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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 30, 2000
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission File No. 1-5315
SPRINGS INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
SOUTH CAROLINA 57-0252730
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
205 NORTH WHITE STREET 29715
FORT MILL, SOUTH CAROLINA (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code:
(803) 547-1500
Securities registered pursuant to Section 12(b) of the Act
Name of each exchange
Title of each class on which registered
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Class A Common Stock; $.25 par value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act
None
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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or such shorter period that the Registrant
was required to file such reports), and (2) has been subject to such filing
requirements for at least the past 90 days. Yes [X] No [ ]
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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [ ]
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Aggregate market value of Springs Industries, Inc. Common Stock, excluding
treasury shares, held by nonaffiliates as of March 22, 2001, was $453,047,564.
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As of March 22, 2001, there were 10,790,474 shares of Class A Common Stock and
7,151,563 shares of Class B Common Stock of Springs Industries, Inc.
outstanding.
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DOCUMENTS INCORPORATED BY REFERENCE
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Specified Portions of Annual Report to Security Holders for Fiscal Year Ended
December 30, 2000 (Parts I & II)
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SECURITIES AND EXCHANGE COMMISSION
Washington, DC
FORM 10-K ANNUAL REPORT
SPRINGS INDUSTRIES, INC.
* * * * * *
TABLE OF CONTENTS TO FORM 10-K
PART I
ITEM
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1. BUSINESS
2. PROPERTIES
3. LEGAL PROCEEDINGS
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
PART II
5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
6. SELECTED FINANCIAL DATA
7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
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ITEM
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PART II
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
PART III
10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
11. EXECUTIVE COMPENSATION
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
PART IV
14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
SIGNATURES
EXHIBIT INDEX
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SECURITIES AND EXCHANGE COMMISSION
Washington, DC
FORM 10-K ANNUAL REPORT
SPRINGS INDUSTRIES, INC.
PART I
ITEM 1. BUSINESS
Springs Industries, Inc., a corporation organized under the laws of
the State of South Carolina, began its operations in 1888. Springs' principal
executive offices are located at 205 North White Street, Fort Mill, South
Carolina 29715 (telephone number: 803/547-1500). The term "Springs" or "the
Company" as used herein means Springs Industries, Inc., and its subsidiaries
unless indicated otherwise.
Springs realigned its internal organizational structure during the
first quarter of 1999 to reflect the Company's strategic focus on the home
furnishings market, resulting in one reportable segment, which is the home
furnishings segment. The Company is engaged in manufacturing, marketing,
selling and distributing home furnishing products. The Company's product line
includes sheets, pillows, pillowcases, bedspreads, comforters, mattress pads,
baby bedding and infant apparel, towels, shower curtains, bath and accent rugs,
other bath fashion accessories, over-the-counter home-sewing fabrics, drapery
hardware, and hard and soft decorative window fashions. For segment reporting
information for each of the last three fiscal years, see pages 17 and 18 of the
Company's Annual Report to Shareholders (the "Annual Report"), which is
incorporated herein by reference.
Through both internal development and acquisitions of complementary
businesses, Springs has emerged as one of the most significant manufacturers and
marketers of home furnishings in the United States. The Company believes that
the factors contributing to Springs' industry position are its highly automated
manufacturing and distribution facilities, its well-known brands, and its
ability to offer a wide array of home furnishings in coordinating fashions and
designs to large retailers.
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Net sales for 2000 were $2.275 billion and net income was $67.1
million. The Company announced two separate restructuring plans in 2000. For
details on the restructuring plans, see page 27 of the Annual Report under the
caption "Management's Discussion and Analysis of Operations and Financial
Condition - Restructuring and Realignment."
Springs' home furnishing products are sold primarily through its own
sales force to retailers and are varied in design, styling and color to appeal
to a broad spectrum of consumers. The Company's retail customers include
department stores, specialty stores, national chains, mass merchandisers, home
improvement stores, and catalog operations. Springs also sells bath products
through independent sales representatives to retail customers, bed and bath
products through distributors to institutional customers and directly to
consumers through its 59 company-owned outlet stores, and decorative window
products directly to large-scale contractors and to distributor / fabricators.
The Company has a wholly-owned Canadian subsidiary (Springs Canada,
Inc.) that markets and distributes bedding and bath products in that country.
The majority of the bedding products sold in Canada is purchased by the Company
from a Canadian manufacturer. Springs Canada enables the Company to better
serve Canadian home furnishing retailers and their customers.
On January 5, 1999, Springs acquired the remaining 50% interest in
American Fiber Industries, LLC ("AFI"), a manufacturer and distributor of bed
pillows, mattress pads, down comforters and comforter accessories. Springs
acquired its original 50 percent interest in February 1997. The cost of the
remaining equity interest totaled approximately $15 million. Effective January
23, 1999, the Company purchased the stock of Regal Rugs, Inc. ("Regal"). Regal
imports and manufactures bath and accent rugs. The purchase price for Regal was
approximately $35 million. Both of these acquisitions reflect Springs'
continuing strategic emphasis on increasing sales through acquisitions that
complement the Company's extensive line of home furnishings.
For additional details of the acquisitions described above, see pages
26 and 27 of the Annual Report under the caption "Management's Discussion and
Analysis of Operations and Financial Condition - Acquisitions."
Home furnishing products represented 100%, 100%, and 92.4% of
consolidated revenues for each of 2000, 1999, and 1998, respectively. Specialty
fabric products represented 7.6% of consolidated revenues for 1998.
Raw materials used by the Company include principally cotton,
polyester fiber and purchased woven fabric. The Company also purchases other
natural and manmade fibers, finished knitted and non-woven fabrics, dyes and
chemicals, aluminum, plastic, wood, and steel. Such raw materials are generally
readily available;
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and the Company is not dependent on any one supplier as a source for raw
materials. Any shortage in the supply of cotton by reason of weather, disease
or other factors, or significant increases in the price of cotton or polyester,
however, could adversely affect the Company's future results of operations.
The Company considers its trademarks to be materially important to its
business. The Company sells bed and bath products under the Wamsutta(R),
Springmaid(R), Performance(TM), Regal(R) and Dundee(R) brands, over-the-counter
home-sewing fabric under the Springmaid(R) and Daisy Kingdom(R) brands, and
decorative window products under the Graber(R), Bali(R), Nanik(R),
FashionPleat(R), Maestro(TM) and CrystalPleat(R) brands. The Wabasso(R) and
Texmade(R) brands are used for bed products sold in Canada. The trademarks are
protected, in part, through United States and foreign trademark registrations.
Home furnishing products are also sold under various trademarks licensed from
third parties and under private brand names of certain customers.
In 2000, the Company's requirements for cash to finance working
capital were provided from operations and available credit facilities.
Management expects that cash generated by operations and borrowings from bank
lines will adequately provide for the Company's cash needs during 2001. Trade
receivables are generally collected in 60 days or less.
Sales to the Company's top ten customers were $1.449 billion, an
increase of 11% over 1999, and represent 64% of total sales in 2000. In 2000,
sales to Wal-Mart Stores, Inc., were $622.4 million, an increase of 38% over
1999, and represent 27% of total sales in 2000. No other customer accounted for
ten percent or more of Springs' total sales. While the Company has no reason to
believe that it will lose the business of any of its largest customers, the
loss of one or more of the largest accounts (or a material portion of any
thereof) could have a material adverse effect upon the Company's business.
The Company's unfilled order position at December 30, 2000, amounted
to approximately $106 million. The unfilled order position at January 1, 2000,
was approximately $146 million. The higher level of open orders at the end of
1999 reflects the rollout of the Springmaid(R) brand to the mass-merchant
channel in the first quarter of 2000, as well as a decline in sales in the
latter part of 2000 due to the softening retail economy.
The markets in which the principal products of the Company are sold
are highly competitive as to price, quality, customer service and product
design. The Company believes that it competes effectively with respect to these
factors. In certain product categories competition is concentrated among
several large domestic companies while in other product categories competition
is much more dispersed among both large and small companies.
Springs is involved in certain administrative proceedings governed by
environmental laws and regulations, including proceedings under the
Comprehensive Environmental Response, Compensation, and Liability Act. The
potential costs to the
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Company related to all of these environmental matters are uncertain due to
factors such as: the unknown magnitude of possible pollution and cleanup costs;
the complexity and evolving nature of governmental laws and regulations and
their interpretations; the timing, varying costs and effectiveness of
alternative cleanup technologies; the determination of the Company's liability
in proportion to other potentially responsible parties; and the extent, if any,
to which such costs are recoverable from insurers or other parties.
The Company estimates the range of possible losses for such matters to
be between $5 million and $14 million, and has accrued an undiscounted
liability of approximately $8 million, which represents management's best
estimate of Springs' probable liability concerning all known environmental
matters. Management believes the $8 million will be paid out over the next 15
years. This accrual has not been reduced by any potential insurance recovery to
which the Company may be entitled regarding environmental matters.
Approximately 18,200 associates were employed by Springs and its
subsidiaries at the end of 2000.
Springs' international sales accounted for approximately 6.3% of total
sales in 2000, 6.7% in 1999, and 6.8% in 1998. The bulk of Springs' sales
outside of the United States is made in Canada. During each of the last three
years, less than 5% of the Company's assets have been located outside of the
United States.
ITEM 2. PROPERTIES
The Company owns its Executive Office Building and an additional
office building in Fort Mill, South Carolina.
The Company leases offices and showrooms in New York City and
additional space in other cities for administrative and sales offices,
manufacturing facilities, outlet stores and distribution centers.
The Company also owns an administrative center and a major warehouse
facility, both located near Lancaster, South Carolina. The administrative
center houses customer service operations, computer and data processing
operations and accounting offices. The warehouse facility serves as a warehouse
and distribution center for a significant portion of the Company's products.
Springs currently has 40 manufacturing plants. Of these: 21
manufacture bedding products, such as sheets, comforters, pillows and mattress
covers; 13 manufacture bath products such as towels, bath rugs, and shower
curtains; five manufacture decorative window products; and one manufactures
infant bedding. Of these plants: 13 are in South Carolina; 11 in Georgia; two
in each of Alabama,
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California, North Carolina, Pennsylvania, and Wisconsin; and one in each of
Indiana, Mississippi, Nevada, Oklahoma, Tennessee, and Virginia. Springs
considers all plants to be well maintained and generally in good operating
condition.
The plants are owned by Springs and are unencumbered, except for four
which are subject to mortgages and four which are leased either through
industrial revenue bond financing or through other lease arrangements.
ITEM 3. LEGAL PROCEEDINGS
The Company operates a towel finishing plant in Griffin, Georgia, which
discharges treated wastewater into a creek located near the plant. Because the
plant has been unable to meet certain provisions of its National Pollutant
Discharge Elimination System ("NPDES") permit for the discharge, the Company
negotiated an administrative order with the Georgia Environmental Protection
Division ("EPD"), which allows the Company to continue discharging into the
creek until December 3, 2001. The order contemplated a change in the Georgia
environmental rules that would allow site-specific exceptions based on
appropriate scientific evaluations that provide adequate protection to the
environment and would require the Company to apply for an appropriate permit
modification following adoption of the rule change.
In 2000 the Georgia Department of Natural Resources adopted the
contemplated rule change and the Company submitted a permit application as
required in the administrative order. The Company has furnished certain
additional information which the EPD requested following its receipt of the
application. The Company presently anticipates that the permit will be issued
by the December 3, 2001, deadline.
EPD also issued a consent order in February 2000 which provides for
certain penalties because of the inability of the Company to comply with its
NPDES permit. The order imposes monthly and quarterly penalties of up to a
maximum of $68,000 per year for failure to satisfy certain provisions of the
NPDES permit after December 7, 1999.
Additional information required by this Item is incorporated by
reference from the Notes to Consolidated Financial Statements, Note 15. - Other
Matters, found on page 24 of the Annual Report.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None reportable.
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EXECUTIVE OFFICERS OF THE REGISTRANT
Pursuant to Instruction #3 to Paragraph (b) of Item 401 of Regulation
S-K, the following information is provided on the Company's Executive Officers.
Position and Business
Name Age Experience
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Jeffrey A. Atkins 52 Executive Vice President and Chief Financial Officer (August 1999 to present). Chief Executive
Officer, Pete's Brewing Co. (May 1997 to August 1998). Chief Financial Officer, Pete's
Brewing Co. (December 1996 to August 1998). Vice President-Corporate Planning & Strategy,
Quaker Oats Co. (March 1995 to December 1996).
Crandall C. Bowles 53 Chairman of the Board, President and Chief Executive Officer (April 1998 to present). President
and Chief Executive Officer (January 1998 to April 1998). President and Chief Operating Officer
(January 1997 to January 1998). Executive Vice President (April 1992 to January 1997). President
- Bath Fashions Group (May 1995 to January 1997). Director (1978 to present).
Gracie P. Coleman 49 Senior Vice President - Human Resources (February 1999 to present). Vice President - Marketing
and Corporate Support for Government Solutions, Lucent Technologies (1997 to February 1999).
Human Resources Vice President, Lucent Technologies (1996 to 1997). Human Resources Vice
President - Strategic Partners Network Systems, AT&T (1995 to 1996).
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John R. Cowart 50 Senior Vice President & Chief Purchasing Officer (August 1999 to present). Director of
Sourcing-Europe, General Electric (October 1997 to August 1999). Director of Sourcing-Asia,
General Electric (May 1996 to October 1997). General Manager-Sourced Products, General
Electric (September 1994 to May 1996).
C. Powers Dorsett 56 Senior Vice President - General Counsel and Secretary (February 1996 to present). Vice
President - General Counsel and Secretary (February 1990 to January 1996).
William K. Easley 57 Senior Vice President (February 1996 to present). President - Textile Manufacturing (May
1995 to present).
Ray Greer 46 Senior Vice President and Chief Information Officer (October 1999 to present). Vice
President-Information Technology, Philips China Electronics Group (1998 to October 1999).
General Manager-Information Technology, Philips China Electronics Group (1996-1998).
Principal, IBM Corporation (1992-1996).
Samuel J. Ilardo 45 Vice President and Treasurer (April 1998 to present). Treasurer (May 1995 to April 1998).
Stephen P. Kelbley 58 Executive Vice President (September 1991 to present). President - Home Furnishings Operating
Group (February 1998 to present). President - Diversified Home Products Group (January 1997
to February 1998). President - Diversified Products Group (May 1995 to January 1997).
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Charles M. Metzler 48 Vice President - Controller (February 1996 to present). Controller - Springs Canada, Inc.
(September 1992 to January 1996).
Thomas P. O'Connor 54 Executive Vice President (August 1992 to present). President - Sales and Marketing Group
(February 1998 to present). President - Bed Fashions Group (May 1995 to February 1998).
Elizabeth M. Turner 40 Vice President - Public Affairs (March 1999 to present). Director of Public Relations
(September 1997 to February 1999); Director - Corporate Affairs for Coca-Cola Bottling
Company Consolidated (September 1996 to August 1997). Manager - Corporate Affairs for
Coca-Cola Bottling Company Consolidated (October 1990 to August 1996).
Crandall C. Bowles, Chairman, President and Chief Executive Officer, and a
director of the Company, and Leroy S. Close, a director of the Company, are
siblings. There are no other family relationships within the director and
executive officer group.
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PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Class A Common Stock of Springs is traded on the New York Stock
Exchange. As of March 22, 2001, there were approximately 2,350 holders of
record of Class A Common Stock, and approximately 70 holders of Class B Common
Stock. No established trading market exists for Class B Common Stock. Class B
Common Stock may, however, at the election of the holder, be exchanged on a
one-for-one basis at any time for Class A Common Stock.
Information required by this Item on the sales prices and dividends of
the Common Stock of Springs is incorporated by reference from page 32 of the
Annual Report under the caption "Quarterly Financial Data (Unaudited)."
ITEM 6. SELECTED FINANCIAL DATA
Information required by this Item is incorporated by reference from
pages 30 and 31 of the Annual Report under the caption "Selected Financial
Data."
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Information required by this Item is incorporated by reference from
pages 25 through 29 of the Annual Report under the caption "Management's
Discussion and Analysis of Operations and Financial Condition."
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Information required by this Item is incorporated by reference from
pages 28 and 29 of the Annual Report under the caption "Management's Discussion
and Analysis of Operations and Financial Condition - Market Risk Sensitive
Instruments and Positions."
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Financial statements, including the report of independent certified
public accountants, and supplementary data required by this Item are
incorporated by reference from the Annual Report. See Item 14 for a list of
financial statements and the
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pages of the Annual Report from which they are incorporated. Supplementary data
is incorporated by reference from page 32 of the Annual Report under the
caption "Quarterly Financial Data (Unaudited)."
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information on Executive Officers is provided at the end of Part I
of this Form 10-K under the caption "Executive Officers of the Registrant."
DIRECTORS OF THE REGISTRANT
JOHN F. AKERS, AGE 66, RETIRED CHAIRMAN AND CHIEF EXECUTIVE OFFICER OF
INTERNATIONAL BUSINESS MACHINES CORPORATION. Mr. Akers served as chairman and
chief executive officer of IBM from 1986 until his retirement in May 1993. A
director of the Company since December 1993, Mr. Akers is also a director of
Hallmark Cards, Inc., Lehman Brothers Holdings, Inc. (New York), The New York
Times Company, PepsiCo., Inc., and W.R. Grace & Co.
CRANDALL CLOSE BOWLES, AGE 53, CHAIRMAN, PRESIDENT, AND CHIEF EXECUTIVE OFFICER
OF THE COMPANY. Mrs. Bowles served as executive vice president of the Company
from April 1992 until January 1997, when she became president and chief
operating officer. She served in these positions until January 1, 1998, when
she became chief executive officer. She was elected to the additional position
of Chairman of the Board in April 1998. A director of the Company since 1978,
Mrs. Bowles is also a director of Deere & Company.
JOHN L. CLENDENIN, AGE 66, CHAIRMAN EMERITUS OF BELLSOUTH CORPORATION. Mr.
Clendenin served as chairman and chief executive officer of BellSouth from 1984
until December 1996 and as chairman through December 1997. A director of
Springs since 1990, Mr. Clendenin is also a director of Coca-Cola Enterprises
Inc., Equifax Inc., Home Depot Inc., The Kroger Company, National Service
Industries, Inc., and Powerwave Technologies Inc.
LEROY S. CLOSE, AGE 50, CHAIRMAN OF THE BOARD OF SANDLAPPER FABRICS, INC., A
PRINTER AND CONVERTER OF TEXTILE FABRICS. Mr. Close was president and chief
executive officer of Sandlapper from 1986 through 2000. A director of the
Company since 1991, he was a vice president of the Company's former Apparel
Fabrics Division from 1983 to 1986. Mr. Close is a brother of Mrs. Bowles.
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CHARLES W. COKER, AGE 67, CHAIRMAN OF SONOCO PRODUCTS COMPANY SINCE 1990. A
director of Springs since 1977, Mr. Coker served as chief executive officer of
Sonoco from 1976 to 1998. Mr. Coker is also a director of Bank of America
Corporation, Carolina Power & Light Company, Florida Progress Corporation,
Progress Energy, Inc., and Sara Lee Corporation.
WILLIAM G. KELLEY, AGE 55, FORMER CHAIRMAN, CHIEF EXECUTIVE OFFICER AND
PRESIDENT OF CONSOLIDATED STORES CORPORATION, A SPECIALTY RETAIL COMPANY, FROM
1990 UNTIL 2000. Mr. Kelley is a consumer products/retailing consultant and
became a director of Springs in February 2000.
JOHN H. MCARTHUR, AGE 66, DEAN OF THE FACULTY, HARVARD UNIVERSITY GRADUATE
SCHOOL OF BUSINESS ADMINISTRATION, FROM 1980 UNTIL HIS RETIREMENT IN 1995. Mr.
McArthur presently serves as senior advisor to the president of the World Bank.
A director of the Company since 1989, Mr. McArthur is also a director of AES
Corporation, Ardais Corporation, BCE Inc., BCE Emergis, Inc., Cabot
Corporation, GlaxoSmithKline plc, HCA The Healthcare Company, KOC Holdings,
A.S., Rohm and Haas Company, and Telsat Canada.
ALDO PAPONE, AGE 68, SENIOR ADVISOR, AMERICAN EXPRESS COMPANY, 1991 TO PRESENT.
A director of Springs since April 1993, Mr. Papone served as chairman and chief
executive officer from 1989 to 1990, and as president and chief operating
officer from 1985 to 1989, of American Express Travel Related Services Company,
Inc. Mr. Papone served as a director of American Express Company from 1990 to
1998. Mr. Papone is also a director of Hyperion Solutions Corporation.
ROBIN B. SMITH, AGE 61, CHAIRMAN AND CHIEF EXECUTIVE OFFICER OF PUBLISHERS
CLEARING HOUSE. Ms. Smith served as president of Publishers Clearing House from
1981 to August 1996, when she was elected Chairman, and has served as its chief
executive officer since 1988. Ms. Smith has served as a director of Springs
since 1993 and is also a director of BellSouth Corporation, Kmart Corporation,
Texaco, Inc., and two clusters of mutual funds administered by Prudential
Investments Mutual Fund Management LLC.
SHERWOOD H. SMITH, JR., AGE 66, CHAIRMAN EMERITUS OF CAROLINA POWER & LIGHT
COMPANY. Mr. Smith served as chief executive officer of Carolina Power & Light,
a predecessor of Progress Energy, Inc., from September 1979 until October 1996,
as chairman from 1980 to 1999, and as president from 1976 to 1992. A director
of Springs since 1991, Mr. Smith is also a director of Wachovia Corporation and
Nortel Networks Corp., and a trustee of Northwestern Mutual Life Insurance
Company.
STEWART TURLEY, AGE 66, RETIRED CHAIRMAN OF ECKERD CORPORATION. Mr. Turley
served as chief executive officer of Eckerd Corporation from 1974 to February
1996, as its chairman from 1975 until February 1997, and as its president from
1974 to 1993. A director of Springs since 1984, Mr. Turley is also a director
of MarineMax, Inc., Sprint Corp., and Watermark Communities, Inc.
INFORMATION REGARDING THE BOARD OF DIRECTORS
During 2000, the Company's Board of Directors held five meetings. The Company's
ten non-employee Directors serve as the committee members of all committees
with the exception of the Audit Committee which is composed of Messrs. Akers,
Clendenin, and Smith and Ms. Smith. All Directors attended at least 75% of the
total number of meetings of the Board and committees of the Board on which they
serve during 2000. Except for the Audit Committee, the
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committees do not meet on a regular basis but only as circumstances require.
