<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>
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] 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
THOMASTON MILLS, INC.
(THOMASTON MILLS, INC. LOGO)
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 7, 1999
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 7, 1999 at
11:00 A.M., Eastern Daylight Saving Time, for the following purposes:
(1) To elect a Board of ten Directors;
(2) To approve the selection of Ernst & Young LLP, certified public
accountants, as independent auditors for the Company for the fiscal year
2000; 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 24, 1999 will be entitled to notice of, and to vote at, the meeting or
any adjournment thereof.
By Order of the Board of Directors,
/s/ Neil H. Hightower
NEIL H. HIGHTOWER
President and Chief
Executive Officer
Dated: September 14, 1999
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 7, 1999
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 7, 1999 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 ten
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 July 1, 2000.
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 ten nominees for director; and in favor of the
selection of Ernst & Young LLP as independent auditors of the Company for the
fiscal year ending July 1, 2000.
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
24, 1999 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 24, 1999, there were
1,630,366 shares of Class B Common Stock issued, outstanding and entitled to be
voted, and 4,909,680 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 September 14, 1999.
<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 September 10, 1999 by (i) each director of the Company, (ii) each
executive officer of the Company named in the Summary Compensation Table on page
7, (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
BENEFICIALLY OF CLASS BENEFICIALLY OF CLASS
NAME OF BENEFICIAL OWNER OWNED OUTSTANDING OWNED OUTSTANDING
------------------------ ------------ ----------- ------------ -----------
<S> <C> <C> <C> <C>
Thomas D. Adams, Jr.(1)............................ 44,168 0.84 116,610 6.33
C. Ronald Barfield(2).............................. 28,494 0.54 16,552 0.90
Archie H. Davis.................................... 900 * 100 *
H. Stewart Davis(3)(4)............................. 115,612 2.33 293,425 17.26
Charles F. Eichelberger(5)......................... 0 * 250 *
George H. Hightower(3)(6).......................... 328,032 6.26 130,267 7.08
George H. Hightower, Jr.(3)(7)..................... 200,308 4.03 268,970 15.82
Neil H. Hightower(3)(8)............................ 429,252 8.63 327,504 19.26
William H. Hightower, Jr.(3)(9).................... 338,755 6.47 96,324 5.23
William H. Hightower, IV(3)(10).................... 38,023 0.77 111,561 6.84
Jonathan O. Huff(3)(11)............................ 26,937 0.51 704 *
A. William Ott(3)(12).............................. 2,400 0.05 3,000 0.16
Rosser R. Raines(13)............................... 17,000 * 2,276 *
Dr. Jerry M. Williamson............................ 1,100 * 200 *
Dom H. Wyant....................................... 600 * 200 *
All directors and executive officers as a group(22
persons)(14)..................................... 1,128,318 21.53 1,071,559 58.21
Mount Vernon Mills, Inc.(15)....................... 1,011,034 20.59 162,318 9.96
Quest Advisory Corporation and Quest Management
Company(16)...................................... 425,100 8.66 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 186,188 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
<PAGE> 5
(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 16,232 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 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
30286-0004.
(4) Includes 54,012 shares of Class A Common Stock and 96,963 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 61,600 shares of Class A Common Stock and 70,124 shares of Class
B Common Stock which Mr. Davis could acquire upon the exercise of options
within 60 days of September 10, 1999.
(5) Includes 250 shares of Class B Common Stock owned of record by Mr. Charles
Eichelberger.
(6) Includes 69,150 shares of Class A Common Stock and 37,019 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 16,232 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.
(7) Includes 138,708 shares of Class A Common Stock and 198,846 shares of
Class B Common Stock owned of record by Mr. George H. Hightower, Jr. Also
includes 61,600 shares of Class A Common Stock and 70,124 shares of Class
B Common Stock that Mr. Hightower could acquire upon the exercise of
options within 60 days of September 10, 1999.
(8) Includes 100,449 shares of Class A Common Stock and 163,532 shares of
Class B Common Stock owned of record by Mr. Neil H. Hightower; 8,321
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 16,232
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 61,600 shares of Class A Common Stock and
70,124 shares of Class B Common Stock that Mr. Hightower could acquire
upon the exercise of options within 60 days of September 10, 1999.
