TABLE>
7
<PAGE> 10
EXECUTIVE COMPENSATION
The following table sets forth information regarding the compensation paid
by the Company for services in all capacities to the Company's Chief Executive
Officer and four most highly compensated other executive officers.
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
----------------------
NAME AND PRINCIPAL FISCAL ANNUAL COMPENSATION SECURITIES UNDERLYING ALL OTHER
POSITION YEAR SALARY OPTIONS(#) COMPENSATION(4)
- -------------------------- ------ ------------------- ---------------------- ---------------
<S> <C> <C> <C> <C>
Neil H. Hightower 1996 $ 292,750 22,000(1) $15,200
President, CEO 1995 282,758 80,000(2) 13,200
and Director 1994 271,362 -- 13,200
H. Stewart Davis 1996 265,000 22,000(1) 11,600
Executive Vice-President 1995 255,933 80,000(2) 9,600
and Director 1994 245,342 -- 9,600
George H. Hightower, Jr. 1996 265,000 22,000(1) 11,600
Executive Vice-President 1995 255,933 80,000(2) 9,600
and Director 1994 245,342 -- 9,600
8,000(3)
John Carson 1996 172,500 8,000(3) 0
Vice President 1995 169,699 -- 0
1994 166,940 0
Rosser R. Raines 1996 137,015 8,000(3) 11,000
Treasurer 1995 139,115 8,000(3) 9,600
and Director 1994 137,852 -- 9,600
</TABLE>
- ---------------
(1) Consists of 11,000 shares of Class A Common Stock and 11,000 shares of Class
B Common Stock.
(2) Consists of 40,000 shares of Class A Common Stock and 40,000 shares of Class
B Common Stock.
(3) Class A Common Stock.
(4) Amounts shown are for services as Directors, paid in accordance with the fee
schedule on Page 7.
8
<PAGE> 11
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
PERCENT OF TOTAL
NUMBER OF SECURITIES OPTIONS GRANTED
UNDERLYING TO EXERCISE OR
OPTIONS EMPLOYEES IN BASE PRICE GRANT DATE
NAME GRANTED(#) FISCAL YEAR ($/SH) EXPIRATION DATE VALUE $(1)
- ----------------------------- -------------------- ---------------- ----------- --------------- ----------
<S> <C> <C> <C> <C> <C>
Neil H. Hightower 11,000 Class A 5.95% 13.250 08-14-04 $ 43,560
11,000 Class B 33.33% 13.625 08-14-04 50,160
H. Stewart Davis 11,000 Class A 5.95% 13.250 08-14-04 43,560
11,000 Class B 33.33% 13.625 08-14-04 50,160
George H. Hightower, Jr. 11,000 Class A 5.95% 13.250 08-14-04 43,560
11,000 Class B 33.33% 13.625 08-14-04 50,160
John R. Carson 8,000 Class A 4.32% 13.250 08-14-04 31,680
-- -- -- -- --
Rosser R. Raines 8,000 Class A 4.32% 13.250 08-14-04 31,680
-- -- -- -- --
</TABLE>
- ---------------
(1) The value was calculated using the Black-Scholes methodology. The Company's
future stock performance will not necessarily be consistent with such
valuation.
9
<PAGE> 12
The table below sets forth information as of June 29, 1996 with respect to
exercised and unexercised stock options by the executive officers of the Company
named in the Summary Compensation Table.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS IN-THE-MONEY OPTIONS
SHARES AT FISCAL YEAR END(#) AT FISCAL YEAR END*($)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------------- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Neil H. Hightower
Class A 0 0 30,000 0 2,400 0
Class B 0 0 31,640 0 2,835 0
H. Stewart Davis
Class A 0 0 30,000 0 2,400 0
Class B 0 0 31,640 0 2,835 0
George H. Hightower, Jr.
