FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 29, 1997
Commission file number 1-10984
BURLINGTON INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 56-1584586
(State or other juris- (I.R.S. Employer
diction of incorpora- Identification No.)
tion or organization)
3330 West Friendly Avenue, Greensboro, North Carolina 27410
(Address of principal executive offices)
(Zip Code)
(910) 379-2000
(Registrant's telephone number, including area code)
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 for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
As of April 15, 1997, there were outstanding 56,259,594 shares of Common Stock,
par value $.01 per share, and 4,995,608 shares of Nonvoting Common Stock, par
value $.01 per share, of the registrant.
<PAGE>
Part I - Financial Information
Item 1. Financial Statements
BURLINGTON INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
Consolidated Statements of Operations
(Amounts in thousands, except for per share amounts)
Three Three Six Six
months months months months
ended ended ended ended
March 29, March 30, March 29, March 30,
1997 1996 1997 1996
--------- --------- ---------- ----------
Net sales........................ $ 537,161 $ 572,081 $1,013,651 $1,084,775
Cost of sales.................... 450,196 471,760 854,106 906,449
--------- --------- ---------- ----------
Gross profit..................... 86,965 100,321 159,545 178,326
Selling, administrative and
general expenses............... 37,993 43,925 75,332 84,876
Amortization of goodwill......... 4,540 4,552 9,079 9,105
--------- --------- ---------- ----------
Operating income before
interest and taxes............. 44,432 51,844 75,134 84,345
Interest expense................. 14,849 16,621 29,485 32,922
Other expense (income) - net..... (5,620) (362) (6,186) (73)
--------- --------- ---------- ----------
Income before income taxes....... 35,203 35,585 51,835 51,496
Income tax expense:
Current........................ 9,949 13,448 12,187 17,346
Deferred....................... 4,139 1,436 9,148 4,976
--------- --------- ---------- ----------
Total income tax expense..... 14,088 14,884 21,335 22,322
--------- --------- ---------- ----------
Income before
extraordinary item............. 21,115 20,701 30,500 29,174
Extraordinary item:
Loss from early
extinguishment of debt, net
of income tax benefit of
$454 for the six months
ended March 30, 1996.......... - - - 697
--------- --------- ---------- ----------
Net income....................... $ 21,115 $ 20,701 $ 30,500 $ 28,477
========= ========= ========== ==========
Average common shares
outstanding.................... 61,962 62,501 62,469 63,822
Net income per common share:
Income before
extraordinary item............ $ 0.34 $ 0.33 $ 0.49 $ 0.46
Extraordinary item............. - - - (0.01)
--------- --------- ---------- ----------
$ 0.34 $ 0.33 $ 0.49 $ 0.45
========= ========= ========== ==========
1
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BURLINGTON INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
Consolidated Balance Sheets
(Amounts in thousands)
March 29, September 28,
1997 1996
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents....................... $ 12,961 $ 15,392
Short-term investments.......................... 21,525 22,755
Customer accounts receivable after deductions
of $21,053 and $21,466 for the respective
dates for doubtful accounts, discounts,
returns and allowances........................ 355,584 342,390
Sundry notes and accounts receivable............ 7,319 6,608
Inventories..................................... 353,421 329,386
Prepaid expenses................................ 4,452 2,839
----------- -----------
Total current assets....................... 755,262 719,370
Fixed assets, at cost:
Land and land improvements...................... 34,256 34,332
Buildings....................................... 393,043 381,281
Machinery, fixtures and equipment............... 595,991 585,587
----------- -----------
1,023,290 1,001,200
Less accumulated depreciation and amortization.. 451,551 436,069
----------- -----------
Fixed assets - net......................... 571,739 565,131
Other assets:
Investments and receivables..................... 21,346 14,032
Intangibles and deferred charges................ 30,553 25,875
Net assets held for sale........................ 4,462 4,409
Excess of purchase cost over
net assets acquired............................ 548,046 557,125
----------- -----------
Total other assets......................... 604,407 601,441
----------- -----------
$ 1,931,408 $ 1,885,942
=========== ===========
LIABILITIES and SHAREHOLDERS' EQUITY
Current liabilities:
Short-term borrowings........................... $ 3,900 $ -
Long-term debt due currently.................... 470 1,720
Accounts payable and accrued expenses........... 173,429 196,583
Income taxes payable............................ 16,517 20,674
Deferred income taxes........................... 48,632 46,375
----------- -----------
Total current liabilities.................. 242,948 265,352
Long-term liabilities:
Long-term debt.................................. 890,738 837,136
Other........................................... 59,102 57,360
----------- -----------
Total long-term liabilities................ 949,840 894,496
Deferred income taxes........................... 117,065 110,174
Shareholders' equity:
Common stock issued............................. 684 684
Capital in excess of par value.................. 881,246 885,185
Accumulated deficit............................. (162,499) (192,999)
Currency translation adjustments................ (10,429) (9,263)
----------- -----------
709,002 683,607
Less cost of common stock held in treasury...... (87,447) (67,687)
----------- -----------
Total shareholders' equity................. 621,555 615,920
----------- -----------
$ 1,931,408 $ 1,885,942
=========== ===========
2
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BURLINGTON INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
Consolidated Statements of Cash Flows
Increase (Decrease) in Cash and Cash Equivalents
(Amounts in thousands)
Six Six
months months
ended ended
March 29, March 30,
1997 1996
---------- ---------
Cash flows from operating activities:
Net income......................................... $ 30,500 $ 28,477
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization of fixed assets.. 32,004 33,187
Amortization of intangibles
and deferred debt expense..................... 9,393 10,742
Deferred income taxes.......................... 9,148 4,976
Gain on disposal of assets..................... (4,780) -
Loss from early extinguishment of debt......... - 1,151
Changes in assets and liabilities:
Customer accounts receivable - net......... (14,249) (42,894)
Sundry notes and accounts receivable....... (711) 6,149
Inventories................................ (25,269) (9,798)
Prepaid expenses........................... (1,613) (857)
Accounts payable and accrued expenses...... (16,060) (11,013)
(Payment) receipt of financing fees............ 364 (15)
Change in interest payable..................... 284 2,216
Change in income taxes payable................. (2,096) 9,500
Other.......................................... (8,628) 1,481
---------- ---------
Total adjustments......................... (22,213) 4,825
---------- ---------
Net cash provided by operating activities.......... 8,287 33,302
---------- ---------
Cash flows from investing activities:
Capital expenditures............................... (40,264) (42,767)
Proceeds from sales of assets...................... 4,697 3,099
Investment in joint venture........................ (1,750) -
Change in investments.............................. (186) (1,207)
---------- ---------
Net cash used by investing activities.............. (37,503) (40,875)
---------- ---------
Cash flows from financing activities:
Net change in short-term borrowings................ 3,900 26
Repayments of long-term debt....................... (9,882) (545,930)
Proceeds from issuance of long-term debt........... 61,504 590,865
Proceeds from exercise of stock options............ 2,057 -
Purchase of treasury stock......................... (30,794) (45,021)
---------- ---------
Net cash provided (used) by financing activities... 26,785 (60)
---------- ---------
Net change in cash and cash equivalents............ (2,431) (7,633)
Cash and cash equivalents at beginning of period... 15,392 10,507
---------- ---------
Cash and cash equivalents at end of period......... $ 12,961 $ 2,874
========== =========
3
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BURLINGTON INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
Notes to Consolidated Financial Statements
As of and for the six months ended March 29, 1997
Note A.