(9) Includes 107,707 shares of Class A Common Stock and 19,308 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
3
<PAGE> 6
accordance with the wishes of the majority of the trustees. Mr. Hightower
disclaims beneficial ownership with respect to shares owned by the
Community Foundation.
(10) Includes 23,732 shares of Class A Common Stock and 1,964 shares of Class B
Common Stock owned of record by Mr. William H. Hightower, IV and 4,491
shares of Class A Common Stock and 200 shares of Class B Common Stock
owned of record by Mr. Hightower's wife. Mr. Hightower holds voting rights
from family members for 109,397 shares of Class B Common Stock. Also
includes 9,800 shares of Class A Common Stock which Mr. Hightower could
acquire upon the exercise of options within 60 days of September 10, 1999.
(11) Includes 7537 shares of Class A common Stock and 704 shares of Class B
Common Stock owned by Mr. Jonathan O. Huff and 1600 shares of Class A
Common Stock owned by his wife. Also includes 17,800 shares of Class A
Common Stock which Mr. Huff could acquire upon the exercise of options
within 60 days of September 10, 1999.
(12) Includes 3,000 shares of Class B Common Stock owned by Mr. A. William Ott.
Also includes 2400 shares of Class A Common Stock which Mr. Ott could
acquire upon the exercise of options within 60 days of September 10, 1999.
(13) Includes 2,276 shares of Class B Common Stock owned of record by Mr.
Rosser R. Raines. Also includes 17,000 shares of Class A Common Stock
which Mr. Raines could acquire upon the exercise of options within 60 days
of September 10, 1999.
(14) Includes 144,600 shares of Class A 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 September 10, 1999,
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.
(15) 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,
425,150 shares of Class A Common Stock and 10,662 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.
(16) Based solely on a Schedule 13G filed with the Commission as of February
10, 1999, 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 425,100 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 July 3, 1999. 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 ten 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 nominee is unable to serve, an event which is not anticipated, such
proxies will be voted for the remaining 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 ---------------------------------------------------
FIRST CLASS A NON-VOTING CLASS B VOTING
ELECTED COMMON STOCK 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. 55 1976 44,168(1) 0.84 116,610(1) 6.33
President, Adams Realty Company,
Thomaston, Georgia
C. Ronald Barfield 62 1989 28,494(1) 0.54 16,552(1) 0.90
Partner, Adams, Barfield, Dunaway
& Hankinson
Thomaston, Georgia
Archie H. Davis 57 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 and
Savannah Electric and Power Co.,
Inc., a division of the Southern Co.
H. Stewart Davis 56 1981 115,612(1)(2) 2.33 293,425(1)(2) 17.26
Executive Vice President of the
Company
Thomaston, Georgia
George H. Hightower 83 1945 328,032(1)(2) 6.26 130,267(1)(2) 7.08
Retired; formerly Chairman of
the Board of the Company,
Thomaston, Georgia
George H. Hightower, Jr. 50 1981 200,308(1)(2) 4.03 268,970(1)(2) 15.82
Executive Vice President of the
Company
Thomaston, Georgia;
also serves as a Director of
Thomaston Federal Savings Bank
Thomaston, Georgia
Neil H. Hightower 58 1980 429,252(1)(2) 8.63 327,504(1)(2) 19.26
President and CEO of the Company,
Thomaston, Georgia
Rosser R. Raines 61 1993 17,000(1) * 2,276(1) *
Retired, formerly Treasurer
of the Company
Thomaston, Georgia
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
COMMON STOCK OWNED BENEFICIALLY
YEAR ---------------------------------------------------
FIRST CLASS A NON-VOTING CLASS B VOTING
ELECTED COMMON STOCK 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>
Dr. Jerry M. Williamson 63 1981 1,100 * 200 *
President, Gordon College,
University System of Georgia,
Barnesville, Georgia
Dom H. Wyant 72 1983 600 * 200 *
Retired 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: George H. Hightower, Jr. is the son of George H. Hightower. Neil H.
Hightower and H. Stewart Davis are the nephews of George H. Hightower.
DIRECTORS COMMITTEES AND MEETINGS
The Board of Directors held eight meetings during fiscal 1999. 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 10
during the intervals between formal meetings of the full N. H. Hightower
Board, in accordance with the policies of the Company and W. H. Hightower, Jr.
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 scope J. M. Williamson
of their work and review with them their findings; and to D. H. Wyant
monitor the internal controls of the Company.
