1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
RUSSELL CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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(RUSSELL(R) LOGO)
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
RUSSELL CORPORATION
To the Shareholders of Russell Corporation:
Notice is hereby given that the Annual Meeting of the Shareholders (the
"Annual Meeting") of Russell Corporation (the "Company") will be held on
Wednesday, April 21, 1999, at 11:00 a.m., Central Daylight Time, at the general
offices of the Company, 755 Lee Street, Alexander City, Alabama, for the
following purposes:
(1) To elect two directors to the Board of Directors for three year
terms ending with the Annual Meeting of Shareholders in 2001 and
two directors to the Board of Directors to fill unexpired terms
ending with the Annual Meeting of Shareholders in 2000; and
(2) To transact such other business as may properly come before the
meeting.
Holders of the common stock of the Company at the close of business on
March 3, 1999, are entitled to notice of and to vote upon all matters at the
Annual Meeting or at any adjournment thereof.
You are cordially invited to attend the Annual Meeting so that we may
have the opportunity to meet with you and discuss the affairs of the Company.
WHETHER YOU PLAN TO ATTEND THE MEETING OR NOT, PLEASE SIGN AND RETURN THE
ENCLOSED PROXY SO THAT THE COMPANY MAY BE ASSURED OF THE PRESENCE OF A QUORUM AT
THE ANNUAL MEETING. A stamped, addressed envelope is enclosed for your
convenience in returning your proxy.
BY ORDER OF THE BOARD OF DIRECTORS
FLOYD G. HOFFMAN
Senior Vice President,
General Counsel and Secretary
Alexander City, Alabama
March 18, 1999
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RUSSELL CORPORATION
PROXY STATEMENT FOR THE ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD APRIL 21, 1999
This Proxy Statement is furnished by and the accompanying proxy is
solicited on behalf of the Board of Directors of Russell Corporation, an Alabama
corporation (the "Company"), for use at its Annual Meeting of Shareholders to be
held at the general offices of the Company in Alexander City, Alabama, on
Wednesday, April 21, 1999, at 11:00 a.m., Central Daylight Time, and at any
adjournment thereof (the "Annual Meeting"). The Proxy Statement and accompanying
proxy will initially be mailed to shareholders on or about March 18, 1999.
Shares represented by a properly executed proxy in the accompanying form
will be voted at the meeting and, when instructions have been given by the
shareholder, will be voted in accordance with those instructions. In the absence
of contrary instructions, the proxies received by the Board of Directors will be
voted FOR the election of all nominees for director of the Company. A
shareholder who has given a proxy may revoke it at any time prior to its
exercise by giving written notice of such revocation to the Secretary of the
Company, by executing and delivering to the Company a later dated proxy
reflecting contrary instructions or by appearing at the Annual Meeting and
taking appropriate steps to vote in person.
ELECTION OF DIRECTORS
The Bylaws of the Company ("Bylaws") provide for a Board of Directors of
not less than nine nor more than 15 members. In addition, the Bylaws also
provide that the Board of Directors shall set the number of directors within the
specified limitations by resolution adopted by a majority of the entire Board of
Directors and that the Board will be divided into three classes, as nearly equal
in number as possible, each of which will serve for three years. On February 28,
1996, a majority of the Board of Directors adopted a resolution which
established the size of the Board of Directors at ten members, effective April
24, 1996. It is proposed to elect two directors to serve until the Annual
Meeting of Shareholders in 2002 and two directors to fill unexpired terms ending
with the Annual Meeting of Shareholders in 2000, to serve in each case until
their successors have been duly elected and qualified. Proxies cannot be voted
for more than two persons for the terms ending in 2002 and for more than two
persons for the terms ending in 2000. It is intended that shares represented by
the Board of Directors' proxies will be voted for the election of the following
four persons to serve in each case for the terms indicated:
NOMINEES TO SERVE UNTIL ANNUAL MEETING OF SHAREHOLDERS IN 2002:
Year First Shares
Name, Age and Elected Director Beneficially
Principal Occupation of the Owned as of Percent
of Nominee Company March 3, 1999 of Class
---------- ------- ------------- --------
Herschel M. Bloom (55) 1986 7,355 *
Partner,
King & Spalding
Atlanta, Georgia
attorneys
Ronald G. Bruno (47) 1992 11,899 *
President,
Bruno Capital
Management Corporation
Birmingham, Alabama
an investment company
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NOMINEES TO FILL UNEXPIRED TERMS ENDING WITH ANNUAL MEETING OF SHAREHOLDERS IN
2000:
Year First Shares
Name, Age and Elected Director Beneficially
Principal Occupation of the Owned as of Percent
of Nominee Company March 3, 1999 of Class
---------- ------- ------------- --------
John F. Ward (55) 1998 955,153(1)(2) 2.74
Chairman, President and Chief
Executive Officer of
the Company
Eric N. Hoyle (51) 1998 612,960(2) 1.76
Executive Vice President and
Chief Financial Officer
of the Company
EACH OF THE DIRECTORS NAMED BELOW WILL CONTINUE IN OFFICE AFTER THE ANNUAL
MEETING UNTIL HIS OR HER TERM EXPIRES AS INDICATED:
Annual Meeting Year First Shares
at Which Elected Director Beneficially
Name, Age and Term of the Owned as of Percent
Principal Occupation Expires Company March 3, 1999 of Class
- -------------------- ------- ------- ------------- --------
Benjamin Russell (61) 2000 1963 5,896,501(3) 16.93
Chairman and
Chief Executive Officer,
Russell Lands, Incorporated
Alexander City, Alabama
a land and timber company
Margaret M. Porter (48) 2000 1997 2,053 *
Civic Volunteer
Birmingham, Alabama
C.V. Nalley III (56) 2001 1989 2,185 *
Chief Executive Officer,
The Nalley Companies
Atlanta, Georgia
automobile and truck sales
and leasing companies
John R. Thomas (62) 2001 1966 599,228(4) 1.72
Chairman, President and
Chief Executive Officer,
Aliant Financial Corporation
Alexander City, Alabama
a bank holding company
John A. White (59) 2001 1992 3,054 *
Chancellor,
University of Arkansas
Fayetteville, Arkansas
Tim Lewis (43) 2001 1995 534 *
President,
T.A. Lewis & Associates, Inc.
Birmingham, Alabama
telecommunications consultants
(*)Represents less than one percent (1%).
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(1) The shares of the Company's Common Stock owned by Mr. Ward include
282,066 which may be acquired by him pursuant to options granted under
the Company's existing stock option plans described below, which options
may be exercised within sixty days of March 3, 1999. See also "Security
Ownership of Management" on page 14.