Class A 0 0 30,000 0 2,400 0
Class B 0 0 31,640 0 2,835 0
John R. Carson
Class A 0 0 9,600 0 2,400 0
Class B 0 0 -- -- -- --
Rosser R. Raines
Class A 0 0 10,000 0 3,000 0
Class B 0 0 -- -- -- --
</TABLE>
- ---------------
* Based on the closing price reported on NASDAQ at fiscal year end less the
exercise price.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
---------------------------------------------------------
REMUNERATION(1) 15 20 25 30 35 AND OVER
--------------- ------ ------ ------- ------- -----------
<S> <C> <C> <C> <C> <C>
75,000 10,662 14,217 17,771 21,325 24,879
100,000 14,975 19,967 24,958 29,950 34,942
125,000 19,287 25,717 32,146 38,575 45,004
150,000 23,600 31,467 39,333 47,200 55,067
175,000 27,917 37,217 46,521 55,825 65,129
200,000 32,225 42,967 53,708 64,450 75,192
225,000 36,537 48,717 60,896 73,075 85,254
250,000 40,850 54,467 68,083 81,700 95,317
275,000 45,162 60,217 75,271 90,325 105,379
300,000 49,475 65,967 82,458 98,950 115,442
400,000 66,725 88,967 111,208 133,450 155,692
</TABLE>
- ---------------
(1) Five-Year Average Annual Compensation
The table above sets forth the estimated annual benefit payable upon
retirement at normal retirement age 65 and under (i) the Company's
noncontributory retirement plan covering salaried employees (the "Retire-
10
<PAGE> 13
ment Plan") and (ii) with respect to four executive officers whose benefits
under the Retirement Plan are subject to certain restrictions which apply to
tax-qualified plans, Executive Compensation Continuation Agreements (the
"Supplemental Agreements") entered into between the Company and such executives.
The estimated annual benefits payable set forth above are based on the indicated
assumptions as to average annual compensation and years of service as a plan
member, and the maximum Covered Compensation amount applicable in 1995 of
$27,576. The Retirement Plan provides a retirement benefit at normal retirement
for full career employees (35 years of service) of 40.25% of earnings in excess
of Covered Compensation and 21.00% earnings under Covered Compensation. Covered
Compensation is the average of the Social Security Wage Bases for the 35 years
ending in the year of attainment of the Social Security Retirement Age. Annual
employer's contributions to the Retirement Plan are determined by actuarial
computations to fund the Retirement Plan. Amounts contributed are not allocated
to individual participants. The term compensation is defined in the Retirement
Plan as all salaries paid. The credited years of service under the Retirement
Plan for the officers named in the foregoing compensation table as of August 28,
1996, were: Mr. Neil H. Hightower (age 55)-31 years; Mr. H. Stewart Davis (age
53)-32 years; Mr. George H. Hightower, Jr. (age 47)-22 years; Mr. John R. Carson
(age 61)-35 years; Mr. Rosser R. Raines (age 58)-34 years.
The Supplemental Agreements obligate the Company to provide pension and/or
death benefits to the executives in question which will supplement those
benefits paid under the Retirement Plan, and will be equal to the difference
between the benefit which the executive or his beneficiary would receive from
the Retirement Plan in the absence of federally-imposed limitations on the
amount of compensation which may be considered for purposes of the Retirement
Plan and on the maximum amount of benefits payable from tax-qualified plans, and
the amount which the executive of beneficiary in fact receives from the
Retirement Plan. For purposes of these agreements, the definition of
compensation does not include any gain which might result from exercise of any
stock options granted to the executive by the Company. This benefit is unfunded
and may be forfeited by the executive in certain circumstances.
JOINT EXECUTIVE COMMITTEE AND STOCK OPTION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
The Executive Committee recommends proposed compensation for each of the
Company's executive officers to the Board of Directors. While the profitability
of the Company is generally considered with respect to executive compensation,
no specific thresholds or formulas are used. Factors considered by the Executive
Committee are typically subjective, including any planned changes in functional
responsibilities and the Executive Committee's perception of the individual's
performance. The compensation of the Chief Executive Officer is determined in
the same manner as the compensation of other executive officers.
The Company has granted stock options to its executive officers in the past
to strengthen the mutuality of interest between the Company's senior management
and shareholders. Executive officers are encouraged to accumulate stock of the
Company over time. Stock options help to retain and motivate executives, but
reward executives only for overall performance which improves returns for
shareholders. Each of the Company's executive officers has been granted stock
options in previous years pursuant to the Company's stock option plans. Stock
options provided under the 1994 Stock Option Plan were granted to executives
during Fiscal Year 1996 and are included in the table on page 9 of the Proxy
Report.
Federal tax legislation enacted in 1993 would preclude public companies
from taking a tax deduction for compensation over $1 million which is not
"performance-based" and is paid, or otherwise taxable to persons named in the
Summary Compensation Table and employed by the Company at the end of the
applicable tax year. No named executive officer is likely to earn over $1
million in the near future. The Company intends to monitor executive
compensation with respect to federal tax law.