Stock Option -- purpose of which is to administer the stock T. D. Adams, Jr. 2
option plans of the Company C. R. Barfield
A. H. Davis
J. M. Williamson
D. H. Wyant
</TABLE>
6
<PAGE> 9
During fiscal 1999, the Board of Directors and its committees held a total
of 22 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>
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.
LONG TERM COMPENSATION
<TABLE>
<CAPTION>
ANNUAL SECURITIES
FISCAL COMPENSATION UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY OPTIONS(#) COMPENSATION(3)
- --------------------------- ------ ------------ ---------- ---------------
<S> <C> <C> <C> <C>
Neil H. Hightower 1999 $314,981 -0- $16,400
President, CEO and Director 1998 305,910 41,473(1) 15,200
1997 301,455 -0- 15,200
H. Stewart Davis 1999 285,286 -0- 12,200
Executive Vice-President and Director 1998 277,070 41,473(1) 11,600
1997 273,035 -0- 11,600
George H. Hightower, Jr. 1999 285,286 -0- 12,800
Executive Vice-President and Director 1998 277,070 41,473(1) 11,600
1997 273,035 -0- 11,600
A. William Ott(4) 1999 154,448 -0- -0-
Treasurer and CFO 1998 25,000 6,000(2) -0-
1997 -0- -0- -0-
Jonathan O. Huff 1999 139,992 -0- -0-
Vice President 1998 135,960 3,000(2) -0-
1997 136,080 -0- -0-
Rosser R. Raines(5) 1999 71,081 -0- 12,800
Treasurer and Director 1998 142,161 3,000(2) 11,600
1997 140,091 -0- 11,600
Charles F. Eichelberger(6) 1999 72,093 -0- -0-
Vice President 1998 140,080 3,000(2) -0-
1997 138,040 -0- -0-
</TABLE>
- ---------------
(1) Consists of 15,000 shares of Class A Common Stock and 26,473 shares of Class
B Common Stock.
(2) Class A Common Stock.
(3) Amounts shown are for services as Directors, paid in accordance with the fee
schedule on Page 7.
(4) Mr. Ott joined the Company May 1, 1998.
(5) Mr. Raines retired from the Company October 1, 1998 but remains as a
Director.
(6) Mr. Eichelberger resigned from the Company effective December 31, 1998.
7
<PAGE> 10
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The Company did not grant any stock options or stock appreciation rights to
any of the executive officers named herein during fiscal 1999.
The following table sets forth information as of July 3, 1999 with respect
to exercised and unexercised stock options by the executive officers of the
Company named in the Summary Compensation Table.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED IN-THE-MONEY
SHARES OPTIONS OPTIONS
ACQUIRED VALUE AT FISCAL YEAR END(#) AT FISCAL YEAR END*($)
ON REALIZED --------------------------- ---------------------------
NAME EXERCISE(#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Neil H. Hightower
Class A -- -- 61,600 -- $-0- --
Class B -- -- 70,124 -- -0- --
H. Stewart Davis
Class A -- -- 61,600 -- -0- --
Class B -- -- 70,124 -- -0- --
George H. Hightower, Jr.
Class A -- -- 61,600 -- -0- --
Class B -- -- 70,124 -- -0- --
A. William Ott
Class A -- -- 2,400 -- -0- --
Class B -- -- -- -- -- --
Jonathan O. Huff
Class A -- -- 17,800 -- -0- --
Class B -- -- -- -- -- --
</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..... 10,210 13,613 17,017 20,420 23,823
100,000.... 14,523 19,363 24,204 29,045 33,886
125,000.... 18,835 25,113 31,392 37,670 43,948
150,000.... 23,148 30,863 38,579 46,295 54,011
175,000.... 27,460 36,613 45,767 54,920 64,073
200,000.... 31,773 42,363 52,954 63,545 74,136
225,000.... 36,085 48,113 60,142 72,170 84,198
250,000.... 40,398 53,863 67,329 80,795 94,261
275,000.... 44,710 59,613 74,517 89,420 104,323
300,000.... 49,023 65,363 81,704 98,045 114,386
400,000.... 66,273 88,363 110,454 132,545 154,636
</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 "Retirement
Plan") and (ii) with respect to three executive officers whose benefits under
the Retirement Plan are subject to certain restrictions which apply to
tax-qualified plans, Executive Compensation Continuation
8
<PAGE> 11
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 1999 of $33,060. 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% of 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 September 10, 1999, were: Mr. Neil H. Hightower (age
58)-34 years; Mr. H. Stewart Davis (age 56)-35 years; Mr. George H. Hightower,
Jr. (age 50)-25 years; Mr. Charles F. Eichelberger (age 60)-15 years; Mr. Rosser
R. Raines (age 61)-35 years; Mr. A. William Ott (age 43)-1 year; and Mr.
Jonathan O. Huff (age 58)- 25 years.