With respect to interim quarterly financial data, which are unaudited, in
the opinion of Management, all adjustments necessary to a fair statement of the
results for such interim periods have been included. All adjustments were of a
normal recurring nature.
Note B.
Accounts of international subsidiaries are included as of dates three
months or less prior to that of the consolidated balance sheets.
Note C.
Income per common share is computed based on the weighted average number of
common shares outstanding during each period. In February 1997, the Financial
Accounting Standards Board issued Statement of Financial Accounting Standards
No. 128, "Earnings per Share", which the Company is required to adopt in the
first quarter of the 1998 fiscal year. At that time, the Company will be
required to change the method currently used to compute earnings per share and
to restate all prior periods. The impact of Statement No. 128 on the calculation
of earnings per share for these periods is not expected to be material.
Note D.
Use of Estimates: The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.
Note E.
Inventories are summarized as follows (dollar amounts in thousands):
March 29, September 28,
1997 1996
---------- ----------
Inventories at average cost:
Raw materials............................. $ 61,051 $ 49,481
Stock in process.......................... 97,052 96,836
Produced goods............................ 213,567 200,679
Dyes, chemicals and supplies.............. 24,783 23,100
---------- ----------
396,453 370,096
Less excess of average cost over LIFO..... 43,032 40,710
---------- ----------
Total................................. $ 353,421 $ 329,386
========== ==========
Note F.
During the March 1997 quarter, the Company recognized an after-tax gain of
$3.1 million, or $0.05 per share, related to the disposal of certain non-core
operating assets. The related pre-tax gain is included in the caption "Other
expense (income) - net" in the consolidated statement of operations.
4
<PAGE>
Item 2. Management's Discussion and Analysis of Results
of Operations and Financial Condition
General
The Company's earnings per share for the second quarter of the 1997
fiscal year were $0.34 per share, in comparison with $0.33 recorded in the same
quarter of the 1996 fiscal year. Included in the results of the second quarter
of the 1997 fiscal year were two non-recurring items with a net effect of $0.01
gain per share: (i) an after-tax gain of $3.1 million, or $0.05 per share, from
the sale of Advanced Textiles, Inc. (a small non-core business unit); and (ii)
an after-tax charge of $2.3 million, or $0.04 per share, related to the closing
of a yarn spinning plant in the Burlington House Area Rugs division.
Results of operations for the second quarter of the 1997 fiscal year
were essentially flat when compared with the same quarter of the previous year,
despite the weakness in the Company's denim operations which resulted from
inventory reductions in the supply chain. Although the tone of the denim
business is better, the Company expects that the denim inventory correction will
continue into the September quarter and as a result, will negatively impact
earnings for the remaining half of the fiscal year by $0.10 to $0.15 per share.
Performance by Segment
The Company conducts its operations in two principal industry segments:
products for apparel markets and products for interior furnishings markets. The
following table sets forth certain information about the segment results for the
three months and six months ended March 29, 1997 and March 30, 1996,
respectively. Because of the existence of significant non-cash expenses, such as
depreciation of fixed assets and amortization of intangible assets, the Company
believes that operating income before interest, taxes, depreciation and
amortization ("EBITDA"), which is set forth in the table below with respect to
each segment, contributes to a better understanding of the Company's ability to
satisfy its debt obligations and to utilize cash for other purposes. EBITDA
should not be considered in isolation from or as a substitute for operating
income before interest and taxes, cash flow from operating activities and other
consolidated income or cash flow statement data prepared in accordance with
generally accepted accounting principles.
5
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Three Months Ended Six Months Ended
------------------- -------------------
March 29, March 30, March 29, March 30,
1997 1996 1997 1996
-------- -------- -------- --------
(Dollar amounts in millions)
Net sales
Apparel products.................. $ 324.7 $ 362.2 $ 597.7 $ 662.6
Interior furnishings products..... 212.5 209.9 416.0 422.2
-------- -------- -------- --------
Total.......................... $ 537.2 $ 572.1 $l,013.7 $1,084.8
======== ======== ======== ========
Operating income before
interest and taxes
Apparel products.................. $ 33.6 $ 39.5 $ 51.5 $ 59.2
As a percentage of net sales.... 10.3% 10.9% 8.6% 8.9%
Interior furnishings products..... $ 10.8(a)$ 12.3 $ 23.6(a)$ 25.1
As a percentage of net sales.... 5.1% 5.9% 5.7% 5.9%
-------- -------- -------- --------
Total.......................... $ 44.4 $ 51.8 $ 75.1 $ 84.3
As a percentage of net sales.. 8.3% 9.1% 7.4% 7.8%
======== ======== ======== ========
Operating income before interest,
taxes, depreciation and
amortization (EBITDA)
Apparel products.................. $ 46.0 $ 52.9 $ 75.9 $ 85.5
As a percentage of net sales.... 14.2% 14.6% 12.7% 12.9%
Interior furnishings products..... $ 19.3(a)$ 20.9 $ 40.4(a)$ 42.2
As a percentage of net sales.... 9.1% 10.0% 9.7% 10.0%
-------- -------- -------- --------
Total......................... $ 65.3 $ 73.8 $ 116.3 $ 127.7
As a percentage of net sales. 12.2% 12.9% 11.5% 11.8%
======== ======== ======== ========
(a) Includes $3.8 million charge for the closing of a yarn spinning plant in
the Burlington House Area Rugs division.
RESULTS OF OPERATIONS
Comparison of Three Months ended March 29, 1997 and March 30, 1996.