(2) Messrs. Ward and Hoyle are two of the trustees of the Company's pension
plan, which owns 600,960 shares of the Company's Common Stock. As such
trustees, they have the right to vote such shares. These shares are
included in the shares shown as beneficially owned by each of such
persons. However, Messrs. Ward and Hoyle disclaim any beneficial
ownership as to all of such shares.
(3) Includes (i) 731,296 shares held by the Benjamin and Roberta Russell
Foundation, Incorporated, a charitable corporation of which Mr. Russell
is one of nine directors, (ii) 3,945,024 shares held by a trust created
under the will of Benjamin C. Russell, of which Mr. Russell is one of
four trustees, (iii) 225,000 shares held by the Adelia Russell Charitable
Foundation, of which Mr. Russell is one of three trustees, and (iv) 4,000
shares held by Colley's Point, Inc. Profit Sharing Plan, of which Mr.
Russell is one of two trustees.
(4) Includes (i) 112,607 shares owned directly or indirectly, (ii) 32,372
shares held by the Finis Morgan Family Trust, of which Mr. Thomas is one
of three trustees, and (iii) 454,249 shares owned indirectly by Mr.
Thomas as a general and limited partner in two limited partnerships. See
also "Security Ownership of Management" on page 14.
With the exceptions of John F. Ward, Eric N. Hoyle, Tim Lewis and
Margaret M. Porter, each of the above named persons has been a director of the
Company for at least the last five years. Except as noted in the remainder of
this paragraph, each of the above named persons has held the same or comparable
positions with the indicated entities for at least the last five years.
Mr. Ward was elected President and Chief Executive Officer of the Company
effective April 1, 1998, and Chairman of the Board effective April 22, 1998. In
accordance with the Bylaws, Mr. Ward was elected by the Board of Directors to
serve as a director of the Company until the Annual Meeting, filling the
unexpired term of John C. Adams. Prior to his elections to such positions, Mr.
Ward was President of J. F. Ward Group, Inc., a consulting firm specializing in
domestic and international apparel and textile industries from 1996 to 1998.
Prior to that time, Mr. Ward was Chief Executive Officer of the Hanes Group and
Senior Vice President of Sara Lee Corporation.
Mr. Hoyle was elected Executive Vice President and Chief Financial
Officer and a Director effective August 11, 1998. In accordance with the Bylaws,
Mr. Hoyle was elected by the Board of Directors to serve as a director of the
Company until the Annual Meeting, filling the unexpired term of James D. Nabors.
Mr. Hoyle was Chief Financial Officer of Ithaca Industries, Inc. from 1994 to
1998. During the time Mr. Hoyle served as its Chief Financial Officer, Ithaca
Industries, Inc., filed a petition in bankruptcy under Chapter 11 of the
Bankruptcy Code. Prior to that time, he served as Vice President, Finance and
Administration and Chief Financial Officer of the Bali Company, a division of
Sara Lee Corporation, and Sara Lee Intimates group from 1983 to 1994.
Margaret M. Porter has served since 1992 as Chairman of McWane Center in
Birmingham, Alabama. McWane Center is a non-profit organization which promotes
the public understanding and appreciation of science, technology and the
environment and is a statewide resource for Alabama schools. From 1984 to 1996,
Ms. Porter served on the Mtn. Brook (Alabama) City Council, serving as President
of the Council from 1992 to 1996 and as Mayor from July, 1996 to October, 1996.
Ms. Porter has also served in various Alabama public interest organizations,
including the Board of Trustees of The Children's Hospital of Alabama, the Board
of Directors of the Alabama School of Fine Arts Foundation and as Chairman of
the Literacy Council of Central Alabama.
John R. Thomas is a director of Alfa Corporation. Ronald G. Bruno is a
director of Bruno's, Inc., SouthTrust Bank, N.A. and Books-A-Million, Inc.
Herschel M. Bloom is a director of Post Properties, Inc. John A. White is a
director of Motorola, Inc., Logility, Inc., Eastman Chemical Company and J.B.
Hunt Transport Services, Inc.
Should any nominee be unable or unwilling to accept election, it is
expected that the proxies will vote for the election of such other person for
the office of director as the Board of Directors of the Company may then
recommend. The Board of Directors has no reason to believe that any of the
persons named will be unable or will decline to serve if elected.
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During the year ended January 2, 1999, the Board of Directors of the
Company held four regular meetings. Each member of the Board attended at least
75% of the meetings of the Board and the committees of which they are members.
The Company has an Executive Committee consisting of John F. Ward and
Eric N. Hoyle, which is authorized to act in place of the Board of Directors
between meetings of the Board. The Executive Committee held eighteen meetings
during 1998.
The Company has an Executive Compensation Committee consisting of C.V.
Nalley III, Chairman, Herschel M. Bloom and Ronald G. Bruno, which supervises
the Company's general compensation strategies, including incentive compensation,
stock options and benefit programs. The Compensation Committee held three
meetings during 1998.
The Company has an Audit Committee consisting of John A. White, Chairman,
Herschel M. Bloom, Ronald G. Bruno, Tim Lewis, C.V. Nalley III, Margaret M.
Porter, Benjamin Russell, and John R. Thomas, which recommends to the Board of
Directors the appointment of the Company's independent accountants selected to
be the Company's auditors and reviews the audit plan, financial statements and
audit results. The Audit Committee held two meetings during 1998.
The Company has a Finance Committee consisting of Ronald G. Bruno,
Chairman, Herschel M. Bloom, Eric N. Hoyle, Tim Lewis and John R. Thomas. The
Finance Committee reviews the Company's capital structure and financing
activities and held two meetings during 1998.
The Company has a Nominating Committee which recommends candidates for
election to the Company's Board of Directors. The Nominating Committee consists
of Herschel M. Bloom, Chairman, Margaret M. Porter, Benjamin Russell, John R.
Thomas and John A. White and held no meetings during 1998.
Each non-employee director receives a quarterly retainer of $3,750 and a
fee of $1,000 for each Board meeting attended. Members of committees of the
Board who are not employees of the Company receive $650 per quarter per
committee (except chairmen, who receive $1,300 per quarter). In addition, under
the Russell Corporation 1997 Non-Employee Directors' Stock Grant, Stock Option
and Deferred Compensation Plan (the "Directors' Plan"), which was adopted by the
Board of Directors on July 23, 1997, each non-employee director (an "Eligible
Director") receives annually (i) shares of Common Stock having a value of
$5,000, based upon the market value of the Common Stock on the date of grant,
and (ii) an option to purchase shares of Common Stock, exercisable for ten years
at a price equal to the market value of the Common Stock on the date of grant,
having, based upon the number of shares subject thereto, an economic value of
$5,000. In addition, the Directors' Plan allows an Eligible Director to defer
the payment of fees to such director at a fixed rate of interest and to defer
the receipt of Common Stock granted pursuant to the Directors' Plan. Two hundred
thousand (200,000) shares of Common Stock are presently authorized to be issued
under the Directors' Plan and 197,176 shares remain available for issuance.