The Audit Committee, which is responsible for review of the integrity of the
Company's financial reporting, review of its internal controls and
recommendation of independent auditors, met three times during 2000. The
Management Compensation and Organization Committee met five times. This
Committee approves the annual compensation of the Chief Executive Officer and
has responsibility for approval of compensation arrangements for key
executives, approval of executive compensation plans, evaluation of the Chief
Executive Officer's performance, and ensuring management continuity and
succession, including recommending a successor to the Chief Executive Officer
in the event of a vacancy. The Committee on Directors and Corporate Governance
which is responsible for making recommendations to the Board of Directors with
respect to the governance of the Company and the Board, directors'
compensation, nomination of candidates for director, and evaluation of the
Board's performance, met one time. This Committee will consider any
recommendations made in writing by shareholders regarding possible candidates
for the Board of Directors. Such recommendations should be directed to the
Secretary of the Company. The Finance Committee, which is responsible for
review of the Company's financial policies and planning, review of methods of
financing and recommendations with respect to acquisitions and divestitures,
and which has certain fiduciary responsibilities under benefit plans, did not
meet in 2000.
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth a summary of compensation for the Chief
Executive Officer and each of the four other most highly compensated executive
officers of the Company.
SUMMARY COMPENSATION TABLE
LONG-TERM COMPENSATION
ANNUAL COMPENSATION(1) -------------------------------------
--------------------------------- AWARDS
OTHER ------------------------- LONG-TERM ALL
PRINCIPAL ANNUAL RESTRICTED INCENTIVE OTHER
NAME POSITION YEAR SALARY BONUS COMP STOCK OPTIONS/SARS PAYOUTS COMP(2)
- ---- ------------- ---- -------- --------- -------- ---------- ------------ ---------- -------
Bowles, C.C. Chairman and 2000 $637,504 $ 0 $ 0 0 0 $ 0 $79,482
Chief 1999 569,170 418,340 0 0 0 0 52,289
Executive 1998 540,000 137,700 0 0 0 0 53,572
Officer
Atkins, J.A.(3) Executive Vice 2000 $333,136 $ 20,988 $ 0 0 0 $ 0 $30,585
President and 1999 128,429 67,426 36,158(4) 0 35,000 0 3,356
CFO 1998 0 0 0 0 0 0 0
Dorsett, C.P. Senior Vice 2000 $269,720 $ 15,293 $ 0 0 0 $ 0 $28,962
President-- 1999 256,936 121,402 0 0 10,000 0 51,919
General 1998 244,728 45,000 0 0 9,000 0 21,525
Counsel &
Secretary
Kelbley, S.P. Executive Vice 2000 $366,672 $ 23,101 $ 0 0 0 $ 0 $40,619
President 1999 338,672 177,803 0 0 15,000 0 79,174
1998 328,008 73,500 0 0 20,000 0 32,355
O'Connor, T.P. Executive Vice 2000 $366,672 $ 30,000 $ 0 0 0 $ 0 $40,617
President 1999 325,136 177,803 0 0 15,000 0 78,909
1998 296,679 70,000 0 0 20,000 0 28,672
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(1) Includes amounts earned in fiscal year, regardless of whether
deferred.
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(2) Includes the following:
(a) Company contributions to the Springs of Achievement
Partnership Plan, which is a tax qualified profit sharing and savings
plan in which a majority of the Company's associates participate.
Amounts credited for 2000 are as follows:
PROFIT SHARING
SAVINGS FUND RETIREMENT FUND
------------ ---------------
Mrs. Bowles......... $3,400 $8,758
Mr. Atkins.......... 3,400 8,758
Mr. Dorsett......... 3,400 8,758
Mr. Kelbley......... 3,400 8,758
Mr. O'Connor........ 3,400 8,758
(b) For 1999, credits to a contingent compensation plan. In this
plan, amounts credited to the participant's account are contingent
upon continued employment with the Company and through 2000 vested at
a rate of 10 percent per year until termination of employment. A
participant's entire account, however, is fully vested upon retirement
on or after age 65, death, or total disability. Beginning in January
2001, the unvested portion of each participant's account will vest in
full over three years. The account balance through 2000 has been
adjusted each year by an adjustment factor which is equivalent to an
interest rate selected by the Board's Management Compensation and
Organization Committee. Beginning in January 2001, the accounts were
transferred to the participants' accounts within the Company's
Deferred Compensation Plan and will be adjusted by the choices
available under that plan as well as the interest rate previously
approved by the Committee with respect to the Contingent Compensation
Plan. No amounts were credited during 1998 or 2000 under this plan.
(c) Credits to an excess benefit plan and a deferred compensation
plan, which provide for credits equivalent to contributions under the
Springs of Achievement Partnership Plan for deferred compensation and
compensation in excess of limitations provided under the Internal
Revenue Code. Amounts credited for 2000 are as follows:
Mrs. Bowles........... $67,324
Mr. Atkins............ 18,427
Mr. Dorsett........... 16,804
Mr. Kelbley........... 28,461
Mr. O'Connor.......... 28,459
(3) Mr. Atkins joined the Company on August 9, 1999.
(4) Payments pursuant to the Company's moving allowance and home sale
program.
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OPTION TABLE
No options were granted to executive officers in 2000. The following table
provides information about options held by the named executive officers.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL-YEAR-END OPTION/SAR VALUES
Number of Value of
Unexercised Options/ Unexercised, In-The-Money
Shares SARS at Options/SARS at
Acquired Fiscal Year End Fiscal Year End(1)
on Value ---------------------------- ---------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- --------- -------- ------------ ------------- ----------- -------------
Bowles, C.C.... 0 0 68,500 0 $ 0 $ 0
Atkins, J.A.... 0 0 0 35,000 0 0
Dorsett, C.P... 0 0 66,000 19,000 85,938 0
Kelbley, S.P... 0 0 83,500 35,000 103,125 0
O'Connor, T.P.. 0 0 83,500 35,000 103,125 0
- ---------
(1) Value is based on the difference between the closing market price of
the underlying Class A Common Stock at December 29, 2000 ($32.4375),
and the exercise or base price.
LONG-TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR
No long-term incentive awards were granted in 2000.
RETIREMENT PLANS
In 1996 the Board of Directors adopted a Supplemental Executive
Retirement Income Plan for certain executives who are designated as
participants by the Management Compensation and Organization Committee. Target
benefit amounts payable under the Plan are reduced by one half of social
security benefits and by the equivalent value of (i) profit-sharing and Company
matching benefits payable under the Company's Springs of Achievement
Partnership Plan and Deferred Compensation Plan, (ii) benefits under the
Company's Excess Benefit Plan and Contingent Compensation Plan, and (iii)
certain deferred compensation attributable to a defined benefit plan previously
maintained by the Company. The years of credited service as of January 1, 2001,
for the named executive officers who participate in this Plan are as follows:
Mrs. Bowles, nine years; Mr. Atkins, one year; Mr. Dorsett, ten years; Mr.
Kelbley, nine years; and Mr. O'Connor, 32 years. The following table sets forth
target benefit amounts payable (before the reductions described above) in the
form of a straight-life annuity beginning at age 62 for various levels of final
average compensation and years of service:
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PENSION PLAN TABLE
YEARS OF SERVICE
Final Average ---------------------------------------------
Compensation(1) 10 15 20 25
--------------- -------- --------- --------- ----------
$300,000 $ 72,000 $ 108,000 $ 144,000 $ 180,000
500,000 120,000 180,000 240,000 300,000
700,000 168,000 252,000 336,000 420,000
900,000 216,000 324,000 432,000 540,000
1,100,000 264,000 396,000 528,000 660,000
- ----------
(1) Final average compensation means the average of salary and bonus
(which are shown in the Summary Compensation Table) paid or earned for
the five years of the last ten years of employment that provide the
highest average.
CHANGE-OF-CONTROL AGREEMENT
Mr. Atkins has an agreement with the Company providing that he will
receive certain payments if (i) he resigns for good reason, as defined in the
agreement, during specified periods of up to 36 months after the third
anniversary of the date of a change in control or (ii) Springs terminates his
employment without cause at any time during the term of the agreement. The
amount to be paid Mr. Atkins would be his annual salary and the bonus target
amount under Springs' 1999 Achievement Incentive Plan, or any successor plan.
MANAGEMENT COMPENSATION AND ORGANIZATION COMMITTEE REPORT
This report describes the compensation policies of the Management
Compensation and Organization Committee (the Compensation Committee) applicable
to the executive officers of the Company named in the Summary Compensation
Table, including the specific relationship of corporate performance to
compensation of executive officers for 2000. The report also discusses the
2000 compensation of Mrs. Bowles, the Company's Chief Executive Officer.
Compensation Philosophy
The Company's executive compensation program is linked to corporate
performance and return to shareholders. To this end, the Company has developed
an overall compensation strategy and specific compensation plans that tie a
significant portion of executive compensation to the Company's success in
meeting specified performance goals and to appreciation in the Company's stock
price. To allow monitoring of the strategy, a benchmark of median compensation
levels for median performance is used. The overall objectives of this strategy
are to attract and retain the best possible executive talent, to motivate these
executives to achieve the goals inherent in the Company's business strategy, to
link executive and shareholder interests through equity-based plans, and to
provide a compensation program that recognizes individual contributions as well
as overall business results.
Management Compensation and Organization Committee
The Compensation Committee is composed of the Company's ten
non-employee directors and is responsible for approval of compensation
arrangements for key executives and executive compensation plans. The
Compensation Committee reviews compensation recommendations from the chief
executive officer for executive officers who report to the chief executive
officer, including those officers named in the Summary Compensation Table. The
Committee also approves Mrs. Bowles' salary following the Committee's review of
her performance.
The Compensation Committee periodically conducts reviews of the
Company's executive compensation program. In 2000, the Compensation Committee
received reports from management
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regarding assessments conducted by independent compensation consultants of the
effectiveness of the Company's compensation program and its comparison to peer
groups of public corporations recommended by the consultants. In making
comparisons, the primary consideration is the competitiveness of the Company's
annual and long term components of compensation. The compensation reviews
permit an ongoing evaluation of the link between the Company's performance and
its executive compensation as compared to the compensation programs of other
similarly positioned companies.
Compensation Program
The Company's compensation program reflects a weighting of annual base
salary and bonuses (the Annual Component) and equity-based incentives (the
Long-Term Component). For 2000, the annual bonus opportunity for the chief
executive officer was based solely on the achievement of a specific corporate
financial target. For the Company's other executive officers 75% of the
executive's bonus opportunity was based on achievement of a specific corporate
financial target and 25% was based on individual performance.
(1) Annual Component: Base Salary and Annual Bonus
Base Salary: Base salaries for executive officers are determined with
reference to a salary grade level for each job. These levels are determined by
evaluating the responsibilities of each position and comparing it with other
comparable executive officer positions in the marketplace. Salary adjustments
for executive officers are currently made in twelve-month intervals under the
Company's compensation policy. The amount of adjustment is determined by the
Compensation Committee for all executive officers who report to the Chief
Executive Officer within specified limits adopted for all Company associates.
The Committee bases its determination upon the Chief Executive Officer's
evaluation of each executive officer's personal performance. The base salaries
of the named executive officers generally are at or less than the midpoint of
comparable positions at those companies within the compensation peer group.
Increases in base salary for the named executive officers in 2000 were based on
subjective evaluations of individual performance as well as the need to
maintain salaries at competitive levels.
Annual Bonus: Executive bonuses in 2000 were earned pursuant to the
Company's Achievement Incentive Plan (the AIP). Under the AIP for 2000, the
chief executive officer's bonus opportunity was based solely on performance of
the Company as measured by specific corporate financial targets. For other
executive officers, the AIP for 2000 links compensation to the performance of
the Company as measured by specific corporate financial targets and to
individual personal performance. The maximum potential bonuses range from 80%
to 140% of annual base salary depending on the executives' salary grades.
(2) Long-Term Component
To align shareholders' and executive officers' interests, the
Company's compensation program includes long-term compensation in the form of
performance unit awards and stock options. The value of these awards is related
to the value of Company common shares. These awards are made under the
Company's Incentive Stock Plan.
In 2000, no performance unit awards or stock options were granted to
executive officers. The Company did, however, initiate a review in 2000 of the
long-term component of executive compensation.
CEO Compensation
Under the Compensation Committee's policy regarding CEO compensation,
over one-half of Mrs. Bowles' compensation opportunity is at risk based on the
Company's performance. Mrs. Bowles' salary rate was increased in March 2000 as
a result of the Committee's evaluation of her performance and
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because of her low base compensation relative to the median of her peer group.
The Committee also considered her performance in prior years.
Mrs. Bowles did not receive any bonus under the AIP for 2000 because
the Company did not achieve its corporate financial target.
The Compensation Committee has concluded that Mrs. Bowles' performance
warrants the compensation for 2000 as reflected in the Summary Compensation
Table under Item 11, Executive Compensation.
The Compensation Committee has considered the limitations on
deductibility of certain compensation under Section 162(m) of the Internal
Revenue Code. The Compensation Committee's current policy is to assure that all
compensation is deductible under Section 162(m) when paid.
Management Compensation and Organization Committee
C.W. Coker, Chairman
J.F. Akers
J.L. Clendenin
L.S. Close
W.G. Kelley
J.H. McArthur
A.Papone
R.B. Smith
S.H. Smith, Jr.
S.Turley
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Leroy S. Close, a member of the Compensation Committee, is chairman
of Sandlapper Fabrics, Inc., which received payments from the Company in 2000
totaling $1,356,068 for printed fabric and printing services. Additionally, Mr.
Close was a divisional officer of the Company from 1983 to 1986 and is
affiliated with Kanawha Insurance Company, which received $4,180,602 in 2000 for
administrative services provided to the Company's self-funded medical plan and
for group life insurance premiums, and with The Springs Company and affiliated
or related entities, which received $18,159 from the Company for rent,
reimbursement of property taxes on the Founder's House, railroad track
maintenance, and miscellaneous goods and services, and which paid the Company
$33,989 in 2000 for administrative, maintenance, and courier services. These
transactions are also described in Item 13, Certain Relationships and Related
Transactions, under the caption "Transactions with Certain Persons."
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PERFORMANCE GRAPH
Comparative Five-Year Total Returns*
Springs Industries, Inc., S&P 500, Peer Group
[PERFORMANCE GRAPH]
INDEXED RETURNS
YEARS ENDING
---------------------------------------------------
BASE
PERIOD
COMPANY NAME / INDEX DEC 95 DEC 96 DEC 97 DEC 98 DEC 99 DEC 00
- ------------------------- ------ ------ ------ ------ ------ ------
SPRINGS INDUSTRIES - CL A 100 106.96 132.77 109.08 109.15 92.34
S&P SMALLCAP 600 INDEX 100 121.32 152.36 150.37 169.02 188.96
PEER GROUP 100 110.20 130.01 110.27 89.15 112.18
Assumes $100 invested at the close of trading on the last trading day
preceding the first day of the fifth preceding fiscal year in the Company's
Class A Common Stock, S&P Smallcap 600 Index, and Peer Group.
- ---------
* Cumulative total return assumes reinvestment of dividends.
The peer group is composed of those fifty S&P 500 companies with
market capitalizations closest to the Company's as of the beginning of the
Company's 2000 fiscal year, which the Compensation Committee believes is the
most representative group for purposes of comparing the Company's shareholders'
return. The Compensation Committee believes a representative group of reporting
companies cannot be identified in the same industry or lines of business as the
Company and that published industry indexes are not representative of the
Company and its lines of business. Listed below are a list of companies in the
Peer Group and a list of companies in last year's Peer Group which are not
included in this year's Peer Group:
PEER GROUP COMPANIES
Alberto-Culver Company - CL B Dillard's Inc. Pactiv Corporation
Allegheny Technologies Incorporated EOG Resources Inc. Peoples Energy Corporation
Allied Waste Industries, Inc. FMC Corporation Perkinelmer, Inc.
American Greetings Corporation Great Lakes Chemical Corporation Potlatch Corporation
Andrew Corporation HEALTHSOUTH Corporation Power-One, Inc.
Autodesk, Inc. Homestake Mining Pulte Corporation
Ball Corporation Humana Inc. Reebok International Ltd.
Bemis Company, Inc. KB Home Rowan Companies, Inc.
Briggs & Stratton Corporation Longs Drug Stores Corporation Ryder System, Inc.
The Brunswick Corporation Louisiana-Pacific Corporation Snap-on, Incorporated
Centex Corporation Manor Care Inc. Sunoco, Inc.
Consolidated Stores Corp. McDermott International, Inc. Tektronix, Inc.
Cooper Tire & Rubber Company Meredith Corporation Thomas & Betts Corp.
Adolph Coors Company Millipore Corp. Timken Company
Crane Co. National Service Industries, Inc. Tupperware Corporation
Cummins Engine NICOR, Inc. Worthington Industries, Inc.
Deluxe Corp. ONEOK, Inc.
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COMPANIES IN LAST YEAR'S PEER GROUP THAT ARE NOT INCLUDED IN THE
CURRENT PEER GROUP
Aeroquip-Vickers, Inc. Foster Wheeler Corporation Milacron, Inc.
Asarco Incorporated Fruit of the Loom, Ltd. Moore Corp., Ltd.
Battle Mountain Gold Company W R Grace & Co. Nacco Industries Inc.
Bethlehem Steel Corp. The Great Atlantic & Pacific Tea Company, Oryx Energy Co
Inc.
Cabletron Systems Harnischfeger Industries, Inc. Pep Boys Manny Moe & Jack
Case Corporation Harrahs Entertainment Inc. Polaroid Corporation
Cyprus Amax Minerals Co. Helmerich & Payne, Inc. Russell Corporation
Data General Corporation Ikon Office Solutions, Inc. Shared Medical Systems Corporation
Eastern Enterprises Jostens, Inc. Venator Group, Inc.
Fleetwood Enterprises, Inc.
DIRECTORS' COMPENSATION
Directors who are not employees of the Company (Outside Directors)
receive an annual cash retainer of $24,000 and, as described below, restricted
shares of the Company's Class A Common Stock under the Company's Restricted
Stock Plan for Outside Directors (the Directors' Restricted Stock Plan) equal
in value to the cash retainer received during the preceding year. In addition,
each Outside Director receives a fee of $2,500 for attendance at each special
meeting of the Board and $1,000 for each special meeting conducted by
telephone. Chairmen of Board Committees each receive an additional annual fee
of $3,000.
Under the terms of the Directors' Restricted Stock Plan, each Outside
Director receives an annual grant of shares of Class A Common Stock (Restricted
Shares) as of the day before each annual meeting of shareholders having a
market value equal to the annual cash retainer fee earned by the director for
the preceding year. The shares are subject to forfeiture and restrictions on
transfer and become vested upon the termination of the Outside Director's
service on the Board on account of (i) retirement in compliance with the
Board's mandatory retirement policy; (ii) failure to be reelected; or (iii)
death or disability. In addition, the restriction period may end with the
approval of the Board on a case-by-case basis if an Outside Director terminates
his or her service as a member of the Board (i) for reasons of personal or
financial hardship; (ii) to serve in any governmental, diplomatic or any other
public service position or capacity; (iii) to avoid or protect against a
conflict of interest; (iv) on the advice of legal counsel; or (v) as a result
of any other extraordinary circumstances that the Board determines to be
comparable to the foregoing.
Upon the completion of the restriction period, all Restricted Shares
granted to an Outside Director and any distributions thereon retained by the
Company during the restriction period become vested. If an Outside Director
leaves the Board for any reason other than as set forth above, then all
Restricted Shares issued to such Outside Director would be forfeited to the
Company.
An Outside Director may elect deferral of compensation, including the
Restricted Shares, under the Company's Deferred Compensation Plan for Outside
Directors. Under this plan, amounts deferred are (i) held as units equivalent
to the Company's Class A Common Stock and credited with additional units equal
to the number of shares which could be purchased with dividends paid on an
equivalent number of shares of Class A Common Stock, or (ii) credited to an
interest account which is credited quarterly with interest equal to the Lehman
Brothers Corporate Long-Term Baa Index.
Three directors have a deferral account under an Outside Directors
COLI Deferred Compensation Plan related to fees earned during the four-year
period ending April 1990. Those accounts are credited with interest at an
annualized rate equal to Moody's Seasoned Corporate Bond Yield Index, plus 2%
to age 55 and plus 4% thereafter and are paid out when Board service ends.
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Credits under the COLI Plan and the Deferred Compensation Plan are
only contractual obligations of the Company and create no rights superior to
other unsecured, general creditors.
During 2000, Mr. Papone provided consulting services to the Company
for which he was paid $50,000. These services included meetings and
consultations with the Company's Market Strategy Group regarding consumer
advertising and contacts with the Company's primary advertising agency. In
addition, Mr. Papone reviewed certain of the Company's advertising programs and
consumer packaging. Mr. Papone will provide similar services in 2001 and has
been paid a retainer of $50,000. The retainer may be adjusted depending on the
extent of consulting services provided in 2001.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AS OF FEBRUARY
15, 2001:
CLASS A CLASS B PERCENT
COMMON COMMON OF
NAME STOCK(1)(2)(3) STOCK CLASS B
DIRECTORS & NOMINEES
J.F. Akers............... 4,034
C.C. Bowles.............. 84,998(4) 135,600(5) 1.9%
J.L. Clendenin........... 3,927
L.S. Close............... 7,727 73,305(5) 1.0%
C.W. Coker............... 5,227
W.G. Kelley.............. 0
J.H. McArthur............ 3,727
A.Papone................. 4,384
R.B. Smith............... 3,041
S.H. Smith, Jr........... 3,911
S.Turley................. 5,270
EXECUTIVE OFFICERS
J.A. Atkins.............. 3,000
C.P. Dorsett............. 67,709(4)
S.P. Kelbley............. 84,987(4)
T.P. O'Connor............ 87,882(4)
All Directors, Nominees and
Executive Officers as a
Group.................. 472,420(4) 208,905 2.9%
- ---------
(1) Each of the persons named holds less than 1% of the Class A Common
Stock. All Directors, Nominees, and Executive Officers as a Group hold
4.4% of the Class A Common Stock.
(2) Includes shares held under the Outside Directors' Restricted Stock
Plan as follows: Mr. Akers, 3,034; Mrs. Bowles, 487; Messrs.
Clendenin, Close, Coker, and McArthur, 3,727 each; Mr. Papone, 3,384;
Ms. Smith, 2,841; Mr. Smith, 3,411; and Mr. Turley, 4,270. The
directors have sole voting power as to these shares but do not have
investment power until lapse of restrictions on the restricted shares.
(3) Includes shares held in the Springs of Achievement Partnership Plan as
follows: Mrs. Bowles, 318; Mr. Dorsett, 796; Mr. Kelbley, 800; and Mr.
O'Connor, 798. These persons have sole voting and investment power as
to these shares.
(4) Includes beneficial ownership of Class A Common Stock that may be
acquired within 60 days pursuant to stock options awarded under the
Incentive Stock Plan as follows: for Mrs. Bowles, 68,500; Mr. Dorsett,
66,000; Mr. Kelbley, 83,500; and Mr. O'Connor, 83,500.
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(5) See text under the caption "Close Family Ownership" for additional
information about ownership of Class B Common Stock.
Close Family Ownership
Mrs. Bowles and Mr. Close are members of the Close family which,
together with certain related entities, owns as of February 15, 2001, a total
of 174,880 shares (1.6%) of the Company's Class A Common Stock and 7,149,291
shares (99.9%) of the Company's Class B Common Stock. Excluding the shares
owned by Mrs. Bowles and Mr. Close described in Item 12, Security Ownership of
Certain Beneficial Owners and Management, the Close family and related
entities' ownership of Class A and Class B Common Stock is as follows:
CLASS A CLASS B
COMMON COMMON PERCENTAGE
NAME(1) STOCK STOCK OF CLASS B
------- ------- ------- ----------
Close family trusts.......... 5,018,858(2) 70.1
The Springs Company.......... 1,401,930(3) 19.6
Kanawha Insurance Company.... 175,000(4) 2.4
Close Foundation(5).......... 3,392
- ---------
(1) The address for the named parties is P.O. Drawer 460, Lancaster, South
Carolina 29721.
(2) These shares are held in different trusts by Mrs. Anne Springs Close,
and by certain children of Mrs. Close, as trustees for the children of
Mrs. Close. While Mrs. Close, Mrs. Bowles, and Mr. Close each disclaim
beneficial ownership of these shares, they have shared voting and
dispositive power with respect to 4,115,156, 2,655,610, and 1,849,743
of these shares, respectively.
(3) In addition to these shares, The Springs Company holds 343,298 shares
(4.8%) of the Class B shares and 78,763 shares (.7%) of the Class A
shares as the trustee of management trusts for certain members of the
Close Family. All outstanding shares of The Springs Company are owned
by trusts for the benefit of certain members of the Close Family. Mrs.
Close and Mr. Close are directors of The Springs Company.
(4) All outstanding shares of Kanawha Insurance Company are owned by
trusts for the benefit of certain members of the Close family.
(5) The Close Foundation is a nonprofit foundation established by the
Close family. Mrs. Close, Mr. Close, and Mrs. Bowles have shared
voting and dispositive power with respect to these shares.
Other Principal Holders of Common Stock
PERCENTAGE
CLASS NAME & ADDRESS AMOUNT OF CLASS
- ----- -------------------------- ------ ----------
Class A Common Stock Dimensional Fund Advisors, 626,900(1) 5.8%
Inc.
1299 Ocean Avenue
Santa Monica, CA 90401
- ---------
(1) Based on its Schedule 13G filed February 2, 2001, Dimensional Fund
Advisors, Inc., has sole voting and dispositive power with respect to
all of these shares.
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Transactions with Certain Persons
For many years the Company has transacted business with certain
companies that are controlled by members of the Close Family. Mrs. Bowles and
Mr. Close are affiliated with these companies. The amounts paid or received by
the Company for these transactions are set forth below.
The Company paid The Springs Company and certain of its affiliates
$18,159 for rent, reimbursement of property taxes on the Founder's House,
railroad track maintenance, and miscellaneous goods and services in 2000.
Kanawha Insurance Company writes certain group insurance policies for
the Company and provides administrative services under certain of the Company's
self-funded medical benefit programs. Premiums paid to Kanawha for the group
policies totaled approximately $2,450,000 in 2000. The Company also paid Kanawha
approximately $1,730,000 in 2000 for administrative services under certain of
the Company's medical benefit programs.
Payments by the Company to Sandlapper Fabrics, Inc. for printed fabric
and printing services totaled $1,356,068 in 2000. Mr. Close is president and
chief executive officer of Sandlapper Fabrics, Inc.
The Company believes that the services, property, and facilities
described in the foregoing paragraphs, which have been reviewed by the Audit
Committee, have been obtained by it on terms as favorable as those available
from unaffiliated parties.
Charges by the Company for services in 2000 to The Springs Company and
its affiliates were approximately $33,989. These services consisted primarily of
administrative, maintenance, and courier services.
The Company, as a service to its employees and pursuant to individual
authorization, provides at no charge a payroll deduction program for payment of
premiums on individual insurance policies purchased directly from Kanawha
Insurance Company.
In 1987 the Company entered into a 50-year agreement with Springland,
Inc., a wholly-owned subsidiary of The Springs Company, to lease the Founder's
House in Fort Mill, South Carolina, which is listed in the National Register of
Historic Structures. The Company uses the Founder's House to provide quarters
for visiting directors, associates, and guests of the Company. The Founder's
House is also used for meetings by the Company.
The Company is obligated to pay rent of $1 per year under the lease and
to pay for all utilities, insurance, maintenance, and taxes on the Founder's
House. Springland has the right to terminate the lease upon six months' notice
after the year 2019. If Springland elects to terminate the lease, it must pay
the Company the unamortized book value of improvements made by the Company
computed on a straight line amortization basis over a forty-year useful life.
OTHER TRANSACTIONS
In addition to the transactions described in the preceding section, the
Company and its subsidiaries purchase products and services from and/or sell
products to companies of which certain other of the Directors of the Company are
executive officers or directors or otherwise affiliated. Springs does not
consider the amounts involved in such transactions material. Such purchases from
and sales to each company were conduced on an arm's-length basis and were in the
ordinary course of business. Some of such transactions are continuing, and it is
anticipated that similar transactions will continue in the future.
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM
8-K
(a) 1. The following financial statements and Independent
Auditors' Report are incorporated by reference from the Annual Report as a part
of this Report:
(i) Independent Auditors' Report (Annual Report
page 12).
(ii) Consolidated Statements of Operations for
the fiscal years ended December 30, 2000, January 1, 2000, and
January 2, 1999 (Annual Report page 13).
(iii) Consolidated Balance Sheets as of December
30, 2000, and January 1, 2000 (Annual Report page 14).
(iv) Consolidated Statements of Shareholders'
Equity as of December 30, 2000, January 1, 2000, and January
2, 1999 (Annual Report page 15)
(v) Consolidated Statements of Cash Flows for
the fiscal years ended December 30, 2000, January 1, 2000, and
January 2, 1999 (Annual Report page 16).
(vi) Notes to Consolidated Financial Statements
(Annual Report pages 17 through 24).
2. Financial statement schedules are not shown here
because, under applicable rules, they are not required, are
inapplicable, or the information required is included in the Financial
Statements or in the Notes thereto.
3. Exhibits required to be listed by Item 601 of
Regulation S-K are listed (and, where applicable, attached) in the
Exhibit Index attached hereto, which is incorporated herein by this
reference.
(b) Reports on Form 8-K: During the quarter ended December 30,
2000, the Company filed a Current Report on Form 8-K, dated December 8, 2000,
announcing a restructuring plan. No financial statements were filed with the
report.
The matters discussed or incorporated by reference in this
Form 10-K contain forward-looking statements that are based on management's
expectations, estimates, projections, and assumptions. Words such as "expects,"
"believes," "estimates," "should," and variations of such words and similar
expressions are often used to identify such forward-looking statements which
include but are not limited to
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projections of sales, expenditures, savings, completion dates, cash flows, and
operating performance. Such forward-looking statements are made pursuant to the
safe-harbor provisions of the Private Securities Litigation Reform Act of 1995.
These statements are not guaranties of future performance; instead, they relate
to situations with respect to which certain risks and uncertainties are
difficult to predict. Actual future results and trends, therefore, may differ
materially from what is predicted in forward-looking statements due to a variety
of factors, including: the health of the retail economy in general, competitive
conditions, and demand for the Company's products; the unanticipated loss of a
material customer; progress toward the Company's manufacturing and purchasing
efficiency initiatives; unanticipated natural disasters; legal proceedings;
labor matters; and the availability and price of raw materials which could be
affected by weather, disease, energy costs, or other factors. The Company
assumes no obligation to update publicly any forward-looking statements, whether
as a result of new information, future events or otherwise.
[SIGNATURES ON NEXT PAGE]
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, Springs Industries, Inc. has duly caused this
Report to be signed on its behalf by the undersigned, thereunto duly authorized.
SPRINGS INDUSTRIES, INC.
By: /s/ Jeffrey A. Atkins
---------------------------------------
Jeffrey A. Atkins
Executive Vice President and
Chief Financial Officer
Date: March 28, 2001
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
By: /s/ John F. Akers By: /s/ Crandall C. Bowles
----------------------------------- ---------------------------------------
John F. Akers, Director Crandall C. Bowles, Chairman,
Date: March 28, 2001 President & Chief Executive Officer
and Director
(Principal Executive Officer)
Date: March 28, 2001
By: /s/ John L. Clendenin By: /s/ Leroy S. Close
----------------------------------- ---------------------------------------
John L. Clendenin, Director Leroy S. Close, Director
Date: March 28, 2001 Date: March 28, 2001
By: /s/ Charles W. Coker By: /s/ William G. Kelley
----------------------------------- ---------------------------------------
Charles W. Coker, Director William G. Kelley, Director
Date: March 28, 2001 Date: March 28, 2001
By: /s/ John H. McArthur By: /s/ Aldo Papone
----------------------------------- ---------------------------------------
John H. McArthur, Director Aldo Papone, Director
Date: March 28, 2001 Date: March 28, 2001
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By: /s/ Robin B. Smith By: /s/ Sherwood H. Smith, Jr.
----------------------------------- ---------------------------------------
Robin B. Smith, Director Sherwood H. Smith, Jr., Director
Date: March 28, 2001 Date: March 28, 2001
By: /s/ Stewart Turley
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Stewart Turley, Director
Date: March 28, 2001
By: /s/ Jeffrey A. Atkins By: /s/ Charles M. Metzler
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Jeffrey A. Atkins Charles M. Metzler,
Executive Vice President and Vice President-Controller
Chief Financial Officer (Principal Accounting Officer)
(Principal Financial Officer)
Date: March 28, 2001 Date: March 28, 2001
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC
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EXHIBITS
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EXHIBIT INDEX
Item
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(3) (a) Springs' Restated Articles of Incorporation, amended and
restated as of April 18, 1994, incorporated by reference from
Form 10-Q filed August 15, 1994.
(b) Springs' Bylaws, amended as of December 12, 1996, incorporated
by reference from Form 10-K filed March 27, 1998.
(4) $225,000,000 Credit Agreement dated December 17, 1997, among
Springs Industries, Inc., Wachovia Bank, N.A., Bank of America
NT & SA, SunTrust Bank, Atlanta, The Bank of Nova Scotia, The
Bank of Tokyo-Mitsubishi, Ltd., Mellon Bank, N.A., and The
Fuji Bank, Limited, Atlanta Agency, incorporated by reference
from Form 10-K filed March 27, 1998.
Note: No other long-term debt instrument issued by the Company
exceeds 10% of the consolidated total assets of the Company
and its subsidiaries. In accordance with paragraph 4(iii) of
Item 601 of Regulation S-K, the Company will furnish to the
Commission upon request copies of long-term debt instruments
and related agreements.
(10) Material Contracts - Executive Compensation Plans and Arrangements
(a) Springs' Deferred Unit Stock Plan, amended and restated
effective February 22, 1990, incorporated by reference from
Form 10-K, filed March 26, 1990. Amendment effective December
10, 1990, incorporated by reference from Form 10-K, filed
March 25, 1991. Amendment effective August 16, 1990,
incorporated by reference from Form 10-Q, filed November 12,
1991. Amendment effective as of November 1, 1996, incorporated
by reference from Form 10-K filed March 28, 1997.
(b) Springs' Deferred Compensation Plan, as amended and restated
on August 18, 1994, incorporated by reference from Form 10-Q
filed November 14, 1994.
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(c) Springs' Supplemental Executive Retirement Plan, incorporated
by reference from Form 10-Q filed May 12, 1997. Amendment No.
1 effective January 1, 1999, incorporated by reference from
Form 10-K filed March 29, 2000.
(d) Springs' Shadow Retirement Plan, incorporated by reference
from Form 10-K, filed March 19, 1982. Amendment adopted
October 18, 1990, incorporated by reference from Form 10-K
filed March 25, 1991.
(e) Springs' Deferred Compensation Plan for Outside Directors, as
amended and restated on August 18, 1994, incorporated by
reference from Form 10-Q, filed November 14, 1994. Amendments
adopted as of October 29, 1995, and as of November 1, 1996,
incorporated by reference from Form 10-K filed March 28, 1997.
(f) Springs' 1999 Deferred Compensation Plan for Outside
Directors, incorporated by reference from Form S-8 filed June
17, 1999.
(g) Springs' Outside Directors COLI Deferred Compensation Plan
adopted December 12, 1985, incorporated by reference from Form
10-K filed March 14, 1986.
(h) Springs' Senior Management COLI Deferred Compensation Plan
adopted December 12, 1985, incorporated by reference from Form
10-K filed March 14, 1986.
(i) Springs' 1991 Incentive Stock Plan, as approved by
shareholders on April 15, 1991, incorporated by reference from
the Company's Proxy Statement to Shareholders dated February
27, 1991, under the caption "Exhibit A" on pages A-1 through
A-12 of such Proxy Statement. Amendments approved by
shareholders on April 29, 1996, incorporated by reference from
Form 10-Q filed May 14, 1996. Amendments as of November 1,
1996, incorporated by reference from Form 10-K filed March 28,
1997.
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(j) Springs' 1999 Incentive Stock Plan, as approved by the
Company's shareholders on April 19, 1999, incorporated by
reference from the Company's Proxy Statement to Shareholders
dated March 3, 1999, under the caption "Exhibit B" on pages
B-1 through B-13 of such Proxy Statement.
(k) Springs' 1991 Restricted Stock Plan for Outside Directors, as
approved by the Company's shareholders on April 15, 1991,
incorporated by reference from the Company's Proxy Statement
to Shareholders dated February 27, 1991, under the caption
"Exhibit B" on pages B-1 through B-4 of such Proxy Statement.
(l) Springs' 1999 Achievement Incentive Plan effective January 3,
1999, incorporated by reference from Form 10-K filed March 29,
2000.
(m) Springs' Contingent Compensation Plan adopted by the Board of
Directors on June 20, 1991, incorporated by reference from
Form 10-Q filed November 12, 1991.
(n) Springs' Excess Benefits Plan adopted by the Board of
Directors on August 18, 1994, and amended and restated
effective March 1, 1996, incorporated by reference from Form
10-K filed March 28, 1997.
(o) Form of stock option agreement used in conjunction with option
grants under the 1991 Incentive Stock Plan from December 1991
to February 1995, incorporated by reference from Form 10-K
filed March 27, 1998.
(p) Form of stock option agreement used in conjunction with option
grants under the 1991 Incentive Stock Plan after September
1995 and under the 1999 Incentive Stock Plan, incorporated by
reference from Form 10-K filed March 27, 1998.
(q) Form of agreement used in conjunction with grants of
performance units under the 1991 and 1999 Incentive Stock
Plans, incorporated by reference from Form 10-K filed
March 27, 1998.
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(r) Form of agreement used in conjunction with grants of deferred
stock awards under the 1991 and 1999 Incentive Stock Plans,
incorporated by reference from Form 10-K filed March 29, 2000.
(s) Form of agreement used in conjunction with grants of
restricted stock awards under the 1999 Incentive Stock Plan,
incorporated by reference from Form 10-K filed March 29, 2000.
(t) Financial Planning Policy for certain executives of the
Company, incorporated by reference from Form 10-K filed March
27, 1998.
(u) Change of Control and Severance Agreement dated August 9,
1999, by and between the Company and Jeffrey A. Atkins, filed
herewith.
(13) Pages 12 through 32 of the 2000 Annual Report to Shareholders, which
have been expressly incorporated by reference.
(21) List of Subsidiaries of Springs.
(23) Consent of independent auditors for Form S-8 Registration Statements
for 1991 Incentive Stock Plan, 1991 Restricted Stock Plan for Outside
Directors, 1999 Deferred Compensation Plan for Outside Directors, and
1999 Incentive Stock Plan.
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