UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
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:
[X] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
Dan River Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Dan River Inc.
- --------------------------------------------------------------------------------
(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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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[_] 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
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Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
LOGO
March 28, 2002
To our shareholders:
We cordially invite you to attend our annual meeting of shareholders, which
is to be held on April 30, 2002 at the Riverview Inn in Danville, Virginia. The
meeting will start at 10 a.m. EDT.
On the ballot at this year's annual meeting are our proposals (1) to elect
one director to our board of directors and (2) to approve proposed amendments to
our amended and restated articles of incorporation that will effect a reverse
split of our issued and outstanding common stock, which will combine a whole
number of outstanding shares of common stock between two and five into one share
of common stock, depending upon a determination by our board of directors that a
reverse stock split is in our best interests and the best interests of our
shareholders, and authorizing the board of directors to file one such amendment.
As a shareholder, your vote is important. We hope that you will attend the
annual meeting. In the meantime, please complete, sign and return your proxy
card in the enclosed envelope, or follow the other voting procedures described
in this proxy statement as soon as possible to ensure that your shares will be
represented and voted at the meeting. If you attend the annual meeting, you may
vote your shares in person even though you have previously signed and returned
your proxy.
On behalf of your board of directors, thank you for your support of and
interest in Dan River.
Sincerely,
LOGO
Joseph L. Lanier, Jr.
Chairman of the Board and
Chief Executive Officer
LOGO
_______________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on April 30, 2002
_______________
TIME: 10:00 a.m., EDT on April 30, 2002
PLACE: Riverview Inn
Danville, Virginia
ITEMS OF BUSINESS: (1) To elect one director.
(2) To approve proposed amendments to our amended and
restated articles of incorporation that will effect
a reverse split of our issued and outstanding Class A
Common Stock and Class B Common Stock, which will
combine a whole number of outstanding shares of Common
Stock between two and five into one share of Common
Stock, depending upon a determination by our board of
directors that a reverse stock split is in our best
interests and the best interests of our shareholders,
and authorizing the board of directors to file one such
amendment.
(3) To transact any other business that properly comes
before the meeting or any adjournment of the meeting.
WHO MAY VOTE: You can vote if you were a holder of Class A Common Stock or
Class B Common Stock of record on March 1, 2002.
ANNUAL REPORT: A copy of our Annual Report is enclosed.
DATE OF NOTICE: March 28, 2002.
DATE OF MAILING: This notice and the proxy statement are first being mailed
to shareholders on or about March 28, 2002.
DAN RIVER INC.
2291 Memorial Drive
Danville, Virginia 24541
_____________
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 30, 2002
_____________
ABOUT THE MEETING
Who is furnishing this proxy statement?
This proxy statement is being furnished to our shareholders by our board of
directors in connection with the solicitation of proxies by the board of
directors. The proxies will be used at our annual meeting of shareholders to be
held on April 30, 2002.
What am I voting on?
You will be voting on the following:
. To elect one director,
. To approve proposed amendments to our amended and restated articles of
incorporation that will effect a reverse split of our issued and
outstanding Class A Common Stock and Class B Common Stock, which will
combine a whole number of outstanding shares of Common Stock between two
and five into one share of Common Stock, depending upon a determination
by our board of directors that a reverse stock split is in our best
interests and the best interests of our shareholders, and authorizing
the board of directors to file one such amendment, and
. Any other business that properly comes before the annual meeting.
You may not cumulate your votes for any matter being voted on at the annual
meeting and you are not entitled to appraisal or dissenters' rights.
Who can vote?
You may vote if you owned Class A Common Stock or Class B Common Stock as
of the close of business on March 1, 2002. As of March 1, 2002, there were
20,324,439 shares of Class A Common Stock and 2,062,070 shares of Class B Common
Stock outstanding and eligible to vote at the annual meeting.
How do I vote?
You may vote:
. over the internet at the address shown on your proxy card,
. by telephone through the number shown on your proxy card,
. by completing, signing and returning the enclosed proxy card, or
. by attending the meeting and voting in person.
If you hold your shares in the name of a bank or broker, the availability of
telephone and internet voting depends on their voting processes. Please follow
the directions on your proxy card carefully.
1
Can I vote at the meeting?
You may vote your shares at the meeting if you attend in person. Even if
you plan to be present at the meeting, we encourage you to vote your shares by
proxy. You may vote your proxy via the internet, by telephone or by mail.
What if my shares are registered in more than one person's name?
If you own shares that are registered in the name of more than one person,
each person should sign the enclosed proxy. If the proxy is signed by an
attorney, executor, administrator, trustee, guardian or by any other person in a
representative capacity, the full title of the person signing the proxy should
be given and a certificate should be furnished showing evidence of appointment
of such person in a representative capacity.
What does it mean if I receive more than one proxy card?
It means you have multiple accounts with brokers and/or our transfer agent.
Please vote all of these shares. We recommend that you contact your broker
and/or our transfer agent to consolidate as many accounts as possible under the
same name and address. Our transfer agent is EquiServe Trust Company, P.O. Box
43012, Providence, RI 02940-3011 and may be reached at (800) 633-4236.
What if I return my proxy card but do not provide voting instructions?
If you sign and return your proxy but do not include instructions, your
proxy will be voted:
. FOR the election of Richard L. Williams; and
. FOR the approval of proposed amendments to our amended and restated
articles of incorporation that will effect a reverse split of our issued
and outstanding Class A Common Stock and Class B Common Stock, which
will combine a whole number of outstanding shares between two and five
of each of the Class A Common Stock and Class B Common Stock into one
share of Class A Common Stock and Class B Common Stock, respectively,
depending upon a determination by our board of directors that a reverse
stock split is in our best interests and the best interests of our
shareholders, and authorizing the board of directors to file one such
amendment.
Can I change my mind after I vote?
You may change your vote at any time before the polls close at the meeting.
You may do this by:
. voting again by telephone or over the internet prior to 11:59 p.m., EDT,
on April 29, 2002,
. giving written notice to the Secretary of our company,
. delivering a later-dated proxy, or
. voting in person at the annual meeting.
How many votes am I entitled to?
If you own Class A Common Stock, you are entitled to one vote for each
share you own. If you own Class B Common Stock, you are entitled to 4.39 votes
for each share you own. Holders of Class A Common Stock and Class B Common Stock
will vote together as a single voting group for all matters to be voted on at
the annual meeting. Sometimes in this proxy statement we refer to the Class A
Common Stock and the Class B Common Stock collectively as the Common Stock.
2
How many votes must be present to hold the meeting?
In order for us to conduct the annual meeting the holders of a majority of
the votes of the Common Stock outstanding as of March 1, 2002 must be present at
the annual meeting. This is referred to as a quorum. Your shares will be counted
as present at the meeting if you:
. vote via the internet or by telephone,
. return a properly executed proxy (even if you do not provide voting
instructions), or
. attend the annual meeting and vote in person.
How many votes are needed to elect directors?
The nominee receiving the highest number of "yes" votes will be elected a
director. This number is called a plurality. If you do not vote in person or
sign and return a proxy, your shares will not be counted as "yes" votes or "no"
votes at the annual meeting.
How many votes are needed to approve the proposed amendments to the amended and
restated articles of incorporation?
The proposed amendments must be approved by a majority of the votes
entitled to be cast on the amendments.
How many votes are needed for other matters?
To approve any other matter that properly comes before the annual meeting,
the "yes" votes cast in favor of the matter must exceed the "no" votes cast
against the matter.
Will my shares be voted if I do not provide my proxy?
Your shares may be voted under certain circumstances if they are held in
the name of a brokerage firm. Brokerage firms have the authority under the New
York Stock Exchange rules to vote customers' unvoted shares on certain "routine"
matters, including the election of directors. If you hold your shares directly
in your own name, they will not be voted if you do not provide a proxy. If a
brokerage firm signs and returns a proxy on your behalf that does not contain
voting instructions, your shares will be counted as present at the meeting for
quorum purposes, but will not be counted as "yes" votes or "no" votes on any
matter voted on at the annual meeting. They will have the same effect as a vote
against the proposed amendments. These are referred to as broker non-votes.
ELECTION OF DIRECTORS
(Item 1)
How many directors serve on the board of directors?
Our board of directors currently has 5 members. The directors are divided
into three classes with the directors in each class serving a term of three
years. Directors for each class are elected at the annual meeting of
shareholders held in the year in which the term for their class expires. At the
annual meeting on April 30, 2002, one nominee for director is to be elected to
serve until the annual meeting in 2005, or until his successor is elected and
qualified.
Who is the nominee this year?
The nominee is Mr. Richard L. Williams. His current term expires at the
annual meeting.
3
What if the nominee is unwilling to serve?
We do not believe that Mr. Williams will be unwilling or unable to serve as
a director. However, if at the time of the annual meeting he should be unwilling
or unable to serve, proxies will be voted as recommended by the board of
directors either:
. to elect a substitute nominee recommended by the board,
. to allow the vacancy created to remain open until filled by the board,
or
. to reduce the number of directors for the ensuing year.
In no event, however, can a proxy be voted to elect more than one director.
What is the recommendation of the board of directors?
The board of directors recommends a vote FOR Richard L. Williams to hold
office until the annual meeting of shareholders in 2005, or until his successor
is elected and qualified. Proxies returned without instructions will be voted
for Mr. Williams.
What is the background of this year's nominee?
Richard L. Williams, 68, has been a director and president and chief
operating officer of our company or our predecessor since 1989.