EXECUTIVE COMPENSATION
The Executive Compensation Committee of the Board of Directors (the
"Committee") is comprised solely of directors who are not current or former
employees of the Company. The Committee is responsible for establishing the
compensation policy and administering the compensation programs for the
Company's executive officers and other key employees. The Committee periodically
engages independent compensation consultants to assist them in this process. The
Committee intends to make all reasonable efforts to comply with the requirements
to exempt executive compensation from the $1 million deduction limitation under
Section 162(m) of the Internal Revenue Code, unless the Committee determines
that such compliance would not be in the best interests of the Company and its
shareholders. Amendments to the 1993 Executive Long-Term Incentive Plan approved
by shareholders in 1997 and 1998 allow the executive compensation plans to be in
compliance with ss.162(m).
During 1998, an independent consultant conducted a full review of the
Company's executive compensation program. The Committee approved several
significant changes for implementation in 1999. The following report discusses
these changes along with the programs that were in place during 1998.
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EXECUTIVE COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Compensation Philosophy
The compensation program for executive officers is designed to attract,
motivate and retain talented executives who will strive to attain the Company's
strategic and financial objectives and thereby increase shareholder value. The
main elements of the program are:
- - annual compensation (base salary and annual incentives) and
- - long-term compensation (stock options and performance units).
The Company's philosophy is to provide total compensation at a level that
is consistent with its size and performance relative to other leading branded
consumer apparel companies. These companies include many of those in the Value
Line Apparel Index used in the performance graph on page 7. The Committee
periodically reviews the reasonableness of total compensation levels and mix
using public information from comparable company proxy statements and annual
reports as well as survey information from third-party industry surveys.
Annual Compensation
Base Salary - The Committee annually reviews and approves base salaries
for the Company's executive officers, considering the responsibilities of their
positions, their individual performance and their competitive position relative
to comparable companies and industry surveys. Salary ranges are targeted at the
median of the competitive market place. Salary increases, including increases
due to promotions, for the most recent fiscal year are based upon these
criteria.
Annual Incentive - Executive officers are eligible to receive annual
incentive awards under provisions of the 1993 Executive Long-Term Incentive
Plan, as amended in 1997 and 1998. Under this plan, the Committee established
Return on Assets Employed (ROAE) goals for 1998 at the beginning of the year.
These goals applied either at the corporate level and/or the business unit
level, depending upon the participant. Threshold, target and maximum performance
levels were set for each ROAE goal. Target award levels were established for
each participant and incentive awards between 50% and 150% of target were earned
based upon ROAE performance relative to the pre-established performance levels.
No awards were earned for performance below threshold. Awards were payable at
120% of the amount earned, subject to reduction to the extent individual
performance was evaluated as less than outstanding.
For 1999 and subsequent years, annual performance goals will be
established by the Committee for the Company and each operating unit. Maximum
incentive opportunity will be communicated to each participant, as well as the
performance scale under which incentives will be earned. Threshold performance
levels will be established for each goal, below which no incentive will be paid.
Individual standards of performance will provide each participant the
opportunity to earn incentives based upon the accomplishment of strategic and
tactical objectives and will be agreed upon at the beginning of each year. Award
opportunities for the Chief Executive Officer and Chief Financial Officer will
be tied solely to the accomplishment of financial goals approved in advance by
the Committee.
Long-Term Compensation
Performance Units - Since 1993, the Committee has annually awarded
performance units to executive officers. These performance units are earned
based upon the Company's Total Shareholder Return ("TSR") relative to that of
the Standard and Poor's Industrial Index over a three-year period. New grants
have been made each year. In order for any earn out to occur, the Company's TSR
must be between the 33rd and 90th percentile. For the 1996-1998 performance
cycle, since TSR was below the 33rd percentile, no performance units were
earned.
Under the revised executive compensation plan, grants of performance
units will be discontinued. No further performance units will be granted in
1999, although the performance cycles currently in effect (1997- 1999 and
1998-2000) will continue under the provisions established for previous grants.
Stock Options - The Committee believes stock options to be one of the
most effective ways of linking executives with the interests of the
shareholders, since no gain is realized by the executive unless the stock price
increases. The Company grants stock options annually during the first quarter,
although special grants
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may be made throughout the year in unique circumstances such as recruiting
situations. Options are granted with an exercise price equal to the market value
on the date of grant. Options granted prior to 1999 have become exercisable two
years after they are granted. Options expire ten years from the date of grant.
For the foreseeable future, stock options will be the only form of
long-term compensation at the Company. Stock option grant guidelines have been
increased to reflect that grants of performance units have been discontinued,
and to meet the median competitive practice of the marketplace. Options granted
in 1999 and beyond will become exercisable pro-rata on the first four
anniversaries of the grant to reinforce retention and further align executives'
compensation with shareholder returns.
Chief Executive Officer
John F. Ward - Effective April 1, 1998, the Board of Directors elected
John F. Ward President and Chief Executive Officer. His compensation principally
consists of base salary, annual bonus and stock option awards.
- - Annual Compensation
- Base Salary: Mr. Ward's annual salary during 1998 was $650,000,
based upon an assessment of competitive compensation practices in
comparable companies at the time he joined the Company.
- Annual Incentive: The Committee awarded Mr. Ward an annual
incentive payment for 1998 equal to $350,000, which is the amount
guaranteed in his employment agreement. Despite disappointing
financial and shareholder returns, the Company made significant
progress in restructuring the organization, revitalizing the
senior management team and establishing and implementing a
strategic plan that is expected to begin producing results by the
beginning of next year.
- - Long-term compensation
- Stock Options: In accordance with his employment agreement, on
March 31, 1998, Mr. Ward was granted options to purchase 125,000
shares of stock, with an exercise price of $27.1563, the fair
market value on that date. The terms and conditions that apply to
Mr. Ward's stock option grants are described in the notes to the
Summary Compensation Table on page 8.
- - Other benefits: In connection with Mr. Ward's employment, the Company
paid additional amounts designed to replace compensation forfeited by Mr.