Net sales for the second quarter of the 1997 fiscal year were $537.2
million, 6.1% lower than the $572.1 million recorded for the second quarter of
the 1996 fiscal year. Net sales of products for apparel markets for the second
quarter of the 1997 fiscal year were $324.7 million, 10.4% lower than the $362.2
million recorded in the second quarter of the 1996 fiscal year. This reduction
was primarily due to the elimination of the volume produced and marketed by the
Knitted Fabrics division, which was closed in June, 1996, and lower sales of the
Denim division. Net sales of products for interior furnishings markets for the
second quarter of the 1997 fiscal year were $212.5 million in comparison with
the $209.9 million recorded in the second quarter of the 1996 fiscal year. The
increase was mainly attributable to improved activity in the Carpet division.
Total export sales increased 21% over the comparable quarter of the prior year
and represented 12.2% of net sales.
Operating income before interest and taxes for the second quarter of the
1997 fiscal year was $48.2 million before deducting the non-recurring $3.8
6
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million charge for plant closing described under "General", in comparison with
$51.8 million recorded in the same quarter of fiscal 1996. Amortization of
goodwill was $4.5 million and $4.6 million in the second quarter of the 1997 and
1996 fiscal years, respectively. Operating income before interest and taxes for
the apparel products segment for the second quarter of the 1997 fiscal year was
$33.6 million compared to $39.5 million recorded for the second quarter of the
1996 fiscal year. The factors accounting for the decrease in operating income of
the apparel products segment were lower profits of the Denim division partially
offset by the absence of Knitted Fabrics division operating losses in the
current period. Operating income before interest and taxes for the interior
furnishings products segment for the second quarter of the 1997 fiscal year was
$10.8 million, compared to $12.3 million recorded for the second quarter of the
1996 fiscal year. The reduction was due to the non-recurring charge for plant
closing referred to above partially offset by improved results in the Carpet
division.
Operating income before interest, taxes, depreciation and amortization
(EBITDA) for the second quarter of the 1997 fiscal year was $69.1 million before
non-recurring charge, compared with $73.8 million in the second quarter of the
1996 fiscal year. EBITDA for the apparel products segment was $46.0 million, or
14.2% of sales, in the second quarter of the 1997 fiscal year compared with
$52.9 million, or 14.6% of sales in the second quarter of the 1996 fiscal year.
EBITDA for the interior furnishings products segment was $23.1 million before
non-recurring charge in the second quarter of the 1997 fiscal year in comparison
with $20.9 million in the second quarter of the 1996 fiscal year.
Interest expense for the second quarter of the 1997 fiscal year was $14.8
million, or 2.8% of net sales, compared with $16.6 million, or 2.9% of net
sales, in the second quarter of the 1996 fiscal year. The decrease in interest
expense was due primarily to the lower level of debt outstanding.
Other income-net for the second quarter of the 1997 fiscal year was $5.6
million, consisting principally of a $4.8 million gain on the disposal of
certain non-core operating assets and interest income. Other income-net for the
second quarter of the 1996 fiscal year was $0.4 million, consisting principally
of interest income.
Comparison of Six Months ended March 29, 1997 and March 30, 1996.
Net sales for the first six months of the 1997 fiscal year were $1,013.7
million, 6.6% lower than the $1,084.8 million recorded for the first six months
of the 1996 fiscal year. Net sales of products for apparel markets for the first
six months of the 1997 fiscal year were $597.7 million, 9.8% lower than the
$662.6 million recorded in the first six months of the 1996 fiscal year. This
reduction was primarily due to the elimination of the volume produced and
marketed by the Knitted Fabrics division, which was closed in June, 1996. Net
sales of products for interior furnishings markets for the first six months of
the 1997 fiscal year were $416.0 million in comparison with the $422.2 million
recorded in the first six months of the 1996 fiscal year. The change in sales of
the interior furnishings segment was mainly attributable to the sale of the JG
Furniture division in April, 1996. Total export sales increased 17% over the
comparable period of the prior year and represented 11.9% of net sales.
7
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Operating income before interest and taxes for the first six months of the
1997 fiscal year was $78.9 million before deducting the non-recurring $3.8
million charge for plant closing described under "General", in comparison with
$84.3 million recorded in the same period of fiscal 1996. Amortization of
goodwill was $9.1 million in the first six months of the 1997 and 1996 fiscal
years. Operating income before interest and taxes for the apparel products
segment for the first six months of the 1997 fiscal year was $51.5 million
compared to $59.2 million recorded for the first six months of the 1996 fiscal
year. The factors accounting for the decrease in operating income of the apparel
products segment were lower profits of the Denim division partially offset by
the absence of Knitted Fabrics division operating losses in the current period.
Operating income before interest and taxes for the interior furnishings products
segment for the first six months of the 1997 fiscal year was $23.6 million,
compared to $25.1 million recorded for the first six months of the 1996 fiscal
year. The reduction was due to the non-recurring charge for plant closing
referred to above partially offset by improved results in the Carpet division.
Operating income before interest, taxes, depreciation and amortization
(EBITDA) for the first six months of the 1997 fiscal year was $120.1 million
before non-recurring charge, compared with $127.7 million in the first six
months of the 1996 fiscal year. EBITDA for the apparel products segment was
$75.9 million, or 12.7% of sales, in the first six months of the 1997 fiscal
year compared with $85.5 million, or 12.9% of sales in the first six months of
the 1996 fiscal year. EBITDA for the interior furnishings products segment was
$44.2 million before non-recurring charge in the first six months of the 1997
fiscal year in comparison with $42.2 million in the first six months of the 1996
fiscal year.
Interest expense for the first six months of the 1997 fiscal year was $29.5
million, or 2.9% of net sales, compared with $32.9 million, or 3.0% of net
sales, in the first six months of the 1996 fiscal year. The decrease in interest
expense was due primarily to the lower level of debt outstanding.
Other income-net for the first six months of the 1997 fiscal year was
$6.2 million, consisting principally of a $4.8 million gain on the disposal of
certain non-core operating assets and interest income. Other income-net for the
first six months of the 1996 fiscal year consisted principally of a $1.2 million
loss on the disposal of certain non-core operating assets, offset by $1.3
million of interest income.
An extraordinary loss from early extinguishment of debt - $1.2 million
before taxes, $0.7 million net of tax benefit, or $0.01 loss per share - was
recorded in the first six months of the 1996 fiscal year. This resulted from the
write-off of deferred debt expense associated with the replacement of the 1994
Bank Credit Agreement in November, 1995.
Liquidity and Capital Resources
During the first six months of the 1997 fiscal year, the Company generated
$8.3 million of cash from operating activities and $4.7 million from sales of
assets and had net borrowings of long- and short-term debt of $55.5 million.
8
<PAGE>
Cash was primarily used as follows: $30.8 million for the repurchase of Company
common stock and $42.0 million for capital expenditures and investment in joint
venture. At March 29, 1997, total debt of the Company (consisting of current and
non-current portions of long-term debt and short-term borrowings) was $895.1
million compared with $838.9 million at September 28, 1996 and $957.8 million at
March 30, 1996.
The Company's principal uses of funds for the next several years will be
for capital investments (including the funding of acquisitions and
participations in joint ventures), servicing of indebtedness and working capital
needs, and the repurchase of shares of Company common stock. The Company intends
to fund such needs principally from net cash provided by operating activities
and, to the extent necessary, from funds provided under the revolving credit
facility of its 1995 Bank Credit Agreement and the receivables-backed commercial
paper program described below. The Company believes that these sources of funds
will be adequate to meet the Company's foregoing needs.
The Company has a $750.0 million unsecured Revolving Credit Facility ("1995
Bank Credit Agreement") which expires in March, 2001. At April 25, 1997, the
Company had approximately $215.0 million in unused capacity under this facility.
The Company also maintains $27.0 million in additional overnight borrowing
availability under bank lines of credit.
Loans under the 1995 Bank Credit Agreement bear interest at optional
floating rates based on the Adjusted Eurodollar Rate plus 0.275% or Eurodollar
rates or fixed rates which may be offered by lenders pursuant to the competitive
bid procedures under the Agreement. In addition, the entire amount of the $750.0
million credit facility is subject to an annual facility fee of 0.15%. Changes
in the Company's debt rating from current levels would increase or decrease
borrowing costs.
The 1995 Bank Credit Agreement imposes various limitations on the liquidity
of the Company. The Agreement requires the Company to maintain minimum interest
coverage and maximum leverage ratios and a specified level of net worth. In
addition, the Agreement limits dividend payments, stock repurchases, leases, the
incurrence of additional indebtedness by consolidated subsidiaries, the creation
of additional liens and the making of investments in non-U.S. persons and
restricts the Company's ability to enter into certain merger, liquidation or
asset sale or purchase transactions.
The Company also has in effect, through its wholly-owned subsidiary, B.I.
Funding, Inc., a $225.0 million receivables-backed, A-1/D-1 rated commercial
paper program which is supported by a multi-bank liquidity facility expiring in
August 1998. At April 25, 1997, $189.4 million of commercial paper with original
maturities of up to 75 days was outstanding. There were no borrowings
outstanding at such date under the liquidity facility.
In September 1995, a $400 million senior debt shelf registration
statement was filed and became effective. The Company has utilized $150 million
and has remaining capacity of $250 million under this shelf registration.
9
<PAGE>
Because the Company's obligations under the 1995 Bank Credit Agreement and
commercial paper program bear interest at floating rates, the Company is
sensitive to changes in prevailing interest rates. The Company uses derivative
instruments to manage its interest rate exposure, rather than for trading
purposes.
Forward-Looking Statements
With the exception of historical information, the statements contained
in Management's Discussion and Analysis of Results of Operations and Financial
Condition and in other parts of this report include forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. These statements
represent management's current expectations or beliefs as to the future and are
subject to risks and uncertainties which could affect the Company's actual
future results and which could cause those results to differ materially from the
expectations or beliefs expressed in the forward-looking statements. Such risks
and uncertainties include, but are not limited to: the outlook for global
economic activity and its impact upon the Company's businesses; the demand for
textiles products, including the acceptance by customers and consumers of the
Company's products and the possible imbalances between consumer demand and
inventories of the Company's customers; the success of the Company's
value-added, fashion-driven product strategy; the Company's relationships with
its principal customers and suppliers; prices of raw materials and labor
components incorporated into the Company's costs; the continuing availability of
supplies of raw materials; the success of the Company's strategic plans to
expand in the United States, India and Mexico; the Company's ability to finance
its capital expansion and modernization programs, and the level of the Company's
indebtedness and the exposure to interest rate fluctuations; governmental
legislation and regulatory changes which impose higher costs, or greater
restrictions, on the Company's operations; and the long-term implications of the
current development of regional trade blocs and the effect of the anticipated
elimination of quotas and lowering of tariffs under the GATT trade regime by
2005. Other risks and uncertainties may also be described from time to time in
the Company's other reports and filings with the Securities and Exchange
Commission.
10
<PAGE>
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.
At Registrant's Annual Meeting held on February 6, 1997, the following
actions were taken:
1. John D. Englar and Abraham B. Stenberg were elected as Class
II Directors to serve for a three-year term expiring at the
Annual Meeting of Stockholders in 2000; and
2. The selection of Ernst & Young LLP as Registrant's
independent public accountants for its 1997 fiscal year was
approved.
Mr. Englar received 50,654,093 shares voted in favor of his election
and 528,929 shares were withheld; and Mr. Stenberg received 50,659,624 shares
voted in favor of his election and 523,398 shares were withheld. 51,091,331
shares were voted in favor of the selection of Ernst & Young LLP as Registrant's
independent public accountants, 51,786 shares were voted against and 39,905
shares abstained.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
1. Bylaws of the Corporation, as amended through February
6, 1997.
2. Deferred Compensation Plan for Non-Employee Directors.
(Management contract or compensatory plan, contract or
arrangement)
3. Agreement dated as of February 1, 1997 between the
Corporation and George W. Henderson, III. (Management
contract or compensatory plan, contract or arrangement)
4. Agreement dated as of February 1, 1997 between the
Corporation and John D. Englar. (Management contract or
compensatory plan, contract or arrangement)
(b) Reports on Form 8-K.
The Company did not file any reports on Form 8-K during
the quarter for which this report is filed.
11
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BURLINGTON INDUSTRIES, INC.
By /s/ CHARLES E. PETERS, JR.
Charles E. Peters, Jr.
Date: April 30, 1997 Senior Vice President and
Chief Financial Officer
By /s/ AGUSTIN J. DIODATI
Date: April 30, 1997 Agustin J. Diodati
Vice President and
Controller
12
Exhibit 1.
BYLAWS
OF
BURLINGTON INDUSTRIES, INC.
ARTICLE I
OFFICES
SECTION 1. Registered Office. The address of the registered
office of Burlington Industries, Inc. (the "Corporation") in the State of
Delaware is Corporation Trust Center, 1209 Orange Street, in the City of
Wilmington, County of New Castle. The name of the Corporation's registered agent
at such address is The Corporation Trust Company.
SECTION 2. Other Offices. The Corporation may also have an
office or offices at any other place or places within or without the State of
Delaware.
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 1. Annual Meetings. The annual meeting of the
stockholders for the election of directors, and for the transaction of such
other business as may properly come before the meeting, shall be held at such
place, either within or without the State of Delaware, on such date and at such
hour as shall be fixed by resolution of the Board of Directors of the
Corporation (the "Board") and designated in the notice or waiver of notice
thereof.
SECTION 2. Special Meetings. A special meeting of the
stockholders for any purpose or purposes may be called by the Board or the
Chairman of the Board of the Corporation, to be held at such place, within or
without the State of Delaware, on such date and at such hour as shall be
designated in the notice or waiver of notice thereof.
Only such business as is stated in the written notice of a
special meeting may be acted upon thereat.
SECTION 3. Notice of Meetings. Except as otherwise provided by
law, written notice of each annual or special meeting of stockholders stating
the place, date and hour of the meeting and, in the case of a special meeting,
the purpose or purposes for which the meeting is held, shall be given personally
or by first class mail to each stockholder entitled to vote at such meeting, not
less than l0 nor more than 60 calendar days before the date of the meeting. If
mailed, such notice shall be deemed to be given when deposited in the United
States mail, postage prepaid, directed to the stockholder at such stockholder's
address as it appears on the records of the Corporation. If, prior to the time
of mailing, the Secretary shall have received from any stockholder entitled to
vote a written request that notices intended for such stockholder are to be
mailed to some address other than the address that appears on the records of the
Corporation, notices intended for such stockholder shall be mailed to the
address designated in such request.
Notice of a special meeting may be given by the person or
persons calling the meeting, or, upon the written request of such person or
persons, such notice shall be given by the Secretary of the Corporation on
behalf of such person or persons. If the person or persons calling a special
meeting of stockholders give notice thereof, such person or persons shall
forward a copy thereof to the Secretary. Every request to the Secretary for the
giving of notice of a special meeting of stockholders shall state the purpose or
purposes of such meeting.
SECTION 4. Waiver of Notice. Notice of any annual or special
meeting of stockholders need not be given to any stockholder entitled to vote at
such meeting who files a written waiver of notice with the Secretary, signed by
the person entitled to notice, whether before or after the meeting. Neither the
business to be transacted at, nor the purpose of, any meeting of stockholders
need be specified in any written waiver of notice. Attendance of a stockholder
at a meeting, in person or by proxy, shall constitute a waiver of notice of such
meeting, except as provided by law.
SECTION 5. Adjournments. When a meeting is adjourned to
another date, hour or place, notice need not be given of the adjourned meeting
if the date, hour and place thereof are announced at the meeting at which the
adjournment is taken. If the adjournment is for more than 30 calendar days, or
if after the adjournment a new record date is fixed for the adjourned meeting, a
notice of the adjourned meeting shall be given to each stockholder of record
entitled to vote at the adjourned meeting. At the adjourned meeting any business
may be transacted which might have been transacted at the original meeting.
When any meeting is convened the presiding officer, if
directed by the Board, may adjourn the meeting if (a) no quorum is present for
the transaction of business, or (b) the Board determines that adjournment is
necessary or appropriate to enable the stockholders (i) to consider fully
information which the Board determines has not been made sufficiently or timely
available to stockholders or (ii) otherwise to exercise effectively their voting
rights.
SECTION 6. Quorum. Except as otherwise provided by law or the
Restated Certificate of Incorporation, whenever a class of stock of the
Corporation is entitled to vote as a separate class, or whenever classes of
stock of the Corporation are entitled to vote together as a single class, on any
matter brought before any meeting of the stockholders, whether annual or
special, holders of shares entitled to cast a majority of the votes entitled to
be cast by all the holders of the shares of stock of such class voting as a
separate class, or classes voting together as a single class, as the case may
be, outstanding and entitled to vote thereat, present in person or by proxy,
shall constitute a quorum at any such meeting of the stockholders. If, however,
such quorum shall not be present or represented at any such meeting of the
stockholders, the stockholders entitled to vote thereat may adjourn the meeting
from time to time in accordance with Section 5 of this Article II until a quorum
shall be present or represented.
SECTION 7. Voting. Except as otherwise provided by law or the
Restated Certificate of Incorporation or these Bylaws, when a quorum is present
with respect to any matter brought before any meeting of the stockholders, the
vote of the holders of shares entitled to cast a majority of the votes entitled
to be cast by all the holders of the shares constituting such quorum shall
decide any such matter. Unless otherwise provided in the Restated Certificate of
Incorporation, each stockholder represented at a meeting of stockholders shall
be entitled to cast one vote for each share of the capital stock entitled to
vote thereat held by such stockholder.
SECTION 8. Proxies. Each stockholder entitled to vote at a
meeting of stockholders or to express consent or dissent to corporate action in
writing without a meeting may authorize another person or persons to act for
such stockholder by proxy. Such proxy shall be filed with the Secretary before
such meeting of stockholders or such corporate action without a meeting, at such
time as the Board may require. No proxy shall be voted or acted upon after three
years from its date, unless the proxy provides for a longer period.
SECTION 9. Advance Notice of Business to be Transacted at
Stockholder Meetings. No business may be transacted at an annual meeting of
stockholders, other than business that is either (a) specified in the notice of
meeting (or any supplement thereto) given by or at the direction of the Board
(or any duly authorized committee thereof), (b) otherwise properly brought
before the annual meeting by or at the direction of the Board (or any duly
authorized committee thereof) or (c) otherwise properly brought before the
annual meeting by any stockholder of the Corporation (i) who is a stockholder of
record on the date of the giving of the notice provided for in this Section 9
and on the record date for the determination of stockholders entitled to vote at
such annual meeting and (ii) who complies with the notice procedures set forth
in this Section 9.
In addition to any other applicable requirements, for business
to be properly brought before an annual meeting by a stockholder, such
stockholder must have given timely notice thereof in proper written form to the
Secretary of the Corporation.
To be timely, a stockholder's notice to the Secretary must be
delivered to or mailed and received at the principal executive offices of the
Corporation not less than 90 days nor more than 120 days prior to the
anniversary date of the immediately preceding annual meeting of stockholders;
provided, however, that in the event that the annual meeting is called for a
date that is not within 30 days before or after such anniversary date, notice by
the stockholder in order to be timely must be so received not later than the
close of business on the tenth day following the day on which such notice of the
date of the annual meeting was mailed or such public disclosure of the date of
the annual meeting was made, whichever first occurs.
To be in proper written form, a stockholder's notice to the
Secretary must set forth as to each matter such stockholder proposes to bring
before the annual meeting (a) a brief description of the business desired to be
brought before the annual meeting and the reasons for conducting such business
at the annual meeting, (b) the name and record address of such stockholder, (c)
the class or series and number of shares of capital stock of the Corporation
which are owned beneficially or of record by such stockholder, (d) a description
of all arrangements or understandings between such stockholder and any other
person or persons (including their names) in connection with the proposal of
such business by such stockholder and any material interest of such stockholder
in such business and (e) a representation that such stockholder intends to
appear in person or by proxy at the annual meeting to bring such business before
the meeting. No business shall be conducted at the annual meeting of
stockholders except business brought before the annual meeting in accordance
with the procedures set forth in this Section 9, provided, however, that, once
business has been properly brought before the annual meeting in accordance with
such procedures, nothing in this Section 9 shall be deemed to preclude
discussion by any stockholder of any such business. If the Chairman of an annual
meeting determines that business was not properly brought before the annual
meeting in accordance with the foregoing procedures, the Chairman shall declare
to the meeting that the business was not properly brought before the meeting and
such business shall not be transacted.
ARTICLE III
BOARD OF DIRECTORS
SECTION 1. General Powers. The business and affairs of the
Corporation shall be managed by the Board, which may exercise all such powers of
the Corporation and do all such lawful acts and things as are not by law or by
the Restated Certificate of Incorporation directed or required to be exercised
or done by the stockholders.
SECTION 2. Number and Term of Office. Subject to the rights,
if any, of holders of preferred stock of the Corporation, the Board shall
consist of not less than three nor more than fifteen members, the exact number
of which shall be fixed from time to time by the Board. The Board shall, by
resolution passed by a majority of the Board, designate the directors to serve
as initial Class I, Class II and Class III directors upon filing of the Restated
Certificate of Incorporation with the Secretary of State of the State of
Delaware. Except as provided in Section 4 of this Article III, directors shall
be elected by a plurality of the votes cast at annual meetings of stockholders,
and each director so elected shall hold office as provided by Article VIII of
the Restated Certificate of Incorporation. None of the directors need be
stockholders of the Corporation.
SECTION 3. Nomination of Directors and Advance Notice Thereof.
Only persons who are nominated in accordance with the following procedures shall
be eligible for election as directors of the Corporation except as may be
otherwise provided in the Restated Certificate of Incorporation of the
Corporation with respect to the right of holders of preferred stock of the
Corporation to nominate and elect a specified number of directors in certain
circumstances. Nominations of persons for election to the Board of Directors may
be made at any annual meeting of stockholders, or at any special meeting of
stockholders called for the purpose of electing directors, (a) by or at the
direction of the Board (or any duly authorized committee thereof) or (b) by any
stockholder of the Corporation (i) who is a stockholder of record on the date of
the giving of the notice provided for in this Section and on the record date for
the determination of stockholders entitled to vote at such meeting and (ii) who
complies with the notice procedures set forth in this Section 3.
In addition to any other applicable requirements, for a
nomination to be made by a stockholder, such stockholder must have given timely
notice thereof in proper written form to the Secretary of the Corporation.
To be timely, a stockholder's notice to the Secretary must be
delivered to or mailed and received at the principal executive offices of the
Corporation (a) in the case of an annual meeting, not less than 90 days nor more
than 120 days prior to the anniversary date of the immediately preceding annual
meeting of stockholders; provided, however, that in the event that the annual
meeting is called for a date that is not within 30 days before or after such
anniversary date, notice by the stockholder in order to be timely must be so
received not later than the close of business on the tenth day following the day
on which such notice of the date of the annual meeting was mailed or such public
disclosure of the date of the annual meeting was made, whichever first occurs;
and (b) in the case of a special meeting of stockholders called for the purpose
of electing directors, not later than the close of business on the tenth day
following the day on which notice of the date of the special meeting was mailed
or public disclosure of the date of the special meeting was made, whichever
first occurs.
To be in proper written form, a stockholder's notice to the
Secretary must set forth (a) as to each person whom the stockholder proposes to
nominate for election as a director (i) the name, age, business address and
residence address of the person, (ii) the principal occupation or employment of
the person, (iii) the class or series and number of shares of capital stock of
the Corporation which are owned beneficially or of record by the person and (iv)
any other information relating to the person that would be required to be
disclosed in a proxy statement or other filings required to be made in
connection with solicitations of proxies for election of directors pursuant to
Section 14 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the rules and regulations promulgated thereunder; and (b) as to the
stockholder giving the notice (i) the name and record address of such
stockholder, (ii) the class or series and number of shares of capital stock of
the Corporation which are owned beneficially or of record by such stockholder,
(iii) a description of all arrangements or understandings between such
stockholder and each proposed nominee and any other person or persons (including
their names) pursuant to which the nomination(s) are to be made by such
stockholder, (iv) a representation that such stockholder intends to appear in
person or by proxy at the meeting to nominate the persons named in its notice
and (v) any other information relating to such stockholder that would be
required to be disclosed in a proxy statement or other filings required to be
made in connection with solicitations of proxies for election of directors
pursuant to Section l4 of the Exchange Act and the rules and regulations
promulgated thereunder. Such notice must be accompanied by a written consent of
each proposed nominee to being named as a nominee and to serve as a director if
elected.
No person shall be eligible for election as a director of the
Corporation unless nominated in accordance with the procedures set forth in this
Section 3. If the Chairman of the meeting determines that a nomination was not
made in accordance with the foregoing procedures, the Chairman shall declare to
the meeting that the nomination was defective and such defective nomination
shall be disregarded.
SECTION 4. Resignation and Vacancies. Any director may resign
at any time by giving written notice to the Board, the President or the
Secretary of the Corporation. Such resignation shall take effect at the time
specified therein or, if the time is not specified, upon receipt by the
Corporation thereof; and, unless otherwise specified therein, acceptance of such
resignation shall not be necessary to make it effective.
Vacancies occurring in the Board and newly created
directorships may be filled by a majority of the directors then in office,
although less than a quorum, or by a sole remaining director. Any director
elected to fill a vacancy shall hold office for a term that shall coincide with
the term of the class to which such director shall have been elected.