11
<PAGE> 14
The Executive Committee has approved the Supplemental Agreements with
executive officers whose benefits under the Retirement Plan would be subject to
certain restrictions which apply to tax-qualified plans. The purpose of the
Supplemental Agreements is to ensure that each executive officer's total
retirement income benefit will equal the amounts that would have been payable
under the Retirement Plan to him absent such limitations.
Submitted by the Executive Committee and of the Board of Directors the
Stock Option Committee of the Board of Directors.
<TABLE>
<CAPTION>
Executive Committee Stock Option Committee
-------------------------------------------------------------------------------
<S> <C>
Neil H. Hightower Thomas D. Adams, Jr.
William H. Hightower, Jr. C. Ronald Barfield
George H. Hightower Archie H. Davis
Jerry M. Williamson
Dom H. Wyant
</TABLE>
EXECUTIVE COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Executive Committee consists of Neil H. Hightower, George H. Hightower
and William H. Hightower, Jr. Neil H. Hightower is an executive officer of the
Company. George H. Hightower and William H. Hightower, Jr. are former executive
officers of the Company.
12
<PAGE> 15
STOCK PERFORMANCE GRAPH
The following graph compares, for a five-year period ending June 29, 1996,
the Company's total return to Class A shareholders (stock price increase plus
dividends, divided by beginning stock price) with that of (i) Standard & Poor's
500 Composite Index and (ii) a peer group comprised of the following publicly
traded textile companies:
Burlington Industries, Inc.
Cone Mills Corp.
Delta Woodside Industries, Inc.
Dixie Yarns, Inc.
Dominion Textile, Inc.
Fieldcrest Cannon, Inc.
Galey & Lord, Inc.
Springs Industries, Inc. (Class A)
Texfi Industries, Inc.
<TABLE>
<CAPTION>
THOMASTON
Measurement Period MILLS, CLASS
(Fiscal Year Covered) A S&P 500 PEER GROUP
<S> <C> <C> <C>
1990 100.00 100.00 100.00
1991 81.89 107.40 109.19
1992 194.32 121.80 114.05
1993 218.65 138.40 126.79
1994 194.15 140.35 119.17
1995 141.43 176.94 108.80
</TABLE>
- - ASSUMES INITIAL INVESTMENT OF $100
- - USES AVERAGE BEGINNING OF PERIOD MARKET CAPITALIZATION WEIGHTING
- - PEER GROUP EXCLUDES THOMASTON MILLS, INC., PERFORMANCE
13
<PAGE> 16
TRANSACTIONS BETWEEN COMPANY
AND DIRECTORS, OFFICERS AND OWNERS
In the ordinary course of its business, the Company purchases cloth and
other textile products at prevailing market prices from a variety of suppliers,
including Mount Vernon Mills, Inc., which is the beneficial owner of more than
5% of the outstanding Class B Common Stock. During the last fiscal year, Company
purchases from Mount Vernon Mills, Inc. amounted to approximately $7.2 million.
Except as set forth above, in the last fiscal year there have been no
transactions or series of similar transactions, nor are there any currently
proposed transactions or series of similar transactions, exceeding $60,000, to
which the Company or any of its subsidiaries was or is to be a party, with any
director, director nominee, executive officer, beneficial or record shareholder
owning more than 5% of the outstanding Class B Common Stock, or any member of
the immediate family of any of the foregoing persons. Director nominee Dom H.
Wyant is Of Counsel to the law firm of Jones, Day, Reavis & Pogue, which was
retained for legal services. Director nominee C. Ronald Barfield is a partner of
the law firm Adams, Barfield, Dunaway & Hankinson, which was also retained for
legal services.
APPROVAL OF SELECTION OF INDEPENDENT AUDITORS (PROXY ITEM 2)
The Board of Directors of the Company has selected Ernst & Young LLP,
certified public accountants, to serve as independent auditors for the ensuing
fiscal year, subject to ratification by the Company's shareholders.
A representative of Ernst & Young LLP is expected to be present at the
shareholders' meeting and have the opportunity to make a statement if he so
desires. Such representative will be available to respond to appropriate
questions.
Except in its capacity as independent auditors, Ernst & Young LLP has no
direct or indirect financial interest in the Company and has not had any such
interest during the past three years.
The Audit Committee of the Board of Directors approved all of the non-audit
services provided by Ernst & Young LLP and believes they have no effect on audit
independence.