Ward due to accepting employment with the Company. These payments are
described in the Summary Compensation Table and the notes thereto on page
8. Additional provisions of Mr. Ward's agreements are described on page
12.
John C. Adams - Prior to his retirement on March 31, 1998, Mr. Adams was
Chairman of the Board, President and Chief Executive Officer. The provisions of
his retirement agreement are summarized on page 11. The Committee made the
following decisions regarding his compensation during 1998:
- - Annual Compensation
- Base Salary: Mr. Adams received no increase in salary during 1998.
- Annual Incentive: Mr. Adams received no annual incentive payment
for 1998.
- - Long-term compensation
- Performance Units: Mr. Adams was granted 270,000 performance units
for the 1998-2000 performance cycle. Any payment with respect to
these performance units will be pro-rated for the period that Mr.
Adams was actively employed during the performance cycle.
- Stock Options: Mr. Adams was granted 24,600 stock options, with an
exercise price of $24.375 per share, in February 1998 based upon
the grant guidelines previously approved by the Committee. These
options are exercisable in accordance with the 1993 Executive Long
Term Incentive Plan for a period of three years following his
retirement.
Conclusion
The Committee believes that the executive compensation programs directly tie the
pay opportunities of the Company's executives to the financial and shareholder
returns of the Company. The changes that are being implemented in 1999 further
reinforce the linkage between pay and performance, and between executive
compensation and shareholder return, and allow the Company to attract and retain
the caliber of executives required in the highly competitive global environment
in which executives of the Company must perform.
Executive Compensation Committee
C.V. Nalley III
Ronald G. Bruno
Herschel M. Bloom
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COMPARATIVE FIVE-YEAR CUMULATIVE TOTAL RETURNS THROUGH 12/31/98
VALUE OF $100 INVESTED ON 12/31/93 AT FISCAL YEAR-END:
1993 1994 1995 1996 1997 1998
Russell Corporation $ 100.00 $ 112.62 $ 101.32 $ 110.49 $ 100.45 $ 78.47
S&P 500 100.00 101.60 139.71 172.18 229.65 294.87
Value Line Apparel Index 100.00 110.17 120.83 165.49 193.05 238.83
NOTES
1) Assumes that the value of the investment in the Company's Common Stock and in
each index was $100 on the last trading day preceding the first day of the fifth
preceding fiscal year and that all dividends were reinvested.
2) The Value Line Apparel Index presently includes: Fruit of the Loom, Inc.;
Hartmarx Corporation; Jones Apparel Group; Kellwood Company; Liz Claiborne,
Inc.; Nautica Enterprises, Inc.; Oshkosh B'Gosh, Inc.; Oxford Industries, Inc.;
Phillips-Van Heusen Corporation; Polo-Ralph Lauren; Quicksilver, Inc.; St. John
Knits, Inc.; Tommy Hilfiger Corp.; Tultex Corporation; VF Corporation; Warnaco
Group, Inc.; and the Company.
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SUMMARY COMPENSATION TABLE
The following information is furnished for the fiscal years ended January
2, 1999, January 3, 1998 and January 4, 1997 with respect to the Company's Chief
Executive Officer, retired Chief Executive Officer, each of the four other most
highly compensated executive officers of the Company during 1998 whose salary
and bonus exceeded $100,000 and one individual for whom such disclosure would
have been required but for the fact that such individual was not serving as an
executive officer at the end of the 1998 fiscal year (collectively, the "Named
Executive Officers").
Annual Compensation Long Term Compensation
---------------------------------- -----------------------------------
Awards Payouts
------------------------ -------
Name and Other Restricted All
Principal Fiscal Annual Stock Options/ LTIP Other
Position Year Salary Bonus (1) Compensation Awards SAR's Payouts Compensation
- --------------------------------------------------------------------------------------------------------------------------------
John F. Ward 1998 $490,000 $350,000 $44,375(2) 12,127(3) 407,066(4) $3,496,031(5)
Chairman, 1997
President 1996
and C.E.O.
JT Taunton, Jr. 1998 300,000 38,500 8,000
Sr. V.P. & 1997 290,000 0 6,100
C.E.O. Fabrics 1996 265,000 105,000 6,200
and Services
John Frechette (6) 1998 265,000 0 4,500
V.P. International 1997 260,100 0 3,500
1996 256,267 18,000 3,700
Thomas R. Johnson, Jr. 1998 240,000 0 5,200
Sr. V.P. & 1997 235,000 0 4,900
C.E.O. Russell Yarn 1996 223,333 77,900 6,400
Dale W. Wachtel 1998 221,000 80,000 4,500
Sr. V.P. & 1997 210,000 104,000 2,700
C.E.O. Russell 1996 188,433 94,200 2,700
Athletic
John C. Adams 1998 600,000 0 2,060 24,600
Retired Chairman 1997 600,000 0 14,616 19,400
President & C.E.O. 1996 551,000 285,000 8,597 19,800
James D. Nabors 1998 332,000 0 8,900
Retired Exec. V.P. 1997 330,000 0 502 6,900
& C.F.O. 1996 309,667 120,000 627 7,200
(1) Bonus payments are reported for the year in which related services were
performed.
(2) Pursuant to Mr. Ward's employment agreement, includes personal use of
Company aircraft, personal office closure expenses, temporary housing,
club dues and Company provided automobile. For Messrs. Adams and Nabors,
this includes personal use of Company aircraft.
(3) Pursuant to Mr. Ward's employment agreement, one third of this amount
vested on April 1, 1998, with the remainder vesting ratably over the next
two succeeding years.
(4) Pursuant to Mr. Ward's employment agreement, 125,000 options vest ratably
in each of the three years following April 1, 1998, the date of the
grant. The exercise price of these options is $27.1563, the fair market
value on the date of grant, and the options are exercisable until April
1, 2008. Pursuant to the Executive Deferred Compensation and Buyout Plan,
282,066 vested options were issued to Mr. Ward at an exercise price of
$27.1563, the fair market value on the date of grant and are exercisable
until October 1, 2002.
(5) Amounts either paid to Mr. Ward or deposited into a deferred compensation
trust for his benefit to replace benefits and opportunities Mr. Ward
forfeited pursuant to agreements with his former employer as a result of
accepting employment with the Company.
(6) Mr. Frechette resigned from the Company effective January 25, 1999. His
severance agreement is summarized on page 12.
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11
OPTION/SAR GRANTS IN FISCAL 1998
The following table sets forth grants of incentive stock options to the
named executives for the year ended January 2, 1999. This information is
furnished with respect to the Named Executive Officers. No SAR grants were made
during such fiscal year.
Individual Grants (1)
- ------------------------------------------------------------------------------------- Potential Realizable
Number Of Value At Assumed
Securities % Of Total Annual Rates Of Stock
Underlying Options/SARs Price Appreciation
Options/SARs Granted Exercise For Option Term
Granted to Employees Price Expiration -----------------------------
Name in 1998 in 1998 Per Share Date 5% 10%
- ---- ------------ ------------ --------- ---------- ----------- ------------
John F. Ward 125,000(2) 12.52 $27.1563 4/01/08 $ 5,529,345 $ 8,804,557
282,066(2) 28.26 27.1563 10/01/02 9,543,384 11,775,555
JT Taunton, Jr. 8,000 0.80 24.375 1/28/08 317,634 505,780
John E. Frechette 4,500 0.45 24.375 7/31/99(3) 118,051 126,689
Thomas R. Johnson, Jr. 5,200 0.52 24.375 1/28/08 204,848 324,177
Dale W. Wachtel 4,500 0.45 24.375 1/28/08 178,670 284,502
John C. Adams 24,600 2.46 24.375 4/01/01(3) 699,937 811,429
James D. Nabors 8,900 0.89 24.375 5/31/01(3) 255,276 298,272
(1) The stock options were granted at an exercise price equal to the fair
market value of the Company's common stock on the date of the grant. The
stock options become exercisable in full on the second anniversary of the
grant. No other instruments were granted in tandem with the options, nor
do they carry either reload or tax reimbursement features.
(2) See Note (4) on page 8.
(3) Exercise period shortened due to retirement or termination of employment.
AGGREGATED OPTION/SAR EXERCISES IN FISCAL 1998 AND YEAR-END VALUE TABLE
The following table sets forth information concerning the exercise of
stock options for the Named Executive Officers for the fiscal year ended January
2, 1999:
Number of Value of Unexercised
Unexercised Options/SARs In-the-Money Options/SARs
Shares at January 2, 1999 at January 2, 1999 (2)
Acquired Value --------------------------- -------------------------
Name on Exercise Realized (1) Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ------------ ----------- ------------- ----------- -------------
John F. Ward 0 $0 282,066 125,000 $0 $0
JT Taunton, Jr. 0 0 24,100 14,100 0 0
John E. Frechette 0 0 27,700 0 0 0
Thomas R. Johnson, Jr. 0 0 24,900 11,300 0 0
Dale W. Wachtel 0 0 15,900 7,200 0 0
John C. Adams 0 0 124,000 0 0 0
James D. Nabors 0 0 52,800 0 0 0
(1) This amount represents the aggregate of the market value of the Company's
Common Stock at the time each option was exercised, less the exercise
price for such option.
(2) This amount represents the aggregate of the number of options multiplied
by the difference between the closing price of the Company's Common Stock
on December 31, 1998, less the exercise price for such option.
- 9 -
12
LONG-TERM INCENTIVE PLAN AWARDS IN FISCAL 1998
The 1993 Executive Long-Term Incentive Plan provides for the award of
long-term cash incentives to officers of the Company. Performance Units may be
awarded based upon achievement of target goals over a three year period.
Performance Units were awarded in accordance with the following schedule:
Performance or
Number of Other Period Estimated Future Payouts Under Non-Stock
Shares, Until Price-Based Plans
Units or Maturation ----------------------------------------
Name Other Rights or Payout Threshold Target Maximum
- --------------------- ------------ -------------- --------- ------- -------
John F. Ward (1) -- -- -- -- --
JT Taunton, Jr. 90,000 1998-2000 22,500 90,000 180,000
John E. Frechette 44,200 1998-2000 11,050 44,200 88,400
Thomas R. Johnson, Jr. 45,000 1998-2000 18,000 72,000 144,000
Dale W. Wachtel 44,200 1998-2000 11,050 44,200 88,400
John C. Adams 270,000 1998-2000 67,500 270,000 540,000
James D. Nabors 99,600 1998-2000 24,900 99,600 199,200
(1) The Company did not grant Performance Units in 1998 subsequent to January
28, 1998; consequently, no Performance Units were granted to Mr. Ward. The
Company does not intend to grant Performance Units after 1998.
Performance units are earned based upon Company Total Shareholder
Return ("TSR") relative to a peer group, the S & P Industrials. Threshold,
target and maximum awards are earned when TSR is at the 33rd percentile, the
median percentile or the 90th percentile of the peer group. Awards earned based
upon relative TSR performance may be decreased by up to 50% if the Company's
absolute TSR for the performance period is less than a predetermined level.
For further discussion of the 1993 Executive Long-Term Incentive Plan,
see the discussion above under the caption "EXECUTIVE COMPENSATION - EXECUTIVE
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION - LONG-TERM
COMPENSATION".
PENSION PLAN
The officers of the Company participate in the Russell Corporation
Revised Pension Plan (the "Plan"), a defined benefit plan covering all employees
of the Company. The amount of contributions made by the Company to the Plan is
not reflected in the cash compensation table above, since the amount of the
contribution with respect to a specified person is not and cannot readily be
separately or individually calculated by the regular actuaries for the Plan.
Benefits under the Plan are based upon years of credited service at
retirement and upon "Final Average Earnings," which is the average base
compensation for the highest sixty consecutive months out of the final 120
months of employment. This compensation consists only of salary and excludes any
bonus and any form of contribution to other benefit plans or any other form of
compensation. Normal or delayed retirement benefits are payable upon retirement
on the first day of any month following attainment of age 65 and continue for
the life of the employee (and his spouse, if any) or in accordance with other
elections permitted by the Plan.
On January 26, 1994, the Board of Directors adopted a supplemental
retirement plan covering any participant's compensation in excess of the
limitation amount specified in Section 401 et seq., of the Internal Revenue
Code. This plan is a non-qualified plan, thereby rendering any benefits subject
to claims of general creditors and not deductible until paid.
The following table presents estimated annual benefits payable from the
Plan and the supplemental retirement plan mentioned above upon normal or delayed
retirement to participants in specified remuneration and years-of-credited
service classifications. The amounts shown assume the current maximum social
security benefit and that the participant has elected for benefits to be payable
for a single life only.