Who are the directors continuing in office until 2003?
Edward J. Lill, 69, has been a director of our company since 1997. Mr. Lill
is presently a consultant to Metropolitan Life Insurance Company with respect to
accounting and other related matters. Mr. Lill was a senior partner and vice
chairman of the accounting firm, Deloitte & Touche, from 1988 until his
retirement in 1995. Mr. Lill also serves as a director of MacKenzie Investment
Management Inc., which is a management investment company.
John F. Maypole, 62, has been a director of our company since 1992. Mr.
Maypole is a consultant to Metropolitan Life Insurance Company and has over the
past five years served as a consultant to and/or director of various other
corporations and providers of financial services. Mr. Maypole also serves as a
director of Massachusetts Mutual Life Insurance Company and Church and Dwight
Co., Inc., a household consumer product and specialty chemical company.
Who are the directors continuing in office until 2004?
Donald J. Keller, 70, has been a director of our company since 1998. Mr.
Keller was non-executive chairman of Vlasic Foods, International from 1998 until
2001. From 1993 until 1998 he was chairman of B. Manischewitz Company, a food
manufacturer, and was co-chief executive officer of B. Manischewitz Company from
1992 until 1993. From 1995 until 1997 he was chairman of the board of Prestone
Products Corporation, an automotive chemicals manufacturer.
Joseph L. Lanier, Jr., 70, has been chairman of the board of directors and
chief executive officer of our company or our predecessor since 1989. Mr. Lanier
is also a director of SunTrust Banks, Inc., a bank holding company, Flowers
Industries, Inc., a food company, Torchmark Corporation, an insurance company,
and Dimon Incorporated, a tobacco products company.
How often did the board of directors meet during fiscal 2001?
The board of directors met eight times during fiscal 2001. Each director
attended at least 75% of all meetings of the board of directors and committees
on which he served in fiscal 2001.
4
What committees has the board of directors established?
The board of directors has established a compensation committee and an
audit committee. The full board of directors acts as a nominating committee.
Compensation Committee. Messrs. Maypole, Keller and Lill serve as members
of the compensation committee, and Mr. Maypole is the chairman. The compensation
committee is responsible for:
. reviewing annually and approving our compensation strategy to ensure
that our executive compensation strategy supports our business
objectives as well as shareholder interests,
. approving salary, bonuses and other compensation of our executive
officers and key management personnel,
. administering our option and benefit plans, and
. considering issues pertaining to succession planning upon retirement or
termination of the employment of senior managers.
This committee held two meetings in fiscal 2001.
Audit Committee. Messrs. Lill, Keller and Maypole serve as members of the
audit committee, and Mr. Lill is Chairman. The members of the audit committee
are independent as defined in the New York Stock Exchange Rules. The audit
committee is responsible for:
. recommending independent auditors,
. reviewing with the independent auditors the scope and results of the
audit engagement,
. monitoring our financial policies and control procedures,
. reviewing with our independent auditors and management the scope and
results of their respective audits,
. discussing with management and our independent auditors the interim and
annual financial statements that we file with the SEC, and
. reviewing and monitoring the provision of non-audit services by our
auditors.
The audit committee held two meetings in fiscal 2001.
How are directors compensated?
Cash Compensation. Directors who are not employees of our company receive
an annual retainer of $25,000 and $1,000 per board and committee meeting
attended. Directors who are also employees of our company are not separately
compensated for their service as directors.
Options and Restricted Stock. In fiscal 2001, the board of directors
granted to each of Messrs. Keller, Lill and Maypole 2,500 shares of restricted
Class A Common Stock and non-qualified options to purchase an additional 2,500
shares of Class A Common Stock pursuant to the Dan River Inc. 2000 Long-Term
Incentive Plan, which we refer to as the Long-Term Incentive Plan. The
restricted stock vests in three equal increments on March 1, 2002, 2003 and 2004
(or 100% upon a change of control). The options vest and become exercisable in
three equal increments on December 31, 2001, 2002 and 2003 (or 100% upon a
change of control), have an exercise price of $3.07 per share and expire May 11,
2011.
5
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The table below shows, as of March 1, 2002, how many shares of each class
of our Common Stock were beneficially owned by our directors, named executive
officers, owners of 5% or more of our Common Stock and our directors and
executive officers as a group. Under the rules of the SEC, a person
"beneficially owns" securities if that person has or shares the power to vote or
dispose of the securities. The person also "beneficially owns" securities which
that person has the right to purchase within 60 days. Under these rules, more
than one person may be deemed to beneficially own the same securities, and a
person may be deemed to beneficially own securities in which he or she has no
financial interest. Except as shown in the table, the shareholders named below
have the sole power to vote or dispose of the shares shown as beneficially owned
by them.
Percentage
Beneficial Ownership of Beneficial Ownership of Of
Class A Common Stock(1) Class B Common Stock Combined
----------------------------------- ------------------------------
Number of Percent of Number of Percent of Voting
Shares Class(2) Shares Class Power(2)
----------- ------------ ------------- ------------ ------------
Donald J. Keller......................... 55,000(11) * -- -- *
Joseph L. Lanier, Jr.(3)(4).............. 2,404,420(7)(8)(11) 10.1 2,062,070(8)(9) 100.0% 30.4
Edward J. Lill........................... 27,000(11) * -- -- *
John F. Maypole.......................... 90,000(11) * -- -- *
Richard L. Williams(3)(5)................ 740,231(11) 3.1 465,981(9) 22.6 7.5
Barry F. Shea(3)(6)...................... 271,787(11) 1.1 174,912(9) 8.5 2.8
Gregory R. Boozer........................ 98,125(11) * -- -- *
Harry L. Goodrich........................ 77,750(11) * -- -- *
Mezzanine Investment Limited
Partnership-BDR(10)................... 6,708,723 28.1 -- -- 21.7
Dimensional Fund Advisors,
Inc.(12).............................. 1,753,500 7.4 -- -- 5.7
T. Rowe Price Associates,
Inc.(13).............................. 2,318,100 9.7 -- -- 7.5
All executive officers and directors
as a group (12 Persons)............... 3,226,803(7)(11) 13.5 2,062,070(8)(9) 100.0 33.1
___________
* Less than 1%.
(1) Under our articles of incorporation, shares of Class B Common Stock are
convertible into shares of Class A Common Stock on a share-for-share
basis at any time subject to compliance with certain first offer rights.
As a result, shares of Class A Common Stock shown in the table as
beneficially owned by any individual include shares of Class A Common
Stock issuable upon conversion of Class B Common Stock beneficially owned
by such individual.
(2) Based on an aggregate of 20,371,939 shares of Class A Common Stock issued
and outstanding as of March 1, 2002, including restricted stock, plus,
for each individual,
. the number of shares of Class A Common Stock issuable upon conversion of
shares of Class B Common Stock beneficially owned by such individual;
and
. the number of shares of Class A Common Stock issuable upon exercise
of outstanding stock options which are or will become exercisable
prior to April 30, 2002.
(3) The business address of Messrs. Lanier, Williams and Shea is 2291 Memorial
Drive, Danville, Virginia 24541.
(4) Mr. Lanier disclaims beneficial ownership of 96,553 shares that are held by
his wife, Mrs. Ann M. Lanier.
(5) Mr. Williams disclaims beneficial ownership of 96,250 shares that are held
by his wife, Mrs. Suzanne S. Williams.
(6) Mr. Shea disclaims beneficial ownership of 60,000 shares that are held by
his wife, Mrs. Nellie C. Shea.
(7) Includes:
. 252,180 shares of Class A Common Stock issuable upon conversion of
shares of Class B Common Stock beneficially owned by Mr. Joseph L.
Lanier, Jr.,
. 65,553 shares of Class A Common Stock issuable upon conversion of shares
of Class B Common Stock beneficially owned by Mrs. Ann M. Lanier,
6
. 551,722 shares of Class A Common Stock issuable upon conversion of
shares of Class B Common Stock beneficially owned by Mr. Joseph Lanier,
III,
. 551,722 shares of Class A Common Stock issuable upon conversion of
shares of Class B Common Stock beneficially owned by Mrs. Ann L.
Jackson,
. 96,250 shares of Class A Common Stock issuable upon conversion of shares
of Class B Common Stock beneficially owned by Mrs. Suzanne S. Williams,
. 369,731 shares of Class A Common Stock issuable upon conversion of
shares of Class B Common Stock beneficially owned by Mr. Richard L.
Williams,
. 124,912 shares of Class A Common Stock issuable upon conversion of
shares of Class B Common Stock beneficially owned by Mr. Barry F. Shea,
and
. 50,000 shares of Class A Common Stock issuable upon conversion of
shares of Class B Common Stock beneficially owned by Mrs. Nellie C.
Shea.
We refer to the beneficial owners listed in the preceding bullets as the
Senior Management Group. With respect to the shares described above Mr.
Lanier has sole voting power pursuant to the terms of a Voting Agreement
dated November 20, 1997 between the Company and the members of the Senior
Management Group, as amended, which we refer to as the Voting Agreement.
(8) Includes shares of Class B Common Stock beneficially owned by the members
of the Senior Management Group with respect to which Mr. Joseph L. Lanier,
Jr. has sole voting power pursuant to the Voting Agreement. See Footnote
7 above.
(9) Joseph L. Lanier, Jr. has sole voting power with respect to these shares
pursuant to the terms of the Voting Agreement.
(10) Reflects shares of Class A Common Stock beneficially owned by Mezzanine
Investment Limited Partnership--BDR, which we refer to as MILP, whose
address is One Madison Avenue, New York, New York 10010. According to
Schedule 13D/A filed on behalf of MetLife Inc., which we refer to as
MLINC, Metropolitan Life Insurance Company, which we refer to as MetLife,
MILP and 23rd Street Investments, Inc., which we refer to as 23rd Street,
the general partner of MILP is 23rd Street, which is a wholly-owned
subsidiary of MetLife. MetLife is a wholly-owned subsidiary of MLINC, a
publicly traded company. MILP is a limited partnership in which MetLife
is a limited partner with a 99% partnership interest and 23rd Street is
the general partner with a 1% partnership interest.
(11) Includes options exercisable within 60 days and outstanding restricted
stock.
(12) Based solely on Schedule 13G/A filed with the SEC on February 12, 2002. The
address of Dimensional Fund Advisors Inc. is 1299 Ocean Avenue, 11th Floor,
Santa Monica, CA 90401.
(13) According to Schedule 13G/A filed with the SEC on February 11, 2002, T.
Rowe Price Associates, Inc., which we refer to as TRP, possesses sole
voting power over 711,300 shares of Class A Common Stock and sole
deposition power over 2,318,100 shares of Class A Common Stock. The
address of TRP is 100 E. Pratt Street, Baltimore, Maryland 21202.
7
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Registration Rights Agreement
General. We, certain members of senior management, which we refer to as the
Management Shareholders, MILP, and all other holders of our common stock prior
to the initial public offering of our common stock in November 1997, are parties
to a registration rights agreement, dated September 3, 1991, as amended. All
provisions of the registration rights agreement described below terminate on the
earlier of:
. September 3, 2006, or
. the date when shares of Class A Common Stock which are held by the
above-described holders other than Management Shareholders constitute
less than 10% of the outstanding Common Stock, subject to limited
exceptions.
The registration rights agreement is applicable only with respect to shares of
Common Stock held prior to the initial public offering. It contains, among
others, the following provisions:
Demand and Piggyback Registration Rights. The holders (not including the
Management Shareholders) of at least 20% of the Class A Common Stock held by
such holders immediately prior to the initial public offering may, on seven
occasions, demand that we prepare and file a registration statement under the
Securities Act of 1933, as amended. These demand registration rights are
applicable to such number of shares of Class A Common Stock held by such holders
prior to the initial public offering as are designated by the holders of a
majority of such shares of Class A Common Stock after consultation with the book
running lead underwriter of any such offering and the demanding holders. Once
every 12 months, we may delay the filing of any such registration statement for
up to 60 days if we would be required in the opinion of counsel to disclose
information in the registration statement that it would not otherwise be
required to publicly disclose and the board of directors determines that such
disclosure is not in our best interests. In addition, such holders of Class A
Common Stock are entitled to offer and sell their Class A Common Stock in any
underwritten public offering involving the offering of any securities by us or
by any of our subsidiaries, subject to certain limitations. We may also offer
and sell our Class A Common Stock in any underwritten public offering effected
at the request of such holders of Class A Common Stock, subject to certain
limitations.
8
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table shows the compensation earned during fiscal 2001,
fiscal 2000 and fiscal 1999 by our chief executive officer and our four other
most highly compensated executive officers. These individuals are called the
named executive officers.
Summary Compensation Table
Long-Term
Compensation
Annual Compensation(1) Awards(3)
--------------------------------------------------- ----------------------
Securities All Other
Fiscal Other Annual Restricted Underlying Compen-
Name and Principal Position Year Salary Bonus(2) Compensation Stock($)(4) Options(#) sation(5)
--------------------------- ------ ------ -------- ------------ ----------- ---------- ---------
Joseph L. Lanier, Jr. ...................... 2001 551,616 -- 13,120(6) 15,925 32,500 35,998
Chairman and Chief Executive 2000 533,664 104,385 2,921(6) -- 65,000 1,700
Officer 1999 513,139 94,830 -- -- 65,000 1,600
Richard L. Williams ........................ 2001 432,640 -- 10,290(6) 11,025 22,500 25,978
President and Chief Operating 2000 418,560 81,870 2,291(6) -- 45,000 1,700
Officer 1999 402,462 74,370 -- -- 45,000 1,600
Barry F. Shea .............................. 2001 259,584 -- 6,174(6) 4,288 8,750 16,732
Executive Vice President--Chief 2000 251,136 49,122 1,375(6) -- 17,500 1,700
Financial Officer 1999 241,477 44,620 -- -- 17,500 1,600
Gregory R. Boozer .......................... 2001 216,300 -- 5,319(6) 3,675 7,500 16,868
Executive Vice President-- 2000 209,277 40,935 1,146(6) -- 15,000 1,700
Manufacturing 1999 201,231 37,190 48,923(7) -- 12,500 1,600
Harry L. Goodrich .......................... 2001 193,939 -- 4,608(6) 2,450 5,000 15,763
Vice President, Secretary and 2000 186,480 36,475 1,019(6) -- 10,000 1,700
General Counsel 1999 179,308 33,140 108,726(7) -- 10,000 1,600
______________
(1) The aggregate amount of perquisites and other personal benefits, if any,
did not exceed the lesser of $50,000 or 10% of the total annual salary and
bonus reported for each named executive officer and has therefore been
omitted.
(2) Bonuses are based on operating income targets approved by the board of
directors at the beginning of each fiscal year. No bonuses were paid to the
named executive officers for the 2001 fiscal year.
(3) No SARs have been granted.
(4) Restricted stock vests in one third increments on March 1, 2002, 2003 and
2004 and becomes fully vested in the event of a Change of Control as
defined in the Long-Term Incentive Plan. There were a total of 215,250
shares of restricted stock awarded to a total of 54 key employees during
fiscal 2001. The aggregate value of the restricted stock was $105,473 at
December 29, 2001, based on the closing price of our Class A Common Stock
of $0.49 per share on December 28, 2001. No dividends are payable on the
restricted stock
(5) Represents amounts accrued during applicable fiscal years to each named
executive officer pursuant to the Dan River Inc. Salary Retirement Plan
and, for fiscal 2001, the SERP and the restricted SERP (as described
hereafter).
(6) Represents the company match in respect of the named executive officer's
deferrals of salary pursuant to the Dan River Inc. 401(k) Plan, a defined
contribution plan available to all of our salaried employees, and of salary
and bonus pursuant to the Dan River Inc. Non-Qualified 401(k) and Deferred
Compensation Plan, (the "NQ 401(k)") a non-qualified defined
9
contribution plan available to senior managers of the Company. Also
includes interest paid to the named executive officer pursuant to the
NQ 401(k), to the extent such interest exceeded 120% of the applicable
federal rate.
(7) Represents the difference between:
. the fair market value of Class A Common Stock purchased upon exercise
of nonqualified stock options during the applicable fiscal year (based
upon the closing price of the Class A Common Stock in trading on the
New York Stock Exchange on the date of exercise); and
. the exercise price of the option.
Option Grants Table
The following table shows certain information relating to the options
granted to each of the named executive officers during fiscal 2001.
Option/SAR Grants In Last Fiscal Year
Individual Grants Option Term Potential Realizable
------------------------------------- -----------------------
% of Total Exercise Value of Assumed
Number of Securities Options or Base Annual Rates of Stock
Underlying, Granted to Price Per Price Appreciation for
Options/SARs Employees Share Expiration Option Term
-------------------------
Name Granted (#)(1)(2) In Fiscal Year ($/Sh) Date 5% 10%
---- ----------------- -------------- -------- ---------- ----------- ----------
Joseph L. Lanier, Jr. ............. 32,500 10% $ 3.07 5/11/11 $62,748 $159,016
Richard L. Williams ............... 22,500 7% $ 3.07 5/11/11 43,441 110,088
Barry F. Shea ..................... 8,750 3% $ 3.07 5/11/11 16,894 42,812
Gregory R. Boozer ................. 7,500 2% $ 3.07 5/11/11 14,480 36,696
Harry L. Goodrich ................. 5,000 2% $ 3.07 5/11/11 9,654 24,464
___________
(1) We have not granted any SARs.
(2) All options granted are options to purchase Class A Common Stock. The
options vest and become exercisable in three equal increments on December
31, 2001, 2002 and 2003. However, the options vest and become exercisable
immediately in the event of a Change of Control as defined in the Long-Term
Incentive Plan. The optionee or his estate will be entitled to exercise
such options, to the extent vested, within six months after the date of the
event resulting in termination of employment.
10
Aggregated Options Table
The following table shows certain information with respect to options
exercised during fiscal 2001 and options held at the end of fiscal 2001 by each
named executive officer. There were no stock appreciation rights outstanding at
the end of fiscal 2001.
Aggregated Option/SAR Exercises In Last Fiscal Year And
Fiscal Year End Option/SAR Values Table
Number of Securities
Shares Underlying Unexercised
Acquired Options at Fiscal
on Value Year-End (#)(1)
-- --------------------------
Name Exercise (#) Realized($) Exercisable Unexercisable
---- ------------ ----------- ----------- -------------
Joseph L. Lanier, Jr ............................................... -- -- 213,750 113,750
Richard L. Williams ................................................ -- -- 148,750 78,750
Barry F. Shea ...................................................... -- -- 60,625 30,625
Gregory R. Boozer .................................................. -- -- 49,375 25,625
Harry L. Goodrich .................................................. -- -- 27,500 17,500
_________
(1) There were no unexercised in-the-money stock options outstanding at fiscal
year end based on the closing price on the New York Stock Exchange of our
Class A Common Stock on December 28, 2001 of $0.49 share and the respective
option exercise price.