SHAREHOLDERS ENTITLED TO VOTE AND VOTE REQUIRED FOR ACTION
Only shareholders of record of Class B Common Stock at the close of
business on August 22, 1996 will be entitled to vote at the meeting. Each
shareholder of record on the record date is entitled to one vote for each share
of Class B Common Stock of the Company held by him. With respect to each of the
proposals to be presented at the Annual Meeting of Shareholders and with respect
to the election of the eleven nominees for director, a majority of the votes
represented at the meeting will be required for approval. Under the Company's
Bylaws, properly executed proxies either marked "abstain" or held in "street
name" by brokers that are not voted on one or more particular matters (if
otherwise voted on at least one matter) will be counted for purposes of
determining whether a quorum has been achieved at the Annual Meeting but will
not be treated as either a vote for or a vote against any of the matters to
which such abstention or broker non-vote applies.
The Company has 4,909,630 shares of Class A Common Stock outstanding as of
August 28, 1996. The Class A Common Stock has no voting rights except as may
otherwise be required by law. No action involving such voting rights is expected
to be proposed at the Annual Meeting to be held on October 3, 1996.
14
<PAGE> 17
SHAREHOLDERS' PROPOSALS
Shareholders' proposals intended for inclusion in next year's proxy
statement should be sent to the Secretary of the Company, P.O. Box 311,
Thomaston, Georgia 30286 and must be received by April 30, 1997.
OTHER MATTERS WHICH MAY COME BEFORE THE MEETING
The management does not know of any matter other than those referred to in
the accompanying notice of the Annual Meeting of Shareholders which is to come
before the meeting. As to any other matters of proposals that may legally come
before the meeting, it is the intention of the persons named as attorneys in the
proxy to vote said proxy in accordance with their best judgment.
THE DIRECTORS AND MANAGEMENT RECOMMEND A VOTE FOR THE ELECTION OF THE
ELEVEN NOMINEES AS DIRECTORS; AND FOR RATIFYING THE SELECTION OF ERNST & YOUNG
LLP AS INDEPENDENT AUDITORS FOR THE COMPANY.
IF YOU DO NOT PLAN TO ATTEND THE MEETING, PLEASE SIGN AND RETURN THE
ENCLOSED PROXY.
15
<PAGE> 18
<TABLE>
APPENDIX A
<S> <C>
THOMASTON MILLS, INC. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
115 EAST MAIN STREET PROXY The undersigned hereby appoints Neil H. Hightower and George H.
P.O. BOX 311, THOMASTON, GEORGIA 30286 Hightower, Sr. as Proxies, or either of them, each with full power of
- ---------------------------------------- substitution, and hereby authorizes them to represent and to vote, as
designated below, all the shares of Class B Common Stock of Thomaston
Mills, Inc. held of record by the undersigned on August 22, 1996 at the
annual meeting of shareholders to be held on October 3, 1996 or any
adjournment thereof, at the Employee Relations Office, 207 East Gordon
St., Thomaston, GA 30286.
MANAGEMENT RECOMMENDS A VOTE FOR ALL PROPOSALS.
1. ELECTION / / FOR all nominees listed below / / WITHHOLD AUTHORITY / / ABSTAIN
OF (except as marked to the contrary below) to vote for all nominees listed below
DIRECTORS
</TABLE>
Thomas D. Adams, Jr., C. Ronald Barfield, H. Stewart Davis, William H.
Hightower, Jr., George H. Hightower, Archie H. Davis,
Rosser R. Raines, Neil H. Hightower, George H. Hightower, Jr., Dr. Jerry M.
Williamson, Dom H. Wyant
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE WRITE
THAT NOMINEE'S NAME ON THE SPACE PROVIDED BELOW:)
- --------------------------------------------------------------------------------
2. TO APPROVE THE SELECTION OF ERNST & YOUNG LLP as the independent auditors of
the corporation
/ / FOR / / AGAINST / / ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
(continued, and to be signed, on the other side)
PROXY
THOMASTON MILLS, INC. ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON OCTOBER 3,
1996
This proxy when properly executed will be voted in the manner directed herein by
the undersigned shareholder.
If no direction is made, this
proxy will be voted for each
Proposal. Please sign exactly
as name appears below. When
shares are held by joint
tenants, both should sign.
When signing as attorney, as
executor, administrator,
trustee or guardian, please
give full title as such. If a
corporation, please sign in
full corporate name by
President or other authorized
officer. If a partnership,
please sign in partnership
name by authorized person.
Dated: ,1996
------------------
--------------------------------
Signature
--------------------------------
Signature if held jointly
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE
