Filed Pursuant to Rule 424(b)(5)
Registration File No.: 333-86394

PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED JUNE 5, 2002)

16,000,000 SHARES

[COLLINS & AIKMAN CORPORATION LOGO]

COLLINS & AIKMAN CORPORATION

COMMON STOCK

---------------------

We are offering 16,000,000 shares of our common stock.

The shares of our common stock trade on the New York Stock Exchange under
the symbol "CKC." On June 10, 2002, the last sale price of the shares as
reported on the New York Stock Exchange was $10.75 per share. We effected a
one-for-2.5 reverse stock split on May 28, 2002. All information in this
prospectus supplement gives effect to the reverse stock split.

INVESTING IN THE COMMON STOCK INVOLVES RISKS THAT ARE DESCRIBED IN THE
"RISK FACTORS" SECTION BEGINNING ON PAGE S-7 OF THIS PROSPECTUS SUPPLEMENT.

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PER SHARE TOTAL
--------- ------------
Public offering price ........................... $ 10.00 $160,000,000
Underwriting discount ........................... $ 0.50 $ 8,000,000
Proceeds, before expenses, to Collins & Aikman .. $ 9.50 $152,000,000

The underwriters may also purchase up to an additional 2,400,000 shares
from Collins & Aikman at the public offering price, less the underwriting
discount, within 30 days from the date of this prospectus supplement to cover
over-allotments.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus supplement or the accompanying prospectus is truthful or
complete. Any representation to the contrary is a criminal offense.

The shares will be ready for delivery on or about June 14, 2002.

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MERRILL LYNCH & CO. JPMORGAN

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CREDIT SUISSE FIRST BOSTON DEUTSCHE BANK SECURITIES

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WACHOVIA SECURITIES
DRESDNER KLEINWORT WASSERSTEIN
FAHNESTOCK & CO. INC.

The date of this prospectus supplement is June 10, 2002.

INSIDE FRONT COVER
- ------------------

[Photos omitted]

Description:

Photos of convertible roof system, door panels & interior trim, flooring &
accessory mats, seat & headliner fabric, instrument panels & components,
Tuflor(TM) Flooring Systems, and production line.

TABLE OF CONTENTS

PROSPECTUS SUPPLEMENT

PAGE
-----
Prospectus Supplement Summary ................ S-1
Risk Factors ................................. S-7
Use of Proceeds .............................. S-18
Capitalization ............................... S-19
Unaudited Pro Forma Financial
Information ............................... S-20
Unaudited Pro Forma Condensed
Consolidated Statement of Operations ...... S-22
Notes To Unaudited Pro Forma
Condensed Consolidated Statement of
Operations ................................ S-23
Selected Historical Financial Data ........... S-28
Forward-Looking Statements ................... S-30
Management's Discussion and Analysis of
Financial Condition and Results of
Operations ................................ S-31
Business ..................................... S-51
Management ................................... S-63
Principal Stockholders ....................... S-67
Description of Our Indebtedness and
Products Preferred Stock .................. S-72
Description of C&A Capital Stock ............. S-79
Underwriting ................................. S-82
Legal Matters ................................ S-85
Experts ...................................... S-85
About This Prospectus Supplement ............. S-85
Incorporation of Documents by Reference....... S-86

PROSPECTUS

PAGE
-----
About This Prospectus ........................ 1
Forward-Looking Statements ................... 1
Where You Can Find Additional
Information ............................... 2
Incorporation of Documents by Reference 2
Use of Proceeds .............................. 3
Ratios of Earnings to Fixed Charges and
Ratio of Earnings to Combined Fixed
Charges and Preferred Stock Dividends...... 3
Information About Our Company ................ 4
Description of C&A Capital Stock ............. 5
Description of C&A Common Stock .............. 5
Description of C&A Preferred Stock ........... 8
Description of C&A and Products Debt
Securities ................................ 13
Registration Rights Holders .................. 25
Plan of Distribution ......................... 28
Legal Matters ................................ 29
Experts ...................................... 29

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No person has been authorized to give any information or to make any
representation not contained or incorporated by reference in this prospectus
supplement or the accompanying prospectus and, if given or made, such
information or representation must not be relied upon as having been authorized
by us or any underwriter, dealer or agent. Neither this prospectus supplement
nor the accompanying prospectus constitutes an offer to sell or a solicitation
of an offer to buy securities in any jurisdiction in which such offer or
solicitation is not authorized or in which the person making such offer or
solicitation is not qualified to do so or to any person to whom it is unlawful
to make such offer or solicitation.

S-I

This prospectus supplement and the accompanying prospectus incorporate
important business and financial information about us that is not included in
or delivered with these documents. This information is available without charge
to security holders upon written or oral request. See "Incorporation of
Documents by Reference."

You should rely only on the information contained in this document or to
which we have referred you. We and the underwriters have not authorized anyone
to provide you with information that is different. This document may only be
used where it is legal to sell these securities. The information in this
document may only be accurate on the date of this document, regardless of the
time of delivery of this document or any sale of common stock. Unless the
context otherwise requires, all information in this prospectus supplement and
the accompanying prospectus which refers to (a) "C&A Corporation" or "C&A"
refers only to Collins & Aikman Corporation, (b) "Products" refers only to
Collins & Aikman Products Co. and (c) "Collins & Aikman," "we," "us" or "our"
refers to Collins & Aikman Corporation together with its subsidiaries.

S-II

PROSPECTUS SUPPLEMENT SUMMARY

This summary highlights information contained elsewhere in this prospectus
supplement and in the accompanying prospectus. You should read carefully all of
the other information carefully before you consider investing in our common
stock. All information in this prospectus supplement assumes that the
underwriters' over-allotment option is not exercised. In addition, on May 28,
2002, we effected a one-for-2.5 reverse stock split. All information in this
prospectus supplement gives effect to this reverse stock split.

OUR COMPANY

We are a global leader in the design, engineering and manufacturing of
automotive interior components, including instrument panels, fully assembled
cockpit modules, floor and acoustic systems, automotive fabric, interior trim
and convertible top systems. We believe that we have the number one or two
North American market share position in terms of sales in eight out of the nine
major automotive interior categories. We are also the largest North American
supplier of convertible top systems in terms of sales. Our sales are
diversified among North American, European and South American automotive
original equipment manufacturers, or OEMs, and Tier I integrators. Tier I
integrators are direct suppliers to OEMs of integrated modules, such as a
complete seat, door or cockpit. In 2001, we manufactured components for over
90% of all light vehicle production platforms. We have over 25,000 employees
and more than 120 plants and facilities in North America, Europe and South
America. Our pro forma 2001 North American sales accounted for approximately
28.9% of the approximately $7.6 billion of total sales in the North American
markets in which we participate.

We are one of the industry's largest and most broadly based manufacturers
of automotive interior components, systems and modules. We have the capability
to supply diverse combinations of stylistically matched, functionally
engineered and acoustically integrated interior trim components, systems and
modules. We supply products from three primary categories: plastic components
and cockpits, carpet and acoustics and automotive fabrics. In addition, we
market our convertible top systems through the Dura convertible group.

We market all of our products through a single "global commercial
operations" group. All product groups have significant market positions:

o Plastic Components and Cockpits. We have leadership positions in all
major segments of the North American plastic interior trim market. We are
the number one supplier in terms of sales of instrument panels and a
leading supplier in terms of sales of fully assembled cockpit modules.
Our plastic components and cockpit products represented approximately
$2.0 billion, or 57%, of our 2001 pro forma sales.

o Carpet and Acoustics. We are the North American automotive industry's
number one producer in terms of sales of floor carpets with approximately
58% of the North American market and one of the largest suppliers in
terms of sales of interior dash insulators and luggage compartment trim.
Our carpet and acoustics products represented approximately $0.9 billion,
or 27%, of our 2001 pro forma sales.

o Automotive Fabrics. We believe we are the leading North American
producer of automotive fabric in terms of sales, which includes seat and
headliner fabric. Our automotive fabrics products represented
approximately $0.4 billion, or 12%, of our 2001 pro forma sales.

o Dura Convertible Top Systems. We are the largest North American supplier
of convertible top systems in terms of sales with a market share of over
70%. Our Dura convertible top roof systems represented approximately $0.1
billion, or 4%, of our 2001 pro forma sales.

OUR STRATEGY

Our goal is to become the leading manufacturer of automotive interior trim
components to OEMs and Tier I integrators and to realize the integration,
synergy and cost savings opportunities

S-1

created by our recent acquisitions. We believe that demand for our products
will be driven by the desire of OEMs and large Tier I integrators to reduce
their costs and achieve greater efficiencies through outsourcing to a smaller
number of larger scale, global suppliers and to satisfy consumer demand for
greater electronic and technological content in automobiles. In the past year,
we have completed three key acquisitions to position ourselves as a "one stop"
shopping service to OEMs and Tier I integrators -- the Becker and TAC-Trim
acquisitions, which enhanced our plastics and cockpits capabilities, and the
Joan acquisition, which enhanced our fabrics capabilities. We expect to pursue
further acquisitions that strategically enhance our ability to capitalize upon
these industry trends.

The following are the key elements of our strategy:

o Provide integrated product solutions that combine interior styling,
component systems and acoustical technologies. We produce components
that cover substantially all of the non-glass interior surfaces of
automobiles. We believe OEMs increasingly view the vehicle interior as a
major point of competitive differentiation and rely upon automotive
suppliers for research, engineering, design and styling capabilities. Our
ability to bundle multiple components into integrated, custom packages
distinguishes us from our competition and provides us with an opportunity
to increase our content per vehicle.

o Leverage technology to improve manufacturing efficiency. We believe we
have many opportunities to improve our manufacturing efficiency and cost
structure by rationalizing existing operations and incorporating
manufacturing "best practices," processes, procedures and technologies
into our operations. For example, we believe our TAC-Trim facilities are
among the most efficient plastics suppliers in North America and Europe
due to numerous proprietary manufacturing technologies such as the
Intellimold (Trade Mark) and Envirosoft (Trade Mark) patented processes
that allow us to manufacture and combine multiple products to produce
complex integrated interiors. We believe the application of technologies
such as Intellimold (Trade Mark) throughout our operations, as well as
the continued roll-out of these technologies throughout TAC-Trim's
operations, should significantly improve our plastics manufacturing cycle
time, labor costs and scrap rates.

o Pursue cost savings opportunities arising from our acquisitions. The
Becker, Joan and TAC-Trim acquisitions, in tandem with other
restructuring actions, have created the opportunity to realize
significant cost savings estimated at approximately $30 million per year
by 2003. We expect to realize these savings through a number of
initiatives, including purchasing savings, in-sourcing certain of our
plastics tooling and yarn dyeing requirements, consolidating research and
development and sales functions, capacity rationalization and reducing
global headquarters' costs. We expect opportunities for additional
incremental savings in 2003 and beyond.

RECENT DEVELOPMENTS

On May 28, 2002, we effected a one-for-2.5 reverse stock split and a
distribution of non-transferable rights to purchase C&A common stock to all
holders of C&A common stock as of May 28, 2002. Each shareholder (other than
certain shareholders who have agreed to contractually waive their right to
exercise rights) was granted one non-transferable right to purchase 0.40 shares
of common stock per share of common stock held by such holder. Shareholders
holding an aggregate of approximately 52,704,000 shares of common stock,
including holders associated with Heartland, Charles E. Becker, Elkin McCallum
and Textron (see "Principal Stockholders"), have agreed that they

S-2

will not exercise their rights. This means that the rights offering will be
exercisable for an aggregate of approximately 5,800,000 shares of common stock.
The exercise price of the non-transferable rights is $12.50 per whole share of
common stock for which the rights are exercisable. The non-transferable rights
become exercisable for a 16-day minimum period once a registration statement
for the issuance of the underlying shares has been declared effective by the
Securities and Exchange Commission. We are obligated to use our best efforts to
have a registration statement for the underlying shares declared effective
prior to October 31, 2002.

CORPORATE INFORMATION

We are a Delaware corporation and a holding company. All of our operations
are conducted through Collins & Aikman Products Co. and its subsidiaries. Our
principal executive offices are located at 250 Stephenson Highway, Troy,
Michigan 48083 and our telephone number at that address is (248) 824-2500.

THE OFFERING

Common stock offered by us... 16,000,000 shares

Common stock to be
outstanding after
this offering............... 83,198,852 shares(1)

Use of proceeds............. The net proceeds from this offering will be
used to repurchase preferred stock and for
general corporate purposes.

New York Stock
Exchange symbol............. "CKC"

Except as otherwise indicated, all information in this prospectus
supplement assumes that the underwriters' over-allotment option is not
exercised.

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(1) Based on shares outstanding as of May 16, 2002 and excludes (a) 1,057,595
shares of common stock subject to outstanding options granted pursuant to
our stock option plan, (b) 5,800,000 shares of common stock which may be
issued pursuant to the exercise of rights issued in the offering
described under "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Recent Developments" and (c)
160,000 shares of common stock subject to a presently exercisable
warrant. We recently adopted a new 6,600,000 share stock option plan
under which we presently intend to grant options to purchase
approximately 5,500,000 shares of common stock.

S-3

SUMMARY HISTORICAL FINANCIAL INFORMATION

The following table sets forth summary historical financial data for the
fiscal years ended December 25, 1999, December 31, 2000 and December 31, 2001
and the three months ended March 31, 2001 and 2002. The summary historical
financial information for the fiscal years ended December 25, 1999 and December
31, 2000 has been derived from C&A's historical consolidated financial
statements incorporated by reference in the prospectus supplement, which have
been audited by Arthur Andersen LLP, independent accountants (see "Change in
Accountants" in our Annual Report on Form 10-K for the year ended December 31,
2001, which is incorporated by reference in this prospectus supplement). The
summary historical financial information for the fiscal year ended December 31,
2001 has been derived from C&A's historical consolidated financial statements
incorporated by reference in the prospectus supplement, which have been audited
by PricewaterhouseCoopers LLP, independent accountants. The summary historical
financial information for the three month periods ended March 31, 2002 and
March 31, 2001 has been derived from C&A's unaudited historical condensed
financial statements, which, in the opinion of management, include all
adjustments, including usual recurring adjustments, necessary for the fair
presentation of that information for such period.

FISCAL YEAR ENDED THREE MONTHS THREE MONTHS
-------------------------------------------- ENDED ENDED
DECEMBER 25, DECEMBER 31, DECEMBER 31, MARCH 31, MARCH 31,
1999 2000 2001 2001 2002
-------------- -------------- -------------- -------------- -------------
(IN MILLIONS)

STATEMENT OF OPERATIONS DATA:
Net sales ..................................... $1,898.6 $1,901.8 $1,823.3 $ 453.1 $ 914.8
Cost of goods sold ............................ 1,613.9 1,635.2 1,604.5 394.3 783.7
-------- -------- -------- -------- --------
Gross profit .................................. 284.7 266.6 218.8 58.8 131.1
Selling, general and administrative ........... 152.8 158.5 164.4 38.2 67.6
Restructuring charges ......................... 33.4 -- 18.8 9.2 9.1
-------- -------- -------- -------- --------
Operating income .............................. 98.5 108.1 35.6 11.4 54.4
Income (loss) from continuing operations
after taxes .................................. (1.4) (1.4) (49.7) (7.1) (7.4)
Net income (loss) ............................. (10.2) 4.5 (46.2) (7.4) (7.4)
Income (loss) from continuing operations
per common share,
basic and diluted(1) ......................... (0.06) (0.06) (1.28) (0.25) (0.11)
Average common shares outstanding,
basic and diluted(1) ......................... 24.8 24.8 38.9 28.5 67.2
OTHER FINANCIAL DATA (FROM CONTINUING
OPERATIONS):
Depreciation and amortization ................. $ 71.5 $ 74.7 $ 81.8 $ 20.1 $ 30.5
Capital expenditures .......................... 86.4 69.0 54.5 10.7 27.4
SELECTED BALANCE SHEET DATA (AT PERIOD END):
Cash and cash equivalents ..................... $ 14.0 $ 20.9 $ 73.9 $ 23.4 $ 92.1
Total assets .................................. 1,348.9 1,280.3 2,987.9 1,281.2 3,093.1
Total debt (including short-term
borrowings) .................................. 915.6 887.8 1,337.6 824.7 1,331.6
Mandatorily redeemable preferred stock of
Products ..................................... -- -- 147.7 -- 160.5
Common stockholders' equity (deficit) ......... (151.1) (154.9) 374.7 (64.6) 361.5

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(1) Reflects the one-for-2.5 reverse stock split effected on May 28, 2002.

S-4

SUMMARY UNAUDITED PRO FORMA FINANCIAL INFORMATION

The summary unaudited pro forma consolidated financial information for the
fiscal year ended December 31, 2001 and the three months ended March 31, 2002
have been derived from the pro forma consolidated financial data included
elsewhere in this prospectus supplement. See "Unaudited Pro Forma Financial
Information." The summary unaudited pro forma condensed consolidated statement
of operations information for the fiscal year ended December 31, 2001 give pro
forma effect to our acquisitions of Becker, Joan and TAC-Trim (the
"Acquisitions"), the financings related to the TAC-Trim acquisition (the
"Financings") and the sale and leaseback transaction entered into by TAC-Trim
described elsewhere in this prospectus supplement, as if they had occurred on
January 1, 2001. Pro forma adjustments have been used to eliminate historical
goodwill amortization over the periods presented. In addition, the unaudited
pro forma statement of operations information for the fiscal year ended
December 31, 2001 gives pro forma effect to the February 2001 Heartland equity
investment and all of the unaudited pro forma statements of operations
information give effect to this offering and the assumed use of proceeds
therefrom, in each case as if they had occurred on January 1, 2001. The summary
pro forma balance sheet data as of March 31, 2002 gives effect solely to this
offering and the assumed use of proceeds as described in "Use of Proceeds"
therefrom as if it had occurred on March 31, 2002.

The data set forth below should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations,"
"Unaudited Pro Forma Financial Information" and the historical consolidated
financial statements and related notes for C&A, Becker, Joan and TAC-Trim
incorporated by reference in this prospectus supplement. The pro forma
consolidated financial data presented herein is not necessarily indicative of
results that we would have achieved had the referenced transactions been
consummated as of the dates indicated, or that we may achieve in the future.

S-5

SUMMARY UNAUDITED PRO FORMA FINANCIAL DATA
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)

FISCAL YEAR THREE MONTHS
ENDED ENDED
DECEMBER 31, 2001 MARCH 31, 2002
------------------ --------------

PRO FORMA STATEMENT OF OPERATIONS DATA:
Net sales ......................................... $3,481.0 $ 914.8
Cost of goods sold ................................ 3,026.8 783.7
-------- ---------
Gross profit ...................................... 454.2 131.1
Selling, general and administrative ............... 251.7 67.6
Restructuring charges ............................. 30.2 9.1
Operating income .................................. 172.3 54.4
Interest expense, net ............................. 149.4 37.3
Loss on sale of receivables ....................... 6.5 1.1
Products Preferred Stock requirements ............. 29.3 7.1
Income (loss) from continuing operations .......... (41.1) (3.3)
Income (loss) from continuing operations per common
share:
Basic and diluted(1) ............................. $ (0.53) $ (0.04)
Average common shares outstanding(1)
Basic and diluted ................................ 77.6 77.8
OTHER PRO FORMA FINANCIAL DATA:
Depreciation and amortization ..................... $ 154.1 $ 30.5
Capital expenditures .............................. 159.4 27.4

AT MARCH 31,
2002
---------
SELECTED PRO FORMA BALANCE SHEET DATA:
Cash and cash equivalents ............................................. $ 142.6
Working capital (current assets less current liabilities) ............. 30.1
Total assets .......................................................... 3,158.6
Total debt ............................................................ 1,331.6
Products mandatorily redeemable Preferred Stock ....................... 100.5
Stockholders' equity .................................................. 472.0

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See the Unaudited Pro Forma Financial Information for additional detail related
to the amounts above.

(1) Reflects the one-for-2.5 reverse stock split effected on May 28, 2002.

S-6

RISK FACTORS

You should carefully consider each of the risks described below, together
with all of the other information contained in this prospectus supplement and
the accompanying prospectus, before deciding to invest in the common stock.

RISKS RELATED TO OUR BUSINESS

DEMAND IN THE AUTOMOTIVE INDUSTRY IS SIGNIFICANTLY DEPENDENT ON THE U.S.
AND THE GLOBAL ECONOMIES AND OUR BUSINESS AND PROFITABILITY ARE EXPOSED TO
CURRENT AND FUTURE UNCERTAINTIES.

Our financial performance depends, in large part, on conditions in the
global automotive markets that we serve and, generally, on the U.S. and global
economies. Demand in the automotive industry fluctuates in response to overall
economic conditions and is particularly sensitive to changes in interest rate
levels, consumer confidence and fuel costs. In our largest market, the North
American automotive market, reported results from our customers in 2001
reflected lower sales volumes and lower prices for new vehicles than in 2000.
This is reflected in our lower sales and operating margins for 2001. The
September 11th terrorist attacks, recession and other recent developments
adversely affected consumer confidence throughout the U.S. and much of the
world. These developments exacerbated the uncertainty in our markets and their
future impact on us is difficult to predict. Any sustained weakness in demand
or continued downturn in the economy generally would have a material adverse
effect on us.

Our sales are also impacted by retail inventory levels and our customers'
production schedules. In 2001, our OEM customers significantly reduced their
production and inventory levels and reduced their orders from us due to the
uncertain economic environment. In this environment, we cannot predict future
production rates and inventory levels and the sustainability of any recovery.
In addition, we have historically experienced sales declines during the OEMs'
scheduled shut-downs, which usually occur during the third calendar quarter.
Continued uncertainty and other unexpected fluctuations may have a material
adverse effect on us.

THE BASE OF CUSTOMERS WHICH WE SERVE IS CONCENTRATED, AND THE LOSS OF
BUSINESS FROM A MAJOR CUSTOMER OR THE DISCONTINUATION OF PARTICULAR VEHICLE
MODELS COULD REDUCE OUR SALES AND HARM OUR PROFITABILITY.

Because of the relative importance of a few large customers and the high
degree of concentration of OEMs in the automotive industry, our business is
exposed to a high degree of risk related to customer concentration.
DaimlerChrysler AG, General Motors Corporation and Ford Motor Company and their
respective affiliates were our three largest customers and they directly or
indirectly accounted for approximately 29%, 22% and 19% of our 2001 net sales,
respectively. A loss of significant business from, or adverse performance by,
any of these customers would be harmful to our profitability. Although we
receive purchase orders from most of our customers, these purchase orders
typically provide for the supply of a customer's annual requirements for a
particular model or assembly plant, renewable on a year-to-year basis, rather
than for the purchase of a specific quantity of products. It is not possible
for us to predict the level of new production for 2002 car sales. The loss of
business with respect to significant vehicle models could also have a material
adverse effect on us.

There is substantial and continuing pressure from automotive manufacturers
to reduce costs, including costs associated with outside suppliers like us. For
example, OEM customers in the automotive industry attempted to impose price
decreases and givebacks throughout 2001. Such attempted price decreases were
generally in the 3% to 8% range. Several reductions have been agreed to, and
others are currently being negotiated with OEMs and pressures may increase if
overall economic and industry conditions do not improve. We attempt to resist
such downward pricing pressure, while trying to preserve our business
relationships with these customers, but such pricing pressure may have a
material adverse effect on us. At the same time, it is difficult for us to
offset these downward pricing pressures through alternative, less costly
sources of raw materials. In addition, throughout 2001, suppliers engaged in
supplying products in the automotive industry have attempted to impose price
increases on their customers. As a result, we have experienced pricing pressure
from our suppliers. We cannot assure you that we will not be materially and
adversely affected by these substantial and continuing pricing pressures.

S-7

THE PRICES THAT WE CAN CHARGE SOME OF OUR CUSTOMERS ARE PREDETERMINED AND
WE BEAR THE RISK OF COSTS IN EXCESS OF OUR ESTIMATES.

Sales contracts with some of our customers require us to provide our
products at predetermined prices. In some cases, these prices decline over the
course of the contract. The costs that we incur in fulfilling these contracts
may vary substantially from our initial estimates. Unanticipated cost increases
may occur as a result of several factors, including increases in the costs of
labor, components or materials. In some cases, we may be permitted to pass on
to our customers the cost increases associated with specific materials. Cost
overruns that we cannot pass on to our customers could materially and adversely
affect us.

WE MAY NOT BE ABLE TO SUCCESSFULLY INTEGRATE OUR ACQUIRED OPERATIONS OR
REALIZE THE INTENDED BENEFITS OF OUR ACQUISITIONS.

Our future operations and cash flow will depend largely upon our ability
to integrate our Becker, Joan and TAC-Trim acquisitions, achieve the strategic
operating objectives for these acquisitions and realize significant synergies
and cost savings as a result. The Acquisitions account for 49 of our over 120
plants and facilities and approximately 12,500 of our approximately 25,000
employees. TAC-Trim individually accounts for 41 of our plants and facilities
and approximately 12,000 of our employees located across seven different
countries, including two countries where we did not previously operate. We have
not previously undertaken an integration process as large or complex as the
integration plans required by these three acquisitions collectively or by the
TAC-Trim acquisition individually. In order to succeed, we will need to:

o realize projected synergies and cost savings on a timely basis;

o consolidate information technologies;

o capitalize on our increased purchasing power;

o effectively control the progress of our integration process and
associated costs;

o consolidate our program management, research and development and
engineering operations;

o capitalize on our prime contractor strategy and the opportunities
afforded by our broader products offering; and

o maintain strong relationships with Tier I integrators and OEMs.

To the extent we have misjudged the nature and extent of industry trends
or our competition, we may have difficulty in achieving our operating and
strategic objectives. In addition, our integration activities will place
substantial demands on our management, operational resources and financial and
internal control systems. Our future operating results will depend upon our
ability to implement and improve our operating and financial controls and to
combine, train and manage our employee base. There is a risk that the diversion
of management attention, particularly in a difficult operating environment,
will affect our sales and the attention that our management can devote to this
and other operational, financial and strategic issues. In addition, in some of
our past non-U.S. acquisitions, we have encountered integration and systems
difficulties typical of foreign transactions which have given rise to material
weaknesses. See "Change in Accountants" in our Annual Report on Form 10-K for
the year ended December 31, 2001, which is incorporated herein by reference.
Since TAC-Trim involves significant foreign operations, we cannot assure you
that we will not encounter similar difficulties going forward. All statements
concerning the benefits, cost savings and synergies we expect to realize from
the TAC-Trim acquisition and the related financings are forward-looking
statements.

Some of the benefits we expect to derive from our acquisitions include
contractual and other relationships with customers and suppliers. We may not be
able to preserve all of these relationships and some of our anticipated
contractual relationships may cease following the Acquisitions.

WE MAY PURSUE ADDITIONAL ACQUISITIONS THAT FURTHER OUR CURRENT STRATEGIES.

We may selectively identify and acquire other businesses with
complementary products, manufacturing capabilities or geographic markets and we
expect to continually evaluate such opportunities. We

S-8

cannot assure you that any business acquired by us will be successfully
integrated with our operations or prove to be complementary in the manner
expected or profitable. We could incur further indebtedness in connection with
our acquisition strategy and increase our leverage. We could acquire companies
and operations in geographic markets, including foreign markets, in which we do
not currently operate. Acquisitions outside of North America may present unique
difficulties and increase our exposure to the risks attendant to international
operations. The process of integrating acquired companies and operations into
our existing operations may result in unforeseen operating difficulties and may
require significant financial resources that would otherwise be available for
the ongoing development or expansion of existing operations. Any failure to
successfully execute an acquisition could materially and adversely affect us.

OUR CAPITAL RESOURCES MAY BE INADEQUATE IF WE ARE UNABLE TO SUCCESSFULLY
INTEGRATE OUR ACQUIRED BUSINESSES OR IF ECONOMIC CONDITIONS WORSEN.

As a substantially larger company with higher debt levels, our liquidity
requirements will exceed historical levels and we will need to effectively
manage our cash position and working capital levels. In particular, since we
expect significantly greater sales of cockpit modules over the next several
years, we will need to make substantial capital and other investments to meet
our customer requirements. To the extent that the integration of our acquired
businesses is not accomplished in accordance with our expectations, economic
conditions in the automotive industry worsen, we utilize our revolving credit
capacity for acquisitions or otherwise or we are unable to renew our
receivables facility at its maturity, we may be faced with inadequate
liquidity. Additional sources of liquidity may include additional debt, but our
debt instruments may not permit us to incur additional debt, and we may be
unable to secure equity or other financing. This could have a material adverse
effect on us.

WE MAY INCUR UNANTICIPATED CONTINGENT LIABILITIES AS A RESULT OF THE
ACQUISITIONS AND WE MAY EXPERIENCE UNANTICIPATED LIABILITIES ASSOCIATED WITH
FORMER DISCONTINUED OPERATIONS.

We may incur unforeseen environmental, tax, pension, litigation or other
liabilities in connection with the Acquisitions or we may underestimate the
known liabilities. If such liabilities materialize or are greater than we
estimate, they could have a material adverse effect on us. In addition, we have
significant responsibilities related to some of our formerly owned businesses,
or discontinued operations, such as those relating to post-retirement,
casualty, environmental, product liability, lease and other matters. Based upon
the information presently available to us and our insurance coverage, we do not
believe that any of these liabilities will have a material adverse effect upon
our financial condition or results of operations, however, we could be
incorrect in our assumptions and the extent of those contingent liabilities of
which we are aware may exceed our expectations and there may be other such
liabilities of which we presently have no knowledge. See "Business --
Environmental Matters and Legal Proceedings."

IF WE ARE UNABLE TO MEET FUTURE CAPITAL REQUIREMENTS, OUR COMPETITIVE
POSITION MAY BE ADVERSELY AFFECTED.

In securing new business, we are typically required to expend significant
amounts of capital for engineering, development, tooling and other costs.
Generally, we seek to recoup these costs through pricing over time, but we may
be unsuccessful due to competitive pressures and other market constraints or if
a customer ceases production of a particular vehicle. We believe that we will
be able to fund capital expenditures through cash flow from operations,
borrowings under our credit facilities and sales of receivables under our
receivables facility. We cannot assure you that we will have adequate funds to
make all the necessary capital expenditures or that the amount of future
capital expenditures will not be materially in excess of our anticipated
expenditures. If we are unable to make necessary capital expenditures, our
business and our competitive position will be materially and adversely
affected.

RECENT TRENDS AMONG OUR CUSTOMERS WILL INCREASE COMPETITIVE PRESSURES IN
OUR BUSINESSES.

In recent years, the competitive environment among suppliers to the
vehicle manufacturers in the automotive industry has changed significantly as
these manufacturers have sought to outsource more vehicular components, modules
and systems and to use on-line auctions in order to obtain further price
reductions. In addition, these sectors have experienced substantial
consolidation as OEMs have sought to

S-9

lower costs, improve quality and increasingly purchase complete systems and
modules rather than separate components. This consolidation has caused, and its
continuation will continue to amplify, the pricing pressures outlined above in
the discussion of the concentration of our customers. Our competitive strategy
will be to position ourselves as the prime contractor of choice to both Tier I
integrators and OEM assembly plants by supplying a full spectrum of integrated
interior trim components. This strategy presents the risk that some of our
customers may be competitors of ours in certain products as well. If our
business strategy is unsuccessful or our new products fail to gain acceptance
with our targeted customers, it would have a material adverse effect on us.

Furthermore, the trend toward consolidation among automotive parts
suppliers is resulting in a smaller number of large suppliers like us who
benefit from purchasing and distribution economies of scale. If we cannot
achieve the cost savings and operational improvements expected from our prime
contractor business strategy or such savings and improvements are not
sufficient to allow us to compete favorably in the future with other larger,
consolidated companies, we will be materially and adversely affected.

OUR STRATEGY MAY NOT SUCCEED IF ANTICIPATED OUTSOURCING FAILS TO OCCUR DUE
TO UNION CONSIDERATIONS.

Because of the economic benefits inherent in outsourcing to suppliers and
the costs associated with reversing a decision to purchase automotive interior
systems and components from an outside supplier, automotive manufacturers'
commitments to purchasing automotive interior systems and components from
outside suppliers, particularly on a just-in-time basis, are contemplated to
increase. However, under the contracts currently in effect in the United States
and Canada between each of Ford, General Motors and DaimlerChrysler and the
United Auto Workers ("UAW") and the Canadian Auto Workers ("CAW"), in order for
any of such automotive manufacturers to obtain from external sources components
that it currently produces, it must first notify the UAW or the CAW of such
intention. If the UAW or the CAW objects to the proposed outsourcing, some
agreement will have to be reached between the UAW or the CAW and the automotive
manufacturer. Factors that will normally be taken into account by the UAW, the
CAW and the automotive manufacturer include:

o whether the proposed new supplier is technologically more advanced than
the automotive manufacturer;

o whether the new supplier is unionized;

o whether cost benefits exist; and

o whether the automotive manufacturer will be able to reassign union
members whose jobs are being displaced to other jobs within the same
factories.

In the event that outsourcing does not continue for any reason, it may
have a material adverse effect on us.

OUR PRODUCTS ARE SUBJECT TO CHANGING TECHNOLOGY, WHICH COULD PLACE US AT A
COMPETITIVE DISADVANTAGE RELATIVE TO ALTERNATIVE PRODUCTS INTRODUCED BY
COMPETITORS.

We believe that our customers rigorously evaluate their suppliers on the
basis of product quality, price competitiveness, technical expertise and
development capability, new product innovation, reliability and timeliness of
delivery, product design capability, manufacturing expertise, operational
flexibility, customer service and overall management. Our success will depend
on our ability to continue to meet our customers' changing specifications with
respect to these criteria. We may, therefore, require significant ongoing and
recurring additional capital expenditures and investment in research and
development, manufacturing and other areas to remain competitive. We cannot
assure you that we will be able to achieve the technological advances or
introduce new products that may be necessary to remain competitive. Further, we
cannot assure you that any technology developed by us can be adequately
protected such that we can maintain a competitive advantage.

S-10

WE DEPEND ON THE SERVICES OF OTHER KEY INDIVIDUALS AND RELATIONSHIPS, THE
LOSS OF WHICH WOULD MATERIALLY HARM US.

Our success will depend, in part, on the efforts of our executive officers
and other key employees. In addition, our future success will depend on, among
other factors, our ability to attract and retain other qualified personnel. The
loss of the services of any of our key employees or the failure to attract or
retain employees could have a material adverse effect on us. Our largest
stockholder, Heartland Industrial Partners L.P. ("Heartland"), provides us with
valuable strategic, operational and financial guidance. If, for any reason,
such guidance ceased, it could have a material adverse effect upon us as well.

WE MAY BE SUBJECT TO WORK STOPPAGES AT OUR FACILITIES OR THOSE OF OUR
PRINCIPAL CUSTOMERS WHICH COULD SERIOUSLY IMPACT THE PROFITABILITY OF OUR
BUSINESS.

As of March 31, 2002, approximately 51% of our global work force was
unionized. If our unionized workers were to engage in a strike, work stoppage
or other slowdown in the future, we could experience a significant disruption
of our operations, which could have a material adverse effect on us.

Many OEMs and their suppliers have unionized work forces. Work stoppages
or slowdowns experienced by OEMs or their suppliers could result in slowdowns
or closures of assembly plants where our products are included in assembled
vehicles. For example, over the past four years, there have been labor strikes
against General Motors that have resulted in work stoppages at General Motors.
Furthermore, organizations responsible for shipping our customers' products may
be impacted by occasional strikes staged by the unions representing
transportation employees. Any interruption in the delivery of our customers'
products would reduce demand for our products and could have a material adverse
effect on us.

A GROWING PORTION OF OUR REVENUE MAY BE DERIVED FROM INTERNATIONAL
SOURCES, WHICH EXPOSES US TO ADDITIONAL UNCERTAINTY.

Approximately 20% of our 2001 pro forma sales were derived from shipments
to destinations outside of the United States and Canada. As part of our
business strategy, we intend to expand our international operations and
customer base. Sales outside of the U.S. and Canada, particularly sales to
emerging markets, are subject to other various risks, including:

o governmental embargoes or foreign trade restrictions such as antidumping
duties;

o changes in U.S. and foreign governmental regulations;

o tariffs;

o fuel duties;

o other trade barriers;

o the potential for nationalization of enterprises;

o economic downturns;

o inflation;

o environmental laws and regulations;

o political, economic and social instability;

o foreign exchange risk; and

o difficulties in receivable collections and dependence on foreign
personnel and foreign unions.

In addition, there are tax inefficiencies in repatriating funds from non-U.S.
subsidiaries. To the extent such repatriation is necessary for us to meet our
debt service or other obligations, this will adversely affect us. International
operations are frequently conducted through joint venture arrangements that can
materially limit our operational and financial control of the business. We
acquired interests in two foreign joint ventures as part of the TAC-Trim
acquisition, one of which is 50% owned by us while the other one is

S-11

majority owned and publicly traded in Brazil. We do not expect to have the
ability to access the cash flow of these two joint ventures for the foreseeable
future and we may have significant funding requirements in the future with
respect to the 50% joint venture.

WE MAY INCUR MATERIAL LOSSES AND COSTS AS A RESULT OF PRODUCT LIABILITY
AND WARRANTY CLAIMS THAT MAY BE BROUGHT AGAINST US.

We face an inherent business risk of exposure to product liability claims
in the event that the use of our current and formerly manufactured or sold
products results, or is alleged to result, in bodily injury and/or property
damage. We cannot assure you that we will not experience any material product
liability losses in the future or that we will not incur significant costs to
defend such claims. We cannot assure you that our product liability insurance
coverage will be adequate for any liabilities that may ultimately be incurred
or that it will continue to be available on terms acceptable to us. In
addition, if any of our products are or are alleged to be defective, we may be
required to participate in a government-required or OEM-instituted recall
involving such products. Each vehicle manufacturer has its own policy regarding
product recalls and other product liability actions relating to its suppliers.
However, as suppliers become more integrally involved in the vehicle design
process and assume more of the vehicle assembly functions, vehicle
manufacturers are increasingly looking to their suppliers for contribution when
faced with product liability claims. A successful claim brought against us in
excess of our available insurance coverage or a requirement to participate in a
product recall may have a material adverse effect on our business.

In the ordinary course of our business, contractual disputes over
warranties can arise. In the past five years or more, we have not been required
to make any material payments in respect of warranty claims. In most cases,
financial responsibility for warranty costs are contractually retained by our
customer so long as the customers' specifications are met, but we may
nonetheless be subjected to requests for cost sharing or pricing adjustments as
a part of our commercial relationship with the customer. Recently, an employee
of one OEM suggested that the OEM may seek significant cost sharing from us for
a warranty matter relating to an instrument panel manufactured by TAC-Trim that
has been subject to a collaborative process of problem resolution and
management between TAC-Trim and the customer since spring 2000. In this
instance, the work order explicitly excludes TAC-Trim from financial
responsibility for warranty matters. However, we cannot assure you that we will
not be required to financially address this issue or other significant warranty
claims in the future.

OUR BUSINESS MAY BE MATERIALLY AND ADVERSELY AFFECTED BY COMPLIANCE
OBLIGATIONS AND LIABILITIES UNDER ENVIRONMENTAL LAWS AND REGULATIONS.

We are subject to federal, state, local and foreign environmental, and
health and safety, laws and regulations that:

o affect ongoing operations and may increase capital costs and operating
expenses in order to maintain compliance with such requirements; and

o impose liability relating to contamination at our facilities, and at
other locations such as former facilities, facilities where we have sent
wastes for treatment or disposal, and other properties to which we (or a
company or business for which we are responsible) are linked. Such
liability may include, for example, investigation and clean-up of the
contamination, personal injury and property damage caused by the
contamination, and damages to natural resources. Some of these
liabilities may be imposed without regard to fault, and may also be joint
and several (which can result in a liable party being held responsible
for the entire obligation, even where other parties are also liable).

We are legally or contractually responsible or alleged to be responsible
for the investigation and remediation of contamination at various sites, and
for personal injury or property damages, if any, associated with such
contamination. At some of these sites we have been notified that we are a
potentially responsible party under the federal Superfund law or similar state
laws. Other sites at which we may be responsible for contamination may be
identified in the future, including with respect to divested and acquired
businesses.

S-12

We have incurred, and expect to continue to incur, substantial costs to
satisfy our compliance obligations and discharge our liabilities under
environmental laws and regulations. While, based on the information presently
known to us, we do not expect environmental costs or contingencies to have a
material adverse effect on us, we may learn new information concerning existing
matters or discover new matters that could materially and adversely affect us.
In addition, evolving environmental, and health and safety, laws and
regulations may be adopted or imposed. We can give no assurance that we will
not incur material environmental costs or liabilities in the future. See
"Business -- Environmental Matters and Legal Proceedings."

RISKS RELATED TO OUR COMMON STOCK

WE ARE CONTROLLED BY HEARTLAND, WHOSE INTERESTS IN OUR BUSINESS MAY BE
DIFFERENT THAN YOURS.

As of March 31, 2002, on a pro forma basis after giving effect to this
offering, Heartland and its affiliates would have beneficially owned
approximately 32.3% of C&A's outstanding shares of common stock. By reason of
their share ownership and certain stockholders agreements, Heartland and its
affiliates are able to strongly influence or effectively control actions to be
taken by our stockholders or directors, including the election of at least
seven members of C&A's Board of Directors, amendments to C&A's amended and
restated certificate of incorporation and by-laws and approval of significant
corporate transactions, including mergers and sales of substantially all of our
assets.

Pursuant to one stockholders agreement, Heartland, Blackstone Capital
Partners L.P. ("Blackstone"), Wasserstein L.L.C. ("Wasserstein") and certain of
their various affiliates have agreed to vote their shares to ensure that seven
members of C&A's Board of Directors will be designated by Heartland, so long as
Heartland continues to beneficially own at least 25% of the common stock owned
by it as of the date of the stockholders agreement. Blackstone and Wasserstein
have separately and unilaterally relinquished their rights to designate
directors under this stockholders agreement. Charles E. Becker and the other
former Becker stockholders are party to another stockholders agreement pursuant
to which they have agreed to vote their shares for designees of Heartland
representing a majority of C&A's Board of Directors. Heartland currently has
seven designees on C&A's 15 member Board of Directors. In addition, Textron has
the right to designate an additional member of the Board of Directors, which it
has presently chosen not to exercise. The size and composition of C&A's Board
of Directors is subject to change. You should consider that the interests of
Heartland may differ from yours in material respects. See "Management" and
"Principal Stockholders."

WE MAY NOT BE ABLE TO MANAGE OUR BUSINESS AS WE MIGHT OTHERWISE DUE TO OUR
HIGH DEGREE OF LEVERAGE.

We have indebtedness that is substantial in relation to our stockholders'
equity and cash flow. At March 31, 2002, on a pro forma basis after giving
effect to this offering, we would have had $1,331.6 million of outstanding
total debt. Our percentage of total debt and Products Preferred Stock to total
capitalization was 75.2% at March 31, 2002 on such pro forma basis. As of March
31, 2002, we would have had an additional $100 million of unutilized borrowing
capacity under our revolving credit facility and lines of credit and $209.8
million of unutilized amounts under our receivables facility. The degree to
which we are leveraged will have important consequences, including the
following:

o our ability to obtain additional financing in the future for working
capital, capital expenditures, acquisitions, business development efforts
or general corporate purposes may be impaired;

o a substantial portion of our cash flow from operations will be dedicated
to the payment of interest and principal on our indebtedness, dividends
on the Products outstanding preferred stock (the "Products Preferred
Stock"), and capital and operating lease expense, thereby reducing the
funds available to us for other purposes;

o our operations are restricted by our debt instruments and the terms of
the Products preferred stock, which contain material financial and
operating covenants, and those restrictions will limit, among other
things, our ability to borrow money in the future for working capital,
capital expenditures, acquisitions or other purposes;

S-13

o indebtedness under our senior credit facilities and the financing cost
associated with our receivables facility will be at variable rates of
interest, which makes us vulnerable to increases in interest rates;

o our leverage may place us at a competitive disadvantage as compared with
our less leveraged competitors;

o our leverage will make us more vulnerable in the event of a downturn in
general economic conditions or in any of our businesses; and

o our flexibility in planning for, or reacting to, changes in our business
and the industry in which we operate may be limited.

Our ability to service or refinance, when required, the Products Preferred
Stock and our debt, preferred stock, lease and other obligations will depend
principally upon our future operating performance, which will be affected by
prevailing economic conditions and financial, business and other factors, many
of which are beyond our control. Our sources of liquidity includes a
receivables facility which must be renewed on an annual basis. Our inability to
do this may adversely affect us. See "Description of Our Indebtedness and
Products Preferred Stock" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Liquidity and Capital
Resources."

FUTURE SALES OF OUR COMMON STOCK AFTER THIS OFFERING, WHETHER BY US OR OUR
STOCKHOLDERS, COULD ADVERSELY AFFECT THE MARKET PRICE OF THE COMMON STOCK.

Although the common stock is publicly traded, there has been a relatively
small public float for C&A common stock prior to this offering. After this
offering, approximately 83,200,000 shares of C&A common stock will be
outstanding. We believe that approximately 62,120,187 shares are "restricted
shares" within the meaning of Rule 144 under the Securities Act of 1933 and
held by persons who are parties to registration rights agreements with us.
These include approximately 8,860,000 shares held by persons associated with
two former affiliates which may be freely sold without limitation under Rule
144 after June 13, 2002. All of these persons have agreed in these registration
rights agreements not to sell or otherwise dispose of their shares for at least
120 days following specified transactions, including this offering, as
requested by the underwriters for this offering. However, the former affiliates
will have held their shares as non-affiliates of Collins & Aikman for a
sufficient period of time to freely sell their shares without restriction
following the expiration of this 120-day period. Moreover, these former
affiliates are investment funds and the registration rights agreements do not
prohibit them from distributing the shares held by them to their investors,
free of the transfer restrictions so long as these distributees own less than
1% of the outstanding C&A common stock. One of these funds has indicated that
it may do so prior to or following the offering. Other holders of shares may be
permitted, from time to time, to sell shares of C&A common stock subject to
compliance with the volume and other limitations of Rule 144 or pursuant to the
exercise of their demand or piggyback registration rights. Sales of shares of
C&A common stock in the public market, or the perception that such sales could
occur, may have a disruptive effect on the market price for, and trading in,
our common stock, particularly in light of our relatively small public float.
These sales might also make it more difficult for us to sell equity securities
in the future and at a price that we deem appropriate. In addition,
shareholders entitled to participate in the rights offering may exercise rights
and sell shares in a manner that could similarly adversely affect the market
for shares of C&A common stock. We have registered up to approximately $750.0
million in value of common stock that may be issued under the registration
statement to which this prospectus supplement relates, which may have some of
the adverse effects to which we have referred above.

We also may issue shares of C&A common stock from time to time as
consideration for future acquisitions and investments. In the event any such
acquisition or investment is significant, the number of shares that we may
issue may in turn be significant. In addition, we may also grant registration
rights covering those shares in connection with any such acquisitions and
investments. We have also adopted a new stock option plan covering
approximately 6,600,000 million shares. We intend to grant options to purchase
approximately 5,500,000 shares of C&A common stock at the offering price in
connection with this offering and we may grant options at exercise prices in
the future under the plan at prices below prevailing market prices. If any
options are issued with exercise prices less than the fair market value of

S-14

our common stock, we may be required to recognize an expense associated with
the difference between the exercise price and the fair market value. In
addition, we expect to reprice existing options to purchase approximately
500,000 shares of C&A common stock at the offering price. This will require us
to recognize an expense equal to the difference between the former exercise
price and new exercise price.

WE HAVE SUBSTANTIAL AMOUNTS OF PREFERRED STOCK, SOME OF WHICH BEARS
DIVIDENDS AT INCREASING RATES, WHICH COULD ADVERSELY AFFECT YOUR INTERESTS AS A
COMMON STOCKHOLDER.

On a pro forma basis, after giving effect to this offering, we would have
had approximately $203.5 million liquidation preference of Products Preferred
Stock on March 31, 2002. The terms of these shares are summarized under
"Description of Our Indebtedness and Products Preferred Stock", but prospective
investors in C&A common stock should note that dividends accrue at increasing
rates and we are permitted to pay only a portion of the dividends in cash under
our debt instruments. In addition, under certain circumstances, if we have not
offered to purchase certain of these shares that are still held by Textron,
there are further dividend increases up to 20% per annum rate. These provisions
and the accrual of non-cash dividends could adversely affect your returns as a
common stock investor.

WE HAVE NOT RECENTLY PAID DIVIDENDS ON C&A COMMON STOCK, AND OUR HOLDING
COMPANY STRUCTURE MAY LIMIT OUR ABILITY TO PAY DIVIDENDS IN THE FUTURE.

C&A is a holding company whose only material asset is the capital stock of
its subsidiaries. C&A's principal business operations are conducted by its
subsidiaries, and C&A has no operations of its own. Accordingly, C&A's only
source of cash to pay dividends is expected to be distributions with respect to
its ownership interests in its subsidiaries.We did not pay dividends or make
any other distributions with respect to C&A common stock during 2001. There can
be no assurance that C&A's subsidiaries will generate sufficient cash flow to
pay dividends or distribute funds to C&A or that contractual restrictions,
including certain restrictive covenants contained in the agreements governing
our credit facilities and senior subordinated notes or future debt instruments,
will permit such dividends or distributions. See "Description of Our
Indebtedness and Products Preferred Stock."

A CHANGE OF CONTROL COULD RESULT IN THE ACCELERATION OF OUR DEBT
OBLIGATIONS.

Certain changes of control could result in the acceleration of our senior
credit facilities, our senior subordinated notes and our senior notes and
adverse obligations in respect of the Products Preferred Stock. We cannot
assure you that we would be able to repay any indebtedness that is accelerated
as a result of a change in control or meet our other obligations, and this
would likely materially adversely affect our financial condition.

THE C&A COMMON STOCK PRICE MAY BE VOLATILE, AND YOU COULD LOSE ALL OR PART
OF YOUR INVESTMENT.

The market for equity securities has been extremely volatile. The
following factors could cause the price of C&A common stock in the public
market to fluctuate significantly from the price you will pay in this offering:

o actual or anticipated variations in our quarterly results of operations;

o changes in market valuations of companies in the retail automotive parts
industry;

o changes in expectations of future financial performance or changes in
estimates of securities analysts;

o fluctuations in stock market prices and volumes;

o issuances or sales of common stock or other securities in the future;

o the addition or departure of key personnel; and

o announcements by us or our competitors of acquisitions, investments or
strategic alliances.

Volatility in the market price of C&A common stock may prevent investors
from being able to sell their common stock at or above the public offering
price. In the past, class action litigation has often been brought against
companies following periods of volatility in the market price of those
companies' common stock. We may become involved in this type of litigation in
the future. Litigation is often expensive and diverts management's attention
and company resources and could have a material adverse effect on our business
and results of operations.

S-15

OUR QUARTERLY OPERATING RESULTS MAY FLUCTUATE, WHICH COULD CAUSE OUR STOCK
PRICE TO DECLINE.

We have historically experienced sales declines during our OEM customers'
scheduled shut-downs, which usually occur during the third calendar quarter. In
addition, the following are among the factors that could cause our operating
results to fluctuate from quarter-to-quarter:

o declines in the North American, South American and European automobile
and light truck builds;

o labor costs and strikes at our major customers and at our facilities;

o prices for raw materials used in the manufacture of our products;

o changes in consumer preferences;

o dependence on significant automotive customers;

o the level of competition in the automotive supply industry and pricing
pressure from automotive customers; and

o risks associated with conducting business in foreign countries.

Many of these factors are beyond our control, and we believe that you
should not rely on our results of operations for past periods as any indication
of our expected results in any future period. If our revenues vary
significantly from quarter-to-quarter, our business could be difficult to
manage and our quarterly results could be below expectations of investors and
stock market analysts, which could cause our stock price to decline.

C&A'S AMENDED AND RESTATED CERTIFICATE OF INCORPORATION AND BYLAWS CONTAIN
PROVISIONS THAT COULD DISCOURAGE A TAKEOVER OR PREVENT OR DELAY A MERGER THAT
YOU BELIEVE IS FAVORABLE.

o authorizing C&A's Board of Directors to issue, without prior stockholder
approval, preferred stock commonly referred to as "blank check" preferred
stock, with rights senior to those of the common stock;

o providing for a classified Board of Directors;

o prohibiting stockholder action by written consent;

o limiting the ability of stockholders to call special meetings or remove
directors; and

o requiring advance notice for stockholders to nominate directors or
propose matters for consideration at stockholder meetings.

These and other provisions in C&A's amended and restated certificate of
incorporation and bylaws could reduce the price that investors might be willing
to pay for shares of C&A common stock in the future and result in the market
price being lower than it would be without these provisions. See "Description
of C&A Capital Stock -- Anti-Takeover Provisions."

THERE MAY BE RISKS RELATED TO OUR PRIOR USE OF ARTHUR ANDERSEN LLP AS OUR
INDEPENDENT PUBLIC ACCOUNTANT.

The consolidated financial statements of C&A for the years ended December
31, 2000 and December 25, 1999, included in the Annual Report on Form 10-K for
the year ended December 31, 2001, as amended, and incorporated by reference
into this prospectus supplement, to the extent and for the periods indicated in
their report, have been audited by Arthur Andersen LLP, independent public
accountants. Arthur Andersen LLP has not consented to the incorporation by
reference of their report in this prospectus supplement and we have dispensed
with the requirement to file their consent in reliance upon Rule 437a of the
Securities Act of 1933. Since Arthur Andersen LLP has not consented to the
incorporation by reference of their report in this prospectus supplement, you
will not be able to recover

S-16

against Arthur Andersen LLP under Section 11 of the Securities Act of 1933 for
any untrue statements of a material fact contained in the financial statements
audited by Arthur Andersen LLP or any omissions to state a material fact
required to be stated therein.

The indictment of Arther Andersen LLP may adversely affect Arthur Andersen
LLP's ability to satisfy any claims arising from the provision of auditing
services to us, including claims that may arise out of Arthur Andersen LLP's
audit of our financial statements incorporated by reference in this prospectus
supplement, and may impede our access to the capital markets after completion
of this offering. Arthur Andersen LLP, which audited our financial statements
incorporated by reference in this prospectus supplement for the years ended
December 25, 1999 and December 30, 2000, has informed us that on March 14, 2002
an indictment was unsealed charging it with federal obstruction of justice
arising from the government's investigation of Enron Corp. Arthur Andersen LLP
has indicated that it intends to contest the indictment vigorously. Should we
seek to access the public capital markets after we complete this offering, SEC
rules will require us to include or incorporate by reference in any prospectus
three years of audited financial statements. The SEC's current rules would
require us to present audited financial statements for one or more fiscal years
audited by Arthur Andersen LLP. If the SEC ceases accepting financial
statements audited by Arthur Andersen LLP, we could be unable to access the
public capital markets unless PricewaterhouseCoopers LLP, our current
independent accounting firm, or another independent accounting firm, is able to
audit the financial statements originally audited by Arthur Andersen LLP. Any
delay or inability to access the public capital markets caused by these
circumstances could have a material adverse effect on our business,
profitability and growth prospects.

WE HAD PREVIOUSLY REPORTED MATERIAL WEAKNESSES WHICH MAY REQUIRE FURTHER
RESOLUTION.

We note that, as a result of its 1999 audit, Arthur Andersen LLP reported
material weaknesses in C&A's internal control systems. The identified
conditions specifically related to four of our foreign locations, most of which
had been recently acquired. These weaknesses were primarily attributable to the
effects of implementing a new computer system as part of our acquisition
integration strategy and Year 2000 compliance efforts. Issues at these
locations primarily related to the detail records supporting the general ledger
and staff training needs. As a result, in 2000, we committed significant
resources to addressing the issues, including the re-implementation of certain
systems, implementing an internal audit function and replacing controllers at
three of the four locations. We made significant progress in addressing these
issues; however, Arthur Andersen LLP continued to report material weaknesses
following its 2000 audit because two of these four foreign locations were
assessed as continuing to have similar material weaknesses as in 1999.
Improvement efforts at these locations were hampered by personnel turnover and
continuing acquisition integration efforts. Arthur Andersen LLP did not modify
its report on our 1999 and 2000 audited financial statements as a consequence
of these material weaknesses. These items are no longer material weaknesses,
but they remain as items to be worked on and may require further resolution.

S-17

USE OF PROCEEDS

We expect to receive net proceeds from the sale of the shares of
approximately $150.5 million, after deducting the underwriting discount and
estimated offering expenses. Assuming the overallotment option is exercised, we
will receive an additional $22.8 million in net proceeds from the sale of the
shares. We intend to apply such net proceeds as follows:

o approximately $100.0 million to repurchase shares of the Products series
A preferred stock issued to Textron as part of the consideration for the
TAC-Trim acquisition at a price of approximately 75% of their liquidation
preference and accrued and unpaid dividends thereon; and

o the balance of approximately $50.5 million (or $73.3 million if the
overallotment option is exercised) will be retained by us for general
corporate purposes, which may include strategic acquisitions and
investments, debt reduction, preferred stock repurchases, or reduction of
our receivables facility balances.

We do not have current specific plans for the balance of the proceeds of
$50.5 million (or $73.3 million if the overallotment option is exercised). Our
determination as to how to specifically apply the balance of the proceeds will
depend upon a number of factors. We continually evaluate strategic acquisitions
and investments that will enhance the capabilities of our existing businesses
or add to our global presence or customer base, but we do not have any
agreements or understandings with respect to any of the foregoing. At some
presently indeterminate point in time, if no such opportunities present
themselves, we may elect to reduce our term debt under our credit facilities or
repurchase additional series A preferred stock or reduce utilization of our
receivables facility with all or a portion of such proceeds. Our decision will
be based primarily upon our view as to how best to maximize our flexibility and
return on capital.

As of March 31, 2002, Products had approximately $187.9 million in
liquidation preference, including accrued dividends of $5.2 million, of
outstanding series A preferred stock, which presently bears dividends at a rate
of 11% per annum and is mandatorily redeemable in January 2013. As of March 31,
2002 term debt under our senior credit facilities had a weighted average
interest rate of 8.9%. Our term debt matures on December 31, 2005. Indebtedness
under our senior credit facilities was incurred as part of the consideration
for the TAC-Trim acquisition and to refinance indebtedness under our prior
senior credit facilities. Pending application of proceeds to any particular
use, we intend to invest in high quality, short-term investments.

S-18

CAPITALIZATION

The following table sets forth our cash and cash equivalents and
capitalization as of March 31, 2002, on an actual basis and as adjusted to give
effect to the application of the net proceeds from this offering. You should
read this table in conjunction with the information under the headings "Use of
Proceeds," "Unaudited Pro Forma Financial Information," "Selected Historical
Financial Data" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and our financial statements and the notes
to those financial statements incorporated by reference in this prospectus
supplement.

AS OF MARCH 31, 2002
---------------------------
ACTUAL AS ADJUSTED
------------ ------------
(IN MILLIONS)

Cash and cash equivalents ......................... $ 92.1 $ 142.6
========= =========
Credit Facilities:(1)(2)
Revolving Credit Facility ....................... -- --
Senior Credit Facilities ........................ 395.5 395.5
10 3/4% Senior Notes of Products due 2011 ......... 500.0 500.0
11 1/2% Senior Subordinated Notes of Products due
2006 ............................................ 400.0 400.0
Other debt(3) ..................................... 36.1 36.1
--------- ---------
Total debt ...................................... 1,331.6 1,331.6
--------- ---------
Products Preferred Stock(4) ....................... 160.5 100.5
--------- ---------
Common stock ($0.01 par value, 300.0 shares
authorized; 67.2 shares issued and outstanding at
March 31, 2002, actual; as adjusted 83.2 shares
issued and outstanding at March 31, 2002, as
adjusted)(5) .................................... 0.7 0.8
Other paid-in capital(5) ........................ 1,124.1 1,274.5
Accumulated deficit (4) ......................... (690.2) (730.2)
Accumulated other comprehensive loss ............ (73.1) (73.1)
--------- ---------
Total stockholders' equity ..................... 361.5 472.0
--------- ---------
Total capitalization ......................... $ 1,853.6 $ 1,904.1
========= =========

- ----------
(1) Does not include our receivables facility. Our receivables facility
provides us with up to $250.0 million of availability. None of this
facility was utilized and $209.8 million was available at March 31, 2002.

(2) Our senior credit facilities are comprised of $175.0 million of revolving
credit availability, $100.0 million of tranche A term loans and $300.0
million of tranche B term loans. See "Description of Our Indebtedness and
Products Preferred Stock."

(3) Other debt is principally comprised of borrowings at our Brazilian
subsidiary.

(4) Represents the reduction in carrying value of Products Preferred Stock as
a result of the repurchase. The $100.0 million cash payment for the
repurchase of Products series A preferred stock is at a price of
approximately 75% of its liquidation preference of $133.3 million. The
$133.3 million of liquidation preference was initially valued at
approximately $60.0 million. The difference between the $60.0 million
reduction in carrying value and the $100.0 million cash payment will be
accounted for as an increase in accumulated deficit.

(5) Represents $150.5 million of net offering proceeds.

S-19

UNAUDITED PRO FORMA FINANCIAL INFORMATION

The following unaudited pro forma condensed consolidated statements of
operations have been derived from: (a) our audited and unaudited historical
financial statements filed in our 2001 Form 10-K as amended and March 31, 2002
Form 10-Q as amended and in the audited and unaudited financial statements of
Collins & Aikman, Becker, Joan and TAC-Trim included in our Current Reports on
Form 8-K filed September 17, 2001, October 10, 2001 and January 14, 2002,
respectively, adjusted, as applicable, to give pro forma effect to the
Acquisitions, Financings, the February 2001 Heartland equity investment, the
$86.9 million sale and leaseback transaction entered into by TAC-Trim ("Textron
Leasing Transaction"), this offering and the assumed use of proceeds, and (b)
unaudited interim historical data for Collins & Aikman, Becker, Joan and
TAC-Trim, adjusted, to give pro forma effect to the Acquisitions, Financings
and this offering and the assumed use of proceeds. All information is presented
after giving effect to the one-for-2.5 reverse stock split. Shares associated
with proceeds which will be used for general corporate purposes are not
considered in computing loss per share.

The TAC-Trim cash purchase price was financed through a combination of the
sale of 12.8 million shares of C&A's common stock and debt financing including
fees and expenses associated with the foregoing. Debt financing for the
TAC-Trim acquisition, as well as the refinancing of Products' existing credit
facilities, was obtained through $400 million of term loans under Products' new
$575 million senior credit facilities, the sale of accounts receivable under a
new accounts receivable financing arrangement and the issuance of $500 million
of 10 3/4% Senior Notes due 2011.

The unaudited pro forma condensed consolidated statements of operations
for the year ended December 31, 2001 give pro forma effect to the Acquisitions,
the Financings, the Textron Leasing Transaction and this offering and the
assumed use of proceeds, as if they had occurred on January 1, 2001. In
addition, the pro forma condensed consolidated statement of operations for the
year ended December 31, 2001 gives effect to the February 2001 Heartland equity
investment and the unaudited pro forma condensed consolidated statement of
operations for the three months ended March 31, 2002 gives effect solely to
this offering and the assumed use of proceeds. The unaudited pro forma
condensed consolidated balance sheet as of March 31, 2002 gives pro forma
effect to this offering as if it occurred on March 31, 2002.

The unaudited pro forma condensed consolidated statements of operations
are presented for informational purposes only and do not purport to represent
what our results of operations would actually have been had the referenced
transactions occurred at such time or to project our results of operations for
any future period or date.

The pro forma adjustments are based upon available information and various
assumptions that we believe are reasonable. The pro forma adjustments and
certain assumptions are described in the accompanying notes. Pro form
adjustments have been used to eliminate historical goodwill amortization over
the periods presented. Appraisals for Becker and Joan were performed during
2001 and the related allocation of purchase price was completed. The allocation
of the purchase price for the TAC-Trim acquisition is preliminary and will be
revised upon the completion of the fixed asset and intangible asset appraisals,
which are in progress. Accordingly, as the appraisals are completed it is
likely that adjustments to depreciation expense as well as specifically
identifiable intangible assets and the related amortization will be recorded in
future periods. The Company based on current knowledge and consultation with
the outside valuation specialists, estimates the value of identifiable,
definite-lived intangible assets at $40 million. Such intangible assets include
proprietary technologies such as Intellimold, Invisitech and other
manufacturing and software processes, customer relationships and trade names.
Based on the nature of these intangibles and their estimated useful lives, the
weighted average amortization period is seven years. The Company estimates that
there are no indefinite lived intangible assets resulting from the TAC-Trim
acquisition.

The unaudited pro forma condensed consolidated statements of operations
should be read in conjunction with the historical financial statements of C&A,
Becker, Joan and TAC-Trim and the related notes to such financial statements
found in our 2001 Form 10-K and March 31, 2002 Form 10-Q/A and our Current
Reports on Form 8-K filed September 17, 2001, October 10, 2001 and January 14,
2002, respectively, and incorporated by reference herein.

S-20

The purchase of Becker, Joan and TAC-Trim was at a significant premium
over historical net assets and the primary reasons for this premium are
described below:

The Becker acquisition was important to the Company because it elevated us
from a sub-scale plastics player to a sizable, broad-range plastics supplier.
Becker's large-tonnage press capabilities complement our small-to-medium
tonnage capabilities, rounding out the products we can offer our customers.
Greater operating scale justifies greater investment in research and
development, which leads to better customer relationships and future technology
leadership. Synergies between Becker and C&A led the Company to pay well in
excess of the fair value of Becker's identifiable assets: together the two
businesses may negotiate lower prices on resin due to larger volume; several
plants can be closed into larger plants with open capacity, saving overhead
costs; Becker brings tooling operations which allow us to in-source tooling
requirements and capture some profit; and Charles Becker, a skilled and
successful veteran of the auto industry, provides synergies by applying his
expertise to C&A's plastics, tooling and European operations as C&A's Vice
Chairman.

The Joan acquisition was important to the Company because it (1) increased
our market share in automotive fabrics and (2) gave us more control over
product quality and supply-chain management through vertical integration.
Greater operating scale justifies greater investment in research and
development, which leads to better customer relationships and future technology
leadership. Synergies between Joan and C&A led us to pay well in excess of the
fair value of Joan's identifiable assets: together the two businesses may
negotiate lower prices on yarn and dye due to larger volume; Joan's Lowell and
Hickory plants were not transferred because we had open capacity in our fabrics
plants, saving all overhead costs at the former Joan facilities; Joan brings a
package dying operation, Western Avenue Dyers, which allows us to in-source our
package yarn dying requirements and capture some profit; and the ability to
package dye a portion of its requirements provides leverage on the suppliers
who provide the balance of our package-dyed yarn.

The TAC-Trim acquisition was important to the Company because it further
elevated us from a sizeable plastics player to a leading supplier in scale and
in manufacturing and product technology. Greater operating scale justifies
greater investment in research and development, which leads to better customer
relationships and future technology leadership. Synergies between TAC-Trim and
the Company led us to pay well in excess of the fair value of TAC-Trim's
identifiable assets: together the two businesses may negotiate lower prices on
resin and MRO due to larger volume; TAC-Trim's leading manufacturing
disciplines can be rolled out to our other plants to increase profitability and
decrease capital expenditures and working capital; before our acquisition of
TAC-Trim, the business bought parts for its cockpit products from outside
manufacturers, but we can in-source many of these parts and capture profit;
consolidation of overlapping headquarters functions generate savings on
headcount and occupancy costs.

S-21

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2001
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)

PRO FORMA ADJUSTMENTS
--------------------------------------------------
PRO
1/1/01- 1/1/01- 1/1/01- OFFERING FORMA
6/30/01 9/20/01 12/20/01 TAC-TRIM ADJUST- AS AD-
C&A BECKER JOAN TAC-TRIM ITALY(1) OTHER SUBTOTAL MENTS JUSTED
--------- ------- ------- ---------- -------- ------- ---------- ---------- ---------

Net sales ............... $1,823.3 $97.3 $94.6 $1,590.0 $(124.2) $ -- $3,481.0 $ -- $3,481.0
Cost of goods sold ...... 1,604.5 91.2 75.9 1,430.3 (145.0) (30.1)(2) 3,026.8 -- 3,026.8
-------- ----- ----- -------- ------- ------ -------- ------ --------
Gross profit ............ 218.8 6.1 18.7 159.7 20.8 30.1 454.2 -- 454.2
Selling, general and
administrative
expenses ............... 164.4 11.1 3.2 83.0 (8.1) (1.9)(3) 251.7 -- 251.7
Restructuring charges ... 18.8 1.2 -- 10.2 -- -- 30.2 -- 30.2
-------- ----- ----- -------- ------- ------ -------- ------ --------
Operating income ........ 35.6 (6.2) 15.5 66.5 28.9 32.0 172.3 172.3
Interest expense, net ... 84.3 3.2 2.6 8.2 (1.0) 52.1 (4) 149.4 -- 149.4
Loss on sale of
receivables ............ 10.8 -- -- -- -- (4.3)(5) 6.5 -- 6.5
Products preferred
stock requirements ..... 2.4 -- -- -- -- 46.2 (6) 48.6 (19.3)(6) 29.3
Other (income)
expense, net ........... 6.4 (0.2) (0.1) 38.8 3.4 (32.4)(7) 15.9 -- 15.9
Income (loss) from
continuing
operations before
income taxes ........... (68.3) (9.2) 13.0 19.5 26.5 (29.6) (48.1) 19.3 (28.8)
Income tax expense
(benefit) .............. (18.6) (1.8) 5.7 8.4 9.5 9.1 (8) 12.3 -- 12.3
-------- ------ ----- -------- -------- ------ --------- ------ --------
Income (loss) from
continuing
operations ............. $ (49.7) $(7.4) $ 7.3 $ 11.1 $ 17.0 $(38.7) $ (60.4) $ 19.3 $ (41.1)
======== ===== ===== ======== ======= ====== ======== ====== ========
Reflects the one-for-2.5 reverse stock split effected on May 28, 2002
Income (loss) from continuing operations per common share:
Basic and diluted .................................................................................................... $ (0.53)
Average common shares outstanding:
Basic and diluted .................................................... ............................................... 77.6
========

See notes to Unaudited Pro Forma Condensed Consolidated Statements of Operations

S-22

NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS

The Unaudited Pro Forma Condensed Consolidated Statement of Operations for
the year ended December 31, 2001 reflects results of operations for Becker,
Joan and TAC-Trim independently through the acquisition dates of July 3, 2001,
September 21, 2001 and December 20, 2001, respectively. Subsequent to the
acquisition dates, results of operations for Becker, Joan and TAC-Trim have
been included in the results of operations of C&A.

The unaudited pro forma condensed consolidated statement of operations
includes adjustments necessary to reflect the estimated effect of the
Acquisitions, Financings, the February 2001 Heartland equity investment and the
Textron Leasing Transaction as if they had occurred on January 1, 2001.

1. The statement of operations for TAC-Trim reflects a 90% consolidated
interest in Textron Automotive Italia S.r.l. ("TAC-Trim Italy"). The TAC-Trim
acquisition provides for the acquisition of only 50% of TAC-Trim Italy's parent
company and gives both parties significant participatory rights. This
adjustment provides for the removal of TAC-Trim Italy. See footnote 7 for the
adjustment to account for C&A's corresponding 50% equity investment in TAC-Trim
Italy's parent company.

2. Represents pro forma adjustments to decrease cost of goods sold for the
respective entries as follows (in millions):

YEAR ENDED DECEMBER 31, 2001
------------------------------------------------
BECKER JOAN TAC-TRIM TOTAL
---------- --------- ---------- ----------

Depreciation .................................... (a)(e) $(0.2) $ -- $ (7.7) $ (7.9)
Joan purchase savings ........................... (b) -- (0.4) -- (0.4)
Cost associated with leases not assumed ......... (c) -- (0.3) -- (0.3)
Material purchase savings ....................... (d) -- -- -- (3.6)
Textron Leasing Transaction ..................... (e) -- -- 9.6 9.6
Purchase accounting adjustment to customer
supply contracts ............................... (f) -- -- (27.5) (27.5)
------
$(30.1)
======

- ----------
(a) Represents (i) decreased depreciation expense, primarily resulting from the
reduction in value of leasehold improvements for leases on facilities to be
closed in connection with the Becker acquisition, and (ii) decreased
depreciation expense from the reduction of assets resulting from the
Textron Leasing Transaction.

(b) In connection with the Joan acquisition, Collins & Aikman entered into a
contract with a company owned by the selling shareholder to purchase flat
woven goods. The adjustment reflects the difference between historical and
contractually agreed prices applied to actual purchases made from the
previously related party supplier during the periods indicated.

(c) Adjustment reflects costs associated with leases not assumed on Joan
facilities contractually excluded from the Joan acquisition. All other
costs associated with the retained business continue to be reflected in the
Unaudited Pro Forma Condensed Consolidated Statement of Operations.

(d) Collectively, Collins & Aikman, Becker and TAC-Trim have both common
suppliers and common commodity purchases. The adjustment reflects purchase
savings mathematically derived from the lowest historically contracted
pricing applied to actual purchase volumes during the pro forma periods
presented.

(e) The adjustments reflect the impact of the Textron Leasing Transaction
completed in connection with the transactions. Assuming the Textron Leasing
Transaction had occurred on January 1, 2001, we would have replaced
depreciation expense with lease expense. The estimated depreciation expense
associated with the assets included in the Textron Leasing Transaction was
$7.7 million for the year ended December 31, 2001. The estimated lease
expense from the Textron Leasing Transaction would have been $9.6 million
for the same period.

(f) The adjustment reflects the impact of purchase accounting adjustments to
customer supply contracts.

S-23

3. Represents pro forma adjustments to increase/(decrease) selling,
general and administrative expense as follows (in millions):

YEAR ENDED DECEMBER 31, 2001
------------------------------------------------
BECKER JOAN TAC-TRIM TOTAL
---------- --------- ---------- ----------

Elimination of related party management fees
and other .......................................... (a) $(1.4) $ -- $ -- $(1.4)
Elimination of certain management positions ......... (b) (0.4) (0.3) (2.7) (3.4)
Amortization ........................................ (c) 1.8 -- 5.7 7.5
TAC-Trim employee benefit plan adjustments .......... (d) -- -- 2.2 2.2
Net increase in parent company management
fee ................................................ (e) -- -- -- 0.3
-----
5.2
Less: Historical goodwill amortization ............. (7.1)
-----
$(1.9)
=====

- ----------
(a) Represents adjustment to eliminate related party management fees and other
fees historically paid by Becker to its related parties. The management and
oversight function will be replaced by support provided by Collins & Aikman
and Heartland (see 3(e) for the net increase in quarterly advisory fees).

(b) Reflects the elimination of compensation and benefits costs of certain
executive management positions that are redundant with existing positions.
The selling companies are primarily responsible for severance costs
associated with these individuals. Collins & Aikman anticipates incurring
$0.6 million in severance costs relating to these individuals. Such costs
are not reflected in the unaudited pro forma condensed consolidated
financial statement.

(c) Reflects amortization of intangible assets for TAC-Trim which are assumed
to have a value of $40 million and a 7 year average life. The allocation of
the purchase price for the TAC-Trim acquisition is preliminary and will be
revised upon the completion of the fixed asset and intangible asset
appraisals, which are in progress. If the TAC-Trim intangible assets were
$10 million greater or less than the $40 million assigned value, the pro
forma EPS (without regard to tax effect, if any) would have been $0.02
lower or higher, respectively. Appraisals for Becker and Joan were
performed during 2001 and the related allocation of purchase price was
completed. As a result of these appraisals, $18 million was allocated to
definite lived intangible assets, representing non-compete agreements,
which will be amortized over their five year lives.

(d) In connection with the TAC-Trim acquisition, certain purchase accounting
adjustments for TAC-Trim pensions and other post-retirement benefit plans
will be necessary. These adjustments reflect the net effect on historically
recorded benefit expenses as if the transactions had occurred on January 1,
2001 and primarily result from a decrease in the funded status of the
pension plan and conventional purchase accounting adjustments, offset by
savings derived from a change to a cash balance plan (as provided by the
amended TAC-Trim acquisition agreement).

(e) Represents the net additional quarterly advisory fee contractually arranged
with Heartland.

4. Represents the increase in interest expense to reflect the impact of
(i) the elimination of interest expense reflected in the historical financial
statement, which is replaced by (ii) interest expense resulting from the
acquisition pro forma debt structure, and (iii) the amortization of financing
costs over the terms of the corresponding debt. A summary follows (in
millions):

YEAR ENDED
DECEMBER 31, 2001
------------------

Interest on Revolving Credit Facility (a) ..................... $ --
Interest on Tranche A Facility (a) ............................ 7.8
Interest on Tranche B Facility (a) ............................ 24.0
Interest on Products 11 1/2% Senior Subordinated Notes ........ 46.0
Interest on Products 10 3/4% Senior Notes ..................... 53.8
Other (b) ..................................................... 7.7
-------
Subtotal ................................................... 139.3
Amortization of debt issue costs (c) .......................... 10.7
-------
Interest expense under new debt structure .................. 150.0
Less: historical interest expense ............................. (97.9)
-------
Net increase ............................................... $ 52.1
=======

- ----------
(a) The interest on the revolving credit facility and the tranche A term loan
facility is variable based on LIBOR plus 3.75%, with a minimum LIBOR rate
of 3.00%. The assumed interest rate of 7.75% was in effect during the
period. The interest on the tranche B term loan facility is variable based
on LIBOR plus 4.00%, with a minimum LIBOR rate of 3.00%. The interest rate
of 8.00% was in effect during the period. Based on $100 million of
borrowings under the tranche A term facility and $300 million of borrowings
under the tranche B term facility, a 0.125% increase or decrease in the
assumed weighted average interest rate for the term loans would change pro
forma interest expense by $0.4 million for the year ended December 31,
2001.

(b) Other includes interest on foreign debt, commitment fees and letters of
credit fees.

(c) Debt issuance costs are amortized over the term of the corresponding
agreements ranging from 4 to 10 years. Offering adjustment represents
write-off of unamortized debt issuance costs allocable to the debt being
repaid.

S-24

5. Represents the elimination of historical loss on sale of receivables
and replacement with the pro forma loss on sale of receivables. The resulting
pro forma loss on sale of receivables assumes the sale of $183.3 million of
receivables and an effective rate of 3.52% (commercial paper rate at December
31, 2001, plus 1.50%).

6. Represents the preferred stock requirements on Products Preferred Stock
issued as part of the TAC-Trim acquisition (in millions):

YEAR ENDED
DECEMBER 31, 2001 OFFERING
------------------- -----------

Products Preferred Stock requirements calculated using the effective
interest method (annual dividend rate carrying value of $82.2 million
(Series A) ............................................................. $ 26.5 $ (19.3)
Products Preferred Stock requirements calculated using the effective
interest method (annual dividend rates of 12%, escalating to 16%) on the
carrying value of $64.7 million (Series B and C)........................ 22.1 --
Less: historical preferred stock requirements recorded .................. (2.4) --
------- -------
$ 46.2 $ (19.3)
======= =======

The $19.3 million offering adjustment gives effect to the $100 million
repurchase of $133.3 million liquidation preference of Products Series A
Preferred Stock with a carrying value of $60 million. The $40 million excess
over the carrying value has not been reflected in the pro forma statement of
operations, however this will be an increase to accumulated deficit and
deducted from net income in arriving at net income available to common
stockholders in the period in which the transaction occurs (which is expected
to be in the second or third quarter of 2002).

The amounts below reflect the repurchase of $133.3 million liquidation
value of Series A Product Preferred Stock. The remaining $106.2 million
difference between the carrying amount and liquidation value will be accreted
through the statement of operations through December 31, 2012 using the
effective interest method.

JANUARY 1, 2001
CARRYING LIQUIDATION
AMOUNT VALUE DIFFERENCE
---------------- ------------ -----------

Series A ......... $ 22.2 $ 49.4 $ 27.2
Series B ......... 55.7 123.7 68.0
Series C ......... 9.0 20.0 11.0
------- ------- -------
$ 86.9 $ 193.1 $ 106.2
======= ======= =======

The terms of our debt instruments place significant restrictions on our
ability to pay cash dividends. The computation assumes dividends are paid
quarterly. The terms of the instruments allow dividends to be accumulated. If
dividends were not paid the preferred stock requirements would increase $1.0
million.

7. This adjustment gives effect to equity accounting for our 50%
investment in TAC-Trim Italy's parent company in the net losses in TAC-Trim
Italy ($10.2 million). See footnote 1 for further discussion on the equity
investment in TAC-Trim Italy's parent company. This adjustment also reverses
the $42.6 million loss on the Textron Leasing Transaction reflected in their
historical financial statements.

8. Represents the estimated tax effect of the foregoing adjustments at
C&A's marginal tax rates. Such adjustment recognizes Products Preferred Stock
requirements as permanent differences. In addition, the adjustment reflects the
net additional tax for Becker and Joan as if the acquired companies were taxed
as C-corporations for all periods presented at C&A's marginal tax rates.

S-25

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2002
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)

C&A OFFERING PRO FORMA
----------- --------------- ------------

Net sales .............................................. $914.8 $ -- $914.8
Cost of goods sold ..................................... 783.7 -- 783.7
------ ----- ------
Gross profit ........................................... 131.1 -- 131.1
Selling, general and administrative expenses ........... 67.6 -- 67.6
Restructuring charges .................................. 9.1 -- 9.1
------ ----- ------
Operating income ....................................... 54.4 -- 54.4
Interest expense, net .................................. 37.3 -- 37.3
Loss on sale of receivables ............................ 1.1 -- 1.1
Products Preferred Stock requirements .................. 11.2 (4.1)(1) 7.1
Other expense, net ..................................... 6.3 -- 6.3
------ ----- ------
Income (loss) from continuing operations before
income taxes .......................................... (1.5) 4.1 2.6
Income tax expense (benefit) ........................... 5.9 -- 5.9
------ ----- ------
Income (loss) from continuing operations ............... $ (7.4) $ 4.1 $ (3.3)
======= ===== ======
Reflects the one for 2.5 reverse stock split effected on
May 28, 2002
Income (loss) from continuing operations per
common share:
Basic and diluted ................................................................ $(0.04)
Average common shares outstanding:
Basic and diluted ................................................................ 77.8
======

- ----------
(1) Represents the adjustment of Products preferred stock requirements as a
result of the $100.0 million repurchase of $133.3 million liquidation
preference of Products Preferred Stock, Series A.

See notes to Unaudited Pro Forma Condensed Consolidated Statements of
Operations

S-26

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
MARCH 31, 2002
(IN MILLIONS)

C&A ADJUSTMENTS PRO FORMA
------------ --------------- ------------

Current Assets:
Cash and cash equivalents .................................. $ 92.1 $ 50.5 (1) $ 142.6
Accounts receivable, net ................................... 487.4 -- 487.4
Inventories ................................................ 143.8 -- 143.8
Other ...................................................... 148.4 -- 148.4
--------- -------- ---------
Total current assets ..................................... 871.7 50.5 922.2
Property, plant and equipment, net .......................... 608.7 -- 608.7
Deferred tax assets ......................................... 132.9 -- 132.9
Other assets ................................................ 176.1 -- 176.1
Goodwill .................................................... 1,249.8 15.0 (2) 1,264,8
Intangible assets ........................................... 53.9 53.9
--------- -------- ---------
TOTAL ASSETS ................................................ $ 3,093.1 $ 65.5 $ 3,158.6
========= ======== =========
Current Liabilities:
Short-term borrowings ...................................... $ 33.0 $ -- $ 33.0
Current maturities of long-term debt ....................... 22.2 -- 22.2
Accounts payable ........................................... 531.7 -- 531.7
Accrued expenses ........................................... 290.2 15.0 (2) 305.2
--------- -------- ---------
Total current liabilities ................................ 877.1 15.0 892.1
Long-term debt .............................................. 1,276.4 -- 1,276.4
Other, including post-retirement benefit obligation ......... 417.6 -- 417.6
Products Preferred Stock, mandatorily redeemable
in 2012 .................................................... 160.5 (60.0)(3) 100.5
Common stock ($.01 par value, 67.2 shares issued and
outstanding as adjusted 83.2 shares issued and
outstanding) ............................................... 0.7 0.1 (4) 0.8
Other paid-in capital ....................................... 1,124.1 150.4 (4) 1,274.5
Accumulated deficit ......................................... (690.2) (40.0)(3) (730.2)
Accumulated other comprehensive loss ........................ (73.1) (73.1)
TOTAL COMMON STOCKHOLDERS' EQUITY ........................... 361.5 110.5 472.0
--------- -------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY .................. $ 3,093.1 $ 65.5 $ 3,158.6
========= ======== =========

- ----------
(1) Represents net cash proceeds of $150.5 million from the offering less
$100.0 million used for the repurchase of Products Preferred Stock.

(2) Reflects a $15.0 million additional payment to be made to settle the
purchase price of TAC-Trim.

(3) The $100.0 million cash payment represents the repurchase of Products
Series A preferred stock at a price of approximately 75% of its
liquidation preference of $133.3 million and a carrying value of $60.0
million. The difference between the $60.0 million carrying value and the
$100.0 million cash payment is an increase to accumulated deficit, in the
period of such repurchase, and income available for common stockholders
will be reduced by $40.0 million.

(4) Represents $150.5 million of net offering proceeds.

S-27

SELECTED HISTORICAL FINANCIAL DATA

The following table sets forth our selected financial data for the fiscal
years ended December 27, 1997, December 26, 1998, December 25, 1999, December
31, 2000 and December 31, 2001 and the three months ended March 31, 2001 and
2002. The selected financial information for the fiscal years ended December
25, 1999 and December 31, 2000 has been derived from C&A's historical
consolidated financial statements incorporated by reference in the prospectus
supplement, which have been audited by Arthur Andersen LLP, independent
accountants (see "Change in Accountants" in our Annual Report on Form 10-K for
the year ended December 31, 2001, which is incorporated by reference in this
prospectus supplement). The selected financial information for the fiscal years
ended December 27, 1997 and December 26, 1998 has also been derived from C&A's
historical consolidated financial statements audited by Arthur Andersen LLP.
The selected financial information for the year ended December 31, 2001 has
been derived from C&A's historical consolidated financial statements
incorporated by reference in the prospectus supplement, which have been audited
by PricewaterhouseCoopers LLP, independent accountants. The selected financial
information for the three month periods ended March 31, 2001 and March 31, 2002
has been derived from C&A's unaudited historical condensed financial
statements, which, in the opinion of management, include all adjustments,
including usual recurring adjustments, necessary for the fair presentation of
that information for such period.

The data set forth below should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations,"
"Unaudited Pro Forma Financial Information" and the historical consolidated
financial statements and related notes for C&A, Becker, Joan and TAC-Trim
incorporated by reference in the prospectus supplement. All per share data
gives effect to the one-for-2.5 reverse stock split.

FISCAL YEAR ENDED (1)
--------------------------------------------------------------------- THREE MONTHS THREE MONTHS
DECEMBER 27, DECEMBER 26, DECEMBER 25, DECEMBER 31, DECEMBER 31, ENDED ENDED
1997 1998 1999 2000 2001 MARCH 31, 2001 MARCH 31, 2002
------------ ------------ ------------ ------------ ------------ -------------- --------------
(DOLLARS IN MILLIONS)

STATEMENT OF OPERATIONS
DATA:
Net Sales .................. $ 1,629.3 $ 1,825.5 $ 1,898.6 $ 1,901.8 $ 1,823.3 $ 453.1 $ 914.8
Gross Profit ............... 233.2 248.2 284.7 266.6 218.8 58.8 131.1
Selling, general and
administrative
expenses (excluding
goodwill
amortization) ............. 119.4 142.7 145.8 151.4 157.3 36.4 67.6
Restructuring charge
and impairment of
long-lived assets (2) ..... 22.6 -- 33.4 -- 18.8 9.2 9.1
Goodwill amortization ...... 6.7 7.0 7.0 7.1 7.1 1.8 --
Operating income ........... 84.5 98.5 98.5 108.1 35.6 11.4 54.4
Interest expense, net (3)... 77.6 82.0 92.1 96.6 84.3 23.3 37.3
Products Preferred
Stock Requirements ........ -- -- -- -- 2.4 -- 11.2
Loss on sale of
receivables (4) ........... 4.7 6.1 5.4 9.2 10.8 1.4 1.1
Income (loss) from
continuing operations
before income taxes ....... 2.9 5.2 (1.2) 0.8 (68.3) (15.0) (1.5)
Income tax expense
(benefit) ................. 13.0 5.3 0.2 2.2 (18.6) (7.9) 5.9
Loss from continuing
operations ................ (10.1) (0.1) (1.4) (1.4) (49.7) (7.1) (7.4)
Income from
discontinued
operations, including
disposals, net of
income taxes .............. 166.0 -- -- 6.6 8.8 -- --
Income (loss) before
extraordinary items
and cumulative effect
of a change in
accounting principle ...... 156.0 (0.1) (1.4) 5.2 (40.9) (7.1) (7.4)
Net income (loss) (5) ...... 155.2 (3.8) (10.2) 4.5 (46.2) (7.4) (7.4)

S-28

Per Share Data:
Pre-split ..................
Loss from continuing
operations per basic
and diluted share ......... (0.15) -- (0.02) (0.03) (0.51) (0.10) (0.04)
Addback goodwill
amortization, net of
tax ....................... 0.09 0.09 0.10 0.10 0.06 0.02 --
--------- --------- ---------- --------- --------- --------- ---------
As adjusted ................ (0.06) 0.09 0.08 0.07 (0.45) (0.08) (0.04)
Dividends per share ........ -- -- 0.81 -- -- -- --
Giving effect to reverse
stock split
Loss from continuing
operations per basic
and diluted share ......... (0.38) -- (0.06) (0.06) (1.28) (0.25) (0.11)
Addback goodwill
amortization, net of
tax ....................... 0.22 0.23 0.24 0.25 0.16 0.05 --
--------- ---------- ---------- --------- --------- --------- ----------
As adjusted ................ (0.16) 0.23 0.18 0.19 (1.12) (0.20) (0.11)
Dividends per share ........ -- -- 2.03 -- -- -- --
BALANCE SHEET DATA (AT
PERIOD END):
Total assets ............... $ 1,302.4 $ 1,382.2 $ 1,348.9 $ 1,280.3 $ 2,987.9 $ 1,281.2 $ 3,093.1
Long-term debt,
including current
portion ................... 772.9 866.0 912.5 884.0 1,301.9 821.2 1,298.6
Common stockholders'
equity (deficit) .......... (66.9) (79.8) (151.1) (154.9) 374.7 (64.6) 361.5
OTHER DATA (FROM
CONTINUING OPERATIONS):
Capital expenditures ....... $ 56.5 $ 95.8 $ 86.4 $ 69.0 $ 54.5 $ 10.7 $ 27.4
Depreciation and
amortization .............. 58.8 67.1 71.4 74.7 81.8 20.1 30.5

- ----------
(1) The year 2001 was a calendar year; fiscal year 2000 had 53 weeks; all
other fiscal years had 52 weeks.

(2) In 2001, we recorded a restructuring charge consisting of $7.6 million in
asset impairments and $11.2 million primarily related to severance
accruals. In 1999, we recorded a restructuring charge consisting of $13.4
million in asset impairments and $20.0 million primarily related to
severance accruals. In 1997, we wrote down fixed assets by $5.1 million
and reduced goodwill by $17.5 million to reflect impairments in the
carrying values of certain assets and goodwill associated with two of our
manufacturing facilities.

(3) Excludes amounts allocated to discontinued operations totaling $12.5
million in 1997. No amounts were allocated to discontinued operations in
2001, 2000, 1999 and 1998.

(4) Excludes amounts allocated to discontinued operations totaling $0.6
million in 1997. No amounts were allocated to discontinued operations in
2001, 2000, 1999 and 1998.

(5) In 1999, we recorded an $8.8 million charge for the cumulative effect of
a change in accounting principle related to start-up costs.

S-29

FORWARD-LOOKING STATEMENTS

This prospectus supplement contains "forward-looking" information, as that
term is defined by the federal securities laws, about our financial condition,
results of operations and business. You can find many of these statements by
looking for words such as "may," "will," "expect," "anticipate," "believe,"
"estimate" and similar words used in this prospectus supplement.

These forward-looking statements are subject to numerous assumptions,
risks and uncertainties (including trade relations and competition). Because
the statements are subject to risks and uncertainties, actual results may
differ materially from those expressed or implied by the forward-looking
statements. We caution readers not to place undue reliance on the statements,
which speak only as of the date of this prospectus supplement.

The cautionary statements set forth above should be considered in
connection with any subsequent written or oral forward-looking statements that
we or persons acting on our behalf may issue. We do not undertake any
obligation to review or confirm analysts' expectations or estimates or to
release publicly any revisions to any forward-looking statements to reflect
events or circumstances after the date of this prospectus supplement or to
reflect the occurrence of unanticipated events.

Risks and uncertainties that could cause actual results to vary materially
from those anticipated in the forward-looking statements included in this
prospectus supplement include general economic conditions in the market in
which we operate and industry-based factors such as:

o declines in the North American, South American and European automobile
and light truck manufacturing volumes;

o labor costs and strikes at our major customers and at our facilities;

o changes in consumer preferences;

o dependence on significant automotive customers;

o the level of competition in the automotive supply industry and pricing
pressure from automotive customers; and

o risks associated with conducting business in foreign countries.

In addition, factors more specific to us could cause actual results to
vary materially from those anticipated in the forward-looking statements
included in this prospectus supplement such as substantial leverage,
limitations imposed by our debt instruments, our ability to successfully
integrate acquired businesses, including actions we have identified as
providing cost saving opportunities, and our ability to successfully pursue our
prime contractor business strategy and our customer concentration.

Our divisions may also be affected by changes in the popularity of
particular vehicle models or particular interior trim packages or the loss of
programs on particular vehicle models.

We disclose important factors that could cause our actual results to
differ materially from our expectations under "Risk Factors," "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
elsewhere in this prospectus supplement. These cautionary statements qualify
all forward-looking statements attributable to us or persons acting on our
behalf. When we indicate that an event, condition or circumstance could or
would have an adverse effect on us, we mean to include effects upon our
business, financial and other conditions and results of operations.

Market data and other statistical information used throughout this
prospectus supplement are based on data supplied by CSM Worldwide, an
independent market research firm. Some data are also based on our good faith
estimates, which are derived from our review of internal surveys, as well as
the CSM Worldwide data. Although we believe these sources are reliable, we have
not independently verified the information and cannot guarantee its accuracy
and completeness. Unless otherwise specified, all market share data refer to
the North American, or NAFTA countries, automotive market and relates to our
pro forma 2001 information.

S-30

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL

We are a global leader in the design, engineering and manufacturing of
automotive interior components, including instrument panels, fully assembled
cockpit modules, floor and acoustic systems, automotive fabric, interior trim
and convertible top systems. We have the number one or two North American
market share position in seven out of ten major automotive interior categories
tracked by CSM Worldwide and are also the largest North American supplier of
convertible top systems. We are a leading global supplier of fully assembled
cockpit modules, a growing market segment. Sales are primarily made to North
American and European automotive OEMs and Tier I integrators. In North America,
we manufacture components for over 90% of all light vehicle production
platforms. The automotive supply industry in which we compete is cyclical and
is influenced by the level of North American and European vehicle production.

Our net sales in 2001 were $1,823.3 million compared to $1,901.8 million
in 2000. In fiscal year 2000, we changed our year-end to a calendar year-end.
The 2000 fiscal year consisted of 53 weeks.

In February 2001, Heartland acquired a controlling interest in C&A.
Heartland is a private equity firm formed to focus on investments in industrial
companies. As a result of the transaction, Heartland is entitled to elect a
majority of C&A's Board of Directors. Heartland's strategy is to facilitate the
growth of its controlled companies through acquisitions and internal growth.
Since Heartland's initial investment in February 2001, we have aggressively
pursued acquisitions in furtherance of our strategy to become a prime
contractor to Tier I integrators and OEMs.

RECENT ACQUISITIONS

We completed three key acquisitions in 2001. The acquisition of Becker
Group L.L.C., a leading supplier of plastic components to the automotive
industry, was completed in July 2001; the acquisition of Joan Automotive
Industries, Inc., a leading supplier of body cloth to the automotive industry,
and Joan's affiliated yarn dyeing operation, Western Avenue Dyers, L.P., was
completed in September 2001. The Becker and Joan acquisitions were financed
through issuances of C&A common stock, warrants to purchase C&A common stock,
cash on hand and borrowings under a revolving credit facility and sales of the
acquired companies' accounts receivable under the receivables facility. The
TAC-Trim acquisition completed in December 2001, the refinancing of our then
existing credit agreement and the replacement of the receivables facility were
funded through the offering of $500 million in notes, the issuance of $160
million of C&A common stock for cash, borrowings under a new senior secured
credit facility and sales of receivables under a new receivables facility. We
also issued to Textron, the seller, 7.2 million shares of C&A common stock
(after giving effect to our announced reverse stock split) and 0.3 million
shares of Products Preferred Stock with an estimated fair value at the time of
the acquisition of $160.9 million and $146.9 million respectively. Commitments
under the new senior secured credit facility total $575 million, and are
comprised of $400 million of term loans, and a $175 million revolving credit
facility that allows funding of up to $75 million for Canadian subsidiaries in
Canadian dollars.

These acquisitions and financing transactions substantially increased our
revenues and cash flow and have materially altered our capital and operating
structure. As a result of these acquisitions and financing transactions,
historical results of operations are not necessarily indicative of future
results and will not be comparable. Key ratios and indicators may change as a
result of the acquisitions. For example, while cockpit sales are expected to
comprise an increasing portion of gross revenues, cockpits generally have a
lower gross margin, partially offset by lower selling, general and
administrative expenses. The cockpit business is generally less asset-intensive
than our traditional businesses. Additionally, the integration of these three
acquisitions into our company will be challenging, and we may not realize any
or all of the cost savings or benefits that we expect. Given how recently these
acquisitions have been completed, the cost savings and efficiencies associated
with them have not been material to the periods discussed below.

S-31

RECENT DEVELOPMENTS

On May 17, 2002, we announced a one-for-2.5 reverse stock split with a
record date of May 28, 2002 and a distribution of non-transferable rights to
purchase C&A common stock to all holders of C&A common stock as of May 28,
2002. Each shareholder (other than certain shareholders who have agreed to
contractually waive their right to exercise rights) was granted one
non-transferable right to purchase 0.40 shares of common stock per share of
common stock held by such holder. Shareholders holding an aggregate of
approximately 52,704,000 shares of common stock, including holders associated
with Heartland, Charles E. Becker, Elkin McCallum and Textron (see "Principal
Stockholders"), have agreed that they will not exercise their rights. This
means that the rights offering will be exercisable for an aggregate of
approximately 5,800,000 shares of common stock, after giving effect to the
reverse stock split. The exercise price of the non-transferable rights is
$12.50 per whole share of common stock for which the rights are exercisable,
after giving effect to the reverse stock split. The non-transferable rights
become exercisable for a 16-day minimum period once a registration statement
for the issuance of the underlying shares has been declared effective by the
Securities and Exchange Commission. We are obligated to use our best efforts to
have a registration statement for the underlying shares declared effective
prior to October 31, 2002.

RESULTS OF OPERATIONS

QUARTER ENDED MARCH 31, 2002 COMPARED TO QUARTER ENDED MARCH 31, 2001

Net Sales: Net sales for the first quarter of 2002 increased 101.9%, or
$461.7 million, to $914.8 million from the first quarter of 2001. Overall, the
increase in net sales was primarily driven by C&A's acquisitions of TAC-Trim,
Becker and Joan, which in the aggregate contributed $478.1 million compared to
the sales in the period ended March 31, 2001. Excluding the impact of the
acquisitions, net sales decreased 3.6% from the same period last year. The
decrease is due primarily to a $8.3 million reduction resulting from
discontinued retail, non-automotive and low margin business, a $2.5 million
decrease in industry production in Europe, $5.6 million in customer price
reductions and $4.7 million due to weaker foreign currencies offset by a $2.9
million increase in industry production in North America and new business
awards.

Net sales for the North American Automotive Interior Systems division
(NAAIS) increased $361.3 million to $621.2 million from the first quarter of
2001. Excluding the $369.0 million impact of the TAC-Trim and Becker
acquisitions, net sales for NAAIS decreased 3.0% from the same period last
year. This reduction is due largely to a $4.2 million discontinued retail
business, a $2.7 million decline in Plastics and Cockpits sales, $3.1 million
of customer price reductions and $3.4 million due to unfavorable mix related to
higher dollar content vehicle programs and $2.1 million due to weaker Canadian
companies. These decreases were partially offset by $7.8 million in increased
carpet and acoustic volumes due to higher North American car builds compared to
the prior year.

Net sales for the European and the other non-North American Automotive
Interior Systems division (EAIS), which includes South America, increased
107.6% to $147.8 million from the first quarter of 2001. Without the $80.6
million benefit of TAC-Trim, sales declined 5.6%. The decrease is primarily due
to the $1.1 million impact of a 2001 sale of a non-automotive business and a
$2.5 million decrease due to non-renewal of certain acoustics vehicle programs
in Germany.

Net sales for the Specialty Automotive Products division increased 19.5%
to $145.8 million compared to the first quarter of 2001. Excluding the
acquisition of Joan, which contributed $28.5 million to net sales, net sales
decreased 3.9%. The decrease is due primarily to a $10.5 million decrease in
the sale of convertible systems, particularly the Chrysler Sebring, partially
offset by a $6.5 million increase in the Ford Thunderbird convertible volumes.

Gross Margin: For the first quarter of 2002, gross margin was 14.3%, up
from 13.0% in the comparable 2001 period. This increase was primarily due to
higher gross margins of the acquired companies, which had a combined gross
margin of 15.1%. Excluding the acquired companies, gross margins increased to
13.5%. The increase is primarily due to $5.9 million of purchasing and spending
savings, partially offset by $5.6 million of customer price reductions.

S-32

Selling, General and Administrative Expenses: Selling, general and
administrative expenses for the first quarter of 2002 are $67.6 million
compared to $38.2 million in the 2001 period. The increase is due to the
additional costs assumed from the acquisitions. Due to sales leveraging, in
tandem with reductions in headcount and discretionary spending; selling,
general and administrative expenses as a percentage of sales declined from 8.4%
in the first quarter 2001 to 7.4% in 2002.

Restructuring Charge: During the first quarter 2002, C&A undertook a
restructuring program costing $9.1 million compared to the restructuring
program undertaken in the first quarter 2001 costing $9.2 million. The 2002
charge includes $5.5 million of severance costs and $3.6 million of future
commitments.

Operating Income Highlights by Division: The NAAIS results reflect
improvement in operating performance across the division. The Carpet and
Acoustics business operating income increased $8.9 million. This increase was
attributable to sales growth and resulting efficiencies driven by an increase
in light vehicle build, as well as $3.0 million of purchasing and spending
savings. After considering the $36.3 million impact of the acquisitions, the
improvements were offset by a $2.0 million decrease in the Plastics & Cockpit
business operating income attributable to declines in sales volumes primarily
associated with certain GM models and the resulting inefficiencies.

The EAIS operating performance was adversely impacted by the elimination
of a non-automotive business, loss of certain acoustics programs, business
launch costs associated with the BMW Mini program, resulting in decreases to
operating income of $0.6 million, $1.5 million and $1.5 million, respectively.

Specialty Automotive Products division operating income increased $9.2
million as compared to the first quarter of 2001. The increase was the result
of improved performance at the fabrics operations resulting from increased
build volumes in the Ford Thunderbird, and was offset by a $0.9 million
reduction resulting from slightly lower performance in the convertible
operations due largely to declines in the build volumes of certain models,
particularly the Chrysler Sebring.

Interest Expense: Net interest expense increased $14.0 million to $37.3
million for the first quarter of 2002. The increase in interest expense is
primarily attributed to the $500.0 million 10 3/4% Senior Notes due 2011 issued
in December 2001 and an increase in the amortization of loan fees. The increase
was partially offset by lower borrowing rates on the senior credit facilities
and the prior year retirement of $48.3 million of JPS Automotive 11 1/8% senior
notes.

Loss on Sale of Receivables: We have the ability to sell, through our
Carcorp subsidiary, interests in a pool of accounts receivable. In connection
with the receivable sales, a loss of $1.1 million was recognized during the
first quarter of 2002, compared to a loss of $1.4 million for the first quarter
of 2001. The decrease is primarily due to lower sales of eligible receivables
and lower interest rates.

Subsidiary Preferred Stock Requirements: In connection with the TAC-Trim
acquisition on December 20, 2001, Products issued to Textron preferred stock
with a liquidation preference of $326.4 million and an estimated fair market
value of $146.9 million. During the first quarter 2002, we incurred subsidiary
preferred stock requirements totaling $11.2 million.

Other Expense (Income): We recognized other expense of $6.3 million in the
first quarter of 2002, compared to other expense of $1.7 million in the first
quarter of 2001. The increase in other expense resulted primarily from losses
from a joint venture and net foreign exchange losses.

For the periods ended March 31, 2002 and March 31, 2001, "other income"
consisted primarily of gains related to derivatives used in the Company's
hedging strategy. For the period ended March 31, 2002 "other expense" related
primarily to a $3.6 million of foreign currency transaction loss and the equity
in loss of a joint venture in the amount of $3.4 million. For the period ended
March 31, 2001 "other expense" related primarily to foreign currency
transaction losses.

Income Taxes: On a quarterly basis, we recognize tax expense based upon an
estimate of our overall effective tax rate (before preferred stock
requirements) for the full year. The overall effective tax rate for the year
fluctuates primarily due to changes in estimated income for the full year, and
the mix of income

S-33

and losses in different tax jurisdictions and the impact of non-deductible
subsidiary preferred stock requirements. We recognized income tax expense of
$5.9 million in the first quarter of 2002 compared to an income tax benefit of
$7.9 million in the first quarter of 2001.

Net Income: The combined effect of the foregoing resulted in net loss of
$7.4 million in the first quarter of 2002, compared to a net loss of $7.4
million in the first quarter of 2001.

2001 COMPARED TO 2000

Net Sales: Net sales for 2001 decreased 4.1% to $1,823.3 million, down
$78.5 million from 2000. Excluding the favorable impact of sales from acquired
businesses during 2001 of approximately $127.2 million, net sales would have
decreased 10.8%. The reduction in net sales, excluding the effect of
acquisitions, was primarily driven by a decrease in North American vehicle
production of 10% versus 2000 ($135.0 million). We were particularly adversely
impacted by the recession and declining consumer confidence as well as by the
recent terrorist attacks in the United States. These factors led to
substantially reduced inventory levels at our customers in the fourth quarter
as customers sold vehicles in an uncertain and difficult economic environment.
Sales for the 2001 period were also primarily impacted by customer price
reductions ($30.0 million), and weaker Canadian and European currencies ($24.0
million) and a reduction in headliner fabrics business ($20.0 million).

Net sales for NAAIS during 2001 were down 2.6% to $1,145.0 million, a
decrease of $30.6 million from fiscal 2000. Excluding the favorable impact of
sales from the TAC-Trim and Becker acquisitions during 2001 of approximately
$95.2 million, net sales would have decreased 10.8%. The decline in net sales,
excluding the effect of the Becker acquisition, was primarily driven by a
decrease in North American vehicle production ($100.0 million) and customer
price reductions ($24.0 million).

Net sales for EAIS were down $26.3 million to $258.2 million during 2001,
a decrease of 9.2% from fiscal 2000. The decrease in Europe was primarily due
to the negative impact caused by changes in foreign currency exchange rates
($16.0 million) and customer price reductions ($6.0 million).

Net sales for the Specialty Automotive Products division decreased 4.9% to
$420.1 million in 2001, down $21.6 million from 2000. Excluding the favorable
impact of sales from the Joan acquisition during 2001 of approximately $31.4
million, net sales would have decreased 12.0%. The decrease, excluding the
impact of the Joan acquisition, was due primarily to lower North American
vehicle production ($35.0 million) and a reduction in headliner fabric business
($20.0 million).

Gross Margin: For 2001, gross margin was 12.0%, down from 14.0% in 2000.
Excluding the effect of acquisitions, our gross margin would have been 12.4%.
This decrease is primarily a result of decreased operating leverage related to
lower volumes in both North America and Europe. Additionally, during 2001 gross
margin was adversely impacted by the following items:

o TAC-Trim Acquisition: Due to the closing of the TAC-Trim acquisition on
December 20, 2001, we incurred eleven days of fixed costs during a normal
industry shutdown period with less than $6 million in sales. This
resulted in a gross margin loss for the eleven days of $4.2 million.

o Launch Costs: We incurred launch costs during the second and third
quarters of 2001 related to the Ford Thunderbird convertible program in
our Specialty Automotive Products division. In Europe, our plastics
facility in the UK experienced difficulties principally related to an
outside paint supplier on the launch of the new BMW R50 (Mini) program
during the second half of 2001.

o Integration Costs: We incurred $2.5 million of costs during the fourth
quarter of 2001 related to acquisition integration. The majority of these
costs related to the Becker and Joan acquisitions.

o Facility Closure Costs: In addition, during 2001, we incurred $2.5
million of costs related to the sale of the retail/commercial floormat
business in North America and the shutdown of a small accessory floormat
facility.

These unfavorable items were exacerbated by various customer price
reductions of approximately $40 million, but were partially offset by
commercial recoveries of $6.9 million and improvements in operating performance
at NAAIS of $10.3 million and at the fabrics operations of $5.5 million.

S-34

Selling, General and Administrative Expenses: Selling, general and
administrative expenses for 2001 were $164.4 million, compared to $158.5
million in 2000. Relative to 2001, the comparable 2000 period included an extra
week of costs due to the fiscal year change mentioned earlier. The increase is
primarily due to additional costs assumed from acquisitions ($7.4 million),
credits in 2000 relating to a pension related actuarial benefit and the sale of
property (totaling $2.0 million) and additional expense in 2001 related to
management incentive compensation plans of $3.0 million. These items more than
offset the benefit in 2001 of cost reductions from earlier restructuring
programs and reduced spending. As a percentage of sales, selling, general and
administrative expenses were 9.0% and 8.3% for 2001 and 2000, respectively.

Restructuring Charge: During 2001, we undertook two restructuring programs
resulting in charges totaling $18.8 million. The goal of the first quarter of
2001 restructuring program (charge of $9.2 million) was to de-layer management
in the North American, European and Specialty operations. The second program
resulted in a fourth quarter charge of $9.6 million. The objective of this
program was to downsize three facilities in North America via better
utilization of manufacturing and warehouse floor space (including associated
headcount reductions) and to reduce headcount in our Mexican operations. The
pre-tax $18.8 million charge includes $11.2 million of severance costs and $7.6
million of asset impairment charges.

Operating Income Highlights by Division: Operating income at NAAIS
declined to $73.9 million for 2001 from $87.2 million for the prior year. The
decline in NAAIS operating income primarily reflected the impact of lower North
American production volumes of $8.7 million as well as restructuring charges of
$8.2 million which were offset by improvements in operating performance of
$10.3 million. The results for 2001 also included costs of $3.2 million related
to the sale of the retail/commercial floormat business and the shutdown of a
small accessory floormat facility.

Operating income at EAIS declined to a loss of $22.3 million for 2001 from
income of $1.1 million for 2000. The decline in EAIS operating income primarily
reflected the impact of product mix and customer price reductions along with
the recognition of restructuring charges. Additionally, EAIS operating
performance was adversely impacted by launch costs associated with the BMW R50
(Mini) during the second half of 2001 as well as a $1.1 million loss on the
sale of a small metal pressing operation in the UK in the third quarter of
2001. Benefits from earlier restructuring programs and purchasing savings
reduced the negative impact of these items.

Operating income at the Specialty Automotive Products division declined to
$13.0 million for 2001 from $22.8 million for 2000. The decline in Specialty
Automotive Products division operating income primarily reflects expenses
incurred due to the ramp-up of the Chrysler Sebring convertible in the early
part of 2001 ($6.1 million), the start-up of the new Ford Thunderbird
convertible in mid-year 2001 ($1.5 million) and the impact of restructuring
charges ($1.7 million). Margins, as a percentage of sales, for the fabrics
business remained consistent with 2000, as better operating performance and
benefits of added volume from the Joan acquisition offset the margin impact of
lower net sales driven by lower industry production and reduction in headliner
fabric business.

Interest Expense: Interest expense for 2001 decreased $12.3 million to
$84.3 million as compared to 2000. The decrease in interest expense is
primarily attributed to lower average debt balances resulting from the
Heartland Transaction. The benefit of working capital reductions and sale and
leaseback transactions also offset increased borrowings related to
acquisitions.

Loss on Sale of Receivables: We sell on a continuous basis, through our
Carcorp subsidiary, an interest in a pool of accounts receivable. In connection
with the sale of accounts receivables, a loss of $10.8 million was recognized
during 2001, compared to a loss of $9.2 million for 2000. Included in the 2001
and 2000 losses were up-front fees related to the new accounts receivable
facilities put in place during both periods. In December 2001, we entered into
a new larger facility in connection with the TAC-Trim acquisition, resulting in
up-front fees of $5.6 million. During the first quarter of 2000, we incurred
fees of $1.6 million associated with a new accounts receivable securitization
replacing one that had expired. Excluding these expenses, the remaining
decrease of $2.4 million, is primarily due to lower interest rates during 2001.

S-35

Products Preferred Stock Requirements: Products issued to the seller
preferred stock with a $326.4 million liquidation value and an estimated fair
market value of $146.9 million in connection with the TAC-Trim acquisition. The
2001 charge represents dividends accrued of $1.5 million and accretion of
discount of $0.9 million.

Other Expense (Income): We recognized other expense of $6.4 million in
2001, compared to other expense of $1.5 million in 2000. The increase in other
expense resulted primarily from an $8.1 million loss on the sale and leaseback
of real estate transactions completed during the second and fourth quarters of
2001, offset by a gain of $6.2 million on shares received as result of the
Prudential Financial demutualization and initial public offering. The remaining
increase in expense is primarily due to higher foreign currency transaction
losses.

Income Taxes: We recognized an income tax benefit of $18.6 million in 2001
compared to an income tax expense of $2.2 million in 2000. The overall
effective tax rate for 2001 was 27.2 percent compared to 276 percent for 2000.
Certain state taxes and permanent differences, that do not fluctuate with
income, such as non-deductible goodwill and dividends and accretion of
preferred stock impacted the effective rate by: (1) reducing the effective tax
rate when a loss exists and a tax benefit is recorded, or (2) increasing the
effective tax rate when we have income and tax expense is recorded.

Discontinued Operations: During 2001, we received payments on
environmental claims related to discontinued operations of $14.5 million.
During 2000, we settled claims for certain other environmental matters for
$20.0 million. In fiscal 2001 and 2000, $8.8 million and $6.6 million were
recorded as income from discontinued operations, respectively, net of income
taxes of $5.7 million and $4.4 million, respectively.

Extraordinary Charge: During 2001 and 2000, we recognized extraordinary
charges of $5.3 million and $0.7 million, respectively. Of the 2001 charge,
$5.0 million represents a charge off of debt issue costs associated with our
old credit facility, which was replaced by a new credit facility entered into
in conjunction with the TAC-Trim acquisition. In addition, during 2001 and 2000
charges were recorded in connection with the repurchase of JPS Automotive
Senior Notes at prices in excess of carrying values of $0.3 million and $0.7
million, respectively.

Net Income: The combined effect of the foregoing resulted in a net loss of
$46.2 million for 2001, compared to net income of $4.5 million in 2000.

2000 COMPARED TO 1999

Our 2000 fiscal year consisted of 53 weeks as compared to a 52-week year
in fiscal 1999. Therefore, all sales and associated costs and expenses were
impacted by the longer reporting period in fiscal 2000. In a 53-week year, our
policy is to include the additional week in the first quarter of the year.
There were no material acquisitions within either period.

Net Sales: Net sales of $1,901.8 million for 2000 were relatively flat
compared to the prior year. Net sales for the NAAIS division increased 2.1% to
$1,175.6 million, up $23.9 million from 1999. The increase in sales was
primarily driven by higher industry production volume as well as a favorable
product mix. Net sales for the EAIS division decreased 7.1% to $284.5 million,
down $21.9 million from 1999. This decrease was primarily due to the negative
impact of foreign currency translation offset by slightly higher industry
production volume. Net sales for the Specialty Automotive Products division
were relatively flat with the prior year at $441.7 million. Production volume
increases in the fabrics business were offset largely by lower convertible
volumes, primarily due to a reduction in Chrysler Sebring production levels.

Gross Margin: Gross margin was 14.0% in 2000, down from 15.0% in 1999.
This decrease was primarily due to one-time costs related to various commercial
customer recovery issues, performance issues at the Springfield operation,
certain asset write-offs, lower convertible build volumes and operating issues
relating to the relocation of headliner production to the Farmville facility.
These decreases were partially offset by the benefits recognized from a
restructuring program implemented in 1999 and 2000 and improved performance at
the Manchester, Michigan plastics facility.

S-36

Selling, General and Administrative Expenses: Selling, general and
administrative expenses increased 3.8% to $158.6 million, up $5.8 million from
1999. The increase is primarily due to one-time costs related to the
aforementioned commercial customer recovery issues and the impact of an
additional week in the first quarter of fiscal 2000 partially offset by
one-time pension-related actuarial benefits driven by the restructuring program
and the reduction of our bonus accrual. As a percentage of sales, selling,
general and administrative expenses increased to 8.3% in 2000, compared to 8.0%
in 1999.

Operating Income Highlights by Division: Operating income for the NAAIS
division decreased by 2.5% to $87.2 million, operating income for the EAIS
division decreased to $1.1 million from $2.3 million and operating income for
the Specialty Automotive Products division decreased by 42.4% to $22.8 million
for the reasons described above.

Restructuring Charge: We recognized a $33.4 million charge in 1999
relating to our 1999 reorganization plan.

Interest Expense: Interest expense, net of interest income of $3.4 million
and $2.5 million in 2000 and 1999, respectively, increased $4.6 million to
$96.6 million in 2000. The increase is primarily attributed to higher average
interest rates and higher average debt balances in 2000. The weighted average
interest rates were 10.0% and 9.6% at December 31, 2000 and December 25, 1999,
respectively.

Loss on the Sale of Receivables: In connection with receivables sales, a
loss of $9.2 million was recognized in 2000, compared to a loss of $5.4 million
in 1999. During the first quarter of 2000, we entered into a new accounts
receivable securitization arrangement resulting in one-time expenses for
initial fees totaling $1.6 million. The remaining increase is due to higher
interest rates and increased sales of eligible receivables. The prior
securitization facility expired and a new facility came into effect on December
27, 1999.

Other Expense: We recognized other expense of $1.5 million, compared to
other expense of $2.2 million in 1999. The decrease is primarily due to lower
option premiums resulting from a lower volume of hedging activity in 2000
offset, partially by increased foreign exchange transaction losses and higher
losses from joint ventures in 2000.

Income Taxes: We recognized income tax expense of $2.2 million in 2000,
compared to income tax expense of $0.2 million in 1999. Our effective tax rate
was 276% in 2000, compared to (22%) in 1999. The increase in our effective tax
rate is primarily due to the impact of prior year non-recurring tax credits,
along with the effects of certain state taxes and non-deductible goodwill,
which do not fluctuate with income.

Discontinued Operations: In 2000, we settled environmental claims related
to discontinued operations for a total of $20 million. Of this amount, $6.6
million was recorded as income from discontinued operations, net of income
taxes of $4.4 million.

Extraordinary Charge: In 2000, we recognized an extraordinary charge of
$0.7 million, net of income taxes of $0.5 million, in connection with the
repurchase of $38 million principal amount of JPS Automotive Senior Notes on
the market at prices in excess of carrying values.

Cumulative Effect of a Change in Accounting Principle: We adopted the
provisions of Statement of Position No. 98-5, "Reporting on the Cost of
Start-Up Activities" ("SOP 98-5") at the beginning of 1999. SOP 98-5 provides
guidance on the financial reporting of start-up costs and organization costs
and requires that all non-governmental entities expense the costs of start-up
activities as these costs are incurred instead of being capitalized and
amortized. The cumulative effect of adopting SOP 98-5 resulted in a charge of
$8.8 million, net of income taxes of $5.1 million, in 1999.

Net Income (Loss): The combined effect of the foregoing resulted in net
income of $4.5 million in 2000, compared to a net loss of $(10.2) million in
1999, which included a restructuring charge of $33.4 million.

LIQUIDITY AND CAPITAL RESOURCES

We had cash and cash equivalents totaling $92.1 million and $73.9 million
at March 31, 2002 and December 31, 2001, respectively. We had $335.4 million of
unutilized borrowing availability under our

S-37

credit arrangements as of March 31, 2002. The total was comprised of $99.6
million under our revolving credit facility (including $75.0 million available
to certain of our Canadian subsidiaries), approximately $26.0 million under
bank demand lines of credit in Canada and Austria and a line of credit for
certain other European locations. Availability under the revolving credit
facility was reduced by outstanding letters of credit of $75.3 million as of
March 31, 2002.

The completion of the TAC-Trim acquisition on December 20, 2001
significantly increased debt levels and has added significant new liquidity
requirements in order to launch part of TAC-Trim's projected new book of
business and to finance capital expenditures at TAC-Trim. These new liquidity
requirements will relate primarily to tooling and advanced engineering and
development. While ultimately we expect to be entitled to record these amounts
from our customers, we will need to finance them to achieve our revenue goals.
Otherwise, much of our increased capital expenditures relate to our larger size
and are expected to be readily serviced by our larger cash flow base.

Our principal sources of funds are cash generated from operating
activities, borrowings under credit facilities and the issuance of common
stock. To facilitate the collection of funds from operating activities, we have
sold receivables under account receivables facilities and entered into an
accelerated payment collection program that provides favorable terms to two of
our larger customers. We continue to seek means to generate additional cash for
debt reduction and our growth strategy. Among other things, we seek to further
improve working capital management and continue to utilize a lease financing
strategy.

OPERATING ACTIVITIES

Net cash provided by (used in) the continuing operating activities was
$74.2 million and $131.4 million for the quarter ended March 31, 2002 and the
year ended December 31, 2001, respectively. This compared to $(11.9) million
and $130.9 million for the quarter ended March 31, 2001 and the year ended
December 31, 2000, respectively. The increase in cash provided by (used in)
operating activities for the quarter ended March 31, 2002 was due primarily to
the increase in cash generated from reductions in working capital. Working
capital reductions were primarily facilitated by the timing of payments of
accounts payable and certain other payables, partially offset by an increase in
accounts receivable. The increase in cash provided by operating activities for
the year ended December 31, 2001 was due primarily to the increase in cash
generated from reductions in working capital (primarily facilitated by
receivable collections at TAC-Trim and a decrease in inventory volumes),
partially offset by a decrease in income from continuing operations.

INVESTING ACTIVITIES

Net cash used in investing activities was $50.0 million for the quarter
ended March 31, 2002, compared to net cash used of $18.0 million in the quarter
ended March 31, 2001. The increase in cash used in investing activities is
primarily the result of a $16.7 million increase in capital expenditures
(resulting primarily from the TAC-Trim acquisition) and the payment of $22.6
million in acquisition costs related to the TAC-Trim acquisition which had been
previously accrued.

During 2001, Products entered into sale and leaseback transactions that
generated net proceeds of $86.2 million. See "-- Leases" for additional
discussion.

As discussed above in "-- Recent Acquisitions," during 2001 we completed
several key acquisitions. Cash consideration, net of cash received and
including acquisition fees, was $61.8 million for Becker, $102.0 million for
Joan and $589.4 million for TAC-Trim.

Additional acquisition costs in the amount of $7.3 million resulted from
purchasing the remaining 50% interest of a joint venture established in the UK
to manufacture automotive interior fabrics and the acquisition of the remaining
25% interest in Collins & Aikman Carpet and Acoustics, S.A. de C.V. (an
automotive supply operation primarily of acoustical and plastic components in
Sweden, Belgium and France).

FINANCING ACTIVITIES

Net cash used in financing activities for the quarter ended March 31, 2002
was $6.0 million and primarily represented the repayment of debt and short-term
borrowings. At March 31, 2002, we had total

S-38

outstanding indebtedness of $1,298.6 million (excluding short-term borrowings
of $33.0 million and approximately $75.3 million of outstanding letters of
credit) at a weighted average interest rate of 9.8% per annum. At December 31,
2001 we had total outstanding indebtedness of $1,301.9 million (excluding short
term borrowing of $35.7 million and approximately $68.6 million of outstanding
letters of credit).

Net cash provided by financing activities for the quarter ended March 31,
2001 was $32.4 million representing proceeds from the issuance of common stock
and the reissue of treasury stock of approximately $105.6 million and proceeds
of approximately $50.0 million from the issuance of long-term debt. These
proceeds were partially offset by debt issue costs and the repayment of
long-term debt and revolving credit facilities.

During 2001, Heartland, and certain other investors, acquired an aggregate
of 22.8 million shares of common stock from C&A at a price of $12.50 per share
(after giving effect to our announced reverse stock split), representing a cash
investment in us of $285.0 million before fees and expenses. Net proceeds paid
to us from the equity transactions were $264.3 million. A portion of the
proceeds were used to pay $10.7 million in transaction related costs to obtain
change in control consents, fees related to term loan facilities and other
amendments to credit agreement facilities. The remaining proceeds of $253.6
million were used to pay down a revolving credit facility and to fund part of
the TAC-Trim acquisition. In addition, we issued additional shares of C&A
common stock and shares of Products Preferred Stock to sellers of Becker, Joan
and TAC-Trim. All of the shares referred to in this paragraph were issued in
private placements and were exempt from registration under Section 4(2) under
the Securities Act.

During 2001, Products used proceeds from an amended and restated credit
facility to retire all outstanding JPS Automotive 11 1/8% Senior Notes. The
notes, which were due June 2001, were repaid in full on March 28, 2001, at a
redemption price equal to their principal amount with interest accrued to the
redemption date. We recognized an extraordinary charge of $0.3 million in
connection with this repurchase of the remaining outstanding JPS Automotive
Senior Notes at prices in excess of carrying values. The amended and restated
credit facility was repaid during 2001 with proceeds from various financing
arrangements that we entered into as part of the TAC-Trim acquisition. These
financing arrangements included entering into new senior credit facilities and
a new receivables facility along with the issuance of the Products Preferred
Stock and 10 3/4% Senior Notes of Products due in 2011.

The new senior credit facility consists of a revolving credit facility and
tranche A and tranche B term loan facilities. The revolving credit facility
will provide for revolving loans and extensions of credit up to a maximum
principal amount of $175.0 million. A portion of the revolving credit facility
will be available to Canadian subsidiaries in Canadian dollars and a portion of
the revolving credit facility will be available in the form of letters of
credit. The tranche A facility is comprised of term loans in an aggregate
principal amount of $100.0 million and the tranche B facility is comprised of
term loans in an aggregate principal amount of $300.0 million. The revolving
credit facility, the tranche A term loan and the tranche B term loan mature in
December 2005. Borrowings under the new senior credit facilities will bear
interest at variable rates based on a spread to the adjusted LIBOR or a base
rate, at our option. At March 31, 2002, we had $400.0 million in term loans
outstanding under this facility.

On an ongoing basis, we have entered into an agreement to sell trade
accounts receivable of certain business operations to a bankruptcy-remote,
special purpose subsidiary, wholly owned by us. Our receivables subsidiary
will, subject to certain conditions, from time to time, sell an undivided
fractional ownership interest in a pool of domestic and certain Canadian
receivables, up to a balance of $250.0 million, to bank-sponsored multi-seller
commercial paper conduits under a committed facility. As of March 31, 2002, we
had $209.8 million undrawn under the receivables facility.

New receivables will be added to the pool as collections reduce previously
sold receivables. We expect to service, administer and collect the receivables
on behalf of the receivables subsidiary and the conduits. The proceeds of sale
will be less than the face amount of accounts receivable sold by an amount that
approximates the purchaser's financing costs. The receivables facility has a
term of 364 days, extendible for additional 364-day periods with the agreement
of all parties. The new receivables facility will be an important source of
ongoing liquidity to us. This facility could be extended on less favorable
terms and if it were not extended, we may be unable to obtain a replacement
facility or otherwise find an alternative source of funds providing us with
comparable liquidity.

S-39

Products issued Textron 182,700 shares of series A redeemable preferred
stock, 123,700 shares of series B redeemable preferred stock and 20,000 shares
of series C redeemable preferred stock. The preferred stock was recorded at its
estimated fair value of $146.9 million, which is less than the liquidation
value of $1,000 per share or $326.4 million. The estimated fair value was based
on market prices for securities with similar terms, maturities and risk
characteristics, and includes a liquidation discount to reflect market
conditions.

Products also issued $500 million of 10 3/4% Senior Notes due in 2011 (the
"Products Senior Notes") in connection with the TAC-Trim acquisition. We also
amended the indenture governing the $400 million of Products' 11 1/2% Senior
Subordinated Notes due in 2006 (the "Products Senior Subordinated Notes") to
make each subsidiary guarantor of the Products Senior Notes a senior
subordinated guarantor of the Products Senior Subordinated Notes.

OUTLOOK

Our principal uses of funds from operating activities and borrowings for
the next several years are expected to fund interest and principal payments on
our indebtedness, net working capital increases, costs associated with our
previously divested businesses, capital expenditures and lease expenses. The
completion of the TAC-Trim acquisition on December 20, 2001 significantly
increased debt levels and has added significant new liquidity requirements in
order to launch part of TAC-Trim's projected new book of business and to
finance capital expenditures at TAC-Trim. These new liquidity requirements will
relate primarily to tooling and advanced engineering and development. While
ultimately we expect to be entitled to recover these amounts from our
customers, we will need to finance these requirements to achieve our revenue
goals. Otherwise, much of our increased capital expenditures relate to our
larger size and are expected to be readily serviced by our larger cash flow
base. We believe cash flow from operations, the recent inflow of capital,
proceeds of this offering, debt financings and related refinancings of
indebtedness provide adequate sources of liquidity for us. We may use existing
sources of funds or require additional sources of funds for our acquisition
activities in the future.

CONTRACTUAL OBLIGATIONS

Below is a table that identifies our significant contractual obligations.
Following the table is a more detailed description of these obligations
(without giving effect to our use of proceeds from this offering).

PAYMENT DUE BY PERIOD
-----------------------------------------------------------------------
LESS THAN
TOTAL 1 YEAR 1-3 YEARS 4-5 YEARS AFTER 5 YEARS
------------- ---------- ----------- ----------- --------------
(IN MILLIONS)

Long-Term Debt ............... $ 1,298.6 $ 22.2 $ 128.1 $ 648.3 $ 500.0
Preferred Stock(1) ........... 326.4 -- -- -- 326.4
Operating Leases ............. 298.8 46.5 96.9 50.4 105.0
Capital Expenditures ......... 32.5 32.5 -- -- --
---------- ------- -------- -------- --------
Total ....................... $ 1,956.3 $ 101.2 $ 225.0 $ 698.7 $ 931.4

- ----------
(1) Mandatorily Redeemable Preferred Stock of Products (excluding accrued
dividends)

SENIOR SECURED CREDIT FACILITIES

General: As noted under "--Liquidity and Capital Resources", we entered
into a new senior secured credit facility that allows borrowings in the
aggregate of up to $575.0 million. Borrowings under the credit facility are
secured by all our assets and the assets of Products and certain subsidiaries
of each, and are unconditionally and irrevocably guaranteed jointly and
severally by us and each existing and subsequently acquired or organized
domestic subsidiaries (other than by our receivables subsidiary). Available
funding under this credit facility is reduced if the program size or commitment
level under our new receivables facility (discussed below) exceeds $250.0
million.

Interest Rates and Fees: Borrowings bear interest, at our option, at
either (a) adjusted LIBOR plus a 3.75% margin in the case of the revolving
credit and tranche A facilities and a 4.00% margin in the case of the tranche B
facilities, in all cases subject to a minimum LIBOR of 3.00% or (b) the highest
of

S-40

(i) JPMorgan Chase Bank's prime rate, (ii) the federal funds effective rate
plus 1/2 of 1.00% and (iii) the base CD rate plus 1.00%. A commitment fee on
any unused commitments under the revolving portion of the credit facility equal
to 1.00% per annum is payable quarterly in arrears and is subject to adjustment
based on attaining certain performance targets.

Covenants: The credit facility requires that we meet certain financial
tests, including, without limitation, the following tests: a maximum leverage
ratio, a minimum interest coverage ratio and certain prescribed limitations on
capital expenditures. The credit facility also contains customary covenants and
restrictions, including, among others, limitations or prohibitions on declaring
dividends and other distributions, redeeming and repurchasing capital stock,
prepaying, redeeming and repurchasing other indebtedness, loans and
investments, additional indebtedness, liens, sale-leaseback transactions,
preferred stock, capital expenditures, recapitalizations, mergers, acquisitions
and asset sales and transactions with affiliates.

Events of Default: The credit facility contains certain customary events
of default, including, among others cross-default and cross-acceleration to
other indebtedness (including to the receivables facility).

11 1/2% SENIOR SUBORDINATED NOTES DUE 2006

Products has outstanding $400 million in principal amount of 11 1/2% Senior
Subordinated Notes due 2006. The indenture governing the Products senior
subordinated notes contains restrictive covenants (including, among others,
limitations on indebtedness, restricted payments, liens, asset dispositions,
changes of control and transactions with affiliates) that are customary for
such securities. For a detailed description of the terms of the Products Senior
Subordinated Notes, see "Description of Our Indebtedness and Products Preferred
Stock."

10 3/4% SENIOR NOTES DUE 2011

As discussed above, in connection with the TAC-Trim acquisition, Products
sold $500 million principal amount of 10 3/4% Senior Notes due 2011. The
indenture governing the Products Senior Notes contains restrictive covenants
(including, among others, limitations on indebtedness, restricted payments,
liens, asset dispositions, change of control and transactions with affiliates)
that are customary for such securities. For a detailed description of the terms
of the Products Senior Notes, see "Description of Our Indebtedness and Products
Preferred Stock."

MANDATORILY REDEEMABLE PREFERRED STOCK OF PRODUCTS

As discussed above, as part of the consideration paid to Textron for the
TAC-Trim acquisition, Products issued mandatorily redeemable preferred stock to
Textron with an estimated fair market value of $146.9 million and a liquidation
value of $326.4 million. On March 31, 2002, the liquidation value of the
Products Preferred Stock was $333.6 million including accrued dividends of $7.2
million. For a detailed description of the terms of this preferred stock, see
"Description of Our Indebtedness and Products Preferred Stock."

LEASES

During 2001, Products entered into sale and leaseback transactions for
certain manufacturing equipment and non-manufacturing properties. The
transactions resulted in the recognition of a $4.4 million net deferred asset
that is being amortized over the lease term, and the recognition of an $8.7
million loss.

During 2001, we received net proceeds (after fees) of approximately $86.2
million from sale and leasebacks of real property and equipment, which we used
to reduce outstanding debt. The aggregate lease expenses associated with these
leases will be $88.8 million, $12.5 million of which relates to 2002. To the
extent permitted by the credit facility, we may enter into additional similar
leasing arrangements from time to time. As part of these sale-leaseback
transactions, Products sold and contemporaneously leased back real property
from unrelated third parties, and received net proceeds (after fees) of $46.4
million.

In June 2001, we entered into sale-leaseback transactions with each of New
King, L.L.C. ("New King") and Anchor Court, L.L.C. ("Anchor Court"), which are
affiliates of Becker Ventures LLC

S-41

("Becker Ventures"). Becker Ventures is controlled by Charles Becker, a C&A
director. See "-- Other Information -- Effects of Certain Transactions with
Related Parties."

In connection with these sale-leaseback transactions, Products sold and
contemporaneously leased back real property located in Troy, Michigan and
Plymouth, Michigan from New King and Anchor Court, respectively, for net
proceeds of $15.1 million in aggregate. The initial lease term in each
transaction is 20 years and each lease has two successive ten year renewal
options. The basic rent for the Troy, Michigan property is $1.3 million per
year, and the basic rent for the Plymouth, Michigan property is $0.5 million
per year. The rental rates in each case are subject to adjustment after
expiration of the initial term.

Prior to the TAC Trim acquisition, TAC-Trim entered into an $86.9 million
sale and leaseback transaction with two separate single purpose affiliates of
Textron Financial Corporation, as lessor and purchaser, with respect to a
portfolio of manufacturing equipment situated in different locations throughout
the United States and Canada. Payments under the Textron Leasing Transaction
are guaranteed by Products and secured by a first perfected mortgage lien over
certain real property with a value equal to $25.0 million. Each lease is for an
initial term of three years with three one-year renewal options. As is
customary, the documentation for the Textron leasing transaction incorporates
covenants by reference, from our credit facility, that may be amended or waived
by the senior lenders, and also contains events of default. See "-- Other
Information -- Effects of Certain Transactions with Related Parties."

We also have other equipment lease agreements with several lessors that,
subject to specific approval, provide availability of funding for operating
leases and sale and leasebacks as allowed in our other financing agreements.

Refer to Note 12, "Leases" in the notes to the financial statements
included in our Annual Report on Form 10-K for the year ended December 31,
2001, which is incorporated herein by reference, for information regarding
future minimum lease payments.

CAPITAL EXPENDITURES

We make capital expenditures on a recurring basis for replacements and
improvements. As of March 31, 2002, we had made approximately $27.4 million in
capital expenditures. During 2001, we made approximately $54.5 million in
capital expenditures for continuing operations.

Capital expenditures will materially increase with the expanded book of
business in 2002 and in future years will depend upon demand for our products
and changes in technology. We currently anticipate that our aggregate capital
expenditures for 2002 will range from approximately $120.0 to $140.0 million. A
portion of capital expenditures may be financed through leasing arrangements.
Capital expenditures in future years will depend upon demand for our products
and changes in technology.

SOURCES OF LIQUIDITY

The table below identifies our significant sources of liquidity:

AVAILABILITY EXPIRATION PER PERIOD
---------------------------------------------------------------------
MAXIMUM
AMOUNT LESS THAN
AVAILABLE 1 YEAR 1-3 YEARS 4-5 YEARS AFTER 5 YEARS
----------- ---------- ----------- ----------- --------------
(IN MILLIONS)

Receivables Facility(1) .............. $ 250.0 $ 250.0 $ --
Revolving Credit Facility(2) ......... 175.0 -- -- 175.0 --
Lines of Credit(3) ................... 55.0 55.0 -- -- --
Total Available ...................... $ 480.0 $ 305.0 $175.0

- ----------
(1) Amount available at March 31, 2002 was $209.8 million.

(2) At March 31, 2002, $75.3 million of outstanding letters of credit reduce
the maximum amount available under the Revolving Credit Facility.

(3) Amount available at March 31, 2002 was $26.0 million.

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Additionally, in March 2002, we entered into an accelerated customer
payment program for the collection of accounts receivables from two of our
larger customers. We have received early payment on receivables through this
program, reducing borrowings and availability under our receivables facility.
This program provides us with a net increase in liquidity.

RECEIVABLES FACILITY

General: As discussed above, in connection with the TAC-Trim acquisition,
we entered into an agreement to sell, on an ongoing basis, the trade accounts
receivable of certain business operations to a bankruptcy-remote, special
purpose subsidiary, wholly owned and consolidated by us. The receivables
subsidiary (Carcorp) will, subject to certain conditions, from time to time,
sell an undivided fractional ownership interest in a pool of domestic and
certain Canadian receivables, up to $250 million, to various multi-seller
commercial paper conduits supported by a committed liquidity facility. Upon
sale to the conduit, Carcorp will hold a subordinated retained interest in the
receivables. Under the terms of the agreement, new receivables are added to the
pool as collections reduce previously sold receivables. We expect to service,
administer and collect the receivables on behalf of Carcorp and the conduit.
The proceeds of sale will be less than the face amount of accounts receivable
sold by an amount that approximates the purchaser's financing costs. The term
of the receivables facility will initially be 364 days, and may be extended for
additional 364-day periods with the agreement of all parties.

Restrictions: This receivables facility contains certain restrictions on
Carcorp (including maintenance of $60.0 million net worth) and on the sellers
(including limitations on liens on receivables, modifications of the terms of
receivables, and changes in credit and collection practices) customary for
facilities of this type. The commitments under the receivables facility are
subject to termination prior to their term upon the occurrence of certain
events, including payment defaults, breach of covenants, including defined
interest coverage and leverage ratios, bankruptcy, default by us in servicing
the receivables and failure of the receivables to satisfy certain performance
criteria.

COMMERCIAL COMMITMENTS

Following is a discussion of our significant commercial commitments.

Letters of Credit: We acquired a 50% interest in an unconsolidated Italian
joint venture as part of the TAC-Trim acquisition. The Italian joint venture
will incur indebtedness in connection with its ongoing capital expenditure
program to service three new vehicle lines of Fiat at Fiat's Cassina plant and
other planned capital expenditures. We agreed initially to issue letters of
credit of up to $10.0 million to support this debt. If such letters of credit
are drawn, there can be no assurance that this Italian joint venture will have
sufficient assets to reimburse us.

Put and Call Arrangement: We entered into a put and call arrangement with
respect to the 50% interest in the Italian joint venture. The arrangement
permits Textron to require us to purchase Textron's interests in the joint
venture for an aggregate of approximately $23.1 million, subject to an increase
by $5.0 million under certain circumstances, after the third anniversary of
closing. Additionally, the arrangement permits us to require Textron to sell
its interests in the joint venture to us for fair market value following the
third anniversary of the closing. We cannot be sure that we will have adequate
liquidity to satisfy any put, or exercise any call, of the Textron interest.

In addition, our credit facility may restrict such further acquisition or
any further financing of the joint venture. While we will be permitted, and
required, to provide certain guarantees and letters of credit support, we may
not be permitted to further finance the joint venture and this may adversely
affect the value of the interests which we could be required to purchase at a
fixed price in the future.

Contingent Consideration and Purchase Price Adjustments: Under the
TAC-Trim acquisition agreement, the purchase price paid by us is subject to
adjustment based upon working capital and debt levels and the seller is
entitled to a return of any cash left in the business at closing and
reimbursement of certain capital expenditures made by it after September 30,
2001. We and Textron have agreed to a purchase price adjustment pursuant to the
purchase agreement for our purchase of TAC-Trim. We agreed to pay to Textron,
for the cash, cash equivalents or other short-term assets of TAC-Trim
transferred to us

S-43

at the closing, $10.0 million on May 24, 2002 and a further $20.0 million on or
before August 31, 2002, in each case with interest at 11 1/2% from the December
20, 2001 closing. At our option, through December 31, 2002, we can repurchase
at 75% of liquidation value plus accrued dividends either approximately $133.33
million in liquidation value of the Products series A preferred stock or all of
the $182.7 million in liquidation value of the series A preferred stock. If we
repurchase $133.33 million in liquidation value of the Products series A
preferred stock, the cash payment referred to above would be reduced to $15.0
million (rather than the aggregate of $30.0 million) and if we repurchase all,
the effective cash payment would be $10.0 million (rather than $30.0 million).
Additionally, we have an option from September 1, 2002 through August 31, 2003
to acquire all of the outstanding Products Preferred Stock owned by Textron at
a discount to its liquidation value plus accrued dividends.

As part of the TAC-Trim acquisition agreement, we may be obligated to make
additional aggregate payments to Textron of $15.0 million to $125.0 million in
the event that our cumulative EBITDA (which is defined in the purchase
agreement to adjust for the expected effect of acquisitions after the closing
of the TAC-Trim acquisition and the related financings) for the five-year
period ending December 31, 2006 is between $2,908.0 million and $4,691.0
million.

If our material debt instruments prohibit this payment, then we will be
entitled to issue additional preferred stock having terms equivalent to the
series B preferred stock, except that we will be required to mandatorily redeem
such preferred stock at its liquidation preference, with accrued and unpaid
dividends, at such time as, and to the extent that, we are permitted to do so
under our material debt instruments. In addition, under the TAC-Trim
acquisition agreement, we are permitted to use the "Textron" name for 18 months
in exchange for payments of $13.0 million on December 15, 2002 and $6.5 million
on December 15, 2003.

Becker Ventures holds 4.0 million shares of the Company which were
acquired as part of the financing for the TAC-Trim acquisition. Mr. Becker is
the managing member of Becker Ventures and holds a controlling interest in
Becker Ventures.

OTHER INFORMATION--EFFECTS OF CERTAIN TRANSACTIONS WITH RELATED PARTIES

Heartland Transactions

We are a party to a services agreement with Heartland under which
Heartland provides us with advisory and consulting services, including services
with respect to developments in the automotive industry and supply markets,
advice on financial and strategic plans and alternatives and other matters as
we may reasonably request and are within Heartland's expertise. The services
agreement terminates on the earlier of its 10th anniversary or the date upon
which Heartland ceases to own C&A common stock equivalent to 25% of that owned
by them on February 23, 2001.

Under the services agreement, we are obligated to pay to Heartland a $4.0
million annual advisory fee on a quarterly basis and to reimburse its
out-of-pocket expenses related to the services it provides. We have also agreed
to pay a fee of 1% of the total enterprise value of certain acquisitions and
dispositions. In connection with Heartland's initial investment in us on
February 23, 2001, we paid Heartland a fee of $12.0 million and reimbursed it
for its reasonable out-of-pocket expenses incurred in connection with its
initial investment. We paid a fee of $12.5 million to Heartland as a result of
its advisory services in connection with the TAC-Trim acquisition.

Charles E. Becker Transactions

In July 2001, we completed the acquisition of Becker. As a result of the
Becker acquisition and a purchase of C&A common stock immediately afterwards,
Charles Becker became one of C&A's principal stockholders. Charles Becker
became Vice Chairman and a member of C&A's Board of Directors upon closing of
the Becker acquisition. We agreed to make $18.0 million in non-compete payments
over five years to Mr. Becker at the time of the acquisition. In addition,
Becker Ventures, an affiliate of Mr. Becker, acquired additional shares of C&A
common stock as part of the financings in connection with the TAC-Trim
acquisition at a price of $12.50 per share.

S-44

As discussed above under "-- Liquidity and Capital Resources -- Leases,"
we are a party to certain sale-leaseback transactions with certain affiliates
of Becker Ventures LLC, an entity that is controlled by Charles Becker, a C&A
director. The purpose of these sale-leaseback transactions was to reduce our
outstanding debt. We believe that the terms of the sale-leaseback transactions
with Becker Ventures are on terms substantially similar to those which could
have been negotiated in arms-length transactions of the same type. These
sale-leaseback transactions were authorized by the independent members of C&A's
Board of Directors.

In connection with the Becker acquisition, we entered into a lease
agreement with Becker Ventures for our headquarters at 250 Stephenson Highway,
with the effective date of the lease being January 1, 2002. In March 2002, we
entered into lease agreements with Becker Ventures, effective January 1, 2002,
for 150 Stephenson Highway and 350 Stephenson Highway. The base rent for all
three premises is $13.25 per sq. ft. Total square footage for all three
locations is approximately 286,000. The leases have 20 year terms, and we have
two five-year renewal options. The annual cost under these agreement is $3.8
million. The 2002 cost for these agreements will be approximately $2.4 million.
For the quarter ended March 31, 2002, we recorded a total cost of $3.1 million
for rental expense with related parties.

Products is also party to a lease with an affiliate of Becker Ventures for
five manufacturing facilities totaling 884,000 square feet. The current term of
the lease is ten years, and the base rent for all of the facilities is $3.6
million per year. We are currently negotiating with the landlord to extend the
term of the lease for at least an additional ten years.

Elkin McCallum Transactions

In September 2001, we completed the acquisition of Joan Automotive
Industries, Inc., a leading supplier of bodycloth to the automotive industry,
and all of the operating assets of Joan's affiliated yarn dying operation,
Western Avenue Dyers, L.P. As a result of the Joan acquisition, Joan Fabrics
Corporation ("Joan Fabrics"), a company controlled by Elkin McCallum, became
one of C&A's principal stockholders. Upon completion of the Joan acquisition,
Mr. McCallum became a member of C&A's Board of Directors.

In connection with the Joan acquisition, we entered into a Supply
Agreement dated September 21, 2001 (the "Supply Agreement") with Main Street
Textiles, L.P. ("Main Street"). Main Street is controlled by Elkin McCallum.
Under the Supply Agreement, we agreed to purchase all of our requirements for
flat woven automotive fabric from Main Street for a five year period beginning
on the date of the Supply Agreement. The prices which we will pay for fabric
under the agreement will equal the costs of the raw materials plus an amount
which represents Main Street's standard labor and overhead costs incurred in
manufacturing fabric for us. During the term of the Supply Agreement, Main
Street is prohibited from manufacturing automotive fabric products for third
parties without our prior consent but may sell seconds and close-out items in
bona fide transactions. The Supply Agreement is also terminable by mutual
written consent, upon the occurrence of certain events of bankruptcy, the
appointment of a receiver or trustee, an assignment for the benefit of
creditors, or in the event of a material breach. In addition, either party may
terminate the Supply Agreement upon 270 days prior notice to the other party in
the event that the parties are unable to agree on the pricing of fabric covered
by the Supply Agreement.

We are also a party to a Transition Services Agreement dated September 21,
2001 (the "Transition Agreement") with Joan Fabrics. Under this agreement Joan
Fabrics will provide Products with transitional and support services for a
period not to exceed twelve months in order to support the continued and
uninterrupted operation of the businesses acquired by Products in the Joan
acquisition. As a part of these services, pending our disassembly and removal
of machinery and equipment that we purchased from Joan Fabrics, Joan Fabrics
will use that machinery and equipment to manufacture for us all of our
requirements for some types of knitted and woven automotive fabrics. The terms
of our agreement with respect to this fabric production are substantially
similar to those under the Supply Agreement.

Mr. McCallum became a related party as a result of the Joan acquisition.
The terms of the Supply Agreement and the Transition Agreement were reached
through arms-length negotiations prior to Mr. McCallum becoming a related
party.

S-45

On April 12, 2002, we signed and closed on a merger agreement with Mr.
McCallum and Southwest Railroad Inc., a company wholly-owned by Mr. McCallum,
pursuant to which Southwest Railroad Inc. was merged into one of our
wholly-owned subsidiaries. As consideration in the transaction, Mr. McCallum
received approximately 400,000 shares of C&A common stock and approximately
$2.5 million in cash. Pursuant to the merger agreement, debt owing to Mr.
McCallum of approximately $6.7 million was also repaid. This acquisition is
immaterial to Collins & Aikman's consolidated results and therefore has been
excluded from the pro forma information included in this prospectus supplement.

Textron Transactions

As discussed under "-- Liquidity and Capital Resources -- Leases," "--
Commercial Commitments -- Put and Call Arrangement," "Business -- Technology
and Intellectual Property" and "Business -- Joint Ventures" we are a party to
various agreements and transactions with Textron. Textron became a related
party as a result of its receipt of C&A common stock as consideration in the
TAC-Trim acquisition, and the Textron agreements were reached through
arm's-length negotiations prior to TAC-Trim becoming a related party.

DISCONTINUED OPERATIONS

Net cash flows from discontinued operations in 2001 were $12.2 million,
representing recoveries, net of cash outflows. However, we have significant
obligations related to post-retirement, casualty, environmental, product
liability, lease and other liabilities of discontinued operations. The nature
of many of these contingent liabilities is such that they are difficult to
quantify and uncertain in terms of amount. We have accrued $10.0 million for
casualty reserves, $38.9 million for post retirement costs and $40.7 million
for environmental and product liability costs. Based upon the information
available to management and our experience to date, we believe that these
liabilities will not have a material effect on our financial condition, results
of operations or cash flows. In addition, we have primary, excess and umbrella
insurance coverage for various periods that we expect to cover certain of these
liabilities. However, there can be no assurances that contingent liabilities
will not arise or that known contingent liabilities or related claims will not
exceed our expectations or that insurance will be available to cover these
liabilities. Because the cash requirements of our operations are substantially
a function of these contingencies, it is possible that actual net cash
requirements could differ materially from our estimates.

RECENT AND FUTURE REORGANIZATION PLANS

In 1999, we undertook a reorganization to reduce costs, improve operating
efficiencies throughout our operations and to more effectively respond to the
OEMs' demands for complete interior trim systems and more sophisticated
components. In general, the reorganization involved, among other things: the
reorganization of our operating segments, the closure or sale of various
facilities, and the termination of approximately 1,000 employees.

Upon final completion of the 1999 reorganization plan, as modified in
2000, we recognized a pre-tax restructuring charge of $33.4 million, including
$13.4 million of asset impairments, $15.0 million of severance costs and $5.0
million related to the termination of sales commission contracts.

During the first quarter of 2001, we undertook a restructuring program
resulting in a charge of $9.2 million. The goal of this restructuring program
is to further de-layer management in the North American, European and Specialty
operations. The pre-tax $9.2 million charge includes $8.4 million of severance
costs and $0.8 million of asset impairments.

During the fourth quarter of 2001, we incurred charges totaling $9.6
million including $2.8 million of severance costs and $6.8 million for the
write-off of long-lived assets. We may elect to implement additional
restructuring activities as opportunities to achieve cost savings arise in
future periods.

In the first quarter 2002, we undertook a restructuring program to
rationalize operations in North America, Europe and Specialty operations
resulting in a restructuring charge of $9.1 million. The charge included $5.5
million of severance costs and $3.6 million of costs related to the
establishment of reserves for future commitments. We recognized severance costs
for over 100 personnel primarily at our North

S-46

America and European headquarters and additional reductions at our Specialty
operations. We may elect to implement additional restructuring activities as
opportunities to achieve cost savings arise in future periods.

The preparation of consolidated financial statements in conformity with
accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the consolidated financial statements and the reported amounts
of revenues and expenses during the reporting period. Considerable judgment is
often involved in making these determinations, and therefore, actual results
could differ from those estimates.

Goodwill Impairment Testing: In June 2001, the FASB approved SFAS No. 142,
"Goodwill and Other Intangible Assets" effective for fiscal years beginning
after December 15, 2001. Under SFAS No. 142, goodwill will no longer be
amortized. Amortization of goodwill resulting from business combinations
initiated prior to July 1, 2001, will cease as of January 1, 2002, and
beginning July 1, 2001, goodwill resulting from business combinations initiated
after June 30, 2001 was not amortized. Beginning in 2002, all goodwill and
intangible assets will be tested at least annually for impairment in accordance
with the provisions of SFAS No. 142. We continue to review the provisions of
SFAS No. 142, but cannot determine the complete impact of the standard until
such time as we can complete the first-step of a two-step impairment test. We
are gathering information to prepare the first-step of the impairment test and
expect to complete this step by June 30, 2002. If an impairment loss were
identified as a result of these tests, it would be reported as a cumulative
effect of a change in accounting principle. In accordance with the provisions
of SFAS No.142, we did not amortize goodwill for the period ended March 31,
2002. If goodwill amortization had not been recorded for the period ended March
31, 2001, net loss would have decreased $1.6 million to an adjusted loss of
$5.8 million. The related loss per share would decrease by $0.06 per share
resulting in adjusted loss per share of $0.20 for the period.

Realization of Deferred Tax Assets: Assessing the need for and amount of a
valuation allowance for deferred tax assets requires significant judgment. The
fact that a benefit may be expected for a portion but not all of a deferred tax
asset increases the judgmental complexity. Future realization of deferred tax
assets ultimately depends on the existence of sufficient taxable income of the
appropriate character in either the carryback or carryforward period under the
tax law.

During 2001, Heartland acquired approximately 60% of C&A's outstanding
shares. This constituted a "change in control" that results in annual
limitations on C&A's use of its NOLs and unused tax credits. This annual
limitation on the use of NOLs and tax credits depends on the value of the
equity of C&A and the amount of "built-in gain" or "built-in loss" in C&A's
assets at the date of the "change in control". Based on the expiration dates of
the NOLs and tax credits as well as anticipated levels of domestic income,
management does not believe that the transaction will have a material impact on
these deferred tax assets. Management has reviewed our operating results for
recent years as well as the outlook for our continuing operations and concluded
that it is more likely than not that the net deferred tax assets of $141.7
million at December 31, 2001 will be realized.

Management took into consideration, among other factors, the expected
impact of current year acquisitions, the impact of recent restructuring plans,
and the infusion of cash from Heartland. These factors along with the timing of
the reversal of our temporary differences, certain tax planning strategies and
the expiration date of C&A's NOLs were also considered in reaching this
conclusion. Our ability to generate future taxable income is dependent on
numerous factors, including general economic conditions, the state of the
automotive industry and other factors beyond management's control. Therefore,
there can be no assurance that we will meet our expectation of future taxable
income.

Environmental Contingencies: We are subject to federal, state, local and
foreign environmental, and health and safety, laws and regulations that (i)
affect ongoing operations and may increase capital costs and operating expenses
in order to maintain compliance with such requirements and (ii) impose
liability relating to contamination at facilities, and at other locations such
as former facilities, facilities where we have sent wastes for treatment or
disposal, and other properties to which we may be linked. Such liability may
include, for example, investigation and clean-up of the contamination, personal
injury and property

S-47

damage caused by the contamination, and damages to natural resources. Some of
these liabilities may be imposed without regard to fault, and may also be joint
and several (which can result in a liable party being held responsible for the
entire obligation, even where other parties are also liable).

We believe that we have obtained, and are in material compliance with,
those material environmental permits and approvals necessary to conduct our
various businesses. Environmental compliance costs for continuing businesses
are accounted for as normal operating expenses or capital expenditures, except
for certain costs incurred at acquired locations. Environmental compliance
costs relating to conditions existing at the time of an acquisition are
generally charged to reserves established in purchase accounting. We accrue for
environmental remediation costs when such obligations are known and reasonably
estimable. In the opinion of management, based on the facts presently known to
it, such environmental compliance and remediation costs will not have a
material adverse effect on our business, consolidated financial condition or
future results of operations or cash flows.

We are legally or contractually responsible or alleged to be responsible
for the investigation and remediation of contamination at various sites, and
for personal injury or property damages, if any, associated with such
contamination. At some of these sites we have been notified that we are a
potentially responsible party, ("PRP"), under the federal Superfund law or
similar state laws. Other sites at which we may be responsible for
contamination may be identified in the future, including with respect to
divested and acquired businesses.

We are currently engaged in investigating or remediating certain sites, as
discussed below. In estimating the cost of investigation and remediation, we
have considered, among other things, prior experience in remediating
contaminated sites, remediation efforts by other parties, data released by the
United States Environmental Protection Agency ("USEPA"), the professional
judgment of our environmental experts, outside environmental specialists and
other experts, and the likelihood that other identified PRPs will have the
financial resources to fulfill their obligations at sites where they and we may
be jointly and severally liable. It is difficult to estimate the total cost of
investigation and remediation due to various factors including:

o incomplete information regarding particular sites and other PRPs;

o uncertainty regarding the nature and extent of environmental problems
and our share thereof, if any, of liability for such problems;

o the ultimate selection among alternative approaches by governmental
regulators;

o the complexity and evolving nature of environmental laws, regulations
and governmental directives; and

o changes in cleanup standards.

In addition to the major remediation matters discussed under "Business --
Environmental Matters and Legal Proceedings", we are addressing the following
significant matters:

o The Company is working with the Michigan Department of Environmental
Quality (MDEO) to investigate and remediate soil and groundwater
contamination at a former manufacturing plant in Mancelona, Michigan and
at adjacent owned property formerly used for the treatment and disposal
of plating waste. MDEO is likely to require remediation of groundwater.
In addition, the Company is incurring costs in connection with the
provision of alternate water supplies to residences in the area.

o The current owner of one of the Company's former manufacturing plants
located in Bowling Green, OH has entered into an Administrative Order on
Consent with the Ohio Environmental Protection Agency (OEPA) requiring
investigation and remediation of contamination at the site. The Company
is reimbursing the current owner for costs associated with ongoing
groundwater monitoring and, following selection of an appropriate remedy
by OEPA, will assume 90% of future remediation costs.

o In the 1980's and 1990's, the California Regional Water Quality Control
Board (CRWOCB) and

S-48

other state agencies ordered a predecessor of ours to investigate and
remediate soil and groundwater contamination at a former lumber treatment
plant in Elmira, California. In 1996, the Company entered into an
agreement with the State of California to conduct long-term operation and
maintenance of the remedy implemented at the site.

We have established accruals for certain contingent environmental
liabilities and management believes such reserves comply with generally
accepted accounting principles. We record reserves for environmental
investigatory and non-capital remediation costs when litigation has commenced
or a claim or assessment has been asserted or is imminent, the likelihood of an
unfavorable outcome is probable, and the financial impact of such outcome is
reasonably estimable. At January 1, 2001 the reserve aggregated $37.0 million.
During 2001, reserves associated with acquired companies aggregated $23.6
million and net deductions aggregated $1.0 million. As of December 31, 2001 and
March 31, 2002, total reserves for those contingent environmental liabilities
are approximately $59.6 million.

In the opinion of management, based on information presently known to it,
identified environmental costs and contingencies will not have a material
adverse effect on our consolidated financial condition, future results of
operations or cash flows. However, we can give no assurance that we have
identified or properly assessed all potential environmental liability arising
from our business or properties, and those of our present and former
subsidiaries and their corporate predecessors.

Allowance for Uncollectible Accounts: The allowance for uncollectibles
provides for losses believed to be inherent within our "Accounts and Other
Receivables" (primarily trade receivables and the retained interest in the
receivables facility). Management evaluates both the creditworthiness of
specific customers and the overall probability of losses based upon an analysis
of the overall aging of receivables, past collection trends and general
economic conditions. Management believes, based on its review, that the
allowance for uncollectibles is adequate to cover potential losses. Actual
results may vary as a result of unforeseen economic events and the impact those
events could have on our customers.

Valuation of Mandatorily Redeemable Preferred Stock of Products: Products
issued preferred stock as part of the consideration given to Textron in the
TAC-Trim acquisition. The preferred stock is recorded at fair value, which is
less than the liquidation value of $1,000 per share or $326.4 million. Since
the preferred stock is not publicly traded the use of an estimated fair value
was required. At its issuance, we estimated the fair value to be $146.9 million
based on market prices for securities with similar terms, maturities and risk
characteristics, and included a liquidation discount to reflect market
conditions. The difference between the initial recorded value and the initial
liquidation preference will be accreted over the life of the stock.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

RISK MANAGEMENT

We are exposed to market risk from changes in interest rates and foreign
exchange rates. To mitigate the risk from these interest rate and foreign
currency exchange rate fluctuations, we enter into various hedging transactions
that have been authorized pursuant to policies and procedures. We do not use
derivative financial instruments for trading purposes.

INTEREST RATE EXPOSURE

Our exposure to market risk for changes in interest rates relates
primarily to our variable rate debt obligations. While we have used interest
rate swaps and other interest rate protection agreements to modify our exposure
to interest rate movements and to reduce borrowing rates, no such agreements
were in place at March 31, 2002.

The tables below provide information about our derivative financial
instruments and other financial instruments that are sensitive to changes in
interest rates, including debt obligations. The table presents principal cash
flows and related interest rates by expected maturity dates for our debt
obligations. The instrument's actual cash flows are denominated in U.S. dollars
(dollar amounts in millions).

S-49

EXPECTED MATURITY DATE FAIR VALUE
------------------------------------------------------------------------- MARCH 31,
2002 2003 2004 2005 2006 THEREAFTER TOTAL 2002
----------- ----------- ------------ ------------ ---------- ------------ ------------ -----------
(IN MILLIONS)

Debt:
Fixed rate ($US)............ -- -- -- -- 400.0 500.0 900.0 869.5
Average interest rate..... -- -- -- -- 11.5% 10.75%
Variable rate ($US)......... 19.3 24.2 103.8 248.2 -- -- 395.5 395.5
Average interest rate ...... (A) (A) (A) (A) -- -- (A)

- ----------
(A) Borrowings bear interest at variable rates based on a spread to the
adjusted LIBOR rate or, at our option, a base rate. We are sensitive
to interest rate changes and based upon amounts outstanding at
December 31, 2001, a 0.5% increase in the weighted average interest
rate (6.9% at March 31, 2002) would increase interest costs by
approximately $2.0 million annually.

CURRENCY RATE EXPOSURE

We are subject to currency rate exposure primarily related to foreign
currency purchase and sale transactions and intercompany and third party loans.
The primary purpose of our foreign currency hedging activities is to protect
against the volatility associated with these foreign currency exposures. We
primarily utilize forward exchange contracts and purchased options with
durations of generally less than 12 months.

At March 31, 2002, we had outstanding the following foreign currency
forward and option contract amounts (amounts in millions, except average
contract rate):

UNREALIZED
CURRENCY CURRENCY WEIGHTED AVERAGE CONTRACT GAIN
(PAY) (RECEIVE) CONTRACT AMOUNT RATE PER CONVENTION (LOSS)
- -------------- ----------- ----------------- --------------------------- -----------

Euro ......... GBP $ 8.7 0.6157 GBP per EUR 0.1
GBP .......... Euro $ 0.1 0.6292 GBP per EUR --
GBP .......... USD $ 95.4 1.4090 USD per GBP (0.9)
Euro ......... USD $ 37.3 0.8660 USD per Euro (0.2)
CAD .......... USD $ 492.9 1.6028 CAD per USD 3.6
USD .......... CAD $ 29.0 1.5942 CAD per USD --
SEK .......... GBP $ 34.6 15.1086 SEK per GBP (0.8)
MXN .......... USD $ 2.9 9.3235 MXN per USD (0.1)
CZK .......... Euro $ 4.3 32.0000 CZK per EUR (0.1)

These amounts include option contracts with an aggregate notional amount
of $210.7 million outstanding at March 31, 2002 with a weighted average strike
price of $1.62 CAD per USD. For additional information on hedging activity, see
Note 5, "Foreign Currency Protection Programs" in the notes to the financial
statements included in our Annual Report on Form 10-K for the year ended
December 31, 2001, which is incorporated herein by reference.

The information presented does not fully reflect our net foreign exchange
rate exposure because it does not include the intercompany funding arrangements
denominated in foreign currencies and the foreign currency-denominated cash
flows from anticipated sales and purchases. Management believes that the
foreign currency exposure relating to these items would substantially offset
the exposure discussed above.

S-50

BUSINESS

OUR COMPANY

We are a global leader in the design, engineering and manufacturing of
automotive interior components, including instrument panels, fully assembled
cockpit modules, floor and acoustic systems, automotive fabric, interior trim
and convertible top systems. We believe that we have the number one or two
North American market share position in terms of sales in eight out of the nine
major automotive interior categories. We are also the largest North American
supplier of convertible top systems in terms of sales. We expect the fully
assembled cockpit modules market to grow significantly over the next five years
and have positioned our company as a leading global supplier in this market
with the recent acquisition of TAC-Trim. Our sales are diversified among North
American, European and South American Tier I integrators and automotive OEMs.
In North America, we manufacture components for approximately 90% of all light
vehicle production platforms. We have over 25,000 employees and more than 120
plants worldwide. We are a Delaware corporation formed on September 21, 1988.
We conduct all of our operating activities through Products. Predecessors of
Products have been in operation since 1843.

In February 2001, Heartland Industrial Partners, L.P. acquired a
controlling interest in our company. Since the investment, we have pursued
acquisitions that have furthered a strategy of serving as a prime contractor to
both Tier I integrators, which are shifting capital and emphasis away from
interior components manufacturing and towards electronics and the delivery of
fully integrated interior modules, and to OEMs, which continue to increase
their outsourcing of complete interior manufacturing.

o On July 3, 2001, we acquired the Becker Group L.L.C., a leading supplier
of plastic components to the automotive industry.

o On September 21, 2001, we acquired Joan Automotive Industries, Inc., a
leading supplier of bodycloth to the automotive industry, and the assets
of Joan's affiliated automotive yarn dyeing operation, Western Avenue
Dyers, L.P.

o On December 20, 2001, we acquired TAC-Trim, one of the largest suppliers
of instrument panels and fully assembled cockpit modules and a major
automotive plastics manufacturer of interior and exterior trim components
in North America, Europe and South America.

The combination of Collins & Aikman, Becker, Joan and TAC-Trim created one
of the industry's largest and most broadly based manufacturers of automotive
interior components, systems and modules. We have the capability to supply
diverse combinations of stylistically matched, functionally engineered and
acoustically integrated interior trim components, systems and modules and
market interior products to customers through a single "global commercial
operations" group, which supplies products from three primary categories:
plastic components and cockpits, carpet and acoustics and automotive fabrics.
In addition, we continue to market our convertible top systems through the Dura
convertible group.

INDUSTRY TRENDS

Our strategy is to capitalize on several important automotive industry
trends, which we expect to drive demand for our products. These trends include:

o Increase OEM Demand for Modules, Systems and Complete Interiors. To
reduce costs and simplify assembly processes and design, OEMs
increasingly expect their large scale suppliers to provide fully
engineered systems, pre-assembled combinations of components (systems or
modules) and complete automotive interiors rather than individual
components.

o Accelerating Manufacturing Outsourcing by Tier 1 Integrators. The large
Tier I integrators are respositioning their assets and resources to
focus on electronics and to gain design, assembly and "just-in-time"
sequencing of modules, systems and complete interiors. As a result, they
are seeking to divest or outsource the manufacturing of many component
categories.

o Growing Technological Content and Acoustical Performance
Requirements. The electronic and technological content of vehicles
continues to expand, largely driven by demand for greater

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functionality and convenience. Changes to vehicle interiors, including
hands-free cell phone systems, entertainment and navigational systems
and voice-activated dashboard functions, are expected to rquire enhanced
acoustical properties and increased sound field engineering relative to
today's light vehicles.

o Global Cusotmer Requirements. Automotive manufacturers favor suppliers
with the capability to manufacture automotive interior systems and
components in multiple geographic markets due to the opportunity for
significant cost savings, reduced product development cycle times,
common global platforms and improved product quality and consistency.

OUR STRATEGY

Our goal is to become the leading manufacturer of automotive interior trim
components to OEMs and Tier I integrators and to realize the integration,
synergy and cost savings opportunities created by the combination of Collins &
Aikman, Becker, Joan and TAC-Trim. The following are the key elements of our
strategy.

o Provide integrated product solutions that combine interior styling,
component systems and acoustical technologies. Our ability to bundle
multiple components into integrated, custom packages distinguishes us
from our competition and provides us with an opportunity to increase our
content per vehicle. We believe that we are a leader in product
innovation, design and styling in our business lines, producing
components that cover substantially all of the non-glass interior
surfaces of automobiles. We believe the breadth of our product offering
affords us a significant advantage as OEMs increasingly view the vehicle
interior as a major point of competitive differentiation and rely upon
automotive suppliers for research, engineering, design and styling
capabilities. By employing a cross-disciplinary approach to acoustics,
surface styling and product engineering that takes advantage of our
product development and technological capabilities, we can offer
integrated product solutions to our customers.

o Capitalize on our position as prime contractor to OEMs and Tier I
integrators. We believe that OEMs will accelerate modular and system
sourcing in order to lower costs, reduce time to market and accommodate
global platforms and we also believe that Tier I integrators will
increase the redeployment of assets and capital into the integrated
design, assembly and "just in time" sequenced delivery of complete
interior systems. Because our pro forma 2001 sales accounted for
approximately 28.9% of the approximately $7.6 billion of North American
markets in which we participate, we believe we are well positioned to
capitalize on these opportunities. Furthermore, our products are used in
over 90% of North American vehicle platforms and are sold to all North
American OEMs, transplants (such as Toyota and Honda), and major Tier I
integrators. We are also well positioned with respect to our Tier II
competitors that have comparatively narrower product lines and
significantly less size, scale and technological capabilities.

o Increase content per vehicle. We have substantial new business awards
from our customers across all product categories, with the strongest
growth expected in fully assembled cockpit modules. On a pro forma basis,
we have been awarded net new business that is projected, based on our
customers' production estimates to generate additional sales of
approximately $343 million in 2002. These expected sales include both
conventional instrument panel molding and skinning as well as assembly
and sequencing of fully integrated units with approximately $600 per
vehicle of average expected content. By increasing content per vehicle,
we expect our sales to outperform the industry generally. We intend to
take advantage of our current position to increase our content per
vehicle.

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manufacture and combine mulitiple products to produce complex integrated
interiors. We believe the application of technologies such as
Intellimold(TM) throughout our operations, as well as the continued
roll-out of these technologies throughout TAC-Trim's operations, should
significantly improve our plastics manufacturing cycle time, labor costs
and scrap rates.

o Pursue cost savings opportunities arising from our acquisitions. The
Becker, Joan and TAC-Trim acquisitions, in tandem with other
restructuring actions, create the opportunity to realize significant cost
savings estimated at approximately $30 million per year by 2003. We
expect to realize these savings through a number of initiatives,
including purchasing savings, in-sourcing certain of our plastics tooling
and yarn dyeing requirements, consolidating research and development and
sales functions, capacity rationalization and reducing global
headquarters' costs. We expect additional incremental savings in 2003 and
beyond.

PRODUCTS

We market the majority of our products to customers through a single
"global commercial operations" group, which supplies products from three
primary categories including plastic components and cockpits, carpet and
acoustics and automotive fabrics. In addition, we market convertible top
systems through the Dura convertible group. Our products include the following:

Plastic Components and Cockpits

We manufacture substantially all of the components of the plastic interior
trim within a vehicle, including automotive instrument panels, door panels,
sidewall trim, overhead systems, headrests and armrests, cupholders, air
registers and bezels, slush molded skins, pillar trim, floor console systems,
instrument panel components, and fully assembled cockpit modules. This broad
portfolio of plastic components and cockpits products allows us to offer
customers modules and systems that incorporate individual components. Some
major products include:

o Instrument Panels ("IP"): As the most structurally important plastic
component in the vehicle and as the plastic substrate directly in front of
the driver, the IP occupies the most important piece of "real estate" in
the interior. We believe that we are the number one IP supplier in North
America in terms of sales. The advanced materials we employ include
Envirosoft(TM) castable thermoplastic materials, high performance PVC
alloys, high-definition grain and texture formulation and vacuum forming.
TAC-Trim has also developed the Invisitec(TM) invisible passenger air bag
system, which provides improved appearance and craftsmanship at reduced
cost.

o Cockpits: We are a leading North American and European supplier of
cockpits. The complete array and breadth of our plastic component
offerings has enabled us to become a leader in offering customers a fully
assembled IP system ("cockpit") delivered on a just-in-time basis. As most
of the ancillary interior trim components revolve around the IP placement,
we believe that we will be able to penetrate effectively the customer base
by offering the IP along with complementary plastic accoutrements and
additional products from our other business units. We source various other
parts that make up a fully assembled modular cockpit from outside
suppliers (including radios, wire harnesses, cross-vehicle beams and
steering columns). We expect that our position as a cockpit integrator
will provide significant opportunities to in-source more manufactured
content in the future. Through the proprietary Intelliquence(TM) software,
finished cockpits can be delivered to the OEMs on a just-in-time basis and
installed on the assembly line.

o Door Panels: We believe that we are the second largest supplier of door
panels and related trim in North America in terms of sales. This
decorative plastic interior trim component is an important element to the
overall styling theme of a vehicle's interior.

o Exteriors: Exterior trim components include plastic molded fascia
systems, bodyside cladding, signal lamps, cowl grilles and wheel flares.
We have taken advantage of the systems trend in the exterior trim product
market by producing and assembling fascia with radiator grilles, energy
absorbers, trim moldings and lamps to be delivered in sequence directly
to the OEMs' assembly line.

S-53

Carpet and Acoustics

We have evolved from a North American carpet producer to become a market
leader in a broad range of automotive floor systems, luggage compartment trim,
dash insulators and other acoustic products with production capabilities in
both North America and Europe. While acoustical products are often combined
with molded floor carpet to provide complete interior floor systems, it is
useful to describe four carpet and acoustics product categories:

o Molded Floor Systems: Molded floor systems consist of thermoformed
compression molded carpets. These carpets are provided in either a barrier
or an absorptive NVH (noise, vibration and harshness) system. The barrier
system includes polyethylene, barrier back, and a fiber underlay system or
a foam-in-place system. Products include Tuflor(TM), our proprietary
thermoplastic flooring product, which is rugged, durable and washable. The
products in molded floor systems are highly engineered, and their
manufacture requires a high degree of precision and draws on our robotics
capabilities. We believe we are the number one producer of molded floor
and acoustic systems in the North American market and manufacture molded
floor systems for all of the North American and Japanese OEMs as well as a
number of the European OEMs.

o Luggage Compartment Trim: The other major carpeted area of the vehicle
is the luggage compartment, which includes one-piece molded trunk systems
and assemblies, wheelhouse covers and center pan mats, seatbacks,
tireboard covers and other trunk trim products. We believe that we are
the number two supplier of luggage compartment trim in the North American
market.

o Accessory Floormats: We manufacture automotive accessory floormats by
vulcanizing rubber backing to tufted carpet and also manufacture cargo
mats with value-added distinctive aesthetic and practical features such
as hand-sewn appearance of edges and moisture trapping construction with
our patented Akro Edge (Registered Trademark) floormats. Largely due to
this product differentiation, we have become the largest fully integrated
auto floormat producer in North America.

o Acoustical Products: Acoustical products include interior dash
insulators that insulate the passenger compartment from engine
compartment noise and heat; damping materials that control noise in the
floor, overhead system and sides of the vehicle; and engine compartment
NVH systems. Changes to vehicle interiors, including hands-free cell
phone systems, navigational systems, entertainment systems and
voice-activated Internet access, will require enhanced acoustical
properties and increased sound field engineering relative to today's
light vehicles.

Automotive Fabrics

The combination of our existing fabrics products with Joan makes us one of
the largest automotive fabrics manufacturers. The principal automotive fabrics
are bodycloth (woven or knitted fabric primarily for the seats of the vehicle)
and headliner (knitted fabric laminated with foam such as that on the inside
roof of the vehicle). Automotive fabrics are woven or knit based on the styling
and cost preference of the customer. We offer every major fabric variation,
including dobby velours, jacquard woven velours, flat wovens, double needle-bar
knits, circular knits and tricot knits.

Our styling capability is one of our principal strengths, and is a reason
for our strong sales to OEMs. With the acquisition of Joan, our production of
fabrics is vertically integrated with an expandable dye house operation. Due to
stringent OEM "color fastness" standards, the dyeing and color application
process is a key value-added aspect of auto fabric production and contributes
significantly to price-per-yard.

Dura Convertible Top Systems

We are a vertically integrated full service supplier of convertible roof
systems, and can design, engineer and manufacture all aspects of a convertible
top including the framework, trim set, backlights, well slings, tonneau covers
and power actuating system. In order to differentiate products in the
marketplace, OEMs have been increasing the number of convertible models on both
existing and new platforms. Management believes that this trend will continue
to drive demand for convertible systems. Top-in-a-Box(TM), a system pioneered by
Dura Convertibles, is an assembly-line-ready module containing

S-54

all of the components of a convertible top that enables the OEM to install a
complete convertible top system on the production line. This modular, "bolt-on"
assembly significantly reduces the time and labor traditionally required to
manufacture a convertible model, enabling OEMs to more profitably produce and
sell convertibles. Dura Convertibles has the industry's most complete line of
fabric coverings for convertible and sport utility top covers for OEMs
globally. We maintain final assembly and trim operations near the OEMs' plants,
and thereby offer customers complete just-in-time delivery and sequencing
capabilities.

CUSTOMERS

Customers include both OEMs and Tier I integrators, which have been
increasingly divesting component manufacturing. In the past, OEMs have been
typical direct customers for our plastic components, cockpits, carpet and
acoustic and convertible products, while Tier I integrators have typically been
direct customers for fabrics. We believe that over time, sales to Tier I
integrators will increase as a percentage of total sales as OEMs source
increasingly larger sections of vehicle interiors to Tier I integrators who in
turn shift their capital and emphasis towards electronics and the delivery of
fully integrated interior modules.

Through strategic acquisitions, we have broadened our customer base
globally, with European sales representing 14% of total actual sales for 2001
versus 3% in 1996. DaimlerChrylser AG (including Mercedes, Chrysler, Mitsubishi
and Smart), General Motors Corporation (including General Motors, Opel,
Vauxhall and Saab) and Ford Motor Company (including Ford, Jaguar, Land Rover,
Aston Martin and Volvo) directly and indirectly represented approximately
18.7%, 29.0% and 21.5% of 2001 actual sales, respectively. These percentages
are likely to change with the recent acquisition of TAC-Trim. The following is
a list of our customers:

o Alpha Romeo o General Motors o Magna o Renault
o Audi o Honda o Man o Rover
o BMW o Hyundai o Mazda o Scania
o CAMMI o Intier o Mitsubishi o Seat
o Daimler Chrysler o Isuzu o Nissan o Subaru
o Faurecia o Jaguar o NUMMI o Toyota
o Fiat o Johnson Controls o Opel o Visteon
o Ford o Kia o Porsche o Volkswagen
o Freightliner o Lear Corporation o PSA o Volvo

Our supply relationships are typically sole-source and extend over the
life of the model, which is generally four to seven years, and do not normally
require the purchase by the customer of any minimum number of products. We
receive blanket purchase orders that normally cover annual requirements for
products to be supplied for a particular vehicle model which may be terminated
at any time. In order to reduce reliance on any one model, we produce
automotive interior systems and components for a broad cross-section of both
new and more established models.

MARKETING, ENGINEERING AND DEVELOPMENT

As a global leader in automotive interior components, we differentiate our
company in the marketplace by consistently providing high quality products,
outstanding customer service and program management and cost effective
automotive solutions to global customers. Historically, we marketed individual
components, modules and complete systems to customers. With the implementation
of "Mega" Tier II strategy, we realigned our marketing efforts to sell
integrated product "bundles" to customers in an effort to increase growth in
sales and operating income while enhancing the value-add provided to customers.
Central to this marketing strategy has been the development of products that
enhance both the vehicle's interior aesthetics as well as its acoustic
performance. Equally important, and unlike many other Tier I or Tier II
automotive suppliers, is the development of marketing and program management
teams

S-55

specifically focused on supporting not only OEMs, but major Tier I customers as
well. These dedicated teams, consisting of automotive interior personnel who
are able to meet a customer's entire interior needs, provide a single interface
for our customers and help avoid duplication of our sales and engineering
efforts.

Products are sold directly to customers under sales contracts that are
obtained primarily through competitive bidding. These sales are originated
almost entirely by sales staff. This marketing effort is augmented by design
and manufacturing engineers that work closely with automotive manufacturers
from the preliminary design to the manufacture and supply of automotive
interior modules, systems or components. A key element employed to increase
sales is to develop increasingly higher value-added products through
innovations in materials construction, product design, engineering and styling.
In recognition of this, in April of 2000, we formed the Global Product
Development Division (GPDD) and also created an Advanced Sales and Program
Management Group. The primary focus of the GPDD is to work closely with
customer engineering personnel to develop new products, processes, innovations,
etc. that are central to winning new business from customers. The Advanced
Sales and Program Management Group serves as a "bridge" between the GPDD and
customer-focused sales groups who market our products and are responsible for
ensuring that customers' needs are being met.

Through sales offices in North America, South America, Europe and
Asia-Pacific, our marketing personnel maintain regular contact with our various
customers' engineers and purchasing agents. We continually seek new business
from existing customers, as well as seeking to develop relationships with new
customers. We market our products by maintaining strong customer relationships,
developed over an 80-plus year history in the automotive industry through:

o extensive technical and product development capabilities;

o reliable just-in-time delivery of high-quality products;

o strong customer service;

o innovative new products; and

o a competitive cost structure.

The emergence of modular sourcing favors suppliers with broad
manufacturing capabilities and product lines, experience with diverse materials
and modular coordination. We believe that our broad base of manufacturing
expertise with interior surface resins and materials and our global leadership
in delivering cockpits, will favorably position us in the global automotive
interior industry. Automotive manufacturers have increasingly looked to
suppliers to assume responsibility for introducing product innovations,
shortening the development cycle of new models, decreasing tooling investment
and labor costs, reducing the number of costly design changes in the early
phases of production and improving automotive interior acoustics, comfort and
functionality. Once we are engaged to develop the design for the automotive
interior system or component of a specific vehicle model, we are also generally
engaged to supply these items when the vehicle goes into production.
Substantial resources have been dedicated toward improving engineering and
technical capabilities, establishing or acquiring strong in-house tooling
capabilities and developing advanced technology centers in the United States
and in Europe. Similarly, research and development are an integral part of the
sales and marketing effort. Especially noteworthy are TAC-Trim's proprietary
Intellimold(TM) injection molding control process, Invisitec(TM) invisible
passenger air bag door system and Envirosoft castable TPU and TPO materials.

In order to effectively develop automotive interior systems, it is
necessary to have global capabilities in the engineering, research, design,
development and validation of the interior components, systems and modules
being produced. We conduct research and development at design and technology
centers in Dearborn, Michigan; Dover, New Hampshire; Auburn Hills, Michigan;
Plymouth, Michigan; Heidelberg, Germany and Tyngsboro, Massachusetts and at
several worldwide product engineering centers. At these centers, we design,
develop and engineer products to comply with applicable safety standards, meet
quality and durability standards, respond to environmental conditions and
conform to customer aesthetic and acoustic requirements. In particular,
acoustic requirements and cockpit aesthetics have become more

S-56

important than ever with the advent of in-vehicle telematics. Technologically
advanced acoustics testing centers are maintained in Plymouth, Michigan and
Heidelberg, Germany and cockpit development centers are located in Auburn Hills
and Dearborn, Michigan in order to capitalize on both of these trends.

MANUFACTURING

We focus on combining smaller manufacturing plants into larger scale
plants that have efficient layouts and the ability to absorb core fixed costs.

We possess cross-disciplinary manufacturing expertise, including an
ability to form and assemble multi-material combinations of hard-molded
plastics, slush-molded soft skins and surfaces, carpet, fabric, foam,
insulation, and other trim materials. Management believes the sophistication of
our carpet tufting and dying processes, the foam-in-place process for molded
floors and our small-part plastic moldings and assemblies capabilities creates
a competitive advantage. Recent acquisitions have added to our manufacturing
capabilities:

o With the Joan acquisition, we gained a scaleable, low-cost package
automotive yarn dyeing facility thereby bringing in-house an important
source of supply for the manufacture of our fabrics products.

o The acquisition of Becker, originally established as a tool shop, has
supplemented our existing operations with one of the industry's leading
tool developers allowing the in-sourcing of a significant portion of our
tooling requirements. The addition of Becker's tooling expertise
complemented our manufacturing capabilities for carpet and acoustics
products and TAC-Trim's large part injection molding process.

o The TAC-Trim acquisition added advanced process technologies such as
slush-molded skinning for high-end instrument panels, thermoplastic
casting, and "molded-in" color and decoration insert capability and
overall manufacturing discipline and acumen. Specific product and process
additions brought on by TAC-Trim include: the patented Intellimold (Trade
Mark) feedback control system for injection molding control which
dramatically reduces cycle times, labor costs and scrap rates; and the
proprietary Intelliquence (TM) software sequencing system which
should enable product delivery on a just-in-time basis to global OEM
customers. In addition, TAC-Trim significantly expanded our plastic
manufacturing capabilities allowing us to provide substantially all of an
automobile's interior plastic components.

TECHNOLOGY AND INTELLECTUAL PROPERTY

Significant resources are dedicated to research and development in order
to maintain our position as a leading developer of technology innovations, some
of which have been patented or are in the process of being patented, in the
automotive interior industry. We have developed a number of patented and
proprietary designs for innovative interior features, all focused on increasing
value to the customer. Examples include our developed proprietary slimline
cupholders, Cavelflex(TM) (stretch woven) fabrics and the "AcT(TM) family" of
acoustically tunable products.

Our patents and patent applications exist in five primary areas:
automotive floor mats, automotive fabric products, acoustics, plastics and
convertible systems. With respect to floormats, we hold several U.S. and foreign
patents relating to the Akro Edge (Registered Trademark) floormats. Akro Edge
(Registered Trademark) floormats are the industry standard for their functional
and aesthetic appeal to OEMs and their customers. With respect to automotive
fabric patents, we have numerous patents on headliners, trunkliners and floor
panels. In the acoustics area, in addition to the proprietary Comet (Registered
Trademark) acoustics software, we are actively seeking protection of various
aspects of our AcT(TM) fiber technology and various other means for improving
sound deadening and sound absorption in automotive interiors. We have various
patents and patent applications directed to cup holders, air outlet assemblies,
storage systems and convertible mechanisms.

In connection with the TAC-Trim acquisition we acquired intellectual
property rights to various products and processes including the patented
Intellimold(TM) injection molding control process for use in our business. The
Intellimold(TM) patents are related to methods and/or apparatus for injection
molding.

S-57

TAC-Trim has also developed certain skin materials and compounding solutions
that provide the capability to design cost-effective materials with outstanding
performance and aesthetic qualities. Examples of these materials include
Envirosoft(TM) castable thermoplastic materials, high performance PVC alloys,
high-definition grain and texture formulation and vacuum thermoplastic
applications. TAC-Trim has also developed the Invisitec(TM) invisible passenger
air bag system, which provides improved appearance and craftsmanship at reduced
cost. Invisitec(TM) systems, which integrate the air bag door with the panel and
top cover, have been commercialized for soft-cast and vacuum-formed panels and
hard injection molded instrument panels. In total, TAC-Trim holds approximately
270 U.S. and approximately 1200 foreign active patents and has approximately 350
patents pending. The intellectual property acquired in the TAC-Trim acquisition
is subject to certain limitations on our use and creates continuing obligations
to Textron.

As part of the TAC-Trim acquisition, we entered into three intellectual
property license agreements with Textron. In two of these agreements, we
licensed back to Textron certain intellectual property that was acquired in the
transaction (the "Intellimold Agreement" and the "Licensed-Back IP Agreement").
In the third agreement, we licensed from Textron other intellectual property
that we did not acquire in the transaction (the "Retained IP Agreement"). We
are providing general descriptions of these agreements although these
descriptions do not contain all the material terms in the contracts.

In all three agreements, the ability to use the intellectual property is
limited based on whether the proposed use falls inside or outside a defined
field of automotive products (the "Restricted Field").

In the Intellimold Agreement, we gave Textron an exclusive worldwide,
perpetual, irrevocable license to use outside the Restricted Field our rights
in the Intellimold process and any enhancements developed by it. Textron was
also granted a royalty-free, worldwide, perpetual, irrevocable license to use
our rights in the Intellimold process and any enhancements developed by us
within the Restricted Field solely in connection with its and certain
affiliates' manufacturing, sales and development operations. The Intellimold
Agreement also includes an exclusive royalty-free, worldwide, perpetual,
irrevocable license for us to use within the Restricted Field any enhancements
to the Intellimold process developed by Textron. In the Licensed-Back IP
Agreement, we granted Textron a non-exclusive, worldwide, royalty-free,
perpetual and irrevocable license to use solely outside the Restricted Field
certain intellectual property including over 50 U.S. patents on air bag related
products. In the Retained IP Agreement, Textron granted to us a non-exclusive,
worldwide, royalty-free, perpetual and irrevocable license to use solely within
the Restricted Field certain intellectual property. These patents could have
applicability to the automotive industry but such use is somewhat secondary to
the use of such technology outside the automotive field.

As described under the heading "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Liquidity and Capital
Resources -- Leases", we lease certain equipment from Textron. When those
leases terminate, if Textron and its affiliates continue to own any interest in
the equipment, they will be allowed to use the equipment for certain purposes
and to use related intellectual property.

RAW MATERIALS

Raw materials and other supplies used in our continuing operations are
normally available from a variety of competing suppliers. With respect to most
materials, the loss of a single or even a few suppliers would not have a
material adverse effect on us. We are sensitive to price movements in our raw
materials supply base and have not hedged against price fluctuations in
commodity supplies, such as plastics and resins. While we may not be able to
pass on any future raw materials price increases to customers, a significant
portion of increased cost may be offset through volume purchase savings, value
engineering/ value analysis in conjunction with our major customers and
reductions in the cost of off-quality products and processes. We may evaluate
commodities hedging opportunities from time to time.

COMPETITION

We are a leading supplier in automotive molded carpet and acoustics, auto
fabrics, convertible top systems and automotive plastics components and
cockpits. Customers rigorously evaluate suppliers on the

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basis of product, quality, price competitiveness, technical expertise and
development capability, new product innovation, reliability and timeliness of
delivery, product design capability, leanness of facilities, operational
flexibility, customer service and overall management. Some competitors may have
greater financial resources than us or a competitive advantage in the
production of any given product that we manufacture, and there can be no
assurance that we will be able to successfully compete in the markets for the
products we currently provide.

JOINT VENTURES

We participate in four minority business enterprises in the U.S. (Aguirre
and Collins & Aikman Plastics, LLC, Engineered Plastic Products, Inc., Synova
Plastics, LLC and Synova Carpets LLC). These joint ventures play an important
role in securing new business as automotive manufacturers continue to promote
economic diversity by proactively increasing the amount of business they source
to minority suppliers. These joint ventures were instrumental in our obtaining
contracts with General Motors, Toyota, DaimlerChrysler and Johnson Controls to
supply them with various plastic components and systems for a number of vehicle
models.

In connection with the TAC-Trim acquisition, we acquired a 50% interest in
an Italian joint venture. Textron Automotive Holdings (Italy) S.r.L. is an
Italian company that will offer interior and exterior automotive trim products
to customers in Italy. Textron indirectly owns the other 50% of the Italian
joint venture. A recent project of the Italian joint venture is to service
certain cockpit needs for three new Fiat lines at a facility being built at
Fiat's Cassina, Italy plant. We will not control the joint venture but will be
required to provide certain administrative, technical and engineering services
and to license certain patents and other know-how to the Italian joint venture.
We expect to receive certain fees and reimbursement of certain expenses in
providing these services and licensing these rights. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations --
Liquidity and Capital Resources -- Commercial Commitments" for additional
discussion regarding a put and call arrangement that we entered into with
respect to the remaining 50% interest in the Italian joint venture.

LABOR MATTERS AND EMPLOYEES

As of March 31, 2002, our continuing operations employed approximately
26,304 persons on a full-time or full-time equivalent basis. Approximately 51%
of such employees were represented by labor unions in the United States, Canada
and other countries. Each facility has its own collective bargaining unit and
management believes that our relations with our employees represented by labor
unions and our other employees are generally good. From time to time in the
ordinary course of our business, grievances are filed against us by employees
and unions.

PROPERTIES

We have over 120 plants and facilities in North America, South America,
Europe and Asia. Approximately 70% of the total square footage of these
facilities is owned and the remainder is leased. Many of our facilities are
strategically located to provide product delivery to our customers on a
just-in-time basis.

FACILITIES BY GEOGRAPHIC REGION

NORTH SOUTH
TYPE OF FACILITY AMERICA AMERICA EUROPE ASIA TOTAL
- --------------------------------------------- --------- --------- -------- ------ ------

Manufacturing ............................... 57 4 31 -- 92
Design, Research & Development, and Technical
Centers .................................... 19 -- 8 -- 27
Sales Branches, Offices, Other .............. 16 -- 8 2 26
-- -- -- -- --
Total(1) ................................... 92 4 47 2 145

- ----------
(1) Total facilities shown per the table exceeds the 120 plants and
facilities indicated above because certain facilities listed in the table
serve in more than one of the indicated capacities.

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ENVIRONMENTAL MATTERS AND LEGAL PROCEEDINGS

Except as described below, we are not party to any material pending legal
proceedings, but we are involved in ordinary routine litigation incidental to
the business.

Environmental: We are subject to federal, state, local and foreign
environmental, and health and safety, laws and regulations that (a) affect
ongoing operations and may increase capital costs and operating expenses in
order to maintain compliance with such requirements and (b) impose liability
relating to contamination at facilities, and at other locations such as former
facilities, facilities where we have sent wastes for treatment or disposal, and
other properties to which we may be linked. Such liability may include, for
example, investigation and clean-up of the contamination, personal injury and
property damage caused by the contamination, and damages to natural resources.
Some of these liabilities may be imposed without regard to fault, and may also
be joint and several (which can result in a liable party being held responsible
for the entire obligation, even where other parties are also liable).

We believe that we have obtained, and are in material compliance with
those material environmental permits and approvals necessary to conduct our
various businesses. Environmental compliance costs for continuing businesses
are accounted for as normal operating expenses or capital expenditures, except
for certain costs incurred at acquired locations. Environmental compliance
costs relating to conditions existing at the time of an acquisition are
generally charged to reserves established in purchase accounting. We accrue for
environmental remediation costs when such obligations are known and reasonably
estimable. In the opinion of management, based on the facts presently known to
it, such environmental compliance and remediation costs will not have a
material effect on our business, consolidated financial condition, future
results of operations or cash flows.

We are legally or contractually responsible or alleged to be responsible
for the investigation and remediation of contamination at various sites, and
for personal injury or property damages, if any, associated with such
contamination. At some of these sites we have been notified that we are a PRP
under the federal Superfund law or similar state laws. We may be identified in
other sites in the future and may be responsible for contamination, including
with respect to divested and acquired businesses.

We are currently engaged in investigating or remediating certain sites. In
estimating cost of investigation and remediation, we considered, among other
things, prior experience in remediating contaminated sites, remediation efforts
by other parties, data released by the USEPA, the professional judgment of our
environmental experts, outside environmental specialists and other experts, and
the likelihood that other identified PRPs will have the financial resources to
fulfill their obligations at sites where they may be jointly and severally
liable. It is difficult to estimate the total cost of investigation and
remediation due to various factors including:

o incomplete information regarding particular sites and other PRPs;

o uncertainty regarding the nature and extent of environmental problems
and our share, if any, of liability for such problems;

o the ultimate selection among alternative approaches by governmental
regulators;

o the complexity and evolving nature of environmental laws, regulations
and governmental directives; and

o changes in cleanup standards.

We have established reserves for environmental investigation and
non-capital remediation costs. Management believes such reserves comply with
generally accepted accounting principles. We record reserves for these
environmental costs when litigation has commenced or a claim or assessment has
been asserted or is imminent, the likelihood of an unfavorable outcome is
probable, and the financial impact of such outcome is reasonably estimable. As
of March 31, 2002, total reserves for these environmental costs are
approximately $59.6 million. Approximately half of those environmental reserves
are for the three sites discussed below. The balance relates to approximately
40 additional locations where we are participating in the investigation or
remediation of the site, either directly or through financial contribution or
where we are alleged to be responsible for costs of investigation or
remediation.

S-60

We are implementing a 1991 Administrative Order issued by USEPA concerning
the remediation of soil and groundwater contamination associated with the
Stamina Mills Superfund Site in North Smithfield, Rhode Island. Although the
outcome of ongoing litigation with the government could reduce this expense,
the environmental reserve assumes that we will have full responsibility for
this matter. In addition, in March 2001 we received notice of a suit filed in
Rhode Island state court on behalf of a person alleging medical conditions
caused by exposure over a number of years, through drinking water and
otherwise, to a chlorinated solvent in contaminated groundwater associated with
the site. We filed an answer denying liability. Although management believes we
have significant defenses, the suit is in its early stages.

We are also implementing a 1990 Administrative Order by Consent with the
New Hampshire Department of Environmental Services (DES) concerning the
investigation and remediation of the Cardinal Landfill in Farmington, NH. Among
other things, we also paid for alternative water supplies to residences
impacted by groundwater contamination associated with the landfill and
investigation and, if necessary, remediation of off-site impacts from the
landfill. The DES is in the process of selecting a remedy to address conditions
at the landfill. Concern about conditions in the soil and groundwater at and in
the vicinity of the site have prompted a lawsuit in state court, on behalf of
several families that reside in a mobile home park near the landfill, against
the park owner. Although we believe we would have significant defenses, no
assurance can be given that litigation will not be brought against us arising
out of the contamination or, if so, that the matter would be resolved in a way
that is not material.

As a result of the TAC-Trim acquisition, we are also one of 11 PRPs
implementing a 1993 Consent Decree with USEPA and the State of New Hampshire
concerning the remediation of soil, groundwater and sediment contamination
associated with the Dover Municipal Landfill Superfund Site in Dover, New
Hampshire. Under a related 1997 Administrative Order on Consent with the USEPA,
the PRPs are in the process of assessing a possible alternative to the remedy
previously selected for this site.

In the opinion of management, based on information presently known to it,
identified environmental costs and contingencies will not have a material
adverse effect on the consolidated financial condition or future results of
operations. However, no assurance can be given that management has identified
or properly assessed all potential environmental liability arising from our
business or properties, and those of present and former subsidiaries and their
corporate predecessors.

During 2001, we received payments of $14.5 million on environmental claims
related to discontinued operations. Of the $14.5 million in payments, we
recorded $8.8 million, net of income taxes, as income from discontinued
operations.

During 2000, we settled claims for certain other environmental matters
related to discontinued operations for a total of $20.0 million. Settlement
proceeds are being paid to us in three installments. Installments of $7.5
million were received in both 2000 and 2001. We anticipate receiving the final
payment of $5.0 million on June 30, 2002. Of the $20.0 million settlement, we
recorded the present value of the settlement as $7.0 million of additional
reserves, based on our assessment of potential environmental exposures, and
$6.6 million, net of income taxes, as income from discontinued operations.

See "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Accounting Policies -- Environmental Contingencies".

Other Claims: As of May 17, 2002, we were party to approximately 701
pending cases alleging personal injury from exposure to asbestos containing
materials used in boilers manufactured before 1966 by former operations of ours
which were sold in 1966. Asbestos-containing refractory bricks lined the
boilers and, in some instances, our former operations installed
asbestos-containing insulation around the boilers. These pending cases do not
include cases that have been dismissed or are subject to agreements to dismiss
due to the inability of the plaintiffs to establish exposure to a relevant
product and cases that have been settled or are subject to settlement
agreements. Total settlement costs for these cases have been less than $181,000
or an average of less than $4,250 per settled case. The defense and settlement
costs have been substantially covered by our primary insurance carriers under a
claims handling agreement that expires in August 2006. We have primary, excess
and umbrella insurance coverage for various periods

S-61

available for asbestos-related boiler and other claims. Our primary carriers
have agreed to cover approximately 80% of certain defense and settlement costs
up to a limit of approximately $70.5 million for all claims made, subject to
reservations of rights. The excess insurance coverage, which varies in
availability from year to year, is approximately $620 million in aggregate for
all claims made. Based on the age of the boilers, the nature of the claims and
settlements made to date, and the insurance coverage, management does not
believe that these cases will have a material impact on our financial
condition, results of operations or cash flows. However, we cannot assure that
we will not be subjected to significant additional claims in the future, that
insurance will be available as expected or that unanticipated damages or
settlements in the future would not exceed insurance coverage.

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MANAGEMENT

Set forth below is information regarding directors and executive officers
of C&A.

NAME AGE(1) POSITION
- ------------------------------- -------- -----------------------------------------------

Thomas E. Evans ............... 50 Chairman of the Board and Chief Executive
Officer

Charles E. Becker ............. 55 Vice Chairman of the Board

Robert C. Clark ............... 58 Director

Marshall A. Cohen ............. 67 Director

David C. Dauch ................ 37 Director

Cynthia Hess .................. 45 Director

Timothy D. Leuliette .......... 52 Director

Elkin McCallum ................ 58 Director

W. Gerald McConnell ........... 38 Director

Warren B. Rudman .............. 71 Director

J. Michael Stepp .............. 57 Director and Chief Financial Officer

David A. Stockman ............. 55 Director

Daniel P. Tredwell ............ 44 Director

Samuel Valenti III ............ 56 Director

Gerald E. Jones ............... 56 Executive Vice President Global Manufacturing
Operations, Fabrics

Millard L. King ............... 57 Executive Vice President Global Manufacturing
Operations, Carpet and Acoustics Systems

Bernd Lattemann ............... 60 President and Managing Director European
Operations

Ronald T. Lindsay ............. 51 Senior Vice President, General Counsel and
Secretary

Michael A. Mitchell ........... 58 President Global Commercial Operations

Jerry L. Mosingo .............. 50 Executive Vice President Global Manufacturing
Operations, Plastics & Cockpit Systems

Jonathan L. Peisner ........... 42 Senior Vice President, Treasurer

Jeffrey A. Rose ............... 42 Senior Vice President Global Product
Development and Technology

Russell N. Stroud ............. 59 Senior Vice President Global Supply Chain
Management and Company-Wide Cost
Optimization

Gregory L. Tinnell ............ 41 Senior Vice President, Human Resources

Reed A. White ................. 54 President of Collins & Aikman Dura Convertible
Systems

- ----------
(1) As of March 28, 2002.

Thomas E. Evans has been Chairman of the Board and Chief Executive Officer
of C&A since April 1999. Previously, he was President of Tenneco Automotive, an
automotive supplier and a division of Tenneco, Inc., from 1995 until April
1999. Prior to that, Mr. Evans served for six years with Case Corporation, a
manufacturer of farm machinery and construction equipment and a subsidiary of
Tenneco, Inc., in a series of senior management positions, the last being
Senior Vice President of Worldwide Operations. Prior to his employment with
Case Corporation, he spent sixteen years in the automotive industry with
Rockwell International and Federal Mogul Corporation. Mr. Evans is also a
director of the Motor & Equipment Manufacturers Association, the National
Association of Manufacturers and the Institute of Textile Technology. Mr. Evans
is also a director of Products.

S-63

Charles E. Becker is Vice Chairman of the Board and has been a director
since July 2001. For over 25 years, through 1998, Mr. Becker was the CEO and
co-owner of Becker Group, Inc., a global automotive interiors components
supplier. Becker Group, Inc. was sold to Johnson Controls, Inc. in 1998. In
January 1999, Mr. Becker re-acquired 10 North American plastic molding and
tooling operations from Johnson Controls, which subsequently became Becker
Group, LLC. Mr. Becker is also the owner and chairman of Becker Ventures, LLC,
which was established in 1998 to invest in a variety of business ventures,
including the manufacturing, real estate and service industries. Mr. Becker is
also a director of Metaldyne Corporation (formerly known as MascoTech, Inc.), a
diversified industrial manufacturing company and designated to become a
director of TriMas Corporation.

Robert C. Clark has been a director of C&A since October 1994. Mr. Clark
is Dean of the Harvard Law School and Royal Professor of Law. Mr. Clark joined
Harvard Law School in 1979 after four years at Yale Law School, where he was a
tenured professor, and became Dean in 1989. Mr. Clark is a corporate law
specialist and author of numerous texts and legal articles. Prior to his
association with academia, he was in private practice with Ropes & Gray. Mr.
Clark is also a director of American Lawyer Media Holdings, Inc. and American
Lawyer Media, Inc. and a trustee of Teachers Insurance Annuity Association
(TIAA).

Marshall A. Cohen has been a director of C&A since April 2001. Mr. Cohen
has been Counsel at Cassels Brock and Blackwell, a Canadian law firm, since
October 1996. From 1988 until September 1996, Mr. Cohen served as President and
Chief Executive Officer of The Molson Companies Ltd., a brewing company. Mr.
Cohen is also a director of The Toronto-Dominion Financial Group, Barrick Gold
Corporation, American International Group, Inc., Lafarge Corporation, SMK
Speedy International Inc., The Goldfarb Corporation, Premcor Inc., The Quorum
Group (Vice Chairman), Haynes International, Inc., Metaldyne and Golf Town
Canada Inc. Mr. Cohen serves on the Advisory Boards of The Blackstone Group and
Heartland Industrial Partners L.P.

David C. Dauch has been a director of C&A since May 2002 and vice
president of manufacturing -- driveline division of American Axle &
Manufacturing since 2001, a company he joined in 1995 as manager, sales
administration. In 1996, he became director of sales, GM full size truck
programs and was named vice president of sales and marketing in 1998. From 1987
to 1995, Mr. Dauch was employed by Products at which he held positions of
product manager, account executive, and director of Ford sales and marketing
for the Automotive Carpet and Fabric Groups.

Cynthia L. Hess is the owner and CEO of Hess Group, LLC. Prior to forming
Hess Group in 2002, Ms. Hess was a senior managing director of Heartland (See
"Certain Relationships and Related Transactions -- Certain Relationships --
Heartland"). She was formerly Vice President of corporate quality for
DaimlerChrysler, where she led the corporate strategy for quality improvement
and facilitated quality plan execution. In her 22 years with DaimlerChrysler,
Ms. Hess held various engineering, manufacturing and procurement supply
positions. Ms. Hess is also a director of Metaldyne Corporation.

Timothy D. Leuliette was elected as a director of C&A in February 2001 and
has been a director of Metaldyne since November 2000. He is currently President
and Chief Executive Officer of Metaldyne. He is also designated to become a
director of TriMas Corporation. He is a co-founder of Heartland. Prior to
joining Heartland, Mr. Leuliette joined the Penske Corporation as President and
Chief Operating Officer in 1996. From 1991 to 1996 Mr. Leuliette served as
President and Chief Executive Officer of ITT Automotive, an automotive company.
He also serves on a number of corporate and charitable boards, including
serving as director of The Federal Reserve of Chicago, Detroit Branch.

Elkin McCallum was elected as a director of C&A in September 2001. Mr.
McCallum has been the Chairman of the Board and CEO of Joan Fabrics Corporation
since 1989 and has also been the Chairman and CEO of Tyng Textiles LLC since
1996. Mr. McCallum is currently Vice Chairman of the Board of Trustees of
Bentley College and chairman elect for the next academic year.

W. Gerald McConnell was elected as a director of C&A in February 2001 and
has been a senior managing director of Heartland since its founding in 2000.
Mr. McConnell was formerly a managing director at Deutsche Bank Alex. Brown
(formerly Bankers Trust Co.), a banking firm, from 1997 until

S-64

1999. From 1991 until 1999, Mr. McConnell specialized in leveraged finance and
financial sponsor coverage at Deutsche Bank Alex. Brown. Mr. McConnell also
serves on the board of directors of Springs Industries, Inc. and is designated
to become a director at TriMas Corporation.

Warren B. Rudman has been a director of C&A since June 1995. Mr. Rudman
has been a partner in the law firm of Paul, Weiss, Rifkind, Wharton & Garrison
since January 1993. Mr. Rudman served as a United States Senator from New
Hampshire from 1980 through 1992 and as Attorney General of New Hampshire from
1970 until 1976. Mr. Rudman is also a director of the Chubb Corporation, Allied
Waste, Boston Scientific, the Raytheon Company and an independent trustee of
several mutual funds of the Dreyfus Corporation.

J. Michael Stepp was elected as a director of C&A in February 2001. Mr.
Stepp was previously Executive Vice President and Chief Financial Officer of
C&A from April 1995 through December 1999. Mr. Stepp was a consultant to C&A
and was an independent mergers and acquisitions advisor from January 2000
through February 2001. Since March 2001, Mr. Stepp has been a senior managing
director of Heartland. He is also a director of Products and is designated to
become a director at TriMas Corporation.

David A. Stockman has been a director of C&A since February 2001. Mr.
Stockman is also a director of Metaldyne and Springs Industries, Inc. and is
designated to become a director at TriMas Corporation. He is the senior
managing director and the founder of Heartland. Prior to founding Heartland, he
was a senior managing director of The Blackstone Group L.P. and had been with
Blackstone since 1988. Mr. Stockman also served as the director of the Office
of Management and Budget in the Reagan Administration, and represented Southern
Michigan in the U.S. House of Representatives from 1976 to 1981.

Daniel P. Tredwell has been a director of C&A since February 2001. Mr.
Tredwell is also a director of Metaldyne and Springs Industries, Inc. and is
designated to become a director at TriMas Corporation. He is a senior managing
director and a co-founder of Heartland. He has more than a decade of leveraged
financing experience. Mr. Tredwell served as a Managing Director at Chase
Securities Inc. and had been with Chase Securities since 1985. From 1980 to
1985, Mr. Tredwell was employed as the Press Secretary to U.S. Representative
Robert L. Livingston.

Samuel Valenti III has been a director of C&A since February 2001. He is a
senior managing director of Heartland, Chairman of Valenti Capital LLC, and has
been a director of Metaldyne Corporation since January 2001. Mr. Valenti is a
director of Masco Capital Corporation and has been its President since 1988.
Mr. Valenti was formerly Vice President -- Investments of Masco Corporation, a
home improvement and building products company. Mr. Valenti is also a director
of Products and is designated to become a director at TriMas Corporation.

Gerald E. Jones has been Executive Vice President of Global Manufacturing
Operations, Fabrics since November 2001 and an executive officer since March
2002. Mr. Jones, who has over 30 years of industry experience, joined C&A as a
director of manufacturing in July 1995. From April 2000 until November 9, 2001,
he was General Manager, Automotive Woven Fabrics.

Millard L. King, Jr. has been Chief Operating Officer of U.S. Automotive
Carpet Systems since January 1999 and an executive officer of C&A since March
2002. Mr. King joined C&A in 1971. Prior to his current position with C&A, Mr.
King most recently held the positions of Vice President of Operations for
Automotive Knit Fabrics and then Chief Operating Officer of the Automotive Knit
and Woven Operations.

Bernd Lattemann has been President and Managing Director of European
Operations since January 2002 and an executive officer of C&A since March 2002.
Mr. Lattemann has over 30 years of sales and manufacturing and automotive
experience, including serving as an independent consultant from 1998 to 2002
and Chief Executive Officer from 1996 to 1998 for Becker Group Europe GmbH.
Previously, Mr. Lattemann held several positions at SKF's Specialty Bearings
Division.

Ronald T. Lindsay has been Senior Vice President, General Counsel and
Secretary and an executive officer of C&A since 1999. He has been Senior Vice
President since 1999, Vice President 1988-1999, and since 1988, General Counsel
and Secretary of Products.

S-65

Michael A. Mitchell has been President, Global Commercial Operations since
January 2002 and an executive officer of C&A since March 2002. Mr. Mitchell has
over 40 years of industry experience, having previously held senior management
positions at Chrysler Corporation and American Motors. He served as Executive
Vice President, Business & Product Development from 1997 to 2002 and Executive
Vice President of Engineering, Purchasing and Program Management from 1995 to
1997 for TAC-Trim.

Jerry L. Mosingo has been Executive Vice President, Global Plastics and
Cockpit Systems since January 2002 and an executive officer of C&A since March
2002. Mr. Mosingo has over 30 years of industry experience, and he was
previously Executive Vice President of Manufacturing from 1999 to 2002 and
Senior Vice President of Operations in 1999 for TAC-Trim. Previously, he served
as Vice President of Quality from 1997 to 1999 and Director of Operations from
1992 to 1997 for A.O. Smith.

Jonathan L. Peisner has been Senior Vice President and Treasurer since
February 2002. Mr. Peisner joined C&A in 1999 as Senior Vice President of
Communications and Investor Relations. From January 2000 until February 2002,
he was Senior Vice President of Communications, Investor Relations and Business
Planning. He has been an executive officer of C&A since February 2000. From
1997 until 1999, he was Director of Investor Relations and Business Planning
for Lear Corporation, an automotive supplier, and from 1995 until 1997 he was
director of Investor Relations. Mr. Peisner serves on the National Association
of Manufacturers Public Affairs Steering Committee and the National Investor
Relations Institute Small Cap Advisory Group.

Jeffrey A. Rose has been Senior Vice President, Global Product Development
and Technology since January 2002 and an executive officer of C&A since March
2002. Mr. Rose has 20 years of industry experience, and he previously served as
Vice President of Technology for TAC-Trim, which he joined in 1995 as Director
of Interior Trim Engineering. Prior to 1995, he worked for Toyota at their
Technical Center in Ann Arbor, Michigan.

Russell N. Stroud has been Senior Vice President, Global Supply Chain
Management and Company-Wide Cost Optimization and an executive officer of C&A
since March 2002. He has over 35 years of broad automotive experience with both
OEMs and suppliers. Previously, he served as Vice President of Procurement from
2000 to 2002 and Vice President of Sales, Marketing and Strategic Planning from
1998 to 2000 for New Venture Gear and President & COO for Thyssen Steel Group
from 1996 to 1998 and held a number of positions at Chrysler Corporation.

Gregory L. Tinnell has been Senior Vice President of Human Resources and
an executive officer since April 2000. Previously, he was Vice President of
Human Resources for our southern and Mexican Operations, as well as Vice
President of Global Compensation & Benefits. Mr. Tinnell joined C&A in 1995.
Prior to Collins & Aikman, he served in various management positions with Sara
Lee Corporation, Nabisco Foods Group and North American Refractories Company.
Mr. Tinnell serves on the National Association of Manufacturers Human Resources
Steering Committee.

Reed A. White has been President of Dura Convertible Systems, Inc. (also
known as Collins & Aikman Dura Convertible Systems) since 1994, has been
employed thereby in various management positions since April 1985 and has been
an executive officer of C&A since February 2000.

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PRINCIPAL STOCKHOLDERS

Set forth in the table below is certain information as of May 30, 2002,
regarding the beneficial ownership of C&A common stock by:

o persons who are known to us to own beneficially more than five percent
of C&A common stock based upon information from various sources available
to us as of May 30, 2002;

o current directors of C&A;

o the executive officers of C&A (including our chief executive officer and
our four most highly compensated executive officers); and

o the directors and executive officers of C&A as a group.

The amounts and percentages of C&A common stock beneficially owned are
reported on the basis of regulations of the SEC governing the determination of
beneficial ownership of securities. Under the rules of the SEC, a person is
deemed to be a beneficial owner of a security if that person has or shares
voting power, which includes the power to vote or to direct the voting of the
security, or investment power, which includes the power to dispose of or to
direct the disposition of the security. Certain shareholders, including
Heartland, Blackstone Capital, Wasserstein/C&A Holding, Charles E. Becker and
Elkin McCallum and their respective affiliates are party to stockholders
agreements containing agreements relating to voting for director designees and
share transfer restrictions. Except as indicated in the footnotes to this
table, we believe each beneficial owner named in the table below has sole
voting and sole investment power with respect to all shares beneficially owned
by them.

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PERCENT OF CLASS
AMOUNT AND NATURE OF -------------------------------------
NAME OF BENEFICIAL OWNER** BENEFICIAL OWNERSHIP PRIOR TO OFFERING AFTER OFFERING
- -------------------------------------------- --------------------- ------------------- ---------------

Blackstone Capital Partners L.P. ........... 4,187,348 6.2% 5.0%
345 Park Avenue
New York, NY
Charles E. Becker .......................... 7,539,262(2) 11.2% 9.1%
Robert C. Clark ............................ 32,000(3) * *
Marshall A. Cohen .......................... 4,000(3) * *
David C. Dauch ............................. 0 * *
Thomas E. Evans ............................ 629,242(4) * *
Heartland Industrial Partners L.P. ......... 26,880,000(5) 39.8% 32.3%
55 Railroad Avenue
Greenwich, CT
Cynthia L. Hess ............................ 0(13)
Joan Fabrics Corporation ................... 5,104,000(14) 7.5% 6.1%
100 Vesper Executive Park
Tyngsboro, MA
Timothy D. Leuliette ....................... 0(13)
Ronald T. Lindsay .......................... 34,444(7) * *
Elkin McCallum ............................. 5,543,600(6) 8.2% 6.7%
W. Gerald McConnell ........................ 0(13)
Warren B. Rudman ........................... 28,000(3) * *
J. Michael Stepp ........................... 30,067(8) * *
David A. Stockman .......................... 0(13)
Textron Inc ................................ 7,200,000(9) 10.7% 8.7%
40 Westminster Street
Providence, RI
Daniel P. Tredwell ......................... 0(13)
Samuel Valenti, III ........................ 0(13)
Wasserstein/C&A Holdings, L.L.C ............ 4,668,840(10) 6.9% 5.6%
1301 Avenue of the Americas
New York, NY
Reed A. White .............................. 46,043(11) * *
Executive officers and directors as a group
(25 persons) .............................. 13,961,684(12) 20.6% 16.8%

- ----------
* Less than one percent of shares of common stock outstanding.

** Unless specified, the address of each beneficial owner is c/o Collins &
Aikman Corporation at 250 Stephenson Highway, Troy, Michigan 48083; Attn:
General Counsel.

(1) Of these shares (i) 3,296,448 shares are held directly by Blackstone
Capital Partners L.P., a Delaware limited partnership, the sole general
partner of which is Blackstone Management Associates L.P. ("Blackstone
Associates"), (ii) 170,089 shares are held directly by Blackstone Family
Investment Partnership I L.P., a Delaware limited partnership ("BFIP"),
the sole general partner of which is Blackstone Management Associates I
L.L.C. ("BMA"), (iii) 14,943 shares are held directly by Blackstone
Advisory Directors Partnership L.P., a Delaware limited partnership
("BADP"), the sole general partner of which is Blackstone Associates, and
(iv) 705,868 shares are held directly by Blackstone Capital Company II
L.L.C., a Delaware limited liability company, all the ownership interest
of which is owned directly and indirectly by Blackstone Capital Partners
L.P., BFIP and BADP.

(2) Such shares represent (a) 5,440,000 shares acquired by Mr. Becker as
consideration for the Becker acquisition, (b) 339,262 shares acquired by
Mr. Becker immediately following the closing of the Becker acquisition
from one of the other former Becker shareholders, (c) 160,000 shares
subject to presently exercisable warrants to purchase such common stock
at $12.50 per share acquired by Mr. Becker as consideration for the
Becker acquisition and (d) 1,600,000 shares acquired by Becker Ventures
as part of the financing for the TAC-Trim acquisition. Mr. Becker is the
managing member of Becker Ventures and holds a controlling interest in
Becker Ventures. Mr. Becker became a C&A director and Vice Chairman upon
completion of the Becker acquisition.

(3) Represents shares underlying options granted under C&A's 1994 Directors
Stock Option Plan (the "1994 Plan") which (i) are vested or (ii) will
vest within 60 days unless the director ceases to be a director prior to
that time.

S-68

(4) Of these shares, (i) 98,000 are held directly, (ii) 27,242 shares are
held indirectly in the Stock Fund of the 401(k) and Shadow Retirement
Income Plans and (iii) 504,000 represent shares underlying options
granted under the 1994 Plan which are vested.

(5) The 26,880,000 shares beneficially owned are indirectly owned by
Heartland Industrial Associates L.L.C. as the general partner of each of
the following limited partnerships, which hold the shares directly: (a)
304,125 shares are held directly by Heartland Industrial Partners (FF),
L.P., a Delaware limited partnership, (b) 391,400 shares are held
directly by Heartland Industrial Partners (E1), L.P., a Delaware limited
partnership, (c) 229,951 shares are held directly by Heartland Industrial
Partners (K1), L.P., a Delaware limited partnership, (d) 114,976 shares
are held directly by Heartland Industrial Partners (C1), L.P., a Delaware
limited partnership, and (e) 25,839,549 shares are held directly by
Heartland Industrial Partners, L.P., a Delaware limited partnership.

(6) Of these shares (a) 5,104,000 shares were acquired by Joan Fabrics
Corporation as a part of the consideration for the sale of Joan to us,
(b) 30,000 shares were previously acquired by Mr. McCallum and his
spouse, (c) 9,600 were shares previously acquired by the McCallum Family
Foundation and (d) 400,000 shares were acquired by Mr. McCallum as
consideration in the Southwest Laminates acquisition which was
consummated on April 12, 2002. The sole stockholder of Joan Fabrics
Corporation is JFC Holding Trust, in which Elkin McCallum is the Trustee
and has a 75% beneficial interest and his spouse, Donna McCallum, owns
the balance. Mr. McCallum became a director of C&A upon the consummation
of the Joan acquisition.

(7) Of these shares, (i) 2,920 are held directly, (ii) 17,970 represent
shares underlying options granted under the 1993 Employee Stock Option
Plan (the "1993 Plan") which are vested, (iii) 10,667 represent shares
underlying options under the 1994 Plan which are vested and (iv) 2,887
shares are held indirectly in the Stock Fund of the 401(k) and Shadow
Retirement Income Plans.

(8) Of these shares, (i) 26,000 are held directly and (ii) 4,067 are held
indirectly in the Stock Fund of the 401(k) and Shadow Retirement Income
Plans.

(9) Such shares are beneficially owned by Textron Inc. Under the purchase
agreement for the TAC-Trim acquisition, Textron has the right to
designate a director to serve on C&A's Board of Directors. As of this
date, it has not yet identified the individual that it will designate.
Accordingly, the table does not include the Textron designee, who is
expected to disclaim beneficial ownership of all securities beneficially
owned by Textron.

(10) Of these shares (i) 4,636,684 are held directly by Wasserstein/C&A
Holdings, L.L.C. (the "Wasserstein L.L.C."), which is controlled by
Wasserstein Perella Partners, L.P. ("WP Partners"), the sole general
partner of which is Wasserstein Perella Management Partners, Inc.
("Wasserstein Management"), which is controlled by Cypress Capital
Advisors, LLC ("CCA"), (ii) 7,200 are held directly by WPPN, Inc., an
indirect subsidiary of WP Group, (iii) 18,000 shares are held directly
33% by each of three trusts for which Bruce Wasserstein, the Chairman and
Chief Executive Officer of Wasserstein Management (who is also a director
and stockholders of WP Group), is the Co-Trustee, (iv) 4,201 are owned
directly by Bruce Wasserstein and (v) 2,755 are held by Bruce
Wasserstein's descendants' trusts.

(11) Of these shares, (i) 40,710 represent shares underlying options granted
under the 1993 Plan which are vested and (ii) 5,334 represent shares
underlying options granted under the 1994 Plan which are vested.

(12) Excludes shares held by Heartland and its affiliates, Joan Fabrics and
its affiliates, Becker Ventures and its affiliates, Textron Inc. and its
affiliates, Blackstone Partners and its affiliates and Wasserstein L.L.C.
and its affiliates.

(13) As described under (5) above, 26,880,000 shares are beneficially owned by
Heartland Industrial Associates, L.L.C. Mr. Stockman is the Managing
Member of Heartland Industrial Associates, L.L.C., but disclaims
beneficial ownership of such shares. Messrs. Leuliette, McConnell, Stepp,
Tredwell and Valenti and Ms. Hess are also members of Heartland
Industrial Associates, L.L.C. and also disclaim beneficial ownership of
the shares.

(14) See footnote 6.

STOCKHOLDERS AND REGISTRATION RIGHTS AGREEMENTS

We and various of our shareholders are parties to stockholders agreements
and registration rights agreements. C&A is a party to a stockholders agreement
with Heartland and certain affiliates (the "Heartland parties"), Blackstone and
certain of its affiliates (the "Blackstone parties") and the Wasserstein L.L.C.
and certain of its affiliates (the "Wasserstein parties"). This agreement
contains (i) rights of first refusal on private sales of common stock by the
Blackstone parties and the Wasserstein parties in favor of the Heartland
parties, (ii) tag-along rights in favor of the Blackstone parties and the
Wasserstein parties in the event of certain transfers of common stock by
Heartland and (iii) for so long as Heartland has a right to designate
directors, a drag-along right enabling Heartland to cause the Blackstone
parties and Wasserstein parties to sell all of their common stock with
Heartland when Heartland is selling all of its common stock to a third party
(including by merger). The agreement further provides that the stockholder
parties thereto will vote their shares of C&A common stock to ensure that seven
members of C&A's Board of Directors will be designated by Heartland, one by the
Wasserstein parties and one by the Blackstone parties, in each case so long as
each of Heartland, the Wasserstein parties and the Blackstone parties (in each
case, together with its affiliates) continue to beneficially own at least 25%
of the common stock owned by them as of February 23, 2001. However, the
Blackstone and Wasserstein parties relinquished their rights to designate
directors on March 15, 2002. In addition, there must be three independent
directors not otherwise affiliated with C&A, the Blackstone parties, the
Wasserstein parties or Heartland. C&A's chief executive officer is also
required to serve as a director. Certain rights inure to the benefit of, and
certain obligations bind, subsequent transferees of common

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stock held by the parties to the stockholders agreement, but none of the rights
or obligations apply to public sales, whether under Rule 144 or under a
registration statement.

This stockholders agreement also contains certain restrictions on C&A's
ability to enter into transactions with Heartland and its affiliates. C&A and
its subsidiaries may not enter into any such transaction or series of related
transactions involving payments or other consideration in excess of $500,000
without the consent of (i) each of the Blackstone parties and the Wasserstein
parties, so long as each holds at least 25% of the common stock held by it as
of February 23, 2001, for so long as Heartland and its affiliates directly or
indirectly beneficially own at least 50% of the outstanding common stock and
(ii) a majority of the members of the board who are disinterested with respect
to the particular transaction and were not designated for election by Heartland
so long as Heartland and its affiliates own at least 25% of the common stock
owned by them on the date of the stockholders agreement. The Blackstone parties
and the Wasserstein parties also relinquished their consent rights to the
foregoing as of March 15, 2002. The restrictions described above do not apply
to (i) an advisory fee on certain acquisitions and divestitures by C&A in an
amount not exceeding 1% of the enterprise value thereof and related
out-of-pocket fees and expenses, (ii) transactions involving the sale, purchase
or lease of goods and services in the ordinary course of business and on an
arms-length basis between C&A and portfolio companies of Heartland in an amount
involving not more than $1.25 million in any transaction, and (iii) certain
other transactions.

There is also a stockholders agreement (the "Becker/Joan Stockholders
Agreement") among Charles E. Becker, Michael E. McInerney and Jens Hohnel (the
"Becker parties"), Joan Fabrics Corporation, JFC Holdings Trust, Mr. Elkin
McCallum and Donna McCallum (the "Joan parties"), the Heartland parties and
C&A. The Becker/Joan Stockholders Agreement contains (i) rights of first
refusal on private sales of common stock by the Becker parties and the Joan
parties in favor of the Heartland parties, (ii) tag-along rights in favor of
the Becker parties and the Joan parties in the event of certain transfer of
common stock by Heartland and (iii) for so long as Heartland has a right to
designate directors, a drag-along right enabling Heartland to cause the Becker
parties and Joan parties to sell all of their common stock with Heartland when
Heartland is selling all of its common stock to a third party (including by
merger).

The Becker/Joan Stockholders Agreement further provides that the Becker
parties, the Joan parties and Heartland will each vote their common stock to
ensure that Charles E. Becker and Elkin McCallum are each members of C&A's
Board of Directors, so long as the Becker parties and the Joan parties,
respectively, continue to hold shares representing 25% of the common stock
originally acquired by them. The Becker/Joan Stockholders Agreement also
provides that the Becker parties will vote their shares in favor of the
election of Heartland's designees to C&A's Board of Directors. Certain rights
inure to the benefit of, and certain obligations bind, subsequent transferees
of common stock, but none of the rights or obligations apply to public sales,
whether under Rule 144 or under a registration statement.

Under the various registration rights agreements, we have granted the
following demand registration rights in respect of C&A common stock. Demand
registration rights have been granted to the following persons: (1) Heartland
is entitled to four demand registrations, (2) Blackstone and Wasserstein are
each entitled to two demand registrations, (3) Becker and Joan are each
entitled to two demand registrations and (4) Textron is entitled to two demand
registrations. Each demand holder has rights to be included in other demand
holders' registration statements, subject to various priorities, limitations
and exceptions. In addition, these and other shareholders holding an aggregate
of approximately 62.6 million shares are entitled to piggyback registration
rights. In all cases, Blackstone and Wasserstein have priority rights of
inclusion. We are generally obligated to pay the expenses of registration and
we have indemnified the holders for liability associated with the registration
statements on customary terms. The registration rights agreements prohibit
these shareholders from selling or transferring their shares for a period of
not less than 120 days following this offering, at the request of the
underwriters. The registration rights agreements do not prohibit Blackstone and
Wasserstein from distributing the shares held by them to their

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investors free of this lock-up so long as an investor owns less than 1% of our
outstanding shares. Wasserstein has indicated that it may effect such
distribution prior to or following this offering.

Products is also a party to a preferred stock registration and other
rights agreement with Textron concerning registration and other rights which
Products has granted to Textron with respect to the preferred stock
consideration received by Textron in connection with the TAC-Trim acquisition.

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DESCRIPTION OF OUR INDEBTEDNESS AND PRODUCTS PREFERRED STOCK

SENIOR SECURED CREDIT FACILITIES

General

In connection with the TAC-Trim acquisition, Products and our Canadian
Subsidiaries entered into new senior secured credit facilities (the "new senior
credit facilities") with JPMorgan Chase Bank ("JPMorgan Chase Bank"), as
administrative agent and collateral agent, JPMorgan Bank Canada, as Canadian
administrative agent and collateral agent ("Chase Canada"), Credit Suisse First
Boston ("CSFB"), as syndication agent, Deutsche Bank Trust Company Americas
("DBTCA"), Merrill Lynch Capital Corporation ("Merrill," together with JPMorgan
Chase Bank, Chase Canada, CSFB and DBTCA, the "agents"), as co-documentation
agents and the other lenders party thereto. The following information does not
reflect the discussion under "Use of Proceeds" herein.

The new senior credit facilities consist of a senior secured revolving
credit facility and two senior secured term loan facilities. The revolving
credit facility is comprised of revolving loans in a total principal amount not
to exceed $175.0 million at any one time outstanding, of which approximately
$75.0 million is available to our Canadian subsidiaries. The tranche A facility
is comprised of term loans in a total principal amount of $100.0 million. The
tranche B facility is comprised of term loans in a total principal amount of
$300.0 million.

The revolving credit facility, the tranche A facility and the tranche B
facility each will mature on December 31, 2005.

Security and Guarantees

Products' borrowings under the new senior credit facilities is secured by
all the assets of C&A and Products and certain subsidiaries of each, including
but not limited to:

o a first priority pledge of all of the capital stock (held by C&A,
Products or any domestic subsidiary of Products) of Products and each
existing and subsequently acquired or organized subsidiary of Products,
with limited exceptions for foreign subsidiaries; and

o a perfected first-priority security interest in substantially all
tangible and intangible assets of C&A, Products and each existing or
subsequently acquired or organized domestic subsidiary (other than the
receivables subsidiary (referred to below under the heading "Receivables
Purchase Facility") and insurance subsidiaries) of Products, with limited
exceptions.

Products' obligations under the new senior credit facilities are
unconditionally and irrevocably guaranteed jointly and severally by C&A and
each of our existing and subsequently acquired or organized domestic
subsidiaries, other than our receivables subsidiary.

Interest Rates and Fees

Borrowings bear interest, at our option, at either (a) adjusted LIBOR plus
a 3.75% margin in the case of the revolving credit and tranche A facilities and
4.00% margin in the case of the tranche B facilities, in all cases subject to a
minimum LIBOR of 3.00% or (b) the highest of (i) JPMorgan Chase Bank's prime
rate, (ii) the federal funds effective rate plus 1/2 of 1.00% and (iii) the
base CD rate plus 1.0%.

The new senior credit facilities provide for the payment to the lenders of
a commitment fee on any unused commitments under the revolving credit facility
equal to 1% per annum payable quarterly in arrears. After an initial period of
about six months, this commitment fee (with respect to the revolving credit
facility) and the interest rates with respect to the revolving credit facility
and the tranche A facility will be subject to adjustment subject to our
attaining certain performance targets.

Mandatory Prepayments

The new senior credit facilities require us to prepay outstanding term
loans with 75% (subject to step-downs based upon our attaining certain
performance targets) of excess cash flow, 100% of the net proceeds of asset
dispositions (subject to certain exceptions) and 100% of proceeds of the net
proceeds of debt issuances, other than certain permitted debt.

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Voluntary Prepayments

The new senior credit facilities provide for voluntary prepayments of term
loans and voluntary reductions of the unutilized portion of the commitments
under the revolving credit facility, without penalty (except as set forth
below), subject to certain conditions and restrictions.

Prepayment Premium

The new senior credit facilities require us to pay a prepayment premium on
mandatory and certain voluntary prepayments of the tranche B facility made
within the first three years after the closing date. The prepayment premium is
3% of the amount prepaid during the first year after the closing date, 2% of
the amount prepaid during the second year after the closing date, and 1% of the
amount prepaid during the third year after the closing date.

Covenants

Our new senior credit facilities require that we meet certain financial
tests, including, without limitation, the following tests: a maximum leverage
ratio, a minimum interest coverage ratio and certain prescribed limitations on
capital expenditures. Our new senior credit facilities contain customary
covenants and restrictions, including, among others, limitations or
prohibitions on declaring dividends and other distributions, redeeming and
repurchasing our capital stock, prepaying, redeeming and repurchasing our other
indebtedness, loans and investments, additional indebtedness, liens,
sale-leaseback transactions, preferred stock, capital expenditures,
recapitalizations, mergers, acquisitions and asset sales and transactions with
affiliates.

Events of Default

Our new senior credit facilities specify certain customary events of
default, including, among others:

o nonpayment of principal or interest by us;

o our breach of the affirmative or negative covenants;

o our material breach of the representations and warranties;

o cross-default and cross-acceleration to our other indebtedness
(including to the receivables facility);

o our bankruptcy or insolvency;

o material judgments entered against us;

o certain ERISA violations by us;

o actual or asserted invalidity of security documents or guarantees
associated with the new senior credit facilities; and

o a change in control.

RECEIVABLES PURCHASE FACILITY

In connection with the TAC-Trim acquisition, we entered into an agreement
to sell, on an ongoing basis, the trade accounts receivable of certain business
operations to a bankruptcy-remote, special purpose subsidiary, wholly owned by
us. The receivables subsidiary will, subject to certain conditions, from time
to time, sell an undivided fractional ownership interest in a pool of domestic
and certain Canadian receivables, up to $250 million, to various multi-seller
commercial paper conduits supported by a committed liquidity facility. Upon
sale to the conduit, the receivables subsidiary will hold a subordinated
retained interest in the receivables. Under the terms of the agreement, new
receivables are added to the pool as collections reduce previously sold
receivables. We expect to service, administer and collect the receivables on
behalf of the receivables subsidiary and the conduit. The proceeds of sale will
be less than the face amount of accounts receivable sold by an amount that
approximates the purchaser's financing costs. The term of the receivables
facility will initially be 364 days, and may be extended for additional 364-day
periods with the agreement of all parties.

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11 1/2% SENIOR SUBORDINATED NOTES DUE 2006

As discussed above under the heading "Management's Discussion and Analysis
of Financial Condition and Results of Operations -- Liquidity and Capital
Resources -- 11 1/2% Senior Subordinated Notes due 2006," Products has
outstanding $400.0 million in 11 1/2% Senior Subordinated Notes due 2006.

The Products senior subordinated notes are general unsecured obligations
subordinated in right of payment to all of the existing and future senior
indebtedness of C&A and each of our existing wholly owned domestic subsidiaries
(other than our receivables, insurance and charitable subsidiaries), including
the Products senior notes described below and the senior credit facilities
described above and are guaranteed on a senior subordinated basis by each of
the same subsidiaries that guarantee the senior notes and the senior credit
facilities. The indenture governing the Products senior subordinated notes
contains a change of control provision and covenants substantially similar to
those that govern the Products senior notes.

10 3/4% SENIOR NOTES DUE 2011

As discussed above under the heading "Management's Discussion and Analysis
of Financial Condition and Results of Operations -- Liquidity and Capital
Resources -- 10 3/4% Senior Notes due 2011," Products also has outstanding
$500.0 million in 10 3/4% Senior Notes due December 31, 2011. Interest on the
Products senior notes accrues from December 20, 2001 at the rate of 10 3/4% per
year. Interest on the Products senior notes is payable semi-annually in arrears
on each June 30 and December 31, commencing on June 30, 2002. We may redeem
some or all of the Products senior notes at any time on or after December 31,
2006, at a redemption price equal to 100% of the principal amount plus a
premium declining ratably to par, plus accrued and unpaid interest, if any. In
addition, prior to December 31, 2004, we may redeem up to 35% of the aggregate
principal amount of the Products senior notes with the proceeds of certain
equity offerings at a redemption price equal to 110.75% of the principal amount
of the Products senior notes, plus accrued and unpaid interest, if any.

The Products senior notes are general unsecured obligations and rank
equally with all existing and future senior debt of C&A and each of our
existing wholly owned domestic subsidiaries (other than our receivables,
insurance and charitable subsidiaries) and senior in right of payment to all of
those subsidiaries' existing and future subordinated indebtedness. Future
domestic subsidiaries may also be required to guarantee the Products senior
notes.

Pursuant to the indenture governing the Products senior notes, if we
experience a change of control, we may be required to offer to purchase the
Products senior notes at a purchase price equal to 101% of the principal
amount, plus accrued and unpaid interest, if any. We might not be able to pay
the required price for Products senior notes presented to us at the time of a
change of control because our new senior credit facilities or other
indebtedness may prohibit payment or we might not have enough funds at that
time. The indenture governing the Products senior notes contains covenants that
limit the ability of Products and the ability of our restricted subsidiaries
to, among other things:

o incur or guarantee additional indebtedness;

o pay dividends or make other distributions or repurchase or redeem our
stock;

o make investments;

o sell assets;

o create liens;

o enter into agreements restricting our restricted subsidiaries' ability
to pay dividends or make other distributions;

o enter into transactions with affiliates; and

o consolidate, merge or sell all or substantially all of our assets.

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MANDATORILY REDEEMABLE PREFERRED STOCK OF PRODUCTS

As part of the consideration payable to Textron in the TAC-Trim
acquisition, Products issued to Textron 182,700 shares of its Series A1
Redeemable Preferred Stock, 123,700 shares of its Series B1 Redeemable
Preferred Stock and 20,000 shares of its Series C1 Redeemable Preferred Stock.
In addition, if our debt instruments so require, we may issue additional shares
of a new series of redeemable preferred stock to satisfy any obligation to make
an earn-out payment based upon our performance for the five year period ended
December 31, 2006. Its terms will be identical to the series B preferred stock,
other than that Products will be required to mandatorily redeem such preferred
stock at its liquidation preference, with accrued and unpaid dividends, at such
time as, and to the extent that, Products is permitted to do so under material
debt instruments. In connection with an exchange offer referred to below under
"-- Registration and Other Rights," Products may exchange its Series A1
Redeemable Preferred Stock, Series B1 Redeemable Preferred Stock and Series C1
Redeemable Preferred Stock for its Series A2 Redeemable Preferred Stock, Series
B2 Redeemable Preferred Stock and Series C2 Redeemable Preferred Stock,
respectively, in each case having identical rights and preferences to the
predecessor series. We refer to Series A1 and Series A2 Redeemable Preferred
Stock together as "Series A Preferred Stock," Series B1 and Series B2
Redeemable Preferred Stock together as "Series B Preferred Stock" and Series C1
and Series C2 Redeemable Preferred Stock together as "Series C Preferred
Stock," and we refer to all of the foregoing series of preferred stock
collectively as "Preferred Stock." As discussed below under "-- Optional and
Mandatory Redemption; Exchange of Series C Preferred Stock," "-- Registration
and Other Rights" and "-- Liquidity Provisions Relating to the Textron Shares,"
Products may issue additional shares of Preferred Stock from time to time in
accordance with the provisions of the certificate of designation. The above
information does not reflect our intended use of proceeds from this offering.

Dividends. Holders of Preferred Stock are entitled to receive dividends
accruing on the liquidation preference thereof at a rate of 11% per annum, in
respect of dividend periods ending on or prior to July 1, 2003, and 15% per
annum, in respect of dividend periods ending after July 1, 2003, in the case of
the Series A Preferred Stock, 12% per annum, in respect of dividend periods
ending on or prior to July 1, 2003, and 16% per annum, in respect of dividend
periods ending after July 1, 2003, in the case of the Series B Preferred Stock,
12% per annum, in respect of dividend periods ending on or prior to July 1,
2003, and 16% per annum, in respect of dividend periods ending after July 1,
2003, in the case of the Series C Preferred Stock, in each case payable
quarterly in arrears, commencing on April 1, 2002 and accumulating from the
date of issuance. Products may, at its option, elect to accrue up to an amount
equivalent to 7% per annum of the liquidation value on the Series A Preferred
Stock, an amount equivalent to 8% per annum of the liquidation value on the
Series B Preferred Stock and an amount equivalent to 8% per annum of the
liquidation value on the Series C Preferred Stock in lieu of cash payment of
such dividends and, in each case, any accrued dividends will be added to the
liquidation preference of the applicable series of Preferred Stock. Under
certain circumstances, Products may, at its option, at all times through and
including January 1, 2004 accrue up to the full amount of all dividends on the
Preferred Stock in lieu of cash payment of such dividends and, in each case,
any accrued dividends will be added to the liquidation preference of the
applicable series of Preferred Stock.

Liquidation Preference. Upon any voluntary or involuntary liquidation,
dissolution or winding-up of Products, holders of the Preferred Stock will be
entitled to be paid out of the assets of Products available for distribution to
stockholders in the amount of $1,000 per share plus the aggregate amount of
accrued dividends prior to any distribution to any holders of equity securities
which rank junior to the Preferred Stock. In addition, upon any voluntary or
involuntary liquidation, dissolution or winding-up of Products, the holders of
Series C Preferred Stock will be entitled to a participation in distributions
to Products' common equity tied to any appreciation in the value of Products'
common equity subsequent the issuance date, not to exceed an aggregate of $2
million for all Series C Preferred Stock outstanding.

Because C&A has only a common equity interest in Products, all obligations
in respect of the Preferred Stock must be satisfied prior to the distribution
to C&A of any amounts upon any voluntary or involuntary liquidation,
dissolution or winding up of Products.

Ranking. Upon issuance, the Preferred Stock will rank senior to all
classes of Products' capital stock with respect to dividend and liquidation
rights. Subject to certain conditions, the Preferred Stock will rank

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on a parity with any class of Products' capital stock established after the
issuance date of the Preferred Stock, the terms of which expressly provide that
such class or series ranks on a parity with the Preferred Stock, and junior to
any class of Products' capital stock established after the issuance date of the
Preferred Stock, the terms of which expressly provide that such class or series
ranks senior to the Preferred Stock.

Optional and Mandatory Redemption; Exchange of Series C Preferred
Stock. Products is required to redeem all of the Series A and Series B
Preferred Stock outstanding on January 1, 2013 at a redemption price equal to
100% of the liquidation preference thereof, plus accrued and unpaid dividends
to the date of redemption. Products is also required to redeem all of the
Series C Preferred Stock outstanding on February 1, 2022 at a redemption price
equal to 100% of the liquidation preference thereof, plus accrued and unpaid
dividends to the date of redemption, plus the common equity participation
described under "--Liquidation Preference".

The Series A and Series B Preferred Stock are redeemable, at Products'
option, in whole or in part, at any time on or after January 1 of the years set
forth below, at the redemption prices set forth below (stated as a percentage
of liquidation preference), plus, without duplication, accumulated and unpaid
dividends to the date of redemption.

REDEMPTION PRICE
------------------------------------
SERIES A SERIES B
YEAR PREFERRED STOCK PREFERRED STOCK
- ---- ----------------- ----------------

2007 ........................ 107.500% 108.000%
2008 ........................ 105.000% 105.333%
2009 ........................ 102.500% 102.667%
2010 and thereafter ......... 100.000% 100.000%

The Series C Preferred Stock is not optionally redeemable.

At Products' option or at the option of the holders of a majority of the
outstanding shares of Series C Preferred Stock, the Series C Preferred Stock is
exchangeable for Series B Preferred Stock at any time following January 1, 2003
and prior to January 1, 2004. The rate of exchange will equal the liquidation
preference of the Series C Preferred Stock, plus accrued and unpaid dividends
thereon, plus common equity participation with respect thereto, divided by the
liquidation preference of the Series B Preferred Stock, plus accrued and unpaid
dividends thereon.

Change of Control Offer. If Products experiences a change of control (as
defined in the certificate of designation), Products must give holders of the
Preferred Stock the opportunity to sell to Products their Preferred Stock at
100% of the liquidation preference thereof, plus accrued and unpaid dividends
to the date of redemption, plus, in the case of the Series C Preferred Stock,
common equity participation. No such redemption may be effected until Products
has performed all of its obligations arising upon a change of control under any
of its debt instruments. Products will not consummate a transaction resulting
in a change of control unless at the time of or prior to the change of control,
Products shall have entered into an arrangement which permits the timely
redemption of the Preferred Stock.

Asset Sale Proceeds. If Products disposes of any assets it may either
reinvest the net cash proceeds therefrom in its business or repay outstanding
indebtedness. Any proceeds not so applied will be applied by Products towards
dividends in arrears on the Preferred Stock or an offer to purchase Preferred
Stock at a redemption price equal to 100% of the liquidation preference
thereof, plus accrued and unpaid dividends, plus, in the case of the Series C
Preferred Stock, common equity participation.

Certain Restrictive Provisions. The provisions of the certificate of
designation will limit Products' and its restricted subsidiaries' ability to
incur more debt; pay dividends and make distributions; repurchase stock; make
investments; merge or consolidate; transfer assets; enter into transactions
with affiliates; issue stock of subsidiaries; and amend or modify the
certificate of designation. These covenants are subject to a number of
important exceptions.

Liquidity Provisions Relating to the Textron Shares. The provisions
described in this paragraph apply solely to the holders of Series A Preferred
Stock that constitute Textron Shares (as defined below).

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In the event that either (I) both (A) Products and its restricted subsidiaries
on a consolidated basis meet or exceed certain financial criteria based on
interest coverage, adjusted to exclude the effect of certain acquisitions, at
any time and (B) no Par Offer (as defined below) has been properly made on or
before the next succeeding dividend payment date and all Textron Shares
purchased pursuant thereto or (II) both (A) Products' 10 3/4% Senior Notes due
2011 are repaid at or within 180 days their final stated maturity and (B) no
Par Offer has been properly made on or before such final repayment, the
dividend rate applicable solely to Textron Shares will increase by 1.00% per
annum for the next full dividend period and by an additional 0.50% per annum
for each dividend period thereafter; provided that (1) the dividend rate
applicable to Textron Shares in effect at any time shall not exceed 20% per
annum and (2) the dividend rate will return to the dividend rate otherwise
applicable once a Par Offer has been properly made and all Textron Shares
validly tendered have been purchased pursuant thereto. During any period when
an increased dividend rate in respect of Textron Shares shall be in effect,
Products and its restricted subsidiaries will be subject to additional
restrictions on their ability to incur additional indebtedness.

While the Textron Shares remain outstanding, Products will not redeem more
than $25 million aggregate principal amount of its Existing Notes prior to
their final stated maturity unless prior to or concurrently therewith, a Par
Offer shall have been made.

A "Par Offer" is an offer to purchase for cash any Textron Shares at a
purchase price per share equal to the liquidation preference thereof plus
accrued and unpaid dividends to the date of purchase.

"Textron Shares" means all shares of Series A Preferred Stock held
beneficially and of record solely by Textron and/or its subsidiaries to the
extent solely and continuously beneficially owned since the issuance date.

Upon transfer to any person other than Textron or its subsidiaries,
Textron Shares shall cease to be entitled to any of the benefits described
above. If Textron shares are transferred with cash dividends in arrears arising
from the provisions described above, such cash dividends in arrears shall cease
to exist upon transfer, and in lieu thereof, Products will issue to the
transferee additional shares of Series A Preferred Stock having an aggregate
liquidation preference plus accrued and unpaid dividends equal to the amount of
cash dividends in arrears that shall have ceased to exist.

Voting Rights. Holders of the Preferred Stock are entitled to vote on
matters required or permitted to be voted upon by Products' common
stockholders, but the amount of such vote is limited to 2% of the outstanding
voting rights of all such voting stock in the aggregate. Preferred stockholders
will also be entitled to vote upon certain matters relating to the Preferred
Stock and as otherwise required under the laws of the State of Delaware and as
set forth below. If certain events occur, the holders of the majority of the
then outstanding affected series of Preferred Stock will be entitled to elect
two members of Products' Board of Directors, but in no event will such holders
be entitled to elect more than two members. Such events include if, after
January 1, 2003, there are any cash dividends in arrears which have been unpaid
for any two consecutive quarterly dividend periods; Products fails to redeem
Preferred Stock as required by the certificate of designation; Products fails
to purchase Textron Shares tendered in a Par Offer; certain breaches of the
certificate of designation occur; or certain bankruptcy or insolvency events or
debt accelerations occur.

Exchange of Preferred Stock for Subordinated Notes. Each series of
Preferred Stock is exchangeable on any dividend payment date, solely at
Products' option, for Products' subordinated exchange notes if there are no
cash dividends in arrears at the time of the exchange. For so long as Textron
and its subsidiaries are the holders of at least a majority of the aggregate
liquidation preference of any of the Preferred Stock, we must obtain the
written consent of Textron prior to initiating the exchange. The exchange rate
shall be $1.00 principal amount of exchange notes for each $1.00 of the
aggregate liquidation preference of Preferred Stock.

Registration and Other Rights. Pursuant to a preferred stock registration
and other rights agreement, Products has agreed to provide marketing assistance
to Textron in connection with underwritten resales of Preferred Stock. Such
marketing assistance may occur up to a maximum of three times; provided that
Products will not be required to provide such assistance more than once in any
270-day period.

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In connection with Products' resale assistance, Textron may require
Products to provide purchasers of Preferred Stock with customary exchange offer
style registration rights to have their Preferred Stock registered under the
Securities Act. Under certain circumstances, Products may also be required to
register such purchasers' Preferred Stock for resale pursuant to a shelf
registration statement. In addition, under certain circumstances, Textron may
require Products to register its Preferred Stock for resale pursuant to a shelf
registration statement.

If Products fails to comply with certain provisions in the preferred stock
registration and other rights agreement relating to marketing assistance,
filing exchange offer registration statements or shelf registration statements,
or achieving effectiveness of such exchange offer registration statements or
shelf registration statements, Products may be required to pay liquidated
damages to the affected holders in the event of such noncompliance, up to a
maximum of 2.00% per annum of the aggregate liquidation preference. Any such
liquidated damages may be paid by Products, at its option, in cash or in kind
by issuing additional shares of Preferred Stock of the affected series having
an aggregate liquidation preference, accrued and unpaid dividends and, in the
case of the Series C Preferred Stock, common equity participation equal to the
amount of liquidated damages payable. Liquidated damages will cease to accrue
and be payable upon Products compliance with the applicable provisions of the
preferred stock registration and other rights agreement or (except in the case
of a failure relating to marketing assistance) upon the affected shares of
Preferred Stock becoming transferable without restriction under the Securities
Act.

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DESCRIPTION OF C&A CAPITAL STOCK

The authorized capital stock of C&A consists of 300,000,000 shares of
common stock, par value $0.01 per share, and 16,000,000 shares of preferred
stock, par value $0.01 per share. As of May 30, 2002, there were 67,198,852
shares of common stock outstanding, excluding 1,057,595 shares of common stock
subject to outstanding options granted pursuant to our stock option plans,
5,800,000 shares of common stock which may be issued pursuant to the exercise
of common stock purchase rights described below under "-- Common Stock Purchase
Rights," and 160,000 shares subject to a warrant that is presently exercisable.
As of May 30, 2002, C&A had no shares of preferred stock outstanding.

DESCRIPTION OF C&A COMMON STOCK

Subject to the rights of holders of preferred stock then outstanding,
holders of C&A common stock are entitled to receive such dividends as may from
time to time be declared by the Board of Directors. Holders of C&A common stock
are entitled to one vote per share on all matters on which the holders of C&A
common stock are entitled to vote. Because holders of C&A common stock do not
have cumulative voting rights, the holders of the majority of the shares of C&A
common stock represented at a meeting can select all the directors. In the
event of liquidation, dissolution or winding up of C&A, holders of C&A common
stock would be entitled to share ratably in all assets of C&A available for
distribution to the holders of C&A common stock.

Upon full payment of the purchase price therefor, shares of C&A common
stock will not be liable to further calls or assessments by C&A. There are no
preemptive rights for C&A common stock in the restated certificate of
incorporation.

The transfer agent and registrar for C&A common stock is First Union
National Bank of North Carolina.

COMMON STOCK PURCHASE RIGHTS

On May 17, 2002, we announced a distribution of non-transferable rights to
purchase C&A common stock to all holders of our common stock as of May 28,
2002. Each shareholder (other than certain shareholders who have agreed to
contractually waive their right to exercise rights) will be granted one
non-transferable right to purchase 0.4 shares of common stock per share of
common stock held by such holder. Shareholders holding an aggregate of
approximately 52,704,000 shares of common stock have agreed that they will not
exercise their rights. This means that the rights offering will be exercisable
for an aggregate of approximately 5,800,000 shares of common stock. The
exercise price of the non-transferable rights is $12.50 per whole share of
common stock for which the rights are exercisable. The non-transferable rights
become exercisable for a 16-day minimum period once a registration statement
for the issuance of the underlying shares has been declared effective by the
SEC. We are obligated to use our best efforts to have a registration statement
for the underlying shares declared effective prior to October 31, 2002, but
such date will be extended, at the request of the underwriters for any offering
of our common stock to the 180th day following the closing of this offering.

ANTI-TAKEOVER PROVISIONS

The amended and restated certificate of incorporation and the bylaws of
C&A contain certain provisions that may delay, defer or prevent a change in
control of C&A and make removal of management more difficult. These provisions
are intended to enhance the likelihood of continuity and stability in the
composition of the Board of Directors and in the policies formulated by the
Board of Directors and to discourage certain types of transactions which may
involve an actual or threatened change of control of C&A. The provisions are
designed to reduce the vulnerability of C&A to an unsolicited proposal for a
takeover of C&A that does not contemplate the acquisition of all its
outstanding shares or an unsolicited proposal for the restructuring or sale of
all or part of C&A. The provisions also are intended to discourage certain
tactics that may be used in proxy fights. Set forth below is a description of
such provisions in the restated certificate of incorporation and the bylaws.

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Pursuant to the amended and restated certificate of incorporation, the
Board of Directors is divided into three classes serving staggered three-year
terms. This provision may only by amended or repealed by vote of 80% or more of
the outstanding voting stock. Directors can be removed from office only for
cause and only by the affirmative vote of the holders of a majority of the
combined voting power of the then outstanding shares of voting stock, voting
together as a single class. Vacancies on the Board of Directors and newly
created directorships may be filled only by the remaining directors and not by
the stockholders.

The amended and restated certificate of incorporation provides that the
number of directors will be fixed by, or in the manner provided in, the bylaws.
The bylaws provide that the whole Board of Directors will consist of such
number of members as fixed from time to time by the Board of Directors.
Accordingly, the Board of Directors, and not the stockholders, has the
authority to determine the number of directors and (to the extent such action
is consistent with its fiduciary duties) could delay any stockholder from
obtaining majority representation on the board by enlarging the Board of
Directors and filling the new vacancies with its own nominees until the next
stockholder election.

The bylaws establish an advance notice procedure with regard to the
nomination, other than by or at the direction of the Board of Directors or a
committee thereof, of candidates for election as directors and with regard to
certain matters to be brought before an annual meeting of stockholders of C&A.
In general, notice as to any such stockholder nomination or other proposal must
be received by C&A with respect to annual meetings not less than 90 nor more
than 120 days prior to the anniversary of the immediately preceding annual
meeting and must contain certain specified information concerning the person to
be nominated or the matters to be brought before the meeting and concerning the
stockholder submitting the proposal.

If at any time the parties (other than C&A) to the stockholders agreement
contemplated by that certain share purchase agreement, dated as of January 12,
2001, to which C&A is a party (as such stockholders agreement may be amended,
amended and restated, or otherwise modified or replaced) beneficially own in
the aggregate less than 25% of the outstanding capital stock of C&A, then on
and after such date, any action required or permitted to be taken by the
stockholders of C&A may be effected only at a duly called annual or special
meeting of such stockholders and may not be effected by consent in writing by
such stockholders.

Special meetings of the stockholders may be called only by the Chairman or
one of the co-chairmen of the Board of Directors or a majority of the entire
Board of Directors, and the business transacted at any special meeting will be
confined to the matters specified in the notice of meeting.

The foregoing provisions, together with the ability of the Board of
Directors to issue C&A preferred stock without further stockholder action,
could delay or frustrate the removal of incumbent directors or the assumption
of control by the holder of a large block of C&A's common stock even if such
removal or assumption would be beneficial, in the short term, to stockholders
of C&A. The provisions could also discourage or make more difficult a merger,
tender offer or proxy contest even if such event would be favorable to the
interests of stockholders.

The amended and restated certificate of incorporation also contains a
provision which provides that a Business Combination (as hereinafter defined)
shall require the affirmative vote of the holders of 662/3% or more of the
combined voting power of the then outstanding shares of voting stock of C&A,
voting together as a single class.

A "Business Combination" is

(1) any merger or consolidation of C&A (whether or not C&A is the
surviving corporation);

(2) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of related transactions)
of all or substantially all the assets of C&A;

(3) the adoption of any plan or proposal for the liquidation,
dissolution, spinoff, splitup, splitoff, or winding up of the affairs
of C&A (whether voluntary or involuntary); or

(4) any agreement, contract or other arrangement providing for any of the
transactions described in this definition of Business Combination.

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SECTION 203 OF DELAWARE GENERAL CORPORATE LAW

Section 203 of Delaware General Corporate Law ("DGCL") prevents an
"interested stockholder" (defined in Section 203, generally, as a person owning
15% or more of a corporation's outstanding voting stock), from engaging in a
"business combination" (as defined in Section 203) with a publicly held
Delaware corporation for three years following the date such person became an
interested stockholder unless (i) before such person became an interested
stockholder, the board of directors of the corporation approved the transaction
in which the interested stockholder became an interested stockholder or
approved the business combination; (ii) upon consummation of the transaction
that resulted in the interested stockholder becoming an interested stockholder,
the interested stockholder owned at least 85% of the voting stock of the
corporation outstanding at the time the transaction commenced (excluding stock
held by directors who are also officers of the corporation and by employee
stock plans that do not provide employees with the rights to determine
confidentially whether shares held subject to the plan will be tendered in a
tender or exchange offer); or (iii) following the transaction in which such
person became an interested stockholder, the business combination is approved
by the board of directors of the corporation and authorized at a meeting of
stockholders by the affirmative vote of the holders of two-thirds of the
outstanding voting stock of the corporation not owned by the interested
stockholder.

DIRECTORS' LIABILITY AND INDEMNIFICATION

C&A's amended and restated certificate of incorporation contains a
provision which eliminates the personal liability of C&A's directors for
monetary damages resulting from breaches of their fiduciary duty to the fullest
extent permitted by the DGCL. Under the DGCL, C&A may not eliminate directors'
liability for breaches of the duty of loyalty, acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law,
violations under Section 174 of the DGCL or any transaction from which the
director derived an improper personal benefit. This provision also has no
effect on the ability of stockholders to seek equitable relief, such as an
injunction, that may be available to redress a breach of fiduciary duty, even
though such stockholders could not seek monetary damages from the directors for
such breach. The bylaws contain provisions requiring, subject to certain
procedures, the indemnification of C&A's directors and officers to the fullest
extent permitted by Section 145 of the DGCL, including circumstances in which
indemnification is otherwise discretionary, and provide for the mandatory
advancement of litigation expenses incurred in defense of a claim upon the
receipt by C&A of any undertaking required by law. C&A's Board of Directors is
further authorized, in its discretion, to provide such rights to employees and
agents of C&A. In addition, C&A may enter into indemnification agreements with
its directors and executive officers that generally provide for similar rights
to indemnification and advancement of expenses. Management believes that these
provisions are necessary to attract and retain qualified persons as directors
and officers.

REGISTRATION RIGHTS

We have granted to certain stockholders (the "Registration Rights
Holders") certain demand registration rights and "piggy-back" registration
rights with respect to certain C&A common stock held by them. Based on a review
of Schedule 13Ds filed by the respective parties through May 16, 2002 and other
information available to the Company, as of May 16, 2002, the Registration
Rights Holders hold approximately 62 million shares of C&A common stock, in the
aggregate. They are entitled to rights with respect to the registration of
their shares under the Securities Act of 1933 as follows:

Demand Registration Rights

Under the terms of the agreements between us and the Registration Rights
Holders, certain of such Registration Rights Holders may require us to file a
registration statement under the Securities Act with respect to shares of
common stock owned by them, under certain circumstances, and we are required to
use our reasonable best efforts to effect such a registration. Such rights are
subject to various customary cutback and holdback provisions.

Piggy-Back Registration Rights

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or for the account of other stockholders, the Registration Rights Holders are
entitled to notice of, and to include in the registration, shares of common
stock owned by them, subject to customary cutback and holdback provisions.

The description of the common stock contained in our registration
statement on Form 8-A filed on June 20, 1994 pursuant to Section 12 of the
Exchange Act, including any amendment or report filed for the purpose of
updating such description is incorporated by reference herein.

UNDERWRITING

Merrill Lynch, Pierce, Fenner & Smith Incorporated and J.P. Morgan
Securities Inc. are acting as joint book-running lead managers for this
offering.

Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities
Inc., Credit Suisse First Boston Corporation, Deutsche Bank Securities, Inc.,
First Union Securities, Inc., Dresdner Kleinwort Wasserstein Securities LLC and
Fahnestock & Co. Inc. are acting as representatives of the underwriters named
below. Subject to the terms and conditions described in the underwriting
agreement between us and the underwriters, we have agreed to sell to the
underwriters, and the underwriters severally have agreed to purchase from us,
the number of shares listed opposite their names below.

NUMBER
UNDERWRITER OF SHARES
----------- ---------

Merrill Lynch, Pierce, Fenner & Smith
Incorporated .......................... .......... 4,160,000
J.P. Morgan Securities Inc. ........................... 4,160,000
Credit Suisse First Boston Corporation ................ 3,200,000
Deutsche Bank Securities, Inc. ........................ 3,200,000
First Union Securities, Inc. .......................... 800,000
Dresdner Kleinwort Wasserstein Securities LLC ......... 320,000
Fahnestock & Co. Inc. ................................. 160,000
---------
Total ............................................... 16,000,000
==========

The underwriters have agreed to purchase all of the shares sold under the
underwriting agreement if any of these shares are purchased. No underwriter is
obligated to take any shares allocated to a defaulting underwriter except under
limited circumstances.

We have agreed to indemnify the underwriters against certain liabilities,
including liabilities under the Securities Act of 1933, or to contribute to
payments the underwriters may be required to make in respect of those
liabilities.

The underwriters are offering the shares, subject to prior sale, when, as
and if issued to and accepted by them, subject to approval of legal matters by
their counsel, including the validity of the shares, and other conditions
contained in the underwriting agreement, such as the receipt by the
underwriters of officer's certificates and legal opinions. The underwriters
reserve the right to withdraw, cancel or modify offers to the public and to
reject orders in whole or in part.

COMMISSIONS AND DISCOUNTS

The representatives have advised us that the underwriters propose
initially to offer the shares to the public at the initial public offering
price on the cover page of this prospectus supplement and to dealers at that
price less a concession not in excess of $0.30 per share. The underwriters may
allow, and the dealers may reallow, a discount not in excess of $0.10 per share
to other dealers. After the initial public offering, the public offering price,
concession and discount may be changed.

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The following table shows the public offering price, underwriting discount
and proceeds before expenses to us. The information assumes either no exercise
or full exercise by the underwriters of their over-allotment options.

TOTAL TOTAL
PER SHARE WITHOUT OPTION WITH OPTION
----------- ---------------- ---------------

Public offering price ..................... $ 10.00 $160,000,000 $184,000,000
Underwriting discount ..................... $ 0.50 $ 8,000,000 $ 9,200,000
Proceeds, before expenses, to C&A ......... $ 9.50 $152,000,000 $174,800,000

The net expenses of the offering, not including the underwriting discount,
are estimated at $1.5 million and are payable by us. The underwriters have
agreed to reimburse us for certain expenses in connection with this offering.

OVER-ALLOTMENT OPTION

We have granted options to the underwriters to purchase up to 2,400,000
additional shares at the public offering price less the underwriting discount.
The underwriters may exercise these options for 30 days from the date of this
prospectus supplement solely to cover any over-allotments. If the underwriters
exercise these options, each will be obligated, subject to conditions contained
in the underwriting agreement, to purchase a number of additional shares
proportionate to that underwriter's initial amount reflected in the above
table.

NO SALES OF SIMILAR SECURITIES

We and our executive officers, directors and certain stockholders have
agreed, with limited exceptions, not to sell or transfer any common stock for
120 days after the date of this prospectus supplement without first obtaining
the written consent of Merrill Lynch, Pierce, Fenner & Smith Incorporated and
J.P. Morgan Securities Inc. Specifically, we and these other individuals have
agreed not to directly or indirectly

o offer, pledge, announce the intention to sell, sell or contract to sell
any common stock;

o sell any option or contract to purchase any common stock;

o purchase any option or contract to sell any common stock;

o grant any option, right or warrant to purchase any common stock;

o transfer or dispose of any common stock;

o request or demand that we file a registration statement related to the
common stock; or

o enter into any swap or other agreement that transfers, in whole or in
part, any of the economic consequences of ownership of any common stock
whether any such swap or transaction is to be settled by delivery of
shares or other securities, in cash or otherwise.

This lock-up provision applies to common stock and to securities
convertible into or exchangeable or exercisable for or repayable with common
stock. It also applies to common stock owned now or acquired later by the
person executing the agreement or for which the person executing the agreement
later acquires the power of disposition. Its terms are subject to certain
exceptions, including with respect to certain contemplated issuances.

In addition, three of our stockholders, including two of our former
affiliates, that hold approximately 16,060,000 shares of common stock, have
contractually agreed in registration rights agreements with us not to sell or
transfer these shares for a minimum of 120 days following specified
transactions, including this offering, and we have agreed with the underwriters
not to amend or waive these transfer restrictions during such 120-day period.
The lock-up provisions contained in the registration rights agreements are
substantially similar to those described above. Our two former affiliates are
investment funds and the registration rights agreements do not prohibit them
from distributing the shares held by them to their

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investors free of these lock-up restrictions so long as an investor owns less
than 1% of our outstanding shares. One of these funds has indicated that it may
do so prior to or following the offering.

NEW YORK STOCK EXCHANGE LISTING

The shares are listed on the New York Stock Exchange under the symbol
"CKC."

PRICE STABILIZATION AND SHORT POSITIONS

Until the distribution of the shares is completed, SEC rules may limit the
underwriters from bidding for and purchasing C&A common stock. However, the
representatives may engage in transactions that stabilize the price of the
common stock, such as bids or purchases to peg, fix or maintain that price.

If the underwriters create a short position in the common stock in
connection with the offering, i.e., if they sell more shares than are listed on
the cover of this prospectus supplement, the representatives may reduce that
short position by purchasing shares in the open market. The representatives may
also elect to reduce any short position by exercising all or part of the
over-allotment option described above. Purchases of the common stock to
stabilize its price or to reduce a short position may cause the price of the
common stock to be higher than it might be in the absence of such purchases.

Neither we nor any of the underwriters makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the common stock. In addition, neither
we nor any of the underwriters makes any representation that the
representatives or the lead managers will engage in these transactions or that
these transactions, once commenced, will not be discontinued without notice.

OTHER RELATIONSHIPS

Some of the underwriters and their affiliates have engaged in, and may in
the future engage in, investment banking and other commercial dealings in the
ordinary course of business with us and our affiliates, including Heartland and
its portfolio companies. They have received customary fees and commissions for
these transactions.

Each of the representatives, other than Fahnestock & Co. Inc., is an
affiliate of a financial institution that is a lender under our senior credit
facilities. In addition, JPMorgan Chase Bank, an affiliate of J.P. Morgan
Securities Inc., is the administrative agent and a lender under our senior
credit facilities and the liquidity facility for our receivables facility.

In addition, ML IBK Positions, Inc., an affiliate of Merrill Lynch,
Pierce, Fenner & Smith Incorporated, owns 400,000 shares of our common stock
that it acquired as part of the financing for the TAC-Trim acquisition.
Affiliates of certain underwriters are limited partners of one or all of
Heartland Industrial Partners, L.P., Blackstone Capital Partners L.P. and
Wasserstein Perella Partners, L.P.

First Union Securities, Inc., one of the underwriters, is an indirect,
wholly-owned subsidiary of Wachovia Corporation. Wachovia Corporation conducts
its investment banking, institutional and capital markets businesses through
its various bank, broker-dealer and nonbank subsidiaries (including First Union
Securities, Inc.) under the trade name of Wachovia Securities. Any references
to Wachovia Securities in this prospectus supplement, however, do not include
Wachovia Securities, Inc., member NASD/SIPC and a separate broker-dealer
subsidiary of Wachovia Corporation and affiliate of First Union Securities,
Inc., which may or may not be participating as a selling dealer in the
distribution of the securities offered by this prospectus.

INTERNET DISTRIBUTION

One or more of the underwriters may facilitate the marketing of this
offering online directly or through one of its affiliates. In those cases,
prospective investors may view offering terms and a prospectus supplement
online and, depending upon the particular underwriter, place orders online or
through their financial advisors.

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LEGAL MATTERS

The legality of the shares of common stock will be passed upon for us by
Cahill Gordon & Reindel, New York, New York. Certain legal matters with respect
to the common stock will be passed upon for the underwriters by Cravath, Swaine
& Moore.

EXPERTS

The consolidated financial statements of Collins & Aikman for the year
ended December 31, 2001, incorporated in this prospectus supplement by
reference to the Annual Report on Form 10-K for the year ended December 31,
2001 have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.

The consolidated financial statements of Collins & Aikman for the years
ended December 31, 2000 and December 25, 1999, included in the Annual Report on
Form 10-K for the year ended December 31, 2001 and incorporated by reference
into this prospectus supplement, to the extent and for the periods indicated in
their report, have been audited by Arthur Andersen LLP, independent public
accountants, and are included herein in reliance upon the authority of said
firm as experts in giving said report. Arthur Andersen LLP has not consented to
the incorporation by reference of their report in this prospectus supplement,
and we have dispensed with the requirement to file their consent in reliance
upon Rule 437a of the Securities Act. Because Arthur Andersen LLP has not
consented to the incorporation by reference of their report in this prospectus
supplement, you will not be able to recover against Arthur Andersen LLP under
Section 11 of the Securities Act for any untrue statements of a material fact
contained in the financial statements audited by Arthur Andersen LLP or any
omissions to state a material fact required to be stated therein.

The combined financial statements of TAC-Trim included in the Current
Report on Form 8-K filed on January 4, 2002 (as amended on January 14, 2002)
and incorporated by reference into this prospectus supplement have been audited
by Ernst & Young LLP, independent auditors, as set forth in their report
thereon and incorporated herein by reference. Such consolidated financial
statements are incorporated herein by reference in reliance upon such report
given on the authority of such firm as experts in auditing and accounting, to
the extent and for the periods indicated in their report with respect to such
financial statements.

The combined financial statements of Becker, included in the Current
Report on Form 8-K filed on April 17, 2001 and incorporated by reference into
this prospectus supplement have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon and incorporated herein by
reference. Such combined financial statements are incorporated herein by
reference in reliance upon such report given on the authority of such firm as
experts in auditing and accounting, to the extent and for the periods indicated
in their report with respect to such financial statements.

The combined financial statements of Joan, included in the Current Report
on Form 8-K filed on October 10, 2001 incorporated by reference into this
prospectus supplement have been audited by KPMG LLP, independent auditors,
given on the authority of said firm as experts in auditing and accounting, to
the extent and for the periods indicated in their report with respect to such
financial statements.

ABOUT THIS PROSPECTUS SUPPLEMENT

This prospectus supplement is a supplement to the accompanying prospectus
that is also a part of this document. This prospectus supplement and the
accompanying prospectus are part of a registration statement that we filed with
the Securities and Exchange Commission using a "shelf" registration process.
Under the shelf registration process, we and, under certain circumstances,
selling stockholders may sell any combination of the securities described in
the accompanying prospectus, of which this offering is a part. In this
prospectus supplement, we provide you with specific information about the terms
of this offering. Both this prospectus supplement and the accompanying
prospectus include important information about us, our common stock and other
information you should know before investing in our common stock. This
prospectus supplement also adds, updates and changes information contained in
the

S-85

accompanying prospectus. To the extent that any statement that we make in this
prospectus supplement is inconsistent with the statements made in the
accompanying prospectus, the statements made in the accompanying prospectus are
deemed modified or superseded by the statements made in this prospectus
supplement. You should read both this prospectus supplement and the
accompanying prospectus as well as the additional information described under
the heading "Where You Can Find More Information" beginning on page 2 of the
accompanying prospectus before investing in our common stock.

INCORPORATION OF DOCUMENTS BY REFERENCE

Rather than include certain information in this prospectus supplement that
C&A has already included in reports filed with the Securities and Exchange
Commission, we are incorporating this information by reference, which means
that we can disclose important information to you by referring to those
publicly filed documents containing the information. This information
incorporated by reference is considered to be part of this prospectus
supplement, and the information that C&A files with the Securities and Exchange
Commission after the date of this prospectus supplement will automatically
update and supersede the information in this prospectus supplement.

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COLLINS & AIKMAN CORPORATION

COMMON STOCK
PREFERRED STOCK
UNSECURED DEBT SECURITIES

COLLINS & AIKMAN PRODUCTS CO.

UNSECURED DEBT SECURITIES
GUARANTEED BY COLLINS & AIKMAN CORPORATION

- --------------------------------------------------------------------------------

Collins & Aikman Corporation may offer, from time to time, common stock,
preferred stock and unsecured debt securities, and Collins & Aikman Products
Co. may offer, from time to time, unsecured debt securities which are fully and
unconditionally guaranteed by Collins & Aikman Corporation, collectively
resulting in gross proceeds to the issuers of up to $750,000,008.90. In
addition, up to 9,174,311 shares of common stock of Collins & Aikman
Corporation, may also be sold hereunder by registration rights holders as
described herein.

INVESTING IN THE SECURITIES INVOLVES RISKS THAT ARE DESCRIBED IN THE "RISK
FACTORS" SECTION OF THE ACCOMPANYING PROSPECTUS SUPPLEMENT.

- --------------------------------------------------------------------------------

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.

- --------------------------------------------------------------------------------

The securities may be offered in amounts, at prices and on terms determined at
the time of offering. The securities will only be sold to you through
underwriters which we will select from time to time.

This prospectus may not be used to consummate sales of securities unless
accompanied by a prospectus supplement.You should read this prospectus and the
prospectus supplement carefully before you invest in the securities.

Collins & Aikman Corporation's common stock is listed on the New York Stock
Exchange under the symbol "CKC." The closing price of Collins & Aikman
Corporation's common stock was $17.80 per share on May 30, 2002. We effected a
one-for-2.5 reverse stock split effective as of the close of business on May
28, 2002. All information in this prospectus gives effect to this reverse stock
split.

June 5, 2002

TABLE OF CONTENTS

PAGE
-----

ABOUT THIS PROSPECTUS .......................................... 1
FORWARD-LOOKING STATEMENTS ..................................... 1
WHERE YOU CAN FIND ADDITIONAL INFORMATION ...................... 2
INCORPORATION OF DOCUMENTS BY REFERENCE ........................ 2
USE OF PROCEEDS ................................................ 3
RATIOS OF EARNINGS TO FIXED CHARGES AND RATIO OF EARNINGS TO
COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS .......... 3
INFORMATION ABOUT OUR COMPANY .................................. 4
DESCRIPTION OF C&A CAPITAL STOCK ............................... 5
DESCRIPTION OF C&A COMMON STOCK ................................ 5
DESCRIPTION OF C&A PREFERRED STOCK ............................. 8
DESCRIPTION OF C&A AND PRODUCTS DEBT SECURITIES ................ 13
REGISTRATION RIGHTS HOLDERS .................................... 25
PLAN OF DISTRIBUTION ........................................... 28
LEGAL MATTERS .................................................. 29
EXPERTS ........................................................ 29

---------------------

No person has been authorized to give any information or to make any
representation not contained or incorporated by reference in this prospectus or
the accompanying prospectus supplement and, if given or made, such information
or representation must not be relied upon as having been authorized by us or
any underwriter, dealer or agent. Neither this prospectus nor the accompanying
prospectus supplement constitutes an offer to sell or a solicitation of an
offer to buy securities in any jurisdiction in which such offer or solicitation
is not authorized or in which the person making such offer or solicitation is
not qualified to do so or to any person to whom it is unlawful to make such
offer or solicitation.

Both Collins & Aikman Corporation and its direct, wholly-owned subsidiary,
Collins & Aikman Products Co., are Delaware corporations. The principal
executive offices of each company are located at 250 Stephenson Highway, Troy,
Michigan 48083 and our telephone number at that address is (248) 824-2500.

Unless the context otherwise requires, all information in this prospectus
which refers to (a) "C&A Corporation," "C&A" or the "Company" refers only to
Collins & Aikman Corporation, (b) "Products" refers only to Collins & Aikman
Products Co., and (c) "Collins & Aikman," "we," "us" or "our" refers to Collins
& Aikman Corporation together with its subsidiaries.

ABOUT THIS PROSPECTUS

This prospectus is part of a registration statement that we have filed
with the Securities and Exchange Commission (the "SEC") utilizing a "shelf"
registration process, relating to the securities described herein.

Under this shelf process, the securities described in this prospectus may
be sold in one or more underwritten offerings for up to an aggregate initial
offering price of $1,000,000,000. This prospectus provides you with a general
description of the securities that may be offered. This prospectus does not
contain all of the information set forth in the registration statement as
permitted by the rules and regulations of the SEC. For additional information
regarding C&A or Products and the offered securities, please refer to the
registration statement. Each time we sell securities, we will provide a
prospectus supplement that will contain specific information about the terms of
that offering. The prospectus supplement may also add, update or change
information contained in this prospectus. You should read both this prospectus
and any prospectus supplement together with additional information described
under the heading "Where You Can Find Additional Information."

On May 28, 2002, we effected a one-for-2.5 reverse stock split. All
information in this prospectus gives effect to this reverse stock split.

FORWARD-LOOKING STATEMENTS

This prospectus contains "forward-looking" information, as that term is
defined by the federal securities laws, about our financial condition, results
of operations and business. You can find many of these statements by looking
for words such as "may," "will," "expect," "anticipate," "believe," "estimate"
and similar words used in this prospectus.

The cautionary statements set forth above should be considered in
connection with any subsequent written or oral forward-looking statements that
we or persons acting on our behalf may issue. We do not undertake any
obligation to review or confirm analysts' expectations or estimates or to
release publicly any revisions to any forward-looking statements to reflect
events or circumstances after the date of this prospectus or to reflect the
occurrence of unanticipated events.

Risks and uncertainties that could cause actual results to vary materially
from those anticipated in the forward-looking statements included in this
prospectus include general economic conditions in the market in which we
operate and industry-based factors such as:

o declines in the North American, South American and European automobile
and light truck builds,

o labor costs and strikes at our major customers and at our facilities,

o changes in consumer preferences,

o dependence on significant automotive customers,

o the level of competition in the automotive supply industry and pricing
pressure from automotive customers and

o risks associated with conducting business in foreign countries.

In addition, factors more specific to us could cause actual results to
vary materially from those anticipated in the forward-looking statements
included in this prospectus such as substantial leverage, limitations imposed
by our debt instruments, our ability to successfully integrate acquired
businesses including actions we have identified as providing cost saving
opportunities, and pursue our prime contractor business strategy and our
customer concentration.

Our divisions may also be affected by changes in the popularity of
particular vehicle models or particular interior trim packages or the loss of
programs on particular vehicle models.

These cautionary statements qualify all forward-looking statements
attributable to us or persons acting on our behalf. When we indicate that an
event, condition or circumstance could or would have an adverse effect on us,
we mean to include effects upon our business, financial and other conditions,
results of operations and ability to make payments on the notes.

WHERE YOU CAN FIND ADDITIONAL INFORMATION

C&A files annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any document that C&A
files at the SEC's public reference room at 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for more
information on the public reference rooms. C&A's SEC filings are also available
to you at the SEC's web site at http://www.sec.gov.

INCORPORATION OF DOCUMENTS BY REFERENCE

Rather than include certain information in this prospectus that C&A has
already included in reports filed with the SEC, we are incorporating this
information by reference, which means that we can disclose important
information to you by referring to those publicly filed documents containing
the information. This information incorporated by reference is considered to be
part of this prospectus, and the information that C&A files with the SEC after
the date of this prospectus and prior to the termination of the offerings of
the securities offered hereby will automatically update and supersede the
information in this prospectus. We incorporate by reference the following
documents filed by C&A with the SEC:

o Proxy Statement on Schedule 14A for C&A's annual meeting of stockholders
to be held on May 15, 2002 (other than the sections entitled "Executive
Compensation -- Report of the Compensation Committee," "Performance
Graph," "Report of the Audit Committee of the Board of Directors," and
"Audit Fees.")

o Annual Report on Form 10-K for the fiscal year ended December 31, 2001,
as amended by an Annual Report filed on June 7, 2002;

o Quarterly Report on Form 10-Q for the fiscal quarter ended March 31,
2002, as amended by a Quarterly Report on Form 10-Q/A filed on June 7,
2002;

o Current Report on Form 8-K filed July 3, 2001 and the report on Form
8-K/A filed September 17, 2001;

o Current Report on Form 8-K filed October 4, 2001 and the report on Form
8-K/A filed October 10, 2001;

o Current Report on Form 8-K filed January 4, 2002 and the report on Form
8-K/A filed January 14, 2002;

o Current Report on Form 8-K filed April 17, 2002;

o Current Report on Form 8-K filed May 21, 2002; and

o Current Report on Form 8-K filed May 29, 2002

All documents we file subsequent to the date of this prospectus pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act and prior to the
termination of the offering of the securities covered hereby shall be deemed to
be incorporated by reference into the prospectus.

We will provide to each person, including any beneficial owner, to whom
this prospectus is delivered, a copy of any or all of the information that has
been incorporated in this prospectus but is not being delivered with this
prospectus. We will provide this information upon written or oral request, at
no cost to the requester, directed to Collins & Aikman Corporation, 250
Stephenson Highway, Troy, Michigan 48083, telephone (248) 824-2500, attention:
Chief Financial Officer.

USE OF PROCEEDS

Except as may otherwise be described in the prospectus supplement relating
to an offering of securities, the net proceeds from the sale of the securities
included in this prospectus will be used for general corporate purposes. Any
specific allocation of the net proceeds of an offering of securities to a
specific purpose will be determined at the time of such offering and will be
described in the related prospectus supplement.

RATIOS OF EARNINGS TO FIXED CHARGES AND RATIO OF EARNINGS TO
COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS

The ratio of earnings to fixed charges for each of C&A and Products and
the ratio of earnings to combined fixed charges and preferred stock dividends
of C&A for each of the periods indicated is as follows:

FISCAL YEAR ENDED(1) THREE MONTHS ENDED
-------------------------------------------------------------------------- -----------------------------
DECEMBER 31, DECEMBER 31, DECEMBER 25, DECEMBER 26, DECEMBER 27, MARCH 31, MARCH 31,
2001 2000 1999 1998 1997 2001 2002
-------------- -------------- -------------- -------------- -------------- -------------- --------------

Ratio of earnings to
fixed charges of
Collins & Aikman(2)..... 0.32x(3) 1.02x 0.98x(4) 1.05x 1.02x 0.4x(5) 1.00x(6)
Ratio of earnings to
fixed charges of
Products(2) ............ 0.32x(3) 1.02x 0.98x(4) 1.05x 1.02x 0.4x(5) 1.00x(6)
Ratio of earnings to
combined fixed
charges and preferred
stock dividends of
Collins & Aikman(4)..... 0.32x(3) 1.02x 0.98x(4) 1.05x 1.02x 0.4x(5) 1.00x(6)

- ----------
(1) Fiscal year 2000 was a 53-week year. All other years were 52 weeks.

(2) For purposes of calculating the ratio of earnings to fixed charges,
earnings represents income or loss from continuing operations before
income taxes, exclusive of income or loss from minority interest and
equity method investments, plus fixed charges, plus amortization of
capitalized interest and income distributions from equity method
investments, less capitalized interest. Fixed charges include interest
expense (including amortization of deferred financing costs), capitalized
interest, and the portion of operating rental expense which management
believes is representative of the interest component of rent expense
(assumed to be 33%).

(3) For the year ended December 31, 2001, additional earnings of $68 million
would have been required to make the ratio 1.00x during the period.

(4) For the fiscal year ended 1999, additional earnings of $1.7 million would
have been required to make the ratio 1.00x during the period.

(5) For the three months ended March 31, 2001, additional earnings of $15.1
million would have been required to make the ratio 1.00x during the
period.

(6) For the three months ended March 31, 2002, additional earnings of $0.1
million would have been required to make the ratio 1.00x during the
period.

The ratios for future periods will be included in our reports on Forms
10-K and 10-Q. These reports will be incorporated by reference into this
prospectus at the time they are filed.

INFORMATION ABOUT OUR COMPANY

We are a global leader in the design, engineering and manufacturing of
automotive interior components, including instrument panels, fully assembled
cockpit modules, floor and acoustic systems, automotive fabric, interior trim
and convertible top systems. We have the number one or two North American
market share position in terms of sales in seven out of ten major automotive
interior categories tracked by CSM Worldwide. We are also the largest North
American supplier of convertible top systems in terms of sales. Following our
acquisition of TAC-Trim in December 2001, we became a leading global supplier
of fully assembled cockpit modules, a market segment we expect to grow
significantly over the next five years. In North America, we manufacture
components for approximately 90% of all light vehicle production platforms. We
have over 25,000 employees and more than 120 plants and facilities in North
America, Europe and South America.

C&A is a holding company and all of its operations are conducted through
Products and Products' subsidiaries. In February 2001, Heartland Industrial
Partners, L.P. acquired a controlling interest in C&A. Since the investment, we
have pursued acquisitions that have furthered a strategy of serving as a prime
contractor to both Tier I integrators, which are shifting capital and emphasis
away from interior components manufacturing and towards electronics and the
delivery of fully integrated interior modules, and to OEMs, which continue to
increase their outsourcing of complete interior manufacturing.

o On July 3, 2001, we acquired the Becker Group, a leading supplier of
plastic components to the automotive industry.

o On September 21, 2001, we acquired Joan Automotive Industries, a leading
supplier of automotive fabric to the automotive industry, and the assets
of Joan's affiliated automotive yarn dyeing operation, Western Avenue
Dyers, L.P.

o On December 20, 2001, we acquired the Textron Automotive Company's Trim
division (TAC-Trim), one of the largest suppliers of instrument panels
and fully assembled cockpit modules and a major automotive plastics
manufacturer of interior and exterior trim components in North America,
Europe and South America.

DESCRIPTION OF C&A CAPITAL STOCK

The authorized capital stock of C&A consists of 300,000,000 shares of
common stock, par value $0.01 per share, and 16,000,000 shares of preferred
stock, par value $0.01 per share. As of May 30, 2002, there were 67,577,687
shares of common stock outstanding, excluding 1,057,595 shares of common stock
subject to outstanding options granted pursuant to our stock option plans,
5,800,000 shares of common stock which may be issued pursuant to the exercise
of common stock purchase rights described below under "Description of C&A
Common Stock -- Common Stock Purchase Rights," and 160,000 shares subject to a
warrant that is presently exercisable. As of May 30, 2002, C&A had no shares of
preferred stock outstanding.

DESCRIPTION OF C&A COMMON STOCK

Subject to the rights of holders of preferred stock then outstanding,
holders of C&A common stock are entitled to receive such dividends as may from
time to time be declared by the Board. Holders of C&A common stock are entitled
to one vote per share on all matters on which the holders of C&A common stock
are entitled to vote. Because holders of C&A common stock do not have
cumulative voting rights, the holders of the majority of the shares of C&A
common stock represented at a meeting can select all the directors. In the
event of liquidation, dissolution or winding up of C&A, holders of C&A common
stock would be entitled to share ratably in all assets of the Company available
for distribution to the holders of the Company common stock.

Upon full payment of the purchase price therefor, shares of C&A common
stock will not be liable to further calls or assessments by the Company. There
are no preemptive rights for C&A common stock in the restated certificate of
incorporation.

The transfer agent and registrar for C&A common stock is First Union
National Bank of North Carolina.

COMMON STOCK PURCHASE RIGHTS

On May 17, 2002, we announced a distribution of non-transferable rights to
purchase C&A common stock to all holders of our common stock as of May 28,
2002. Each shareholder (other than certain shareholders who have agreed to
contractually waive their right to exercise rights) will be granted one
non-transferable right to purchase 0.4 shares of common stock per share of
common stock held by such holder. Shareholders holding an aggregate of
approximately 52,704,000 shares of common stock have agreed that they will not
exercise their rights. This means that the rights offering will be exercisable
for an aggregate of approximately 5,800,000 shares of common stock. The
exercise price of the non-transferable rights is $12.50 per whole share of
common stock for which the rights are exercisable. The non-transferable rights
become exercisable for a 16-day minimum period once a registration statement
for the issuance of the underlying shares has been declared effective by the
SEC. We are obligated to use our best efforts to have a registration statement
for the underlying shares declared effective prior to October 31, 2002, but
such date will be extended, at the request of the underwriters for any offering
of our common stock, to the 180th day following the closing of this offering.

ANTI-TAKEOVER PROVISIONS

The amended and restated certificate of incorporation and the bylaws of
C&A contain certain provisions that may delay, defer or prevent a change in
control of C&A and make removal of management more difficult. These provisions
are intended to enhance the likelihood of continuity and stability in the
composition of the board and in the policies formulated by the Board of
Directors and to discourage certain types of transactions which may involve an
actual or threatened change of control of C&A. The provisions are designed to
reduce the vulnerability of C&A to an unsolicited proposal for a takeover of
C&A that does not contemplate the acquisition of all its outstanding shares or
an unsolicited proposal for the restructuring or sale of all or part of C&A.
The provisions also are intended to discourage certain tactics that may be used
in proxy fights. Set forth below is a description of such provisions in the
restated certificate of Incorporation and the bylaws.

Pursuant to the amended and restated certificate of incorporation, the
Board of Directors is divided into three classes serving staggered three-year
terms. This provision may only be amended or repealed by vote of 80% or more of
the outstanding voting stock. Directors can be removed from office only for
cause and only by the affirmative vote of the holders of a majority of the
combined voting power of the then outstanding shares of voting stock, voting
together as a single class. Vacancies on the Board of Directors and newly
created directorships may be filled only by the remaining directors and not by
the stockholders.

The amended and restated certificate of incorporation provides that the
number of directors will be fixed by, or in the manner provided in, the bylaws.
The bylaws provide that the whole Board of Directors will consist of such
number of members as fixed from time to time by the Board of Directors.
Accordingly, the Board of Directors, and not the stockholders, has the
authority to determine the number of directors and (to the extent such action
is consistent with its fiduciary duties) could delay any stockholder from
obtaining majority representation on the Board of Directors by enlarging the
Board of Directors and filling the new vacancies with its own nominees until
the next stockholder election.

A "Business Combination" is

(1) any merger or consolidation of C&A (whether or not C&A is the
surviving corporation);

(2) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of related transactions)
of all or substantially all the assets of C&A;

(3) the adoption of any plan or proposal for the liquidation,
dissolution, spinoff, splitup, splitoff, or winding up of the affairs
of C&A (whether voluntary or involuntary); or

(4) any agreement, contract or other arrangement providing for any of the
transactions described in this definition of Business Combination.

SECTION 203 OF DELAWARE GENERAL CORPORATE LAW

DIRECTORS' LIABILITY AND INDEMNIFICATION

C&A's amended and restated certificate of incorporation contains a
provision which eliminates the personal liability of C&A's directors for
monetary damages resulting from breaches of their fiduciary duty to the fullest
extent permitted by the DGCL. Under the DGCL, C&A may not eliminate directors'
liability for breaches of the duty of loyalty, acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law,
violations under Section 174 of the DGCL or any transaction from which the
director derived an improper personal benefit. This provision also has no
effect on the ability of stockholders to seek equitable relief, such as an
injunction, that may be available to redress a breach of fiduciary duty, even
though such stockholders could not seek monetary damages from the directors for
such breach. The bylaws contain provisions requiring, subject to certain
procedures, the indemnification of C&A's directors and officers to the fullest
extent permitted by Section 145 of the DGCL, including circumstances in which
indemnification is otherwise discretionary, and provide for the mandatory
advancement of litigation expenses incurred in defense of a claim upon the
receipt by the C&A of any undertaking required by law. C&A's Board of Directors
is further authorized, in its discretion, to provide such rights to employees
and agents of C&A. In addition, C&A may enter into indemnification agreements
with its directors and executive officers that generally provide for similar
rights to indemnification and advancement of expenses. Management believes that
these provisions are necessary to attract and retain qualified persons as
directors and officers.

REGISTRATION RIGHTS

We have granted to certain stockholders (the "Registration Rights
Holders") certain demand registration rights and "piggy-back" registration
rights with respect to certain C&A common stock held by them. Based on a review
of Schedule 13Ds filed by the respective parties through May 16, 2002 and other
information available to the Company, as of May 16, 2002, the Registration
Rights Holders hold approximately 62,120,187 million shares of C&A common
stock, in the aggregate. They are entitled to rights with respect to the
registration of their shares under the Securities Act of 1933 as follows:

Demand Registration Rights

Piggy-Back Registration Rights

If we propose to register any of our securities under the Securities Act,
subject to certain exceptions, pursuant to the terms of the agreements between
us and the Registration Rights Holders for our account or for the account of
other stockholders, the Registration Rights Holders are entitled to notice of,
and to include in the registration, shares of common stock owned by them,
subject to customary cutback and holdback provisions. This prospectus may be
used by Registration Rights Holders only when the Company is selling shares
pursuant to an underwritten offering of Company common stock in accordance with
the requirements of the applicable agreement.

DESCRIPTION OF C&A PREFERRED STOCK

Pursuant to the restated certificate of incorporation of the Company, the
Board is authorized, subject to any limitations prescribed by law, to provide
for the issuance of the shares of Company preferred stock in series and to
establish from time to time the number of shares to be included in each such
series and to fix the designation, powers, preferences and rights of the shares
of each such series and any qualifications, limitations or restrictions
thereof. Because the Board has the power to establish the preferences and
rights of each series, it may afford the holders of any Company preferred stock
preferences, powers and rights (including voting rights) senior to the rights
of the holders of Company common stock. The issuance of shares of Company
preferred stock, or the issuance of rights to purchase such shares, could be
used to discourage an unsolicited acquisition proposal.

FUTURE SERIES OF PREFERRED STOCK

The following description of C&A preferred stock sets forth certain
general terms and provisions of C&A preferred stock to which any prospectus
supplement may relate. The statements below describing C&A preferred stock are
in all respects subject to and qualified in their entirety by reference to the
applicable provisions of C&A's amended and restated certificate of
incorporation and bylaws and any applicable amendment to the amended and
restated certificate of incorporation designating terms of preferred stock (a
"Designating Amendment").

Reference is made to the prospectus supplement relating to C&A preferred
stock for specific terms, including:

o The title and stated capital value of such preferred stock;

o The number of shares of preferred stock offered, the liquidation
preference per share and the offering price of the preferred stock;

o The dividend rate(s), period(s) and/or payment date(s) or method(s) of
calculation thereof applicable to the preferred stock;

o The date from which dividends on the preferred stock shall accumulate,
if applicable;

o The procedures for any auction and remarketing, if any, for the
preferred stock;

o The provisions for a sinking fund, if any, for the preferred stock;

o The provision for redemption, if applicable, of the preferred stock;

o Any listing of the preferred stock on any securities exchange;

o The terms and conditions, if applicable, upon which the preferred stock
will be convertible into C&A common stock, including the conversion price
(or manner of calculation thereof);

o Any other specific terms, preferences, rights, limitations or
restrictions of the preferred stock;

o A discussion of U.S. federal income tax considerations applicable to the
preferred stock;

o The voting rights of the preferred stock and the relative ranking and
preference of the preferred stock as to dividends rights and rights upon
liquidation, dissolution or winding up of the affairs of C&A; and

o Any limitations on issuance of any series of preferred stock ranking
senior to or on a parity with such series of preferred stock as to
dividend rights and rights upon liquidation, dissolution or winding up of
the affairs of C&A.

RANK

Unless otherwise specified in the prospectus supplement, C&A preferred
stock will, with respect to dividend rights upon liquidation, dissolution or
winding up of the Company, rank

o senior to all classes or series of C&A common stock, and to all equity
securities ranking junior to the preferred stock with respect to dividend
rights or rights upon liquidation, dissolution or winding up of the
Company;

o on a parity with all equity securities issued by the Company the terms
of which specifically provide that such equity securities rank on a
parity with the preferred stock with respect to dividend rights or rights
upon liquidation, dissolution or winding up of the Company; and

o junior to all equity securities issued by the Company the terms of which
specifically provide that such equity securities rank senior to the
preferred stock with respect to dividend rights or rights upon
liquidation, dissolution or winding up of the Company.

The term "equity securities" does not include convertible debt securities.

DIVIDENDS

Holders of C&A preferred stock of each series will be entitled to receive,
when, as and if declared by C&A's board of directors, out of our assets legally
available for payment, cash dividends at such rates and on such dates as will
be set forth in the prospectus supplement. Each such dividend shall be payable
to holders of record as they appear on our share transfer books on such record
dates as shall be fixed by C&A's board of directors.

Dividends on any series of C&A preferred stock may be cumulative or
non-cumulative, as provided in the applicable prospectus supplement. Dividends,
if cumulative, will be cumulative from and after the date set forth in the
applicable prospectus supplement. If C&A's board of directors fails to declare
a dividend payable on a dividend payment date on any series of C&A Preferred
Stock for which dividends are non-cumulative, then the holders of such series
of C&A preferred stock will have no right to receive a dividend in respect of
the dividend period ending on such dividend payment date, and the Company will
have no obligation to pay the dividend accrued for such period, whether or not
dividends on such series are declared payable on any future dividend payment
date.

If C&A preferred stock of any series is outstanding, no dividends will be
declared or paid or set apart for payment on any stock of the Company of any
other series ranking, as to dividends, on a parity with or junior to the C&A
preferred stock of such series for any period unless:

(a) if such series of preferred stock has a cumulative dividend, full
cumulative dividends have been, or contemporaneously are, declared and
paid or declared and a sum sufficient for the payment thereof is set
apart for such payment on the preferred stock of such series for all
past dividend periods and the then current dividend period or

(b) if such series of preferred stock does not have a cumulative dividend,
full dividends for the then current dividend period have been, or
contemporaneously are, declared and paid or declared and a sum
sufficient for the payment thereof is set apart for such payment on
the preferred stock of such series.

When dividends are not paid in full (or a sum sufficient for such full
payment is not so set apart) upon C&A preferred stock of any series and the
shares of any other series of C&A preferred stock ranking on

a parity as to dividends with the C&A preferred stock of such series, all
dividends declared upon C&A preferred stock of such series and any other series
of C&A preferred stock ranking on a parity as to dividends with C&A preferred
stock shall be declared pro rata so that the amount of dividends declared per
share of C&A preferred stock of such series and such other series of C&A
preferred stock shall in all cases bear to each other the same ratio that
accrued dividends per share on the C&A preferred stock of such series (which
shall not include any accumulation in respect of unpaid dividends for prior
dividends periods if C&A preferred stock does not have a cumulative dividend)
and such other series of C&A preferred stock bear to each other. No interest,
or sum of money in lieu of interest, shall be payable in respect of any
dividend payment or payments on C&A preferred stock of such series which may be
in arrears.

Except as provided in the immediately preceding paragraph, unless,

(a) if such series of C&A preferred stock has a cumulative dividend, full
cumulative dividends on C&A preferred stock of such series have been,
or contemporaneously are, declared and paid or declared and a sum
sufficient for the payment thereof is set apart for payment for all
past dividend periods and the then current dividend period, and

(b) if such series of C&A preferred stock does not have a cumulative
dividend, full dividends on the C&A preferred stock of such series
have been, or contemporaneously are, declared and paid or declared and
a sum sufficient for the payment thereof is set apart for payment for
the then current dividend period,

no dividends (other than in shares of C&A common stock or other shares of stock
raking junior to the C&A preferred stock of such series as to dividends and
upon liquidation) shall be declared or paid or set aside for payment nor shall
any other distribution be declared or made upon the C&A common stock, or any
other stock of the Company ranking junior to or on a parity with the C&A
preferred stock of such series as to dividends or upon liquidation, nor shall
any shares of C&A common stock, or any other shares of the Company raking
junior to or on a parity with the C&A preferred stock of such series as to
dividends or upon liquidation be redeemed, purchased or otherwise acquired for
any consideration (or any moneys be paid to or made available for a sinking
fund for the redemption of any such shares) by the Company (except by
conversion into or exchange for other stock of the Company ranking junior to
the C&A preferred stock of such series as to dividends and upon liquidation).

Any dividend payment made on shares of a series of C&A preferred stock
shall be credited against the earliest accrued but unpaid dividend due with
respect to shares of such series which remains payable.

REDEMPTION

If so provided in the applicable prospectus supplement, the C&A preferred
stock will be subject to mandatory redemption or redemption at the option of
the Company, as a whole or in part, in each case upon terms, at the times and
at the redemption prices set forth in the prospectus supplement.

The prospectus supplement relating to a series of C&A preferred stock that
is subject to mandatory redemption will specify the number of shares of C&A
preferred stock that shall be redeemed by the Company in each year commencing
after a date to be specified, at a redemption price per share to be specified,
together with an amount equal to all accrued and unpaid dividends thereon
(which shall not, if the C&A preferred stock does not have a cumulative
dividend, including any accumulation in respect of unpaid dividends for prior
dividend periods) to the date of redemption. The redemption price may be
payable in cash or other property, as specified in the applicable prospectus
supplement. If the redemption price for the C&A preferred stock of any series
is payable only from the net proceeds of the issuance of shares of stock of the
Company, the terms of the C&A preferred stock may provide that, if no such
shares of stock shall have been issued or to the extent the net proceeds from
any issuance are insufficient to pay in full the aggregate redemption price
then due, the C&A preferred stock shall automatically and mandatorily be
converted into the applicable shares of stock of the Company pursuant to
conversion provisions specified in the applicable prospectus supplement.

Notwithstanding the foregoing, unless:

(a) if a series of C&A preferred stock has a cumulative dividend, full
cumulative dividends on all shares of such series of C&A preferred
stock shall have been, or contemporaneously are, declared and paid or
declared and a sum sufficient for the payment thereof set apart for
payment for all past dividend periods and the then current dividend
period, and

(b) if a series of C&A preferred stock does not have a cumulative
dividend, full dividends on all shares of the C&A preferred stock of
such series have been, or contemporaneously are, declared and paid or
declared and a sum sufficient for the payment thereof set apart for
payment for the then current dividend period,

no shares of such series of C&A preferred stock shall be redeemed unless all
outstanding shares of preferred stock of such series are simultaneously
redeemed; provided, however, that the foregoing shall not prevent the purchase
or acquisition of C&A preferred stock of such series pursuant to a purchase or
exchange offer made on the same terms to holders of all outstanding shares of
C&A preferred stock of such series. In addition, unless:

(a) if such series of C&A preferred stock has a cumulative dividend, full
cumulative dividends on all outstanding shares of such series of C&A
preferred stock have been, or contemporaneously are, declared and paid
or declared and a sum sufficient for the payment thereof set apart for
payment for all past dividend periods and the then current dividend
period, and

(b) if such series of C&A preferred stock does not have a cumulative
dividend, full dividends on the C&A preferred stock of such series
have been, or contemporaneously are, declared and paid or declared and
a sum sufficient for the payment thereof set apart for payment for the
then current dividend period,

the Company shall not purchase or otherwise acquire directly or indirectly any
shares of C&A preferred stock of such series (except by conversion into or
exchange for shares of stock of the Company ranking junior to the C&A preferred
stock of such series as to dividends and upon liquidation); provided, however,
that the foregoing shall not prevent the purchase or acquisition of shares of
C&A preferred stock of such series pursuant to a purchase or exchange offer
made on the same terms to holders of all outstanding shares of C&A preferred
stock of such series.

If fewer than all of the outstanding shares of C&A preferred stock of any
series are to be redeemed, the number of shares to be redeemed will be
determined by the Company and such shares may be redeemed pro rata from the
holders of record of such shares in proportion to the number of such shares
held or for which redemption is requested by such holder (with adjustments to
avoid redemption of fractional shares) or by any other equitable manner
determined by the Company.

Notice of redemption will be mailed at least 30 days but not more than 60
days before the redemption date to each holder of record of C&A preferred stock
of any series to be redeemed at the address shown on the stock transfer books
of the Company. Each notice shall state:

o the redemption date;

o the number of shares and series of the C&A preferred stock to be
redeemed;

o the redemption price;

o the place or places where certificates for the C&A preferred stock are
to be surrendered for payment of the redemption price;

o that dividends on the shares to be redeemed will cease to accrue on such
redemption date; and

o the date upon which the holder's conversion rights, if any, as to such
shares shall terminate.

If fewer than all the shares of C&A preferred stock of any series are to
be redeemed, the notice mailed to each such holder thereof shall also specify
the number of shares of C&A preferred stock to be redeemed from each such
holder. If notice of redemption of any C&A preferred stock has been given and

if the funds necessary for such redemption have been set aside by the Company
in trust for the benefit of the holders of any C&A preferred stock so called
for redemption, then from and after the redemption date dividends will cease to
accrue on the C&A preferred stock, and all rights of the holders of such shares
will terminate, except the right to receive the redemption price.

LIQUIDATION PREFERENCE

Upon any voluntary or involuntary liquidation, dissolution or winding up
of the affairs of the Company, then, before any distribution or payment shall
be made to the holders of any C&A common stock or any other class or series of
stock of the Company ranking junior to the C&A preferred stock in the
distribution of assets upon any liquidation, dissolution or winding up of the
Company, the holders of each series of C&A preferred stock shall be entitled to
receive out of assets of the Company legally available for distribution to
stockholders liquidating distributions in the amount of the liquidation
preference per share, if any, set forth in the applicable prospectus
supplement, plus an amount equal to all dividends accrued and unpaid thereon
(which shall not include any accumulation in respect of unpaid noncumulative
dividends for prior dividend periods). After payment of the full amount of the
liquidating distributions to which they are entitled, the holders of C&A
preferred stock will have no right or claim to any of the remaining assets of
the Company. In the event that, upon any such voluntary or involuntary
liquidation, dissolution or winding up, the available assets of the Company are
insufficient to pay the amount of the liquidating distributions on all
outstanding shares of C&A preferred stock and the corresponding amounts payable
on all shares of other classes or series of stock of the Company ranking on a
parity with the C&A preferred stock in the distribution of assets, then the
holders of the C&A preferred stock and all other such classes or series of
stock shall share ratably in any such distribution of assets in proportion to
the full liquidating distributions to which they would otherwise be
respectively entitled.

If liquidating distributions shall have been made in full to all holders
of C&A preferred stock, the remaining assets of the Company shall be
distributed among the holders of any other classes or series of stock ranking
junior to the C&A preferred stock upon liquidation, dissolution or winding up,
according to their respective rights and preferences and in each case according
to their respective number of shares. For such purposes, the consolidation or
merger of the Company with or into any other corporation, trust or entity, or
the sale, lease or conveyance of all or substantially all of the property or
business of the Company, shall not be deemed to constitute a liquidation,
dissolution or winding up of the Company.

VOTING RIGHTS

Holders of the C&A preferred stock will not have any voting rights, except
as set forth below or as otherwise from time to time required by law or as
indicated in the applicable prospectus supplement.

Unless provided otherwise for any series of C&A preferred stock, so long
as any shares of C&A preferred stock of a series remain outstanding, the
Company will not, without the affirmative vote or consent of the holders of at
least two-thirds of the shares of such series of C&A preferred stock
outstanding at the time, given in person or by proxy, either in writing or at a
meeting (such series voting separately as a class):

o authorize or create, or increase the authorized or issued amount of, any
class or series of stock ranking prior to such series of C&A preferred
stock with respect to payment of dividends or the distribution of assets
upon liquidation, dissolution or winding up or reclassify any authorized
stock of the Company into such shares, or create, authorize or issue any
obligation or security convertible into or evidencing the right to
purchase any such shares; or

o amend, alter or repeal the provisions of C&A's amended and restated
certificate of incorporation or the Designating Amendment for such series
of C&A preferred stock, whether by merger, consolidation or otherwise (an
"Event"), so as to materially and adversely affect any right, preference,
privilege or voting power of such series of Preferred Stock or the
holders thereof; provided, however, with respect to the occurrence of any
of the Events set forth in the prior bullet point, so long as the C&A
preferred stock remains outstanding with the terms thereof materially

unchanged, taking into account that upon the occurrence of an Event the
Company may not be the surviving entity, the occurrence of any such Event
shall not be deemed to materially and adversely affect such rights,
preferences, privileges or voting power of holders of C&A preferred
stock, and provided, further that

(x) any increase in the amount of the authorized C&A preferred stock or
the creation or issuance of any other series of C&A preferred stock,
or

(y) any increase in the amount of authorized shares of such series or any
other series of C&A preferred stock, in each case ranking on a parity
with or junior to the C&A preferred stock of such series with respect
to payment of dividends or the distribution of assets upon
liquidation, dissolution or winding up, shall not be deemed to
materially and adversely affect such rights, preferences, privileges
or voting powers.

The foregoing voting provisions will not apply if, at or prior to the time
when the act with respect to which such vote would otherwise be required shall
be effected all outstanding shares of such series of C&A preferred stock shall
have been redeemed or called for redemption and sufficient funds shall have
been deposited in trust to effect such redemption.

CONVERSION RIGHTS

The terms and conditions, if any, upon which any series of C&A preferred
stock is convertible into C&A common stock will be set forth in the applicable
prospectus supplement relating thereto. Such terms will include the number of
shares of C&A common stock into which the shares of C&A preferred stock are
convertible, the conversion price (or manner of calculation thereof), the
conversion period, provisions as to whether conversion will be at the option of
the holders of the C&A preferred stock or the Company, the events requiring an
adjustment of the conversion price and provisions affecting conversion in the
event of the redemption of such series of C&A preferred stock.

TRANSFER AGENT

The transfer agent and registrar for the C&A preferred stock will be set
forth in the applicable prospectus supplement.

DESCRIPTION OF C&A AND PRODUCTS DEBT SECURITIES

GENERAL

C&A or Products may issue debt securities from time to time in one or more
series, under one or more indentures, each dated as of a date on or prior to
the issuance of the debt securities to which it relates. Senior debt securities
and subordinated debt securities may be issued pursuant to separate indentures,
a senior indenture and a subordinated indenture, respectively, in each case
between us and a trustee qualified under the Trust Indenture Act. Products may
issue debt securities from time to time in one or more series, under one or
more indentures, each dated as of a date on or prior to the issuance of the
debt securities to which it relates. Senior debt securities and subordinated
debt securities may be issued pursuant to separate indentures, a senior
indenture and a subordinated indenture, respectively, in each case between
Products and a trustee qualified under the Trust Indenture Act.

The form of such indentures have been filed as an exhibit to the
registration statement of which this prospectus is a part, subject to such
amendments or supplements as may be adopted from time to time. The senior
indentures and the subordinated indentures, as amended or supplemented from
time to time, are sometimes referred to individually as an "indenture" and
collectively as the "indentures." Each indenture will be subject to and
governed by the Trust Indenture Act. The aggregate principal amount of debt
securities which may be issued under each indenture will be unlimited and each
indenture will set forth the specific terms of any series of debt securities or
provide that such terms shall be set forth in, or determined pursuant to, an
authorizing resolution, as defined in the applicable prospectus supplement,
and/or a supplemental indenture, if any, relating to such series.

The statements made below relating to the C&A and Products debt securities
and the indentures are summaries of the anticipated provisions thereof, do not
purport to be complete and are subject to, and are qualified in their entirety
by reference to, all of the provisions of the applicable indenture and any
applicable U.S. federal income tax considerations as well as any applicable
modifications of or additions to the general terms described below in the
applicable prospectus supplement. The applicable prospectus supplement may also
state that any of the terms set forth herein are inapplicable to such series of
C&A and Products and securities.

TERMS

The debt securities will be C&A's or Products' unsecured obligations.

C&A's and Products' senior debt securities will rank equal in right of
payment with all of C&A's or Products' other unsecured and unsubordinated
indebtedness, as applicable.

C&A's and Products' subordinated debt securities will be subordinated in
right of payment to the prior payment in full of all of C&A's or Products'
senior indebtedness, as applicable, which is defined in the section called "--
Ranking of Debt Securities" below.

The specific terms of each series of C&A's and Products' debt securities
will be set forth in the applicable prospectus supplement relating thereto,
including the following, as applicable:

(1) the title of such debt securities and whether such debt securities
are senior debt securities or subordinated debt securities and, if
subordinated debt securities, the specific subordination provisions
applicable thereto;

(2) the aggregate principal amount of such debt securities and any limit
on such aggregate principal amount;

(3) the price (expressed as a percentage of the principal amount thereof)
at which such debt securities will be issued and, if other than the
principal amount thereof, the portion of the principal amount thereof
payable upon declaration of acceleration of the maturity thereof;

(4) if convertible into shares of common stock or preferred stock, the
terms on which such debt securities are convertible, including the
initial conversion price, the conversion period, any events requiring
an adjustment of the applicable conversion price and any requirements
relating to the reservation of such common stock or preferred stock
for purposes of conversion;

(5) the date(s), or the method for determining such date or dates, on
which the principal of such debt securities will be payable and, if
applicable, the terms on which such maturity may be extended;

(6) the rate(s) (which may be fixed or floating), or the method by which
such rate or rates shall be determined, at which such debt securities
will bear interest, if any;

(7) the date(s), or the method for determining such date or dates, from
which any such interest will accrue, the dates on which any such
interest will be payable, the record dates for such interest payment
dates, or the method by which such dates shall be determined, the
persons to whom such interest shall be payable, and the basis upon
which interest shall be calculated if other than that of a 360-day
year of twelve 30-day months;

(8) the place(s) where the principal of and interest, if any, on such
debt securities will be payable, where such debt securities may be
surrendered for registration of transfer or exchange and where notices
or demands to or upon us in respect of such debt securities and the
applicable indenture may be served;

(9) the period(s), if any, within which, the price or prices at which and
the other terms and conditions upon which such debt securities may,
pursuant to any optional or mandatory redemption provisions, be
redeemed, as a whole or in part, at our option;

(10) our obligation, if any, to redeem, repay or purchase such debt
securities pursuant to any sinking fund (as defined in the applicable
indenture) or analogous provision or at the option of a holder
thereof, and the period or periods within which, the price or prices
at which and the other terms and conditions upon which such debt
securities will be redeemed, repaid or purchased, as a whole or in
part, pursuant to such obligations;

(11) if other than U.S. dollars, the currency or currencies in which the
principal of and interest, if any, on such debt securities are
denominated and payable, which may be a foreign currency or units of
two or more foreign currencies or a composite currency or currencies,
and the terms and conditions relating thereto;

(12) whether the amount of payments of principal of or interest, if any,
on such debt securities may be determined with reference to an index,
formula or other method (which index, formula or method may, but need
not be, based on the yield on or trading price of other securities,
including United States Treasury securities, or on a currency,
currencies, currency unit or units, or composite currency or
currencies) and the manner in which such amounts shall be determined;

(13) whether the principal of or interest, if any, on the debt securities
of the series are to be payable, at our election or a holder thereof,
in a currency or currencies, currency unit or units or composite
currency or currencies other than that in which such debt securities
are denominated or stated to be payable and the period or periods
within which, and the terms and conditions upon which, such election
may be made;

(14) provisions, if any, granting special rights to the holders of debt
securities of the series upon the occurrence of such events as may be
specified;

(15) any deletions from, modifications of or additions to the events of
default or our covenants with respect to debt securities of the
series, whether or not such events of default or covenants are
consistent with the events of default or covenants described herein;

(16) whether debt securities of the series are to be issuable initially in
temporary global form and whether any debt securities of the series
are to be issuable in permanent global form and, if so, whether
beneficial owners of interests in any such security in permanent
global form may exchange such interests for debt securities of such
series and of like tenor of any authorized form and denomination and
the circumstances under which any such exchanges may occur, if other
than in the manner provided in the applicable indenture, and, if debt
securities of the series are to be issuable as a global security, the
identity of the depository for such series;

(17) the applicability, if any, of the defeasance and covenant defeasance
provisions of the applicable indenture to the debt securities of the
series;

(18) if exchangeable into another series of debt securities, the terms on
which such debt securities are exchangeable;

(19) if other than denominations of $1,000 and any integral multiple
thereof the denominations in which such Securities shall be issuable;
and

(20) any other terms of the series of debt securities and any additions,
deletions or modifications to the applicable indenture.

If the applicable prospectus supplement provides, C&A and Products debt
securities may be issued at a discount below their principal amount and provide
for less than the entire principal amount thereof to be payable upon
declaration of acceleration of the maturity thereof. In such cases, all
material U.S. federal income tax considerations will be described in the
applicable prospectus supplement.

The applicable prospectus supplement will contain information with respect
to any deletions from, modifications of or additions to the events of default
or covenants described below.

PARENT GUARANTEE

All debt securities issued by Products will be fully and unconditionally
guaranteed by the Company. Additional terms relating to such guarantee will be
set forth in the applicable prospectus supplement relating to Products debt
securities.

DENOMINATION, INTEREST, REGISTRATION AND TRANSFER

The C&A and Products debt securities of each series only in registered
form, without coupons, in denominations of $1,000, or in such other currencies
or denominations as may be set forth in the applicable indenture or specified
in, or pursuant to, an authorizing resolution and/or supplemental indenture, if
any, relating to such series of debt securities.

The principal of and interest, if any, on any series of C&A and Products
debt securities will be payable at the corporate trust office of the trustee,
the address of which will be stated in the applicable prospectus supplement.
However, the issuer's option, interest payments may be made by check mailed to
the address of the person entitled thereto as it appears in the applicable
register for such debt securities.

Subject to certain limitations imposed upon debt securities issued in
book-entry form, C&A and Products debt securities of any series:

o will be exchangeable for any authorized denomination of other debt
securities of the same series and of a like aggregate principal amount
and tenor upon surrender of such debt securities at the trustee's
corporate trust office or at the office of any registrar designated by us
for such purpose; and

o may be surrendered for registration of transfer or exchange thereof at
the corporate trust office of the trustee or at the office of any
registrar designated by us for such purpose.

No service charge will be made for any registration of transfer or
exchange, but we may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection with certain transfers and
exchanges. We may act as registrar and may change any registrar without notice.

COVENANTS

The applicable prospectus supplement will describe any material covenants
in respect of a series of debt securities.

RANKING OF DEBT SECURITIES

Senior debt securities

The senior debt securities will be unsecured unsubordinated obligations of
C&A or Products, as the case may be and will:

o rank equally in right of payment with all other unsecured and
unsubordinated indebtedness of the issuer;

o be effectively subordinated in right of payment to all secured
indebtedness of the issuer to the extent of the value of the assets
securing such indebtedness; and

o be effectively subordinated to all of the issuer's subsidiaries'
indebtedness.

Except as otherwise set forth in the applicable senior indenture or
specified in an authorizing resolution and/or supplemental indenture, if any,
relating to a series of senior debt securities to be issued, there will be no
limitations in any senior indenture on the amount of additional indebtedness
which may rank equal with the senior debt securities or on the amount of
indebtedness, secured or otherwise, which may be incurred by any of our
subsidiaries.

Subordinated debt securities

The subordinated debt securities will be the unsecured subordinated
obligations of C&A or Products, as the case may be. Unless otherwise provided
in the applicable prospectus supplement, the payment of principal of, interest
on and all other amounts owing in respect of the subordinated debt securities
will be subordinated in right of payment to the prior payment in full in cash
of principal of, interest on and all other amounts owing in respect of all of
the issuer's senior indebtedness. Upon any payment or distribution of assets of
any kind or character, whether in cash, property or securities, to creditors of
the issuer upon any total or partial liquidation, dissolution, winding up,
reorganization, assignment for the benefit of creditors or marshaling of the
issuer's assets or in a bankruptcy, reorganization, insolvency, receivership or
other similar proceeding relating to the issuer or the issuer's property,
whether voluntary or involuntary, all principal of, interest on and all other
amounts due or to become due shall be paid, first, to all senior indebtedness
of the issuer in full in cash, or such payment duly provided for to the
satisfaction of the holders of senior indebtedness, before any payment or
distribution of any kind or character is made on account of any principal of,
interest on or other amounts owing in respect of the subordinated debt
securities, or for the acquisition of any of the subordinated debt securities
for cash, property or otherwise.

If any default occurs and is continuing in the payment when due, whether
at maturity, upon any redemption, by declaration or otherwise, of any principal
of, interest on, unpaid drawings for letters of credit issued in respect of, or
regularly accruing fees with respect to, any senior indebtedness, no payment of
any kind or character shall be made by or on behalf of the issuer or any other
person on the issuer's or its behalf with respect to any principal of, interest
on or other amounts owing in respect of the subordinated debt securities or to
acquire any of the subordinated debt securities for cash, property or
otherwise.

If any other event of default occurs and is continuing with respect to any
senior indebtedness, as such event of default is defined in the instrument
creating or evidencing such senior indebtedness, permitting the holders of such
senior indebtedness then outstanding to accelerate the maturity thereof and if
the representative (as defined in the applicable indenture) for the respective
issue of senior indebtedness gives written notice of the event of default to
the trustee (a "default notice"), then, unless and until all events of default
have been cured or waived or have ceased to exist or the trustee receives
notice from the representative for the respective issue of senior indebtedness
terminating the blockage period (as defined below), during the 179 days after
the delivery of such default notice (the "blockage period"), neither the issuer
nor any other person on its behalf shall:

(1) make any payment of any kind or character with respect to any
principal of, interest on or other amounts owing in respect of the
subordinated debt securities; or

(2) acquire any of the subordinated debt securities for cash, property or
otherwise.

Notwithstanding anything herein to the contrary, in no event will a
blockage period extend beyond 179 days from the date the payment on the
subordinated debt securities was due and only one such blockage period may be
commenced within any 360 consecutive days. No event of default which existed or
was continuing on the date of the commencement of any blockage period with
respect to the senior indebtedness shall be, or be made, the basis for
commencement of a second blockage period by the representative of such senior
indebtedness whether or not within a period of 360 consecutive days unless such
event of default shall have been cured or waived for a period of not less than
90 consecutive days (it being acknowledged that any subsequent action, or any
breach of any financial covenants for a period commencing after the date of
commencement of such blockage period that, in either case, would give rise to
an event of default pursuant to any provisions under which an event of default
previously existed or was continuing shall constitute a new event of default
for this purpose).

The subordinated indentures will not restrict the amount of senior
indebtedness or other indebtedness of an issuer or its subsidiaries. As a
result of the foregoing provisions, in the event of the issuer's insolvency,
holders of the subordinated debt securities may recover ratably less than the
issuer's general creditors.

"senior indebtedness" of an issuer, unless otherwise specified in one or
more applicable supplemental indentures or approved pursuant to a board
resolution in accordance with the applicable indenture, means, with respect to
C&A or Products, as applicable:

(1) the principal (including redemption payments), premium, if any,
interest and other payment obligations in respect of (A) the issuer's
indebtedness for money borrowed and (B) the issuer's indebtedness
evidenced by securities, debentures, bonds, notes or other similar
instruments issued by the issuer, including any such securities issued
under any deed, indenture or other instrument to which the issuer is a
party (including, for the avoidance of doubt, indentures pursuant to
which senior debt securities have been or may be issued);

(2) all of the issuer's obligations issued or assumed as the deferred
purchase price of property, all of our conditional sale obligations,
all of the issuer's hedging agreements and agreements of a similar
nature thereto and all agreements relating to any such agreements, and
all of the issuer's obligations under any title retention agreement
(but excluding trade accounts payable arising in the ordinary course
of business);

(3) all of the issuer's obligations for reimbursement on any letter of
credit, banker's acceptance, security purchase facility or similar
credit transaction;

(4) all obligations of the type referred to in clauses (1) through (3)
above of other persons for the payment of which the issuer is
responsible or liable as obligor, guarantor or otherwise;

(5) all obligations of the type referred to in clauses (1) through (4)
above of other persons secured by any lien on any of the issuer's
property or assets (whether or not such obligation is assumed by the
issuer) and

(6) any deferrals, amendments, renewals, extensions, modifications and
refundings of all obligations of the type referred to in clauses (1)
through (5) above, in each case whether or not contingent and whether
outstanding at the date of effectiveness of the applicable indenture
or thereafter incurred,

except, in each case, for the subordinated debt securities and any such other
indebtedness or deferral, amendment, renewal, extension, modification or
refunding that contains express terms, or is issued under a deed, indenture or
other instrument, which contains express terms, providing that it is
subordinate to or ranks equal with the subordinated debt securities.

Such senior indebtedness shall continue to be senior indebtedness and be
entitled to the benefits of the subordination provisions of the applicable
indenture irrespective of any amendment, modification or waiver of any term of
such senior indebtedness and notwithstanding that no express written
subordination agreement may have been entered into between the holders of such
senior indebtedness and the trustee or any of the holders.

DISCHARGE

Under the terms of each indenture, the issuer will be discharged from any
and all obligations in respect of the debt securities of any series that have
become due and payable or will become due and payable within one year of the
within mentioned deposit and the applicable indenture (except in each case for
certain obligations, including to register the transfer or exchange of debt
securities, replace stolen, lost or mutilated debt securities, maintain paying
agencies and hold moneys for payment in trust) if the issuer irrevocably
deposits with the applicable trustee, in trust, moneys or U.S. government
obligations in an amount sufficient to pay all the principal of, and interest
on, the debt securities of such series on the dates such payments are due in
accordance with the terms of such debt securities.

In addition, unless the applicable prospectus supplement and supplemental
indenture provide otherwise, the issuer may elect either (1) to defease and be
discharged from any and all obligations with respect to such debt securities
("defeasance") or (2) to be released from our obligations with respect to such
debt securities under certain covenants in the applicable indenture, and any
omission to comply with such obligations will not constitute a default or an
event of default with respect to such debt securities ("covenant defeasance"):

(a) by delivering all outstanding debt securities of such series to the
trustee for cancellation and paying all sums payable by it under such
debt securities and the indenture with respect to such series; or

(b) after giving notice to the trustee of its intention to defease all of
the debt securities of such series, by irrevocably depositing with the
trustee or a paying agent

(x) in the case of any debt securities of any series denominated in
U.S. dollars, cash or U.S. government obligations sufficient to
pay all principal of and interest on such debt securities; and

(y) in the case of any debt securities of any series denominated in
any currency other than U.S. dollars, an amount of the applicable
currency in which the debt securities are denominated sufficient
to pay all principal of and interest on such debt securities.

Such a trust may only be established if, among other things:

(1) the applicable defeasance or covenant defeasance does not result in a
breach or violation of, or constitute a default under or any material
agreement or instrument to which the issuer or any subsidiary of the
issuer is a party or by which it is bound;

(2) no event of default or event which with notice or lapse of time or
both would become an event of default with respect to the debt
securities to be defeased will have occurred and be continuing on the
date of establishment of such a trust after giving effect to such
establishment and, with respect to defeasance only, no bankruptcy
proceeding with respect to the issuer will have occurred and be
continuing at any time during the period ending on the 91st day after
such date; and

(3) the issuer has delivered to the trustee an opinion of counsel (as
specified in the applicable supplemental indenture) to the effect that
the holders will not recognize income, gain or loss for U.S. federal
income tax purposes as a result of such defeasance or covenant
defeasance and will be subject to U.S. federal income tax on the same
amounts, in the same manner and at the same times as would have been
the case if such defeasance or covenant defeasance had not occurred,
and such opinion of counsel, in the case of defeasance, must refer to
and be based upon a letter ruling of the Internal Revenue Service
received by us, a Revenue Ruling published by the Internal Revenue
Service or a change in applicable U.S. federal income tax law
occurring after the date of the applicable supplemental indenture.

In the event the issuer effects covenant defeasance with respect to any
debt securities and such debt securities are declared due and payable because
of the occurrence of any event of default, other than an event of default with
respect to any covenant as to which there has been covenant defeasance, the

government obligations on deposit with the trustee will be sufficient to pay
amounts due on such debt securities at the time of the stated maturity but may
not be sufficient to pay amounts due on such debt securities at the time of the
acceleration resulting from such event of default.

MODIFICATION AND WAIVER

The issuer, when authorized by a board resolution, and the trustee may
modify, amend and/or supplement the applicable indenture and the applicable
debt securities with the consent of the holders of not less than a majority in
principal amount of the outstanding debt securities of all series affected
thereby (voting as a single class); provided, however, that such modification,
amendment or supplement may not, without the consent of each holder of the debt
securities affected thereby:

(1) change the stated maturity of the principal of or any installment of
interest with respect to the debt securities;

(2) reduce the principal amount of, or the rate of interest on, the debt
securities;

(3) change the currency of payment of principal of or interest on the
debt securities;

(4) change the redemption provisions, if any, of any debt securities in
any manner adverse to the holders of such series of debt securities;

(5) impair the right to institute suit for the enforcement of any payment
on or with respect to the debt securities;

(6) reduce the above-stated percentage of holders of the debt securities
of any series necessary to modify or amend the indenture relating to
such series;

(7) modify the foregoing requirements or reduce the percentage of
outstanding debt securities necessary to waive any covenant or past
default;

(8) in the case of any subordinated indenture, modify the subordination
provisions thereof in a manner adverse to the holders of subordinated
debt securities of any series then outstanding; or

(9) in the case of any convertible debt securities, adversely affect the
right to convert the debt securities into common shares or preference
shares in accordance with the provisions of the applicable indenture.

Holders of not less than a majority in principal amount of the outstanding
debt securities of all series affected thereby (voting as a single class) may
waive certain past defaults and may waive compliance by the issuer with any
provision of the indenture relating to such debt securities (subject to the
immediately preceding sentence); provided, however, that:

(1) without the consent of each holder of debt securities affected
thereby, no waiver may be made of a default in the payment of the
principal of or interest on any debt security; and

(2) only the holders of a majority in principal amount of debt securities
of a particular series may waive compliance with a provision of the
indenture relating to such series or the debt securities of such
series having applicability solely to such series.

The issuer, when authorized by a board resolution, and the trustee may
amend or supplement the indentures or waive any provision of such indentures
and the debt securities without the consent of any holders of debt securities
in some circumstance, including:

o to cure any ambiguity, omission, defect or inconsistency;

o to make any change that does not, in the good faith opinion of our board
of directors, adversely affect the interests of holders of such debt
securities in any material respect;

o to provide for the assumption of our obligations under the applicable
indenture by a successor upon any merger, consolidation or asset transfer
permitted under the applicable indenture;

o to provide any security for or guarantees of such debt securities;

o to add events of default with respect to such debt securities;

o to add covenants that would benefit the holders of such debt securities
or to surrender any rights or powers the issuer has under the applicable
indenture;

o to make any change necessary for the registration of the debt securities
under the Securities Act or to comply with the Trust Indenture Act of
1939, or any amendment thereto, or to comply with any requirement of the
SEC in connection with the qualification of the applicable indenture
under the Trust Indenture Act of 1939; provided, however, that such
modification or amendment does not, in the good faith opinion of the
issuer's board of directors and the trustee, adversely affect the
interests of the holders of such debt securities in any material respect;

o to provide for uncertificated debt securities in addition to or in place
of certificated debt securities;

o to add to or change any of the provisions of the applicable indenture to
such extent as shall be necessary to permit or facilitate the issuance of
the debt securities in bearer form, registrable or not registrable as to
principal, and with or without interest coupons;

o to change or eliminate any of the provisions of the applicable
indenture, provided, however, that any such change or elimination shall
become effective only when there is no debt security outstanding of any
series created prior to the execution of such supplemental indenture
which is entitled to the benefit of such provision;

o to establish the form or terms of debt securities of any series as
permitted by the applicable indenture; or

o to evidence and provide for the acceptance of appointment by a successor
trustee with respect to the debt securities of one or more series and to
add to or change any of the provisions of the applicable indenture as
shall be necessary to provide for or facilitate the administration of the
trusts under the applicable indenture by more than one trustee, pursuant
to the requirements of the applicable indenture.

EVENTS OF DEFAULT AND NOTICE THEREOF

The following events are "events of default" with respect to any series of
debt securities issued thereunder:

(1) failure to pay interest on any debt securities of such series within
60 days of when due or principal of any debt securities of such series
when due (including any sinking fund installment);

(2) failure to perform any other agreement contained in the debt
securities of such series or the indenture relating to such series
(other than an agreement relating solely to another series of debt
securities) for 60 days after notice; and

(3) certain events of bankruptcy, insolvency or reorganization with
respect to us.

Additional or different events of default, if any, applicable to the
series of debt securities in respect of which this prospectus is being
delivered will be specified in the applicable prospectus supplement.

The trustee under such indenture shall, within 90 days after the
occurrence of any default (the term "default" to include the events specified
above without grace or notice) with respect to any series of debt securities
actually known to it, give to the holders of such debt securities notice of
such default; provided, however, that, except in the case of a default in the
payment of principal of or interest on any of the debt securities of such
series or in the payment of a sinking fund installment, the trustee for such
series shall be protected in withholding such notice if it in good faith
determines that the withholding of such notice is in the interest of the
holders of such debt securities; and provided, further, that in the case of any
default of the character specified in clause (2) above with respect to debt
securities of such series, no such notice to holders of such debt securities
will be given until at least 30 days after the occurrence thereof. We shall
certify to the trustee quarterly as to whether any default exists.

In the case of an event of default, other than an event of default
resulting from bankruptcy, insolvency or reorganization, with respect to any
series of debt securities shall occur and be continuing, the trustee for such
series or the holders of at least 25% in aggregate principal amount of the debt
securities of such series then outstanding, by notice in writing to the issuer
(and to the trustee for such series if given by the holders of the debt
securities of such series), will be entitled to declare all unpaid principal of
and accrued interest on such debt securities then outstanding to be due and
payable immediately.

In the case of an event of default resulting from certain events of
bankruptcy, insolvency or reorganization, all unpaid principal of and accrued
interest on all debt securities of such series then outstanding shall be due
and payable immediately without any declaration or other act on the part of the
trustee for such series or the holders of any debt securities of such series.

Such acceleration may be annulled and past defaults (except, unless
theretofore cured, a default in payment of principal of or interest on the debt
securities of such series) may be waived by the holders of a majority in
principal amount of the debt securities of such series then outstanding upon
the conditions provided in the applicable indenture.

No holder of the debt securities of any series issued thereunder may
pursue any remedy under such indenture unless the trustee for such series shall
have failed to act after, among other things, notice of an event of default and
request by holders of at least 25% in principal amount of the debt securities
of such series of which the event of default has occurred and the offer to the
trustee for such series of indemnity satisfactory to it; provided, however,
that such provision does not affect the right to sue for enforcement of any
overdue payment on such debt securities.

CONVERSION AND EXCHANGE RIGHTS

The terms and conditions, if any, upon which the debt securities of any
series will be convertible into C&A common stock or C&A preferred stock or upon
which the senior debt securities of any series will be exchangeable into
another series of debt securities will be set forth in the applicable
prospectus supplement. Such terms will include the conversion or exchange price
(or manner of calculation thereof), the conversion or exchange period,
provisions as to whether conversion or exchange will be at the option of the
holders of such series of debt securities or at our option or automatic, the
events requiring an adjustment of the conversion or exchange price and
provisions affecting conversion or exchange in the event of the redemption of
such series of debt securities.

THE TRUSTEE

The trustee for each series of debt securities will be named in the
applicable prospectus supplement. Each indenture will contain certain
limitations on a right of the trustee, as our creditor, to obtain payment of
claims in certain cases, or to realize on certain property received in respect
of any such claim as security or otherwise. The trustee will be permitted to
engage in other transactions; provided, however, that if it acquires any
conflicting interest, it must eliminate such conflict or resign.

The holders of a majority in principal amount of all outstanding debt
securities of a series (or if more than one series is affected thereby, of all
series so affected, voting as a single class) will have the right to direct the
time, method and place of conducting any proceeding for exercising any remedy
or power available to the trustee for such series or all such series so
affected.

In case an event of default shall occur (and shall not be cured) under any
indenture relating to a series of debt securities and is actually known to a
responsible officer of the trustee for such series, such trustee shall exercise
such of the rights and powers vested in it by such indenture and use the same
degree of care and skill in its exercise as a prudent person would exercise or
use under the circumstances in the conduct of his own affairs. Subject to such
provisions, the trustee will not be under any obligation to exercise any of its
rights or powers under the applicable indenture at the request of any of the
holders of debt securities unless they shall have offered to the trustee
security and indemnity satisfactory to it.

GOVERNING LAW

The indentures and the debt securities will be governed by the laws of the
State of New York.

GLOBAL SECURITIES; BOOK-ENTRY SYSTEM

The issuers may issue the debt securities of any series in whole or in
part in the form of one or more global securities to be deposited with, or on
behalf of, a depository (the "depository") identified in the applicable
prospectus supplement. Global securities, if any, issued in the United States
are expected to be deposited with The Depository Trust Company ("DTC"), as
depository. Global securities will be issued in fully registered form and may
be issued in either temporary or permanent form. Unless and until it is
exchanged in whole or in part for the individual debt securities represented
thereby, a global security may not be transferred except as a whole by the
depository for such global security to a nominee of such depository or by a
nominee of such depository to such depository or another nominee of such
depository or by such depository or any nominee of such depository to a
successor depository or any nominee of such successor.

The specific terms of the depository arrangement with respect to any
series of debt securities will be described in the applicable prospectus
supplement. We expect that unless otherwise indicated in the applicable
prospectus supplement, the following provisions will apply to depository
arrangements.

Upon the issuance of a global security, the depository for such global
security or its nominee will credit on its book-entry registration and transfer
system the respective principal amounts of the individual debt securities
represented by such global security to the accounts of persons that have
accounts with such depository ("participants"). Such accounts will be
designated by the underwriters, dealers or agents with respect to such debt
securities or by us if such debt securities are offered directly by us.
Ownership of beneficial interests in such global security will be limited to
participants or persons that may hold interests through participants.

We expect that, pursuant to procedures established by DTC, ownership of
beneficial interests in any global security with respect to which DTC is the
depository will be shown on, and the transfer of that ownership will be
effected only through, records maintained by DTC or its nominee (with respect
to beneficial interests of participants) and records of participants (with
respect to beneficial interests of persons who hold through participants).
Neither the issuer nor the trustee will have any responsibility or liability
for any aspect of the records of DTC or for maintaining, supervising or
reviewing any records of DTC or any of its participants relating to beneficial
ownership interests in the debt securities. The laws of some states require
that certain purchasers of securities take physical delivery of such securities
in definitive form. Such limits and laws may impair the ability to own, pledge
or transfer beneficial interest in a global security.

So long as the depository for a global security or its nominee is the
registered owner of such global security, such depository or such nominee, as
the case may be, will be considered the sole owner or holder of the debt
securities represented by such global security for all purposes under the
applicable indenture. Except as described below or in the applicable prospectus
supplement, owners of beneficial interest in a global security will not be
entitled to have any of the individual debt securities represented by such
global security registered in their names, will not receive or be entitled to
receive physical delivery of any such debt securities in definitive form and
will not be considered the owners or holders thereof under the applicable
indenture. Beneficial owners of debt securities evidenced by a global security
will not be considered the owners or holders thereof under the applicable
indenture for any purpose, including with respect to the giving of any
direction, instructions or approvals to the trustee thereunder. Accordingly,
each person owning a beneficial interest in a global security with respect to
which DTC is the depository must rely on the procedures of DTC and, if such
person is not a participant, on the procedures of the participant through which
such person owns its interests, to exercise any rights of a holder under the
applicable indenture. We understand that, under existing industry practice, if
it requests any action of holders or if an owner of a beneficial interest in a
global security desires to give or take any action which a holder is entitled
to give or take under the applicable indenture, DTC would authorize the
participants holding the relevant beneficial interest to give or take such
action, and such participants would authorize

beneficial owners through such participants to give or take such actions or
would otherwise act upon the instructions of beneficial owners holding through
them.

Payments of principal of, and any interest on, individual debt securities
represented by a global security registered in the name of a depository or its
nominee will be made to or at the direction of the depository or its nominee,
as the case may be, as the registered owner of the global security under the
applicable indenture. Under the terms of the applicable indenture, the issuer
and the trustee may treat the persons in whose name debt securities, including
a global security, are registered as the owners thereof for the purpose of
receiving such payments. Consequently, neither the issuer nor the trustee has
or will have any responsibility or liability for the payment of such amounts to
beneficial owners of debt securities (including principal and interest). We
believe, however, that it is currently the policy of DTC to immediately credit
the accounts of relevant participants with such payments, in amounts
proportionate to their respective holdings of beneficial interests in the
relevant global security as shown on the records of DTC or its nominee. We also
expect that payments by participants to owners of beneficial interests in such
global security held through such participants will be governed by standing
instructions and customary practices, as is the case with securities held for
the account of customers in bearer form or registered in street name, and will
be the responsibility of such participants. Redemption notices with respect to
any debt securities represented by a global security will be sent to the
depository or its nominee. If less than all of the debt securities of any
series are to be redeemed, we expect the depository to determine the amount of
the interest of each participant in such debt securities to be redeemed to be
determined by lot. None of us, the trustee, any paying agent or the registrar
for such debt securities will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests in the global security for such debt securities or for
maintaining any records with respect thereto.

Neither the issuer nor the trustee will be liable for any delay by the
holders of a global security or the depository in identifying the beneficial
owners of debt securities and we and the trustee may conclusively rely on, and
will be protected in relying on, instructions from the holder of a global
security or the depository for all purposes. The rules applicable to DTC and
its participants are on file with the SEC.

If a depository for any debt securities is at any time unwilling, unable
or ineligible to continue as depository and a successor depository is not
appointed by us within 90 days, the issuer will issue individual debt
securities in exchange for the global security representing such debt
securities. In addition, the issuer may at any time and in our sole discretion,
subject to any limitations described in the prospectus supplement relating to
such debt securities, determine not to have any of such debt securities
represented by one or more global securities and in such event we will issue
individual debt securities in exchange for the global security or securities
representing such debt securities. Individual debt securities so issued will be
issued in denominations of $1,000 and integral multiples thereof.

All moneys paid by the issuer to a paying agent or a trustee for the
payment of the principal of or interest on any debt security which remain
unclaimed at the end of two years after such payment has become due and payable
will be repaid to the issuer, and the holder of such debt security thereafter
may look only to the issuer for payment thereof.

REGISTRATION RIGHTS HOLDERS

The following table sets forth, as of May 30, 2002, information on common
stock ownership by the Registration Rights Holders which in each case
represents all the common stock beneficially owned by each potential selling
stockholder, as determined by a review of 13Ds filed on behalf of each of the
Registration Rights Holders as of May 30, 2002 and/or other information
available to us. The registration of the Registration Rights Holders' common
stock does not necessarily mean that the Registration Rights Holders will elect
to offer or sell any of their shares or be permitted by the applicable
registration rights agreement or the plan of distribution to sell any of their
shares. To the extent any shares are to be offered or sold by a Registration
Rights Holder, their names and the number of shares to be offered or sold by
them will be set forth in a prospectus supplement.

The common stock of the Registration Rights Holders is being registered in
contemplation of their "piggy-back" registration rights under certain
registration rights agreements between us and the Registration Rights Holders.
Common stock of the Registration Rights Holders will be able to be sold under
this prospectus and any prospectus supplement only if the Company undertakes an
underwritten offering of common stock.

We have only allocated 9,174,311 shares of the C&A common stock registered
under the registration statement of which this prospectus is a part to sales by
the Registration Rights Holders. It is not practicable to presently allocate
shares for sale by individual holders because each holder can only sell shares
based upon the priorities set forth in the registration rights agreements and
those priorities will be defined by the extent to which holders desire to sell
their shares and have not previously sold shares under Rule 144 and become
ineligible for use of this prospectus by the terms of their agreements.
Accordingly, the table below sets forth the maximum number of shares of C&A
common stock that may be sold by any single Registration Rights Holder under
the best of assumptions. The accompanying prospectus supplement will specify
the number of shares of C&A common stock being sold in the offering to which it
relates by each Registration Rights Holder participating as a selling
stockholder, if any.

SHARES OF COMMON STOCK
SUBJECT TO REGISTRATION RIGHTS
BENEFICIALLY OWNED PRIOR TO SHARES OF COMMON STOCK
NAME OF REGISTRATION RIGHTS HOLDER THIS OFFERING AVAILABLE FOR SALE
- ---------------------------------------------- ------------------------------- -----------------------

Charles E. Becker 7,539,262(1) 7,539,262(1)
c/o Becker Ventures, L.L.C.
6600 East 15 Mile Road
Sterling Heights, Michigan 48312

Blackstone Capital Partners L.P. 4,187,348(2) 4,187,348(2)
345 Park Avenue
New York, NY 10019

Canada Pension Plan Investment Board 1,600,000 1,600,000
One Queen Street East
Suite 2700
Toronto, Ontario, Canada
M5C 2WS

Comerica Capital Advisors Incorporated 160,000 160,000
500 Woodward Avenue
Detroit, MI 48226

Dresdner Kleinwort Capital Partners 2001 LP. 2,000,000 2,000,000
75 Wall Street
New York, NY 10005

Heartland Industrial Partners L.P. 26,880,000(3) 9,174,311(3)
55 Railroad Avenue
Greenwich, CT 06830

SHARES OF COMMON STOCK
SUBJECT TO REGISTRATION RIGHTS
BENEFICIALLY OWNED PRIOR TO SHARES OF COMMON STOCK
NAME OF REGISTRATION RIGHTS HOLDER THIS OFFERING AVAILABLE FOR SALE
- ------------------------------------ ------------------------------- -----------------------

Jens Hohnel 340,737(4) 340,737(4)
Krutzpart 16
Krefeld 47804
Germany

Joan Fabrics Corporation 5,504,000(5) 5,104,000(5)
100 Vesper Executive Park
Tyngsboro, MA 01879

Masco Capital Corporation 400,000 400,000
1400 North Woodward Avenue
Suite 130
Bloomfield Hills, MI 48180

Michael E. McInerney 680,000(6) 680,000(6)
5755 New King Court
Troy, Michigan 48098

Mesirow Capital Partners VII, L.P. 560,000(7) 560,000(7)
Mesirow Capital Partners VIII, L.P.
350 N Clark 4th Floor
Chicago, IL 60610

ML IBK Positions, Inc. 400,000 400,000
4 World Financial Center
4th Floor
New York, NY 10080

Textron Inc. 7,200,000(8) 7,200,000(8)
40 Westminster Street
Providence, RI 02903

Wasserstein/C&A Holdings, LLC 4,668,840(9) 4,668,840(9)
1301 Avenue of the Americas
New York, NY 10019

- ----------
(1) Such shares represent (a) 5,440,000 shares acquired by Mr. Becker as
consideration for the Becker acquisition, (b) 339,262 shares acquired by
Mr. Becker immediately following the closing of the Becker acquisition
from one of the other former Becker shareholders, (c) 160,000 shares
subject to presently exercisable warrants to purchase such common stock
at $12.50 per share acquired by Mr. Becker as consideration for the
Becker acquisition and (d) 1,600,000 shares acquired by Becker Ventures
LLC ("Becker Ventures") as part of the financing for the TAC-Trim
acquisition. Mr. Becker is the managing member of Becker Ventures and
holds a controlling interest in Becker Ventures.

(2) Of these shares (i) 3,296,448 shares are held directly by Blackstone
Capital Partners L.P., a Delaware limited partnership ("Blackstone
Partners"), the sole general partner of which is Blackstone Management
Associates L.P. ("Blackstone Associates"), (ii) 170,089 shares are held
directly by Blackstone Family Investment Partnership I L.P., a Delaware
limited partnership ("BFIP"), the sole general partner of which is
Blackstone Management Associates I L.L.C. ("BMA"), (iii) 14,943 shares
are held directly by Blackstone Advisory Directors Partnership L.P., a
Delaware limited partnership ("BADP"), the sole general partner of which
is Blackstone Associates, and (iv) 705,868 shares are held directly by
Blackstone Capital Company II L.L.C., a Delaware limited liability
company, all the ownership interest of which is owned directly and
indirectly by Blackstone Partners, BFIP and BADP.

(3) The 26,880,000 shares beneficially owned are indirectly owned by
Heartland Industrial Associates L.L.C. as the general partner of each of
the following limited partnerships, which hold the shares

directly: (a) 304,125 shares are held directly by Heartland Industrial
Partners (FF), L.P., a Delaware limited partnership, (b) 391,400 shares
are held directly by Heartland Industrial Partners (E1), L.P., a Delaware
limited partnership, (c) 229,951 shares are held directly by Heartland
Industrial Partners (K1), L.P., a Delaware limited partnership, (d)
114,976 shares are held directly by Heartland Industrial Partners (C1),
L.P., a Delaware limited partnership, and (e) 25,839,549 shares are held
directly by Heartland Industrial Partners, L.P., a Delaware limited
partnership.

(4) Such shares were acquired by Mr. Hohnel as consideration for the Becker
acquisition.

(5) Of the shares, (a) 5,104,000 shares were acquired by Joan Fabrics Corp.
("Joan") as a part of the consideration for the sale of Joan Automotive
to us and (b) 400,000 shares were acquired by Elkin McCallum as
consideration in the Southwest Laminates acquisition which was
consummated on April 12, 2002. An additional 39,600 shares in aggregate
are owned by Mr. McCallum and the McCallum Family Foundation and are not
subject to registration rights. The sole stockholder of Joan Fabrics
Corporation is JFC Holding Trust, in which Mr. McCallum is the Trustee
and has a 75% beneficial interest and his spouse, Donna McCallum, owns
the balance. Mr. McCallum became a director of Collins & Aikman upon the
consummation of the Joan Fabrics acquisition.

(6) Such shares were acquired by Mr. McInerney as consideration for the
Becker acquisition.

(7) Of the 560,000 shares, 160,000 shares are held by Mesirow Capital
Partners VII and 400,000 shares are held by Mesirow Capital Partners
VIII.

(8) Such shares are beneficially owned by Textron Inc. ("Textron"). Under the
purchase agreement for the acquisition of the trim division of Textron
Automotive Company, Inc. ("TAC-Trim"), Textron has the right to designate
a director to serve on the Collins & Aikman Corporation Board of
Directors. As of this date, it has not yet identified the individual that
it will designate. Accordingly, the table does not include the Textron
designee, who is expected to disclaim beneficial ownership of all
securities beneficially owned by Textron.

(9) Of these shares (i) 4,636,684 are held directly by Wasserstein/C&A
Holdings, L.L.C. (the "Wasserstein L.L.C."), which is controlled by
Wasserstein Perella Partners, L.P. ("WP Partners"), the sole general
partner of which is Wasserstein Perella Management Partners, Inc.
("Wasserstein Management"), which is controlled by Cypress Capital
Advisors, LLC ("CCA"), (ii) 7,200 are held directly by WPPN, Inc., an
indirect subsidiary of WP Group, (iii) 18,000 shares are held directly
33% by each of three trusts for which Bruce Wasserstein, the Chairman and
Chief Executive Officer of WP Management (who is also a director and
stockholders of WP Group), is the Co-Trustee, (iv) 4,201 are owned
directly by Bruce Wasserstein and (v) 2,755 are held by Bruce
Wasserstein's descendants trusts.

Certain of the Registration Rights Holders may be affiliated with
broker-dealers, such as Comerica Capital Advisors (Comerica Securities),
Dresdner Kleinwort Capital Partners (Dresdner Kleinwort Wasserstein), ML IBK
Positions (Merrill Lynch, Pierce, Fenner & Smith Incorporated) and Wasserstein/
C&A Holdings, LLC (Dresdner Kleinwort Wasserstein). Such Registration Rights
Holders, in each case, acquired their shares in the ordinary course of business
and, at the time of acquisition, did not have any agreement or understanding,
directly or indirectly, with any person to distribute such shares. The
applicable prospectus supplement will describe any broker-dealer affiliations
of each selling stockholder thereunder and, if applicable, the offering to
which such prospectus supplement relates will be conducted in accordance with
any applicable rules of the National Association of Securities Dealers, Inc.

The only material relationships (other than as investors or sellers of
businesses for which they recieved their shares) that the Registration Rights
Holders have had with C&A in the past three years are set forth below, to the
best of C&A's knowledge. Elkin McCallum, the beneficial owner of the shares
owned by Joan Fabrics Corporation, and Charles Becker serve on our Board of
Directors. Representatives of Blackstone and Wasserstein have served on our
Board of Directors in the past and they have been a party to various
arrangements prior to Heartland's investment in us, which are disclosed in our
2000 Form 10-K. We are a party to various transactions with Heartland
Industrial Partners, which are described in our 2001 Form 10-K under
"Management's Discussion and Analysis of Financial Condition and Results of
Operations." Becker Ventures, which is controlled by Charles Becker, is also a
party to a sale-leaseback transaction with us that is also described in our
2001 Form 10-K under "Management's Discussion and

Analysis of Financial Condition and Results of Operations." ML IBK Partners is
affiliated with Merrill Lynch, Pierce, Fenner & Smith Incorporated, which has
acted as an initial purchaser in connection with our December 2000 senior notes
offering and as a financial advisor to us from time to time. We are a party to
a number of ongoing agreements with Messrs. McCallum and Becker and their
respective affiliates and Textron arising out of the acquisitions that we have
entered into, which are also described in our 2001 Form 10-K under
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

PLAN OF DISTRIBUTION

We will only sell the securities through underwriters. Registration Rights
Holders that sell any shares of Company Common Stock will sell only through
underwriters. The terms of the offering of the securities with respect to which
this prospectus is being delivered will be set forth in the applicable
prospectus supplement and will include:

o the name or names of the underwriters;

o the purchase price of such securities and the proceeds to us from such
sale;

o any underwriting discounts and other items constituting underwriters'
compensation;

o the public offering price; and

o any discounts or concessions which may be allowed or reallowed or paid
to dealers and any securities exchanges on which the securities may be
listed.

However, we will not offer any Company Common Stock in an "at the market"
offering.

Securities will be acquired by the underwriters for their own account and
may be resold from time to time in one or more transactions, including
negotiated transactions, at a fixed public offering price or at varying prices
determined at the time of sale. The securities may be offered to the public
either through underwriting syndicates represented by managing underwriters or
directly by one or more underwriters acting alone. Unless otherwise set forth
in the applicable prospectus supplement, the obligations of the underwriters to
purchase the securities described in the applicable prospectus supplement will
be subject to certain conditions precedent, and the underwriters will be
obligated to purchase all such securities if any are so purchased by them. Any
public offering price and any discounts or concessions allowed or reallowed or
paid to dealers may be changed from time to time.

If so indicated in the applicable prospectus supplement, we will authorize
underwriters to solicit offers by certain specified institutions to purchase
the securities to which this prospectus and the applicable prospectus
supplement relates from us at the public offering price set forth in the
applicable prospectus supplement, plus, if applicable, accrued interest,
pursuant to delayed delivery contracts providing for payment and delivery on a
specified date in the future. Such contracts will be subject only to those
conditions set forth in the applicable prospectus supplement, and the
applicable prospectus supplement will set forth the commission payable for
solicitation of such contracts.

Underwriters will not be obligated to make a market in any securities. No
assurance can be given regarding the activity of trading in, or liquidity of,
any securities.

Underwriters may be entitled, under agreements entered into with us to
indemnification by us against certain civil liabilities, including liabilities
under the Securities Act of 1933, as amended, or to contribution to payments
they may be required to make in respect thereof. Underwriters may be customers
of, engage in transactions with, or perform services for, us in the ordinary
course of business.

Each series of securities will be a new issue and, other than the common
stock, which is listed on the New York Stock Exchange, will have no established
trading market. We may elect to list any series of securities on an exchange,
and in the case of the common stock, on any additional exchange, but, unless
otherwise specified in the applicable prospectus supplement, we shall not be
obligated to do so. No assurance can be given as to the liquidity of the
trading market for any of the securities.

The place, time of delivery and other terms of the offered securities will
be described in the prospectus supplement.

LEGAL MATTERS

The legality of the C&A common stock and C&A preferred stock, and the
enforceability of the C&A debt securities, the Products debt securities and all
guarantees thereof, will be passed upon for us by Cahill Gordon & Reindel, New
York, New York.

EXPERTS

The consolidated financial statements of Collins & Aikman for the year
ended December 31, 2001, incorporated in this prospectus by reference to the
Annual Report on Form 10-K for the year ended December 31, 2001 have been so
incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.

The consolidated financial statements of Collins & Aikman for the years
ended December 31, 2000 and December 25, 1999, included in the Annual Report on
Form 10-K for the year ended December 31, 2001 and incorporated by reference
into this prospectus, to the extent and for the periods indicated in their
report, have been audited by Arthur Andersen LLP, independent public
accountants, and are included herein in reliance upon the authority of said
firm as experts in giving said report. Arthur Andersen LLP has not consented to
the incorporation by reference of their report in this prospectus, and we have
dispensed with the requirement to file their consent in reliance upon Rule 437a
of the Securities Act of 1933. Because Arthur Andersen LLP has not consented to
the incorporation by reference of their report in this prospectus, you will not
be able to recover against Arthur Andersen LLP under Section 11 of the
Securities Act of 1933 for any untrue statements of a material fact contained
in the financial statements audited by Arthur Andersen LLP or any omissions to
state a material fact required to be stated therein.

The combined financial statements of TAC-Trim included in the Current
Report on Form 8-K filed on January 4, 2002 (as amended on January 14, 2002)
and incorporated by reference into this prospectus have been audited by Ernst &
Young LLP, independent auditors, as set forth in their report thereon and
incorporated herein by reference. Such consolidated financial statements are
incorporated herein by reference in reliance upon such report given on the
authority of such firm as experts in auditing and accounting, to the extent and
for the periods indicated in their report with respect to such financial
statements.

The combined financial statements of Becker, included in the Current
Report on Form 8-K filed on April 17, 2001 and incorporated by reference into
this prospectus have been audited by Ernst & Young LLP, independent auditors,
as set forth in their report thereon and incorporated herein by reference. Such
consolidated financial statements are incorporated herein by reference in
reliance upon such report given on the authority of such firm as experts in
auditing and accounting, to the extent and for the periods indicated in their
report with respect to such financial statements.

The combined financial statements of Joan, included in the Current Report
on Form 8-K filed on October 10, 2001 incorporated by reference into this
prospectus have been audited by KPMG LLP, independent auditors, given on the
authority of said firm as experts in auditing and accounting, to the extent and
for the periods indicated in their report with respect to such financial
statements.

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INSIDE BACK COVER
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[Photos omitted]

Description:

Photos of North American, European and Transplant OEM Customer Base Select
Products.

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16,000,000 SHARES

[COLLINS & AIKMAN LOGO]

COMMON STOCK

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PROSPECTUS SUPPLEMENT
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MERRILL LYNCH & CO.

JPMORGAN

CREDIT SUISSE FIRST BOSTON

DEUTSCHE BANK SECURITIES

WACHOVIA SECURITIES

DRESDNER KLEINWORT WASSERSTEIN

FAHNESTOCK & CO. INC.

JUNE 10, 2002

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