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13
PENSION PLAN TABLE
Years of Credited Service
5 Year Average ----------------------------------------------------------
Remuneration 15 20 25 30 35 40
- -------------- -- -- -- -- -- --
$ 150,000 $ 23,612 $31,483 $39,354 $47,225 $55,096 $59,221
175,000 27,737 36,983 46,229 55,475 64,721 69,533
200,000 31,862 42,483 53,104 63,725 74,346 79,846
225,000 35,987 47,983 59,979 71,975 83,971 90,158
250,000 40,112 53,483 66,854 80,225 93,596 100,471
300,000 48,362 64,483 80,604 96,725 112,846 121,096
350,000 56,612 75,483 94,354 113,225 132,096 141,721
400,000 64,862 86,483 108,104 129,725 151,346 162,346
450,000 73,112 97,483 121,854 146,225 170,596 182,971
500,000 81,362 108,483 135,604 162,725 189,846 203,596
600,000 97,862 130,483 163,104 195,725 228,346 244,846
700,000 114,362 152,483 190,604 228,725 266,846 286,096
800,000 130,862 174,483 218,104 261,725 305,346 327,346
900,000 147,362 196,483 245,604 294,725 343,846 368,598
1,000,000 163,862 218,483 273,104 327,725 382,346 409,846
Years of service credited under the Plan for individuals shown in the
summary compensation table on page 8 are as follows: Mr. Ward, 0 years; Mr.
Taunton, 23 years; Mr. Frechette, 7 years; Mr. Johnson, 9 years; Mr. Wachtel, 22
years; Mr. Adams, 22 years; and Mr. Nabors, 28 years;
STOCK OPTION PLANS
The Company has previously adopted the 1987 Stock Option Plan pursuant
to which the Company granted to key employees of the Company either incentive
stock options or nonqualified stock options. The terms of the options did not
exceed ten years from the dates of grant, and the option prices equaled fair
market value of the shares covered at the times of grant. No further options can
be granted under such plan.
The 1993 Executive Long-Term Incentive Plan (the "1993 Plan")
previously discussed herein is a flexible plan which gives the Executive
Compensation Committee broad discretion to fashion the terms of awards in order
to provide eligible participants with stock based incentives as the Committee
deems appropriate. It permits the issuance of awards in a variety of forms,
including: (a) restricted stock (b) incentive stock options (c) non-qualified
stock options (d) stock appreciation rights and (e) performance share and
performance unit awards.
The 1993 Plan presently provides for the grant of up to 4,000,000
shares of the Common Stock of the Company. There are 1,020,394 shares currently
available for issuance under the 1993 Plan. Issuance of awards under the 1993
Plan will cease as of January 1, 2003.
CERTAIN AGREEMENTS
In connection with the retirement of John C. Adams, the Company and Mr.
Adams entered into an agreement providing for the payment to Mr. Adams in 1998
of the salary and other compensation benefits he would have received had he not
retired. The Company also agreed to pay to Mr. Adams $400,000 per year until he
reaches age 65, and if he should die prior to that time, to pay such amounts to
his wife. Upon attaining age 65, Mr. Adams will receive payments of $300,000 per
year during his lifetime, less the annual benefits payable to him under the
Company's various retirement plans or other deferral arrangements that become
payable at age 65. For purposes of computing the benefits payable to Mr. Adams
under the Company's various retirement plans or other deferral arrangements, Mr.
Adams will be credited with service through the earlier of his death or
- 11 -
14
65th birthday at an annual compensation of $600,000. The Company has also agreed
to continue to provide Mr. Adams with certain life insurance and medical
benefits until he reaches age 65. The payment of the amounts and benefits above
are subject to certain agreements by Mr. Adams concerning non-competition and
related matters.
Effective May 31, 1998, James D. Nabors entered into a retirement
agreement with the Company, which provides that the Company will pay retirement
compensation to Mr. Nabors, or his spouse if Mr. Nabors should die, in an amount
equal to his annual salary at the time of his retirement until May 31, 2000. The
retirement agreement further provides that Mr. Nabors will qualify for full
retirement benefits at age 62.
Effective January 25, 1999, John E. Frechette entered into a severance
agreement with the Company whereby Mr. Frechette will receive his current
monthly salary until July 31, 1999. If Mr. Frechette has not secured other
employment by that date, he will continue to receive such monthly compensation
until such time as he secures other employment, but in no event beyond January
31, 2000.
As noted above in this Proxy Statement, John F. Ward was employed as
the President and Chief Executive Officer of the Company, effective April 1,
1998, upon the retirement of Mr. Adams. The Company entered into an agreement
with Mr. Ward providing for the employment of Mr. Ward for three years until
March 31, 2001, at an annual base salary of $650,000, subject to increase(s) in
the discretion of the Board of Directors and a bonus of $350,000 for 1998. After
1998, Mr. Ward is entitled to receive annual bonuses under the Company's regular
compensation plans, with bonus potential of not less than 100% of base salary,
subject to any increase determined appropriate by the Board of Directors. The
employment agreement provides that the Company will offer health care and
certain other supplemental benefits to Mr. Ward. As noted in the Summary
Compensation Table, Mr. Ward is also entitled to receive certain payments for
reimbursement of expenses in connection with his relocation and employment with
the Company. The agreement also provides that any termination of employment of
Mr. Ward after April 1, 2001 shall be treated as retirement for purpose of the
Company's various plans and benefits. As noted above Mr. Ward was also granted
options in 1998 to purchase 125,000 shares of Company Common Stock at the market
price on the date of grant of $27.1563 and is to be granted options to purchase
a minimum of 75,000 shares each year thereafter at market price at the time of
grant.
Also as noted above, to compensate Mr. Ward for the forfeiture of
certain benefits from his former employer, the Company agreed to make a cash
payment to him of approximately $1,028,000, to put into a trust for his benefit
approximately $2,467,000, to issue him 12,127 shares of common stock of the
Company, and to grant him options to purchase 282,066 shares of Company Common
Stock at the market price of $27.1563 on March 31, 1998. The amounts placed in
trust will be paid to Mr. Ward after April 1, 2001 unless his employment is
terminated by the Company for cause or is terminated by Mr. Ward for any reason
other than death, total disability or certain other reasons set forth in the
agreements. In the event of such termination prior to April 1, 2001, Mr. Ward
will be entitled to receive a prorated amount from the trust based upon the
ratio that the time he has been employed by the Company bears to three years.
Similarly, the options granted to him will be forfeited on the same basis as the
amounts in trust based upon time employed with the Company.
OTHER MATTERS
The Board of Directors does not know at this time of any other matters
to come before the Annual Meeting.
As of the date of the Proxy Statement, the Board of Directors does not
intend to present, and has not been informed that any other person intends to
present, any matter for action at the Annual Meeting other than those matters
stated in the Notice of the Annual Meeting. Accordingly, if other matters should
properly come before the Annual Meeting, it is intended that the holders of the
proxies will act in respect thereto in accordance with their best judgment.