The Supplemental Agreements obligate the Company to provide pension and/or
death benefits to certain executives that 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 or 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 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 1997 Stock Option Plan were granted to one executive
hired during fiscal year 1999.
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
9
<PAGE> 12
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.
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 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
Dr. 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.
10
<PAGE> 13
STOCK PERFORMANCE GRAPH
The following graph compares, for a five-year period ending July 3, 1999,
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.
Galey & Lord, Inc.
Springs Industries, Inc. (Class A)
(Stock Performance Graph)
- ASSUMES INITIAL INVESTMENT OF $100
- USES AVERAGE BEGINNING OF PERIOD MARKET CAPITALIZATION
- PEER GROUP EXCLUDES THOMASTON MILLS, INC. PERFORMANCE
11
<PAGE> 14
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 $1.7 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 a retired partner of 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 24, 1999 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 ten 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 4,909,680 shares of Class A Common Stock outstanding as of
August 24, 1999. 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 7, 1999.
12
<PAGE> 15
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 May 16, 2000. In accordance
with the rules of the Securities and Exchange Commission, the Company may
exercise discretionary authority to vote proxies with respect to any shareholder
proposal to be presented at the Company's 2000 Annual Meeting of Shareholders
but not included in the Company's proxy statement for such meeting if the
shareholder making the proposal has not given notice to the Company by July 31,
2000.
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 or 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 TEN
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.
13
<PAGE> 16
THOMASTON MILLS, INC.
115 EAST MAIN STREET
P.O. BOX 311, THOMASTON, GEORGIA 30286-0004
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Neil H. Hightower and George H. 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 Stock of Thomaston Mills, Inc., held of record by the undersigned on
August 24, 1999 at the annual meeting of shareholders to be held on October 7,
1999 or any adjournment thereof, at the Employee Relations Office, 207 East
Gordon Street, Thomaston, Georgia 30286-0004
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.
MANAGEMENT RECOMMENDS A VOTE FOR ALL PROPOSALS.
PLEASE VOTE, DATE, AND SIGN ON REVERSE SIDE AND RETURN PROMPTLY IN ENCLOSED
ENVELOPE.
Please sign exactly as your name(s) appear(s) on the reverse side of this card.
When shares are held by joint tenants, both should sign. When signing as
attorney, 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.
HAS YOUR ADDRESS CHANGED?
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FOLD AND DETACH HERE
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<PAGE> 17
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
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THOMASTON MILLS, INC.
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<TABLE>
<CAPTION>
1. Election of Directors.
<S> <C> <C> <C> <C>
FOR ALL WITH- FOR ALL
NOMINEES HOLD EXCEPT
THOMAS D. ADAMS, JR. ROSSER R. RAINES [ ] [ ] [ ]
C. RONALD BARFIELD NEIL H. HIGHTOWER
H. STEWART DAVIS GEORGE H. HIGHTOWER, JR.
GEORGE H. HIGHTOWER DR. JERRY M. WILLIAMSON
ARCHIE H. DAVIS DOM H. WYANT
NOTE: IF YOU DO NOT WISH YOUR SHARES VOTED "FOR" A PARTICULAR NOMINEE, MARK THE
"FOR ALL EXCEPT" BOX AND STRIKE A LINE THROUGH THE NAME(S) OF THE NOMINEE(S).
YOUR SHARES WILL BE VOTED FOR THE REMAINING NOMINEE(S).
2. To approve the selection of Ernst & Young LLP as FOR AGAINST ABSTAIN
the independent auditors of the corporation. [ ] [ ] [ ]
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
Mark box at right if an address change has been [ ]
noted on the reverse side of this card.
</TABLE>
RECORD DATE SHARES:
Please be sure to sign and date this Proxy. Date:_____________
______________________________ __________________________________
Shareholder sign here Co-owner sign here
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