SECTION 5. Meetings. (a) Annual Meetings. As soon as
practicable after each annual election of directors, the Board shall meet for
the purpose of organization and the transaction of other business, unless it
shall have transacted all such business by written consent pursuant to Section 6
of this Article III.
(b) Other Meetings. Other meetings of the Board shall be held
at such times as the Board or the Chairman of the Board shall from time to time
determine.
(c) Notice of Meetings. The Secretary shall give notice to
each director of each special meeting, which notice shall state the time, place
and purpose of such meeting. Notice of each such meeting shall be given to each
director prior to such meeting. A waiver of notice by the person entitled
thereto, whether before or after the time of any such meeting, shall be deemed
equivalent to notice. Attendance of a person at a meeting shall constitute a
waiver of notice of such meeting.
(d) Place of Meetings. The Board may hold its meetings at such
place or places, within or without the State of Delaware, as the Board or the
Chairman of the Board may from time to time determine, or as shall be designated
in the respective notices or waivers of notice thereof.
(e) Quorum and Manner of Acting. A majority of the total
number of directors (but not less than one) shall constitute a quorum for the
transaction of business at any meeting of the Board, and the vote of a majority
of those directors present at any such meeting at which a quorum is present
shall be necessary for the passage of any resolution or act of the Board, except
as otherwise expressly required by law or these Bylaws. In the absence of a
quorum for any such meeting, a majority of the directors present thereat may
adjourn such meeting from time to time until a quorum shall be present.
(f) Organization. At each meeting of the Board, one of the
following shall act as Chairman of the meeting and preside, in the following
order of precedence:
(i) the Chairman of the Board;
(ii) the President; or
(iii) any director chosen by a majority of the
directors present.
The Secretary or, in the case of his/her absence, any person (who shall be an
Assistant Secretary, if an Assistant Secretary is present) whom the Chairman
shall appoint shall act as secretary of such meeting and keep the minutes
thereof.
SECTION 6. Directors' Consent in Lieu of Meeting. Any action
required or permitted to be taken at any meeting of the Board or of any
committee thereof may be taken without a meeting if all members of the Board or
such committee, as the case may be, consent thereto in writing, and the writing
or writings are filed with the minutes of the proceedings of the Board or
committee.
SECTION 7. Action by Means of Telephone or Similar
Communications Equipment. Any one or more members of the Board, or of any
committee thereof, may participate in a meeting of the Board or any such
committee by means of conference telephone or similar communications equipment
by means of which all persons participating in the meeting can hear each other,
and participation in a meeting by such means shall constitute presence in person
at such meeting.
ARTICLE IV
COMMITTEES
The Board may, by resolution passed by a majority of the
Board, designate one or more committees, each committee to consist of one or
more directors of the Corporation. The Board may designate one or more directors
as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of any such committee. In the absence or
disqualification of a member of a committee, and in the absence of a designation
by the Board of an alternate member to replace the absent or disqualified
member, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the Board to act at the meeting in the
place of any absent or disqualified member. Any committee, to the extent allowed
by law and provided in the resolution establishing such committee, shall have
and may exercise all the powers and authority of the Board in the management of
the business and affairs of the Corporation. Each committee shall keep regular
minutes and report to the Board when required.
ARTICLE V
OFFICERS
SECTION 1. Executive Officers. The executive officers of the
Corporation shall be a Chairman of the Board, a Vice Chairman, a President, a
Secretary and a Treasurer and may include one or more Vice Presidents, one or
more Assistant Secretaries and one or more Assistant Treasurers. Any two or more
offices may be held by the same person.
SECTION 2. Authority and Duties. All officers, as between
themselves and the Corporation, shall have such authority and perform such
duties in the management of the Corporation as may be provided in these Bylaws
or, to the extent not so provided, by resolution of the Board.
SECTION 3. Term of Office, Resignation and Removal. (a) All
officers shall be elected or appointed by, or in such manner as shall be
determined by, the Board and shall hold office for such term as may be
determined by the Board. Each officer shall hold office until his successor has
been elected or appointed and qualified or his earlier death or resignation or
removal in the manner hereinafter provided. The Board may require any officer to
give security for the faithful performance of his duties.
(b) Any officer may resign at any time by giving written
notice to the Board or to the President or the Secretary of the Corporation, and
such resignation shall take effect at the time specified therein or, if the time
when it shall become effective is not specified therein, at the time it is
accepted by action of the Board. Except as aforesaid, acceptance of such
resignation shall not be necessary to make it effective.
(c) All officers shall be subject to removal, with or without
cause, at any time by the Board.
SECTION 4. Vacancies. Any vacancy occurring in any office of
the Corporation, for any reason, shall be filled by action of the Board. Any
officer appointed or elected by the Board to fill any vacancy shall serve only
until such time as the unexpired term of his predecessor expires unless
reelected or reappointed by the Board.
SECTION 5. Chairman of the Board. The Chairman of the Board
shall have the power to call special meetings of the stockholders, to call
special meetings of the Board and to preside at all meetings of the stockholders
and all meetings of the Board.
SECTION 6. Vice Chairman. The Vice Chairman shall perform such
duties as from time to time may be assigned to him by the President or the
Board.
SECTION 7. President. The President shall be the chief
executive officer of the Corporation and shall have general and active
management and control of the business and affairs of the Corporation subject to
the control of the Board, and shall see that all orders and resolutions of the
Board are carried into effect.
SECTION 8. Vice Presidents. Vice Presidents, if any, in order
of their seniority or in any other order determined by the Board, shall
generally assist the President and perform such other duties as the Board or the
President shall prescribe, and in the absence or disability of the President,
perform the duties and exercise the powers of the President.
SECTION 9. Treasurer. The Treasurer, if any, shall have the
care and custody of all the funds of the Corporation and shall deposit the same
in such banks or other depositories as the Board, or any officer or officers, or
any officer and agent jointly, duly authorized by the Board, shall, from time to
time, direct or approve. He shall disburse the funds of the Corporation under
the direction of the Board, the Chairman of the Board, the Vice Chairman or the
President. He shall keep a full and accurate account of all moneys received and
paid on account of the Corporation and shall render a statement of his accounts
whenever the Board shall require. He shall perform all other necessary acts and
duties in connection with the administration of the financial affairs of the
Corporation and shall generally perform all the duties usually appertaining to
the office of treasurer of a corporation.
SECTION l0. Assistant Treasurers. Assistant Treasurers, if
any, in order of their seniority or in any other order determined by the Board,
shall generally assist the Treasurer and perform such other duties as the Board
or the Treasurer shall prescribe, and, in the absence or disability of the
Treasurer, shall perform the duties and exercise the powers of the Treasurer.