- 12 -
15
PRINCIPAL SHAREHOLDERS
The following table sets forth each person who, to the Company's
knowledge, had sole or shared voting or investment power over more than five
percent of the outstanding shares of Common Stock of the Company as of March 3,
1999.
Name and Address Amount and Nature of Percent
of Beneficial Owner Beneficial Ownership of Class
- ------------------------------------ -------------------- --------
Benjamin Russell 5,896,501 shares (1) 16.93
755 Lee Street
P.O. Box 272
Alexander City, Alabama 35011-0272
Roberta A. Baumgardner 5,868,774 shares (2) 16.85
755 Lee Street
P.O. Box 272
Alexander City, Alabama 35011-0272
Edith L. Russell 4,686,320 shares (3) 13.45
755 Lee Street
P.O. Box 272
Alexander City, Alabama 35011-0272
Nancy R. Gwaltney 4,677,642 shares (4) 13.43
755 Lee Street
P.O. Box 272
Alexander City, Alabama 35011-0272
Merrill Lynch Asset Management Group 3,274,469 shares (5) 9.40
World Financial Center, North Tower
250 Vesey Street
New York, NY 10381
Invesco Capital Management, Inc. 2,439,544 shares (6) 7.00
1315 Peachtree Street N.E., Suite 500
Atlanta, GA 30309
Helen Alison 2,012,588 shares (7) 5.78
755 Lee Street
P.O. Box 272
Alexander City, Alabama 35011-0272
(1) Includes 991,181 shares as to which Mr. Russell has sole voting and
investment power and 4,905,320 shares as to which he has shared voting
and investment power. See Note (3) on page 3.
(2) Includes 1,192,454 shares as to which Mrs. Baumgardner has sole voting
and investment power and 4,676,320 shares as to which she has shared
voting and investment power, consisting of 731,296 shares held by the
Benjamin and Roberta Russell Foundation, Incorporated, a charitable
corporation of which Mrs. Baumgardner is one of nine directors; and
3,945,024 shares held of record and beneficially owned by a trust
created under the will of Benjamin C. Russell of which Mrs.
Baumgardner is one of four trustees.
- 13 -
16
(3) Includes 10,000 shares as to which Mrs. Russell has sole voting and
investment power, and 4,676,320 shares as to which she has shared
voting and investment power consisting of 731,296 shares held by the
Benjamin and Roberta Russell Foundation, Incorporated, a charitable
corporation of which Mrs. Russell is one of nine directors, and
3,945,024 shares held of record and beneficially owned by a trust
created under the will of Benjamin C. Russell of which Mrs. Russell is
one of four trustees. The trustees of the trust created under the will
of Benjamin C. Russell can invade the corpus of the trust for the
benefit of Mrs. Russell.
(4) Includes 731,296 shares held by the Benjamin and Roberta Russell
Foundation, Incorporated, a charitable corporation of which Mrs.
Gwaltney is one of nine directors; 3,945,024 shares held by a trust
created under the will of Benjamin C. Russell of which Mrs. Gwaltney
is one of four trustees; and 1,322 shares as to which Mrs. Gwaltney
has sole voting and investment power.
(5) Information contained in Schedule 13G filed with the Company on
February 8, 1999. The Schedule 13G states that Merrill Lynch Asset
Management Group has sole voting power with respect to no shares, sole
dispositive power with respect to no shares and shared voting and
dispositive power with respect to 3,274,469 shares.
(6) Information contained in Schedule 13G filed with the Company on
February 18, 1999. The Schedule 13G states that Invesco Capital
Management, Inc. has sole voting power with respect to no shares, sole
dispositive power with respect to no shares and shared voting and
dispositive power with respect to 2,439,544 shares.
(7) Includes 2,012,588 shares held by trusts created under the will of
J. C. Alison, of which Mrs. Alison is one of two co-trustees and with
respect to which Mrs. Alison has shared voting and investment power.
Information contained in a Schedule 13G filed with the Company on
February 15, 1999 on behalf of Helen Alison and National Bank of
Commerce in Birmingham, Alabama.
SECURITY OWNERSHIP OF MANAGEMENT
Amount and Nature of Beneficial Ownership
-----------------------------------------
Sole Voting Options
and Exercisable Other Percent
Investment Within Beneficial of
Name of Individual or Group Power 60 Days Ownership Class
- --------------------------- ------------------------------------------------------
John F. Ward 57,127 282,066 615,960 (1)(2) 2.74
Eric N. Hoyle 12,000 0 600,960 (2) 1.76
Tim Lewis 534 0 0 *
Herschel M. Bloom 7,355 0 0 *
C.V. Nalley III 2,185 0 0 *
Ronald G. Bruno 11,899 0 0 *
John A. White 3,054 0 0 *
John R. Thomas 109,107 0 490,121 (3)(4) 1.72
Benjamin Russell 991,181 0 4,905,320 (5) 16.93
Margaret M. Porter 2,053 0 0 *
JT Taunton, Jr. 14,674 30,200 0 *
John E. Frechette 0 23,200 0 *
Thomas R. Johnson, Jr. 2,000 29,800 0 *
Dale W. Wachtel 8,189 18,600 0 *
All Executive Officers and Directors
as a Group (24 persons) 1,783,328 430,166 5,247,733 19.69
(*) Represents less than one percent (1%).
(1) Includes 15,000 shares owned by Mr. Ward's spouse.
(2) See Note (2) on page 3.
(3) See Note (4) on page 3.
(4) Includes 3,500 shares owned by Mr. Thomas' spouse.
(5) See Note (3) on page 3.
- 14 -
17
SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Based solely upon review of Forms 3, 4 and 5 and amendments thereto
related to the Company's most recent fiscal year, and written representations
from certain reporting persons that no Form 5 was required, the Company
believes that all required filings were timely for 1998.
TRANSACTIONS WITH MANAGEMENT AND OTHERS
The Company entered into a fuel supply contract with Russell Lands,
Incorporated on May 21, 1975, under which Russell Lands, Incorporated provides
sawdust, bark, shavings, chips, and other wood materials for use in the
Company's wood chip boilers. The initial term of the contract was four years,
and may be renewed by agreement of the parties from year-to-year thereafter. In
addition, the contract may be cancelled by either party during any renewal
period upon 30 days notice following the occurrence of certain specified
conditions. Benjamin Russell is Chairman, Chief Executive Officer and a
director of Russell Lands, Incorporated, and owns beneficially approximately
70% of the equity interest in such company. Management believes this contract
is in the best interest of the Company's shareholders. During the fiscal year
ended January 2, 1999, the Company paid Russell Lands, Incorporated
approximately $1,035,000 for wood materials to operate these boilers.
The Company purchased miscellaneous building materials and supplies
from Russell Do-It Center, a building supply retailer. The Company also
purchased concrete for various construction and repair projects from Area
Concrete, Inc. Russell Do-It Center is a division of and Area Concrete, Inc. is
a wholly owned subsidiary of Russell Lands, Incorporated. Benjamin Russell is
Chairman, Chief Executive Officer and a director of Russell Lands, Incorporated
and owns beneficially approximately 70% of the equity interest in such company.
Management believes these purchases to be in the best interest of the Company's
shareholders. During the fiscal year ended January 2, 1999, the Company paid
Russell Do-It Center and Area Concrete, Inc. approximately $88,000 and $28,000,
respectively, for the purchases described above.
AUDITORS
Ernst & Young LLP, independent accountants, was selected as the
Company's auditors for 1998 after having previously served in the same capacity
since 1930. Representatives of Ernst & Young will be in attendance at the
Annual Meeting and will be given the opportunity to make a statement and to
respond to appropriate questions.
PROPOSALS BY SHAREHOLDERS
The next annual meeting of shareholders is scheduled to be held on
April 26, 2000, and shareholders of the Company may submit proposals for
consideration for inclusion in the proxy statement of the Company relating to
such annual meeting of shareholders. However, in order for such proposals to be
considered for inclusion in the proxy statement of the Company relating to such
annual meeting, such proposals must be received by the Company not later than
November 19, 1999.
If a shareholder fails to notify the Company on or before February 2,
2000 of a proposal which such shareholder intends to present at the Company's
April 26, 2000 Annual Meeting by a means other than inclusion of such proposal
in the Company's proxy materials for that meeting, then if the proposal is
presented at such annual meeting, the holders of the Board of Director's
proxies at such meeting may use their discretionary voting authority with
respect to such proposal, regardless of whether the proposal was discussed in
the Company's proxy statement for such meeting.
- 15 -
18
GENERAL INFORMATION
The Board of Directors of the Company has fixed the close of business
on March 3, 1999, as the record date for determining the holders of the Common
Stock of the Company entitled to notice of and to vote at the Annual Meeting.
As of such date, the Company had issued and outstanding and entitled to vote at
the Annual Meeting an aggregate of 34,833,094 shares of Common Stock, each
share of which is entitled to one (1) vote on all matters to be considered at
the Annual Meeting.
Pursuant to Section 10-2B-7.25 of the Code of Alabama 1975, as
amended, and the Company's Bylaws, a majority of the Common Stock shares
entitled to vote, represented in person or by proxy, will constitute a quorum
at a meeting of the shareholders. Section 10-2B-7.28 of the Code of Alabama
1975, as amended, requires that each of the nominees to be elected to the Board
of Directors receive the affirmative vote of the majority of the votes cast by
the holders of shares of Common Stock represented at the Annual Meeting as part
of the quorum. The vote for election of directors does not include shares which
abstain from voting on a matter or which are not voted on such matter by a
nominee because such nominee is not permitted to exercise discretionary voting
authority and the nominee has not received voting instructions from the
beneficial owner of such shares. Generally, brokers who act as nominees will be
permitted to exercise discretionary voting authority where they have received
no instructions in uncontested elections for directors and on certain other
matters which are not contested where the brokers have complied with Rule 451
concerning the delivery of proxy materials to beneficial owners of the
Company's Common Stock held by such brokers.
The Annual Meeting may be adjourned from time to time without notice
other than announcement at the Annual Meeting, or at any adjournment thereof,
and any business for which notice was given in the accompanying Notice of
Annual Meeting of Shareholders may be transacted at any such adjournment.
In addition to the use of the mails, proxies may be solicited by
personal interview or by telephone or telegraph. The cost of solicitation of
proxies will be borne by the Company. The Company may request brokerage houses,
nominees, custodians, and fiduciaries to forward soliciting material to the
beneficial owners of the stock held of record and will reimburse such persons
for any reasonable expense incurred in forwarding the material.
Copies of the Company's Annual Report on Form 10-K for the year ended
January 2, 1999, in form as filed with the Securities and Exchange Commission,
may be obtained from Floyd G. Hoffman, the Senior Vice President, General
Counsel and Secretary of the Company, without charge, by persons who were
shareholders beneficially or of record as of March 3, 1999.
By Order of the Board of Directors
FLOYD G. HOFFMAN
Senior Vice President,
General Counsel and Secretary
Alexander City, Alabama
March 18, 1999
- 16 -
19
RUSSELL CORPORATION
Alexander City, Alabama
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS _ April 21, 1999
(This Proxy is solicited by the Board of Directors of the Company)
The undersigned shareholder of Russell Corporation (the "Company")
hereby appoints C.V. Nalley III and John A. White, and each of them, with full
power of substitution, proxies to vote the shares of stock which the
undersigned could vote if personally present at the Annual Meeting of
Shareholders of Russell Corporation to be held at the general offices of the
Company in Alexander City, Alabama, on April 21, 1999 at 11:00 a.m., Central
Daylight Time, or any adjournment thereof:
(1) ELECTION OF DIRECTORS
For terms expiring with the Annual Meeting of Shareholders in 2002:
Herschel M. Bloom, Ronald G. Bruno
[ ] FOR all nominees above [ ] WITHHOLD AUTHORITY
(except as marked to the contrary) to vote for all nominees above
For the remainder of the terms expiring with the Annual Meeting of Shareholders in 2000:
John F. Ward, Eric N. Hoyle
[ ] FOR all nominees above [ ] WITHHOLD AUTHORITY
(except as marked to the contrary) to vote for all nominees above
INSTRUCTION: To withhold authority to vote for an
individual nominee, write the nominee's name in the
space provided below.
(over)
20
(2) IN THEIR DISCRETION UPON SUCH OTHER MATTERS AS MAY PROPERLY
COME BEFORE THE MEETING.
UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTEDFOR
ELECTION OF THE PERSONS NOMINATED BY THE BOARD OF DIRECTORS
AS DIRECTORS.
Please date and sign exactly as name appears on the envelope in which
this material was mailed. If shares are held jointly, each shareholder should
sign. Executors, administrators, trustees, etc. should use full title and, if
more than one, all should sign. If the shareholder is a corporation, please
sign full corporate name by an authorized officer.
-------------------------------------------
Signature(s) of Shareholder(s)
-------------------------------------------
Dated , 1999
-------------------------------