Retirement Plans
The table below shows the annual retirement benefits payable to named
executive officers as a life-only annuity starting at the greater of age 65 or
their current age, based on their remuneration and years of service under our
restricted supplemental executive retirement plan, which we refer to as our
restricted SERP, our supplemental retirement plan, which we refer to as our
SERP, and our salary retirement plan, which we refer to as our retirement plan.
The material terms of these three plans are discussed briefly below the table.
Years of Service
--------------------------------------------------
Remuneration 5 10 15 20 or more
------------ - -- -- ----------
$200,000 .......................................................... $20,000 $ 40,000 $ 60,000 $ 80,000
$350,000 .......................................................... $35,000 $ 70,000 $105,000 $140,000
$500,000 .......................................................... $50,000 $100,000 $150,000 $200,000
$650,000 .......................................................... $65,000 $130,000 $195,000 $260,000
$800,000 .......................................................... $80,000 $160,000 $240,000 $320,000
$950,000 .......................................................... $95,000 $190,000 $285,000 $380,000
The restricted SERP is designed to provide each participant with an
aggregate, noncontributory retirement benefit from us (after taking into account
other deferred compensation benefits from us) at age 65 equal to 40% of such
participant's final average monthly compensation if such participant completes
at least 20 years of service with us. The compensation committee of our board of
directors designates who is eligible to participate in the restricted SERP. A
participant's final average monthly compensation for this purpose consists of
such participant's average monthly base salary, bonus and commissions payable
before any deductions whatsoever, the greater of either
. in the five calendar year period ending immediately before the
participant's retirement date, or
. in the five calendar year period which includes the participant's
retirement date.
A participant's years of service are the same as such participant's years
of vesting service under our retirement plan. If a participant fails to complete
at least 5 years of service, no benefit will be payable to the participant under
the restricted SERP. A participant who completes less than 20 years of service
will receive a fraction of such participant's 40% of final average monthly
compensation benefit. The numerator of this fraction will be such participant's
actual years of service and the denominator of this fraction will be 20. A
participant's restricted SERP benefit is reduced by:
. the retirement benefits payable to the participant under the retirement
plan and the SERP,
11
. the benefits payable under our 401(k) plan to the extent attributable to
matching contributions made by us,
. such participant's social security benefits, and
. any other benefit which the compensation committee of our board of
directors decides duplicates the benefit payable under the restricted
SERP.
A participant's restricted SERP benefit is further reduced to the extent
provided under the retirement plan in the event of retirement prior to age 65.
Finally, a participant's benefit under the restricted SERP cannot be assigned or
otherwise transferred to any other person by a participant, such benefit is
payable to a participant only from our general assets, and a participant is only
a general and unsecured creditor of ours with respect to the payment of such
benefit.
Messrs. Lanier, Williams, Shea, Boozer and Goodrich are participants in the
restricted SERP. For the five calendar year period which ended December 31,
2001, the average monthly compensation for purposes of the restricted SERP for
Messrs. Lanier, Williams, Shea, Boozer and Goodrich was $62,514, $50,338,
$29,905, $23,867 and $20,586, respectively. As of January 1, 2002 each of
Messrs. Lanier, Williams, Shea, Boozer and Goodrich had 12 years of service
under the restricted SERP. As of January 1, 2002 there were 23 other executives
designated as participants in the restricted SERP.
The retirement plan and the SERP work together. The retirement plan
provides a noncontributory benefit to participants based on both years of
service and a participant's career average monthly earnings, which we refer to
as average compensation. Average compensation consists of a participant's base
salary and commissions. No bonuses are taken into account in a participant's
average compensation. Messrs. Lanier, Williams, Shea, Boozer and Goodrich
participate in the retirement plan on the same basis as other salaried
employees, and any benefit which the retirement plan pays to these five named
executive officers reduces the benefit which we will pay to the five named
executive officers under the restricted SERP. Estimated annual benefits payable
under the retirement plan upon retirement at the greater of age 65 or current
age for Messrs. Lanier, Williams, Shea, Boozer and Goodrich based on a single
life annuity were $19,764, $19,692, $41,712, $52,760 and $42,556, respectively.
The SERP will provide a noncontributory benefit to each of our highly
compensated employees who is designated by the compensation committee of our
board of directors as eligible to participate in the SERP and who actually
accrues a benefit under our retirement plan on and after January 1, 2001. The
SERP is designed to work together with the retirement plan to make up for the
fact that the retirement plan does not give a participant credit for bonuses and
cannot give credit for base salary and commissions in excess of the IRS limits.
The SERP will provide a retroactive benefit for a participant for each year
after 1987 and before 2001 if such participant accrued a benefit under the
retirement plan in any such year and was a participant in the SERP on January 1,
2001. The SERP will provide a benefit for each year after 2000 if a participant
accrues a benefit under the retirement plan in any such year. A participant's
benefit under the SERP is paid at the same time and in the same form as provided
under the retirement plan except that a participant's benefit under the SERP is
payable only from our general assets and a participant is only a general and
unsecured creditor of ours with respect to the payment of such benefits. As of
January 1, 2002, there were 111 employees designated as eligible to participate
in the SERP, including Messrs. Lanier, Williams, Shea, Boozer and Goodrich.
Estimated annual benefits payable under the SERP upon retirement at the greater
of age 65 or current age for Messrs. Lanier, Williams, Shea, Boozer and Goodrich
based on a single life annuity were $50,720, $36,678, $37,707, $32,041 and
$20,650, respectively. Any benefit which we pay to the named executive officers
under the SERP reduces the benefit which we will pay to these five executives
under the restricted SERP.
Employment Agreements
Executive Employment Agreements. We have employment agreements with Joseph
L. Lanier, Jr., Richard L. Williams and Barry F. Shea, each of which became
effective on November 20, 1997, and terminate five years thereafter, unless
earlier terminated as described below. Each employment agreement provides for
the employee to be retained in certain specified capacities by us and to devote
his full business time and attention to our business. Each of the employment
agreements provides that we shall pay the employee a bonus under the Dan River
Inc. Management Incentive Plan, which we refer to as the bonus plan, and
reimburse certain business related expenses. The bonus plan provides for the
payment of an annual cash bonus to our executive officers and key employees
based upon our achievement of operating income and working capital management
goals established at the beginning of each fiscal year and approved by the board
of directors. Participation in the bonus plan, as well as award levels and
performance criteria, are recommended by the chief executive officer and
approved by the compensation committee of the board of directors.
Mr. Lanier's employment agreement provides that he will serve as the chief
executive officer and chairman of the board of directors at a base salary of
$460,000 per year, which may be increased at the discretion of the board of
directors, subject to certain cost of living adjustments.
12
The employment agreements with Messrs. Williams and Shea provide for their
employment as president and chief operating officer and chief financial officer,
respectively. Each employment agreement provides that the employee shall receive
a base salary determined by the chief executive officer, subject to approval by
the compensation committee of the board of directors.
The employment agreements are terminable upon the death or disability of
the employee, by us for "good cause," as defined in the employment agreements,
by us without cause, by the employee for "good reason," as defined in the
employment agreements, by the employee without good reason or upon the
occurrence of a "change in control," as defined in the employment agreements.
Each employment agreement provides that, in the event the employee's employment
is terminated for no cause, a change in control, or for good reason, such
employee will be paid an amount equal to two times his annual base salary in
effect at the time of termination, plus any incentive bonus prorated to the date
on which employment is terminated. The employee would also be entitled to
participate for a period of up to twenty-four months after termination of his
employment in various welfare, pension and savings plans and programs offered by
us.
Post-Employment Agreements. We have entered into agreements with Messrs.
Boozer and Goodrich, as well as certain other executive officers and key
employees. These agreements provide certain assurances to the employee in the
event Mr. Lanier ceases for any reason to be chief executive officer, which we
refer to as an employment event, including an agreement not to arbitrarily
reduce the salary of or relocate the employee, and to allow the employee to
participate in certain incentive and other benefit plans at a level commensurate
with his level of participation at the time the employment event occurred. In
the event employment of the employee is terminated by us without "good cause,"
as defined in the post-employment agreements, or by the employee upon breach of
the agreement by us, the employee is entitled to a severance payment of up to
two years salary, plus any bonus otherwise earned for the year in which the
termination occurs. The employee would also be entitled to continue to
participate for a period of up to twenty-four months in various welfare, pension
and savings plans and programs offered by us.
REPORT OF THE AUDIT COMMITTEE
The audit committee of our company is responsible for, among other things,
reviewing with our independent auditors the scope and results of their audit
engagement. In connection with the fiscal 2001 audit, the audit committee has:
. reviewed and discussed with management the audited financial statements
of our company to be included in our annual report on Form 10-K for the
year ended December 29, 2001,
. discussed with Ernst & Young LLP, our independent auditors, the matters
required by Statement of Accounting Standards No. 61,
. considered whether Ernst & Young LLP's provision of non-audit services
to our company was compatible with their independence, and
. received and discussed the written disclosures and letter from Ernst &
Young LLP required under Independent Standards Board Statement No. 1
regarding their independence.
Based on the review and the discussions described in the preceding bullets,
the audit committee has recommended to the board of directors that the audited
financial statements be included in our annual report on Form 10-K for the year
ended December 29, 2001.
Edward J. Lill, Chairman
Donald J. Keller
John F. Maypole
The foregoing report should not be deemed incorporated by reference by any
general statement incorporating by reference this Proxy Statement into any
filing under the Securities Act of 1933 or under the Securities Exchange Act of
1934, except to the extent that we specifically incorporate this information by
reference, and shall not otherwise be deemed filed under such Acts.
13
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Our compensation package for all of our executive officers in fiscal 2001
consisted of:
. base salary,
. cash bonus,
. restricted stock, and
. stock options.
The compensation committee expects that compensation for executive officers in
fiscal 2002 will include these same elements.
Base Salary. Mr. Lanier's base salary is determined in accordance with his
employment agreement, with increases in excess of cost of living increases to be
recommended by the compensation committee and subject to the approval of the
full board of directors. Mr. Lanier received no salary increase in fiscal 2001
due to the imposition of a six month salary freeze in order to cut costs in a
difficult business environment.
Executive officers' salaries are established in line with merit budget
guidelines applicable to all salaried employees and approved by the board of
directors. The merit budget is established annually by the board of directors
and is generally intended to adjust for inflation and competitive factors
relating to pay levels in the textile industry. Adjustments may be approved by
the compensation committee to take account of changes in the executive officer's
responsibilities and his or her overall performance. Merit budget costs were
significantly reduced in fiscal 2001 due to the salary freeze described above.
Cash Bonuses. Each executive officer, including Mr. Lanier, is eligible to
receive an annual cash bonus pursuant to the terms of our management incentive
plan. The established objectives of the management incentive plan are:
. to maximize operating income while encouraging prudent management of
working capital, and
. to enhance our ability to attract and retain talented management.
Operating income targets are recommended at the beginning of each fiscal year by
the compensation committee and approved by the board of directors. The
compensation committee determines the target award level category to which each
executive officer is assigned. In establishing operating income targets and
other financial criteria for awards under the management incentive plan, the
compensation committee has focused specifically on our performance in comparison
to certain other textile companies. For example, achieving a target award under
the management incentive plan generally requires performance above the level of
such other textile companies at the time the bonus targets were established. No
bonus was paid to Mr. Lanier and the other named executive officers with respect
to fiscal 2001.
Restricted Stock and Stock Options. Our restricted stock and long-term
stock option plans are intended to align the interests between our shareholders
and our directors, officers and key employees through the grant of restricted
stock and/or stock options which vest over a period of time. Options granted in
fiscal 2001 had an exercise price equal to the closing price of our Class A
Common Stock on the New York Stock Exchange on May 11, 2001 and, together with
the restricted stock that was granted in fiscal 2001, provide a strong incentive
to management to build shareholder value over time.
Long-Term Equity-Based Awards and Performance-Based Awards. Our
equity-based and performance-based awards are intended to attract and retain key
employees and directors providing such persons with incentives and rewards for
superior performance and increased shareholder value. Stock options, stock
appreciation rights, restricted stock, deferred shares, performance awards and
other stock-based awards may be awarded based on certain performance criteria.
The awards and terms of the awards are determined by the compensation committee
in their sole discretion.
John F. Maypole, Chairman
Donald J. Keller
Edward J. Lill
14
The foregoing report shall not be deemed incorporated by reference by any
general statement incorporating by reference this proxy statement into any
filing under the Securities Act of 1933, or under the Securities Act of 1934,
which we refer to together as the Acts, except to the extent we specifically
incorporate this information by reference, and shall not otherwise be deemed
filed under such Acts.
15
Stock Price Performance Graph
The graph below reflects cumulative shareholder return (assuming the
reinvestment of dividends) on our Class A Common Stock compared to the return on
the S&P 500 Index and a peer group of textile companies which, in our opinion,
are engaged in lines of business similar to those in which we are engaged.
Trading in our Class A Common Stock commenced on November 21, 1997 in connection
with our initial public offering. The graph reflects the investment of $100.00
on November 21, 1997 in our Class A Common Stock, the S&P 500 Index and in the
peer group and the reinvestment of dividends.
Comparison of 5 Year Cumulative Total Return
Assumes Initial Investment of $100
December 2001
[GRAPHIC REMOVED HERE]
Dan River Inc. S&P 500 Peer Group(2)
-------------- ------- -------------
11/21/97 ................................................... 100.00 100.00 100.00
12/31/97 ................................................... 109.58 106.43 110.11
12/31/98 ................................................... 78.33 136.84 122.14
12/31/99 ................................................... 34.17 165.64 60.52
12/31/00 ................................................... 14.80 150.56 30.47
12/31/01 ................................................... 3.67 132.67 11.88
------------
(1) Total returns are based on market capitalization.
(2) Peer group consists of Burlington Industries Inc., Cone
Mills Corporation, Crown Crafts, Inc., Delta Woodside
Industries Inc., Galey & Lord Inc., Pillowtex Corp.,
Springs Industries, Inc., Thomaston Mills, Inc., and
WestPoint Stevens Inc.
The stock price performance graph shall not be deemed incorporated by
reference by any general statement incorporating by reference this proxy
statement into any filing under the Acts, except to the extent we specifically
incorporate this information by reference, and shall not otherwise be deemed
filed under such Acts.
16
APPROVAL OF AMENDMENTS TO OUR AMENDED AND RESTATED ARTICLES OF INCORPORATION
(Item 2)
The board of directors recommends that the shareholders approve amendments
to our Amended and Restated Articles of Incorporation to effect a reverse split
of our issued and outstanding Common Stock, and to file one such amendment. The
reverse split will combine a whole number of outstanding shares between two and
five of each of the Class A Common Stock and Class B Common Stock into one share
of Class A Common Stock and Class B Common Stock, respectively, depending upon
determination by our board of directors that a reverse stock split is in our
best interests and the best interests of our shareholders. The text of the
proposed amendments is provided in Annex A.
If the amendments are approved by the shareholders, the board of directors
will have the authority, in its sole discretion, to determine (i) whether or not
to proceed with the reverse stock split, (ii) when the reverse stock split will
be effective, and (iii) the number of pre-split shares that will be combined
into one share, provided that the number of pre-split shares must be a whole
number of shares. The amendment filed with the Georgia Secretary of State will
contain the number selected by the board of directors. If the amendments are
adopted, there will be no change in the number of authorized shares of each
class of Common Stock and no change in the par value of the Common Stock.
What is a "reverse stock split"?
In a reverse stock split, one share of a company's stock is substituted for
a pre-determined number of shares, thus reducing the number of outstanding
shares without any corresponding change in the par value of the stock or in the
market capitalization of the company. For example, if our board of directors
approves a "one-for-two" reverse split of our Common Stock, each shareholder
would receive one new share of Class A or Class B Common Stock for every two
shares of Class A or Class B Common Stock previously held. Immediately after the
reverse stock split, the aggregate value of the shareholder's stock would be
unchanged, but he or she would hold half as many shares, with each share having
twice its pre-split value.
Why is the board of directors requesting authority to implement the reverse
stock split?
The principal purpose of the reverse stock split is to maintain the closing
market price of our Class A Common Stock above $1.00 per share in order to meet
the continued listing criteria of the New York Stock Exchange, which we refer to
as the NYSE.
Our Class A Common Stock is listed on the NYSE. In order to continue to be
listed on the NYSE, certain NYSE continued listing standards must be met. Among
the standards is a requirement that, in the event the NYSE notifies a listed
company that the average closing price of its listed security has been less than
$1.00 for any consecutive 30-trading-day period, the company must attain a
30-trading-day average closing price of $1.00 or higher within six months of
receipt of the NYSE notice. If the company fails to do so, the security may be
delisted by the NYSE.
In December 2001, we received a notice from the NYSE stating that the
average closing price of our Class A Common Stock had been less than $1.00 for
more than 30-trading-days. In compliance with NYSE rules, we notified the NYSE
of our intention to meet the $1.00 per share price requirement within six months
after our receipt of the notice. The NYSE notice also informed us that our
market capitalization had failed to remain above $15 million for a
30-trading-day period as required for continued listing on the NYSE. In
accordance with NYSE rules, we submitted a business plan in February 2002 that
we believe demonstrates our ability to come into compliance with the market
capitalization requirement within 18 months from the date of the NYSE notice.
The NYSE had up to 45 days from receipt of our business plan to approve or
reject the plan.
On March 12, 2002, the NYSE advised us that it has agreed to accept our
business plan and that, accordingly, it is prepared to continue our NYSE Listing
at this time. However, the NYSE will conduct quarterly reviews for compliance
with the business plan and has advised us that we may be subject to NYSE trading
suspension and eventual delisting if the NSYE determines that goals or
initiatives described in the plan have not been met. We can not assure you that
we will be successful in meeting the goals and initiatives in our business plan
to the NYSE's satisfaction. If we are unsuccessful in these efforts, the NYSE
may suspend trading in and eventually delist our Class A Common Stock.
Our business plan indicates that we will meet the market capitalization
requirement within the required 18 month time period, and based on conservative
assumptions regarding market valuations, our stock price should recover as well.
In reviewing the business plan, however, our directors were concerned that the
timing of the economic recovery and expected improvement in our business would
not permit reasonable time for our stock price to recover sufficiently prior to
the end of the requisite six month
17
period to meet the required $1.00 per share threshhold and thus prevent
delisting. Accordingly, the board of directors believes that the reverse stock
split may be necessary in order to provide an opportunity to maintain our NYSE
listing while allowing sufficient time for a recovery in our stock price.
Why does the board of directors consider our NYSE listing important?
The board of directors believes that it is important to provide our
shareholders with the best possible market for trading our Class A Common Stock.
If delisting were to occur, we expect that our Class A Common Stock would trade
on the National Association of Securities Dealers' Over the Counter Bulletin
Board, which we refer to as the OTCBB, which was established for securities that
do not meet the Nasdaq listing requirements, or in the over the counter market
in the "pink sheets" maintained by Pink Sheets LLC. Such alternative trading
markets are generally considered less efficient and less liquid than the NYSE.
Consequently, selling our Class A Common Stock could be more difficult because
smaller quantities of shares would likely be bought and sold, transactions could
be delayed, and securities analysts' and news media coverage could be reduced.
These factors could result in lower prices and substantial spreads in the
bid and ask prices for shares of our Class A Common Stock. Delisting from the
NYSE could also impair our ability to raise additional capital through equity or
debt financing and, to the extent the stock price is further depressed as a
result of or in connection with the delisting, ownership dilution to
shareholders might be higher if we issue equity in financing or other
transactions, since more shares will need to be issued in order to raise a
specific amount of capital.
Additionally, if our Class A Common Stock is delisted, we might become
subject to Rule 15g-9 under the Securities Exchange Act of 1934, as amended.
This rule generally imposes additional sales practice requirements on
broker-dealers that sell low-priced securities to persons other than established
customers and institutional accredited investors. For transactions covered by
this rule, generally a broker-dealer must make a special suitability
determination for the purchaser and have received the purchaser's written
consent to the transaction prior to sale. Consequently, the rule may affect the
ability of broker-dealers to sell our Class A Common Stock and affect the
ability of holders to sell their shares in the secondary market. Moreover,
investors may be less interested in purchasing low-priced securities because the
brokerage commission, as a percentage of the total transaction value, tends to
be higher for such securities, and some investment funds will not invest in
low-priced securities (other than those that focus on small-capitalization
companies or low-priced securities).
What are the potential disadvantages and risks associated with the reverse stock
split?
As noted above, the principal purpose of the reverse stock split would be
to help maintain the 30-trading-day average closing price of our Class A Common
Stock above the $1.00 threshold required by the NYSE continued listing
standards. We can not assure you that the reverse stock split will accomplish
this objective. While we expect that the reduction in the outstanding shares of
Common Stock will increase the market price of the Class A Common Stock, we can
not assure you that the reverse stock split will increase the market price of
the Class A Common Stock by a multiple equal to the number of pre-split shares
in the reverse split ratio determined by the board of directors (which can range
from two to five) or result in any permanent increase in the market price (which
can be dependent upon many factors, including, but not limited to, our business
and financial performance and prospects). Should the market price decline after
the reverse stock split, the percentage decline may be greater, due to the
smaller number of shares outstanding, than it would have been prior to the
reverse stock split. Additionally, as noted above, should the NYSE determine
that we have not met applicable initiatives and goals set forth in our business
plan, the NYSE could take action to suspend trading in and eventually delist our
Class A Common Stock without regard to our efforts to maintain the $1.00,
30-trading-day average closing price. In some cases the stock price of companies
that have effected reverse stock splits has subsequently declined back to
pre-reverse split levels.
There are other reasons why a reverse stock split may be perceived
negatively in the marketplace. In addition to the fact that the number of shares
available for trading are reduced, which generally has the effect of reducing
liquidity, round lots (i.e., lots in multiples of 100 shares) may be converted
into odd lots due to the split, which may in turn increase transaction costs for
shareholders. Further, a reverse split can have a negative effect on employee
retention and recruitment by potentially reducing the number of shares that we
could offer in option grants and other stock-based awards. We can not assure you
that the market price of our Class A Common Stock immediately after the
effective date of the proposed reverse stock split will be maintained for any
period of time or that the ratio of post- and pre-split shares will remain the
same after the reverse stock split is effected, or that the reverse stock split
will not have an adverse effect on our stock price due to the reduced number of
shares outstanding after the reverse stock split.
18
How will the board of directors determine whether or not to proceed with the
reverse stock split?
The board of directors will not proceed with the reverse stock split if
they consider it unnecessary in order to meet NYSE continued listing standards
or if they believe it is otherwise not in the best interests of our company and
our shareholders. Factors which they may take into consideration include, but
are not limited to, general trends in the stock market, economic and industry
conditions, recent changes and anticipated trends in the per share market price
of our Class A Common Stock, whether the business plan we have submitted to the
NYSE is approved, the status of our business and our projected business and
financial performance.
How will the board of directors determine the ratio of the reverse stock split?
If the board of directors decides to proceed with the reverse stock split,
they will set the ratio of the reverse stock split based on a number of factors.
These include the market price of our Class A Common Stock and anticipated
trends in the market price.
When will the board of directors determine whether or not to proceed with the
reverse stock split?
The board of directors may determine not to go forward with the reverse
stock split at any time on or before 20 days after the proposed amendments are
approved by the shareholders. If the board does not decide to effect the reverse
stock split and file an amendment within 20 days after the shareholders approve
the proposed amendments, none of amendments will be filed and the reverse stock
split will not occur.
19
How will the reverse stock split affect my ownership of Common Stock?
The following table illustrates the principal effects of the reverse stock
split on our Common Stock.
- ------------------------------------------------------------------------------------------------------------------------
NUMBER OF SHARES Before reverse split After reverse split
- ------------------------------------------------------------------------------------------------------------------------
Ratio = 1:2 Ratio = 1:5
---------------------------------------------
---------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
Authorized 265,000,000 265,000,000 265,000,000
Class A Common Stock 175,000,000 175,000,000 175,000,000
Class B Common Stock 35,000,000 35,000,000 35,000,000
Class C Common Stock 5,000,000 5,000,000 5,000,000
Preferred Stock 50,000,000 50,000,000 50,000,000
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
Outstanding (1)
- --------------------------------------------------
Class A Common Stock 20,371,939 10,185,970 4,074,388
Class B Common Stock 2,065,070 1,032,535 413,014
Class C Common Stock 0 0 0
Preferred Stock 0 0 0
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
Available for future issuance
- --------------------------------------------------
Class A Common Stock (2) 148,975,417 159,161,387 165,272,968
Class B Common Stock 32,934,930 33,967,465 34,586,986
Class C Common Stock 5,000,000 5,000,000 5,000,000
Preferred Stock 50,000,000 50,000,000 50,000,000
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
Class A Common Stock reserved and remaining
available for awards under 2000 Long-Term
Incentive Plan 2,000,000 1,000,000 400,000
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
Class A Common Stock reserved and remaining
available for issuance under Dan River Inc. 1997
Stock Incentive Plan 1,518,800 759,400 303,760
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
Class A Common Stock reserved and remaining
available for issuance under The Bibb Company
1997 Omnibus Stock Incentive Plan 68,774 34,387 13,755
- ------------------------------------------------------------------------------------------------------------------------
(1) Assumes reverse split effective as of March 1, 2002, and subject to
adjustment resulting from cash payments in lieu of fractional shares.
(2) Excludes shares reserved and remaining available for issuance under our
option and long term incentive plans listed below. Also excludes shares
reserved for issuance upon conversion of Class B Common Stock into Class
A Common Stock.
If the reverse stock split is implemented, you will own fewer shares than
you owned prior to the reverse split. The number of post-split shares will be
determined by dividing the number of shares owned immediately prior the
effective time of the reverse stock split by a number of shares held prior to
the reverse split determined by the board of directors. Thus, if the board of
directors determines to implement a 1-for-3 reverse stock split, every three
shares of Class A Common Stock or Class B Common Stock that you hold will be
converted into one share of Class A Common Stock or Class B Common Stock, as the
case may be.
20
The reverse stock split will simultaneously apply to all outstanding shares
of our Class A Common Stock and Class B Common Stock, and the exchange ratio
will be the same for both classes of our Common Stock. Except for changes due to
our purchase of fractional shares, the reverse stock split will affect all
shareholders uniformly and will not change their proportionate ownership
interests, nor will the reverse split alter the respective voting rights of
holders of Class A Common Stock and Class B Common Stock. The Common Stock
issued pursuant to the reverse stock split will remain fully paid and
non-assessable, and we will continue to be subject to the periodic reporting
requirements of the Securities Exchange Act of 1934, as amended.
How will the reverse stock split be implemented?
If approved by our shareholders at the annual meeting, and if our board of
directors determines that effecting the reverse stock split is in our best
interests and the best interests of our shareholders, we will file an amendment
with the Georgia Secretary of State at such time as the board has determined is
the appropriate effective time for the reverse stock split; however, the board
must make such determination no later than 20 days after the date the
shareholders approve the amendments. The reverse stock split will become
effective upon the filing of the amendment with the Secretary of State. At such
time, which we refer to as the effective time, each certificate representing our
Common Stock prior to the reverse stock split will be deemed for all corporate
purposes to evidence ownership of post-split shares. There is no "issuance"
resulting from the reverse stock split.
Promptly after the effective time, you will be notified that the reverse
stock split has been effected. Our stock transfer agent, Equiserve LLP, whom we
refer to as the exchange agent, will implement the exchange of stock
certificates representing outstanding shares of Common Stock. You will be asked
to surrender to the exchange agent certificates representing your pre-split
shares in exchange for certificates representing your post-split shares in
accordance with the procedures to be set forth in a letter of transmittal which
we will send. You will not receive a new stock certificate representing your
post-split shares until you surrender your outstanding certificate(s)
representing your pre-split shares, together with the properly completed and
executed letter of transmittal to the exchange agent.
PLEASE DO NOT DESTROY ANY STOCK CERTIFICATE OR SUBMIT ANY CERTIFICATES UNTIL YOU
ARE REQUESTED TO DO SO.
What will be done with fractional shares?
We will not issue scrip or fractional shares, or certificates for
fractional shares, in connection with the reverse stock split. Should you be
entitled to receive fractional shares because you hold a number of shares not
evenly divisible by the relevant reverse split number determined by our Board of
Directors (which will be a whole number ranging from two to five), you will be
entitled, upon surrender to the exchange agent of certificates representing such
shares, to a cash payment (without interest) in lieu thereof. The cash payment
will be equal to the fraction to which you would otherwise be entitled,
multiplied by the average closing sales prices of the Class A Common Stock (as
adjusted to reflect the reverse stock split) for the 20-trading-days immediately
before the effective time. If such price or prices is not available, the
fractional share payment will be based on such other price as is determined by
the board of directors. The ownership of a fractional share will not give you
any voting, dividend or other rights except the right to receive payment for the
fractional share as described above.
Please be aware that, under the escheat laws of your jurisdiction, where we
are domiciled, and where funds will be deposited, sums due for fractional share
that are not timely claimed after the effective time may be required to be paid
to the designated agent for each such jurisdiction, unless we or the exchange
agent have received correspondence concerning ownership of the funds within the
time permitted by the applicable jurisdiction. Thereafter, if you are otherwise
entitled to receive such funds, you will have to seek them directly in the state
to which they were paid.
Do I have dissenter's rights?
Under the Georgia Business Corporation Code shareholders are not entitled
to dissenter's rights with respect to the proposed amendment, and we will not
independently provide shareholders with any such rights.
What are the federal income tax consequences of the reverse stock split?
The following is a summary of certain material federal income tax
consequences of the reverse stock split; however, this does not purport to be a
complete discussion of all of the possible federal income tax consequences of
the reverse stock split. It does
21
not discuss any state, local, foreign or minimum income or other U.S. federal
tax consequences. Also, it does not address the tax consequences to shareholders
who are subject to special tax rules, such as banks, insurance companies,
regulated investment companies, personal holding companies, foreign entities,
nonresident alien individuals, broker-dealers and tax-exempt entities. This
discussion is based on the provisions of the United States federal income tax
law as of the date hereof, which is subject to change retroactively as well as
prospectively. This summary also assumes that the pre-split shares were, and
the post-split shares will be, held as "capital assets," as defined in the
Internal Revenue Code of 1986, as amended (generally, property held for
investment). Your tax treatment may vary depending upon your own particular
facts and circumstances. Accordingly, you should consult with your own tax
advisor concerning the effects of the reverse stock split on you.
You should recognize no gain or loss upon your exchange of your pre-split
shares for post-split shares pursuant to the reverse stock split (except to the
extent of any cash received in lieu of a fraction of your post-split share). You
should treat cash payments in lieu of a fractional post-split share as if the
fractional share were issued to you and then redeemed by the company for cash.
You should then recognize capital gain or loss equal to the difference, if any,
between the amount of cash you received and your basis in the fractional share.
The aggregate tax basis of the post-split shares received in the reverse
stock split (including any fraction of a post-split share deemed to have been
received) will be the same as your aggregate tax basis in the pre-split shares
you exchanged. Your holding period for the post-split shares will include the
period during which the you held the pre-split shares surrendered in the reverse
stock split.
We believe that the reverse stock split will qualify as a
"recapitalization" under Section 368(a)(1)(E) of the Internal Revenue Code. As a
result, the company will not recognize any gain or loss as a result of the
reverse stock split.
What is the recommendation of the Board of Directors?
The Board of Directors recommends that you vote FOR the proposal to approve
the amendments to our Amended and Restated Articles of Incorporation to effect a
reverse split of our issued and outstanding Common Stock and to file one such
amendment. The reverse split will combine a whole number of outstanding shares
between two and five of each of the Class A Common Stock and Class B Common
Stock into one share of Class A Common Stock and Class B Common Stock,
respectively, depending upon a determination by our board of directors that a
reverse stock split is in our best interests and the best interests of our
shareholders.
Independent Auditors
The board of directors has selected Ernst & Young LLP to serve as
independent auditors of our financial statements for the 2002 fiscal year. We
have been advised by Ernst & Young LLP that neither it nor any member thereof
has any direct or material indirect financial interest in our company or any of
our subsidiaries in any capacity. One or more representatives of Ernst & Young
will be present at the annual meeting, will have an opportunity to make a
statement if he or she desires to do so, and will be available to respond to
appropriate questions.
Audit Fees
Ernst & Young LLP billed us an aggregate of $_________ for
professional services rendered for the audit of our annual financial statements
for the 2001 fiscal year and for review of the financial statements included in
our Forms 10-Q for 2001.
Financial Information Systems Design and Implementation Fees
No fees were paid Ernst & Young LLP for any information technology
services (of the type described in Rule 2-01(c)(4)(ii) of Regulation S-X) during
2001.
All Other Fees
Ernst & Young LLP billed us an aggregate of $_________ for all
services rendered to us during fiscal 2001 other than the audit and information
technology services described above.
The audit committee has considered whether the provision of the
information technology services and other services covered in the two previous
paragraphs are compatible with maintaining Ernst & Young LLP's independence.
22
Annual Report on Form 10-K
We will provide without charge, at the written request of any shareholder
of record or beneficial owner of our stock as of March 1, 2002, a copy of the
our Annual Report on Form 10-K, including the financial statements and financial
statement schedule, as filed with the SEC, excluding exhibits. We will provide
exhibits if they are requested by eligible shareholders. We may impose a
reasonable fee for providing the exhibits. Requests for copies of our Annual
Report on Form 10-K should be mailed to:
Dan River Inc.
P.O. Box 261
Danville, Virginia 24543
Attention: Denise Laussade,
Vice President-Finance
Shareholder Nominations for Election of Directors
Under our bylaws, only persons nominated in accordance with certain
procedures will be eligible for election as directors. Shareholders are entitled
to nominate persons for election to the board of directors only if:
. the shareholder is otherwise entitled to vote generally in the election
of directors, and
. timely notice in writing is sent to our Secretary.
To be timely, a shareholder's notice must be received at our principal
executive offices not less than 130 days prior to the meeting.
If less than 60 days' notice or prior public disclosure of the date of the
annual meeting is given or made to shareholders, notice by the shareholder must
be received no later than the close of business on the 10th day following the
day on which such notice of the date the meeting was mailed or such public
disclosure was made, whichever occurs first.
The shareholder's notice must set forth for each person to be nominated for
election as a director:
. the name, age, business address and residence address of the person,
. the principal occupation or employment of the person,
. the number of shares of each class of common stock beneficially owned
by the person, and
. other information that would be required to be disclosed in connection
with the solicitation of proxies for the election of directors pursuant
to Regulation 14(a) under the Exchange Act.
The shareholder's notice must also set forth, with respect to the
shareholder giving such notice:
. the name and address of the shareholder, and
. the number of shares of each class of common stock beneficially owned by
the shareholder.
We may require any proposed nominee to furnish such other information as
may reasonably be required by us to determine the eligibility of such proposed
nominee to serve as a director.
Shareholder Proposals
Any shareholder proposals intended to be presented at our 2003 annual
meeting of shareholders pursuant to Rule 14a-8 under the Securities Exchange Act
of 1934 must be received no later than November 15, 2002 in order to be
considered for inclusion in the proxy materials to be distributed by the board
of directors in connection with the meeting. Any shareholder proposals intended
to be presented at our 2003 annual meeting of shareholders but not to be
included in the board's proxy materials under Rule 14a-8 must be received no
later than December 21, 2002 in order to be considered at the 2003 annual
meeting. However, if we give less than 60 days' notice of our 2003 annual
meeting of shareholders, then shareholder proposals intended to be presented at
the
23
meeting but not to be included in the board's proxy materials under Rule 14a-8
must be received no later than ten days after notice of the 2003 annual meeting
is mailed or a press release or other public communication announcing the
meeting date is made.
Expenses of Solicitation
We will bear the cost of solicitation of proxies by the board of directors
in connection with the annual meeting. No specific fee was allocated to services
provided in connection with the solicitation of proxies. We will reimburse
brokers, fiduciaries and custodians for reasonable expenses incurred by them in
forwarding proxy materials to beneficial owners of Common Stock held in their
names.
By Order of the Board of Directors
LOGO
Harry L. Goodrich
Secretary
Our annual report on Form 10-K for fiscal 2001, which includes audited
financial statements, accompanies this proxy statement. The annual report does
not form any part of the material for the solicitation of proxies.
__________________
24
ANNEX A
Text of Amendment to Amended and Restated Articles of Incorporation of Dan
River Inc.
Dan River Inc., a corporation organized and existing under the laws of the
State of Georgia, hereby certifies as follows:
1. The name of the corporation is Dan River Inc. (the "Corporation").
2. Pursuant to Section 14-2-1007 of the Georgia Business Corporation Code,
these Articles of Amendment amend the Amended and Restated Articles of
Incorporation of the Corporation (the "Articles of Amendment"). These
Articles of Amendment were duly adopted by the shareholders of the
Corporation in accordance with the provisions of Section 14-2-1003 of the
Georgia Business Corporation Code on April 30, 2002.
3. Upon the filing in the office of the Secretary of State of the State of
Georgia of these Articles of Amendment (the "Effective Date"), each
* ( * ) shares of all classes of Common Stock of the
---------- -----
Corporation then issued and outstanding automatically shall be combined
into one (1) share of fully paid and non-assessable Common Stock of the
Corporation of the same class. The number of authorized shares of each
class of the Common Stock and the par value of the Common Stock shall
remain unchanged. There shall be no fractional shares of Common Stock
issued. Each holder of shares of Common Stock who would otherwise be
entitled to receive a fractional share shall be entitled to receive a cash
payment in lieu thereof equal to the fraction to which the shareholder
would otherwise be entitled multiplied by the average of the closing sales
prices of the Common Stock (as adjusted to reflect the reverse split of
shares hereby) for the 20 trading days immediately prior to the Effective
Date, as reported by the New York Stock Exchange. If such price or prices
are not available, or if the stock is no longer traded on the New York
Stock Exchange, the fractional share payment shall be based on such other
price as determined by the Board of Directors of the Corporation.
- ----------------
* By approving this amendment, shareholders will approve the combination of any
number of shares of Common Stock between and including two and five (including
numbers consisting of whole shares) into one share. The Articles of Amendment
filed with the Georgia Secretary of State will include only that number
determined by the Board of Directors to be in the best interests of the
Corporation and its shareholders. The Board of Directors will not implement any
amendment providing for a different split ratio.
1
[TOP HALF OF PROXY CARD]
Vote by Telephone Vote by Internet
It's fast, convenient, and immediate! It's fast, convenient, and your vote is immediately
Call Toll-Free on a Touch-Tone Phone confirmed and posted.
1-877-PRX-VOTE (1-877-779-8683).
Follow these four easy steps: Follow these four easy steps:
1. Read the accompanying Proxy 1. Read the accompanying Proxy
Statement/Prospectus and Proxy Card. Statement/Prospectus and Proxy Card.
2. Call the toll-free number 2. Go to http://www.eproxyvote.com/___
1-877-PRX-VOTE (1-877-779-8683).
3. Enter your 14-digitVoter Control Number
3. Enter your 14-digit Voter Control Number located on your Proxy Card above your name.
located on your Proxy Card above your name.
4. Follow the instructions provided.
4. Follow the recorded instructions.
Your vote is important! Your vote is important!
Call 1-877-PRX-VOTE anytime! Go to http://www.eproxyvote.com/__anytime!
Do not return your Proxy Card if you are voting by Telephone or Internet.
CLASS A - FRONT
DAN RIVER INC.
PROXY FOR CLASS A COMMON STOCK
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS
ON APRIL 30, 2002
The undersigned hereby appoints Joseph L. Lanier, Jr. and John F. Maypole,
and each of them, proxies, with full power of substitution and resubstitution,
for and in the name of the undersigned, to vote all shares of Class A Common
Stock of Dan River Inc. that the undersigned would be entitled to vote if
personally present at the annual meeting of shareholders to be held on April 30,
2002, at 10:00 a.m., EDT, at the Riverview Inn, Danville, Virginia or at any
adjournment thereof, upon the matters described in the accompanying Notice of
Annual Meeting of Shareholders and Proxy Statement, receipt of which is hereby
acknowledged, and upon any other business that may properly come before the
annual meeting or any adjournment thereof. Said proxies are directed to vote on
the matters described in the Notice of Annual Meeting of Shareholders and Proxy
Statement as follows, and otherwise in their discretion upon such other business
as may properly come before the meeting or any adjournment thereof.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO DIRECTION IS INDICATED, THE
PROXY WILL BE VOTED FOR ITEMS 1 AND 2.
Unless you are voting electronically or by telephone, please sign exactly
as your name or names appear hereon. For more than one owners as shown above,
each should sign. When signing in a fiduciary or representative capacity, please
give full title. If this proxy is submitted by a corporation, it should be
executed in the full corporate name by a duly authorized officer, if a
partnership, please sign in partnership name by authorized person.
CLASS A - BACK
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE
FOR WITHHOLD
Nominee listed AUTHORITY
to vote for
nominee listed
[_] [_]
1. To elect one (1) director:
Richard L. Williams
2. To approve amendments to the amended and restated articles of
incorporation which will effect a reverse stock split of each class of
our issued and outstanding Common Stock and combine a whole number of
shares of Common Stock between two and five into one share of Common
Stock, depending upon a determination by the board of directors that a
reverse stock split is in our best interests and the best interests of
our shareholders, and authorizing the board of directors to file one
such amendment.
FOR AGAINST ABSTAIN
[_] [_] [_]
UNLESS YOU ARE VOTING ELECTRONICALLY OR BY TELEPHONE, PLEASE COMPLETE, DATE AND
SIGN THIS PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE, WHETHER OR NOT
YOU PLAN TO ATTEND THE ANNUAL MEETING ON APRIL 30, 2002. IF YOU ATTEND THE
ANNUAL MEETING, YOU MAY VOTE IN PERSON IF YOU WISH, EVEN IF YOU HAVE PREVIOUSLY
RETURNED YOUR PROXY OR VOTED ELECTRONICALLY OR BY TELEPHONE.
RECORD DATE SHARES:
Please be sure to sign and date this proxy.
-------------------------------------
Date
--------------------------------------------------------------------------
Shareholder sign here Co-owner sign here
--------------------------------------------------------------------------
[TOP HALF OF PROXY CARD]
Vote by Telephone Vote by Internet
It's fast, convenient, and immediate! It's fast, convenient, and your vote is immediately
Call Toll-Free on a Touch-Tone Phone confirmed and posted.
1-877-PRX-VOTE (1-877-779-8683).
Follow these four easy steps: Follow these four easy steps:
1. Read the accompanying Proxy 1. Read the accompanying Proxy
Statement/Prospectus and Proxy Card. Statement/Prospectus and Proxy Card.
2. Call the toll-free number 2. Go to http://www.eproxyvote.com/___
1-877-PRX-VOTE (1-877-779-8683).
3. Enter your 14-digitVoter Control Number
3. Enter your 14-digit Voter Control Number located on your Proxy Card above your name.
located on your Proxy Card above your name.
4. Follow the instructions provided.
4. Follow the recorded instructions.
Your vote is important! Your vote is important!
Call 1-877-PRX-VOTE anytime! Go to http://www.eproxyvote.com/__anytime!
Do not return your Proxy Card if you are voting by Telephone or Internet.
CLASS B - FRONT
DAN RIVER INC.
PROXY FOR CLASS B COMMON STOCK
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS
ON APRIL 30, 2002
The undersigned hereby appoints Joseph L. Lanier, Jr. and John F. Maypole,
and each of them, proxies, with full power of substitution and resubstitution,
for and in the name of the undersigned, to vote all shares of Class B Common
Stock of Dan River Inc. that the undersigned would be entitled to vote if
personally present at the annual meeting of shareholders to be held on April 30,
2002, at 10:00 a.m., EDT, at the Riverview Inn, Danville, Virginia or at any
adjournment thereof, upon the matters described in the accompanying Notice of
Annual Meeting of Shareholders and Proxy Statement, receipt of which is hereby
acknowledged, and upon any other business that may properly come before the
annual meeting or any adjournment thereof. Said proxies are directed to vote on
the matters described in the Notice of Annual Meeting of Shareholders and Proxy
Statement as follows, and otherwise in their discretion upon such other business
as may properly come before the meeting or any adjournment thereof.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO DIRECTION IS INDICATED, THE
PROXY WILL BE VOTED FOR ITEMS 1 AND 2.
Unless you are voting electronically or by telephone, please sign exactly
as your name or names appear hereon. For more than one owners as shown above,
each should sign. When signing in a fiduciary or representative capacity, please
give full title. If this proxy is submitted by a corporation, it should be
executed in the full corporate name by a duly authorized officer, if a
partnership, please sign in partnership name by authorized person.
CLASS A - BACK
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE
FOR WITHHOLD
Nominee listed AUTHORITY
to vote for
nominee listed
[_] [_]
1. To elect one (1) director:
Richard L. Williams
2. To approve amendments to the amended and restated articles of
incorporation which will effect a reverse stock split of each class of
our issued and outstanding Common Stock and combine a whole number of
shares of Common Stock between two and five into one share of Common
Stock, depending upon a determination by the board of directors that a
reverse stock split is in our best interests and the best interests of
our shareholders, and authorizing the board of directors to file one
such amendment.
FOR AGAINST ABSTAIN
[_] [_] [_]
UNLESS YOU ARE VOTING ELECTRONICALLY OR BY TELEPHONE, PLEASE COMPLETE, DATE AND
SIGN THIS PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE, WHETHER OR NOT
YOU PLAN TO ATTEND THE ANNUAL MEETING ON APRIL 30, 2002. IF YOU ATTEND THE
ANNUAL MEETING, YOU MAY VOTE IN PERSON IF YOU WISH, EVEN IF YOU HAVE PREVIOUSLY
RETURNED YOUR PROXY OR VOTED ELECTRONICALLY OR BY TELEPHONE.
RECORD DATE SHARES:
Please be sure to sign and date this proxy.
-------------------------------------
Date
--------------------------------------------------------------------------
Shareholder sign here Co-owner sign here
--------------------------------------------------------------------------