SECTION 11. Secretary. The Secretary shall, to the extent
practicable, attend all meetings of the Board and all meetings of the
stockholders and shall record all votes and the minutes of all proceedings in a
book to be kept for that purpose, and shall perform like duties for any standing
committees when required. He shall give or cause to be given notice of all
meetings of the stockholders and of the Board, and shall perform such other
duties as may be prescribed by the Board or the President, under whose
supervision he shall act. He shall keep in safe custody the seal of the
Corporation and affix the same to any duly authorized instrument requiring it
and, when so affixed, it shall be attested by his signature or by the signature
of the Treasurer or an Assistant Secretary, or an Assistant Treasurer. He shall
keep in safe custody the certificate books and stockholder records and such
other books and records as the Board may direct and shall perform all other
duties incident to the office of Secretary and such other duties as from time to
time may be assigned to him by the President or the Board.
SECTION l2. Assistant Secretaries. Assistant Secretaries, if
any, in order of their seniority or in any other order determined by the Board,
shall generally assist the Secretary and perform such other duties as the Board
or the Secretary shall prescribe, and, in the absence or disability of the
Secretary, shall perform the duties and exercise the powers of the Secretary.
ARTICLE VI
CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC.
SECTION 1. Execution of Documents. The Board (or any duly
authorized committee thereof to the extent permitted by law) shall designate the
officers, employees and agents of the Corporation who shall have power to
execute and deliver deeds, contracts, mortgages, bonds, debentures, checks,
drafts and other orders for the payment of money and other documents for and in
the name of the Corporation, and each such officer, employee and agent, without
further action by the Board, may delegate such power (including authority to
redelegate) by any means, written or oral, to other officers, employees or
agents of the Corporation; and, unless so designated or expressly authorized by
these Bylaws, no officer or agent or employee shall have any power or authority
to bind the Corporation by any contract or engagement or to pledge its credit or
to render it liable pecuniarily for any purpose or to any amount.
SECTION 2. Deposits. All funds of the Corporation not
otherwise employed shall be deposited from time to time to the credit of the
Corporation or otherwise as the Board, or any officer of the Corporation to whom
power in this respect shall have been given by the Board, shall direct.
SECTION 3. Proxies in Respect of Stock or Other Securities of
Other Corporations. The Board shall designate the officers of the Corporation
who shall have authority from time to time to appoint an agent or agents of the
Corporation to exercise in the name and on behalf of the Corporation the powers
and rights that the Corporation may have as the holder of stock or other
securities in any other corporation, and to vote or consent in respect of such
stock or securities. Such designated officers may instruct the person or persons
so appointed as to the manner of exercising such powers and rights, and such
designated officers may execute or cause to be executed in the name and on
behalf of the Corporation and under its corporate seal, or otherwise, such
written proxies, powers of attorney or other instruments as they may deem
necessary or proper in order that the Corporation may exercise such powers and
rights.
ARTICLE VII
SHARES AND TRANSFER OF SHARES
SECTION 1. Certificates for Shares. Every owner of shares of
stock of the Corporation shall be entitled to have a certificate certifying the
number and class of shares of stock of the Corporation owned by him, which
certificate shall be in such form as may be prescribed by the Board.
Certificates shall be issued in consecutive order and shall be numbered in the
order of their issue, and shall be signed by or in the name of, the Corporation
by the Chairman of the Board, the Vice Chairman of the Board, the President or a
Vice President and by the Secretary, Treasurer or an Assistant Secretary. Such
signatures shall be in such form as may be prescribed by the Board.
SECTION 2. Stock Ledger. A stock ledger in one or more
counterparts shall be kept, in which shall be recorded the name of each person,
firm or corporation owning the shares evidenced by each certificate for stock of
the Corporation issued, the number of shares of stock evidenced by each such
certificate, the date thereof and, in the case of cancellation, the date of
cancellation. Except as otherwise expressly required by law, the person in whose
name shares of stock stand on the stock ledger of the Corporation shall be
deemed the owner thereof for all purposes as regards the Corporation.
SECTION 3. Transfer of Stock. (a) The transfer of shares of
stock and the certificates evidencing such shares of stock of the Corporation
shall be governed by Article 8 of Subtitle I of Title 6 of the Delaware Code
(the Uniform Commercial Code), as amended from time to time.
(b) Registration of transfers of shares of stock of the
Corporation shall be made only on the books of the Corporation upon request of
the registered holder thereof, or of his attorney thereunto authorized by power
of attorney duly executed and filed with the Secretary of the Corporation, and
upon the surrender of the certificate or certificates for such shares of stock
properly endorsed or accompanied by a stock power duly executed.
SECTION 4. Addresses of Stockholders. Each stockholder shall
designate to the Secretary of the Corporation an address at which notices of
meetings and all other corporate notices may be served or mailed to him, and, if
any stockholder shall fail to so designate such an address, corporate notices
may be served upon him by mail directed to him at his post office address, if
any, as the same appears on the share record books of the Corporation or at his
last known post office address.
<PAGE>
SECTION 5. Lost, Destroyed and Mutilated Certificates. A
holder of any shares of stock of the Corporation shall promptly notify the
Corporation of any loss, destruction or mutilation of any certificate or
certificates evidencing all or any such shares of stock. The Board may, in its
discretion, cause the Corporation to issue a new certificate in place of any
certificate theretofore issued by it and alleged to have been mutilated, lost,
stolen or destroyed, upon the surrender of the mutilated certificates or, in the
case of loss or destruction of the certificate, upon satisfactory proof of such
loss or destruction, and the Board may, in its discretion, require the owner of
the lost or destroyed certificate or his legal representative to give the
Corporation a bond sufficient to indemnify the Corporation against any claim
made against it on account of the alleged loss, theft or destruction of any such
certificate or the issuance of such new certificate.
SECTION 6. Regulations. The Board may make such rules and
regulations as it may deem expedient, not inconsistent with these Bylaws,
concerning the issue, transfer and registration of certificates for stock of the
Corporation.
ARTICLE VIII
SEAL
The Board may provide a corporate seal, which shall be in the
form of a circle and shall bear the full name of the Corporation and the words
and figures "CORPORATE SEAL 1990 DELAWARE".
ARTICLE IX
FISCAL YEAR
The fiscal year of the Corporation shall end on the Saturday
nearest to September 30 of each year, unless changed by resolution of the Board.
ARTICLE X
AMENDMENTS
These Bylaws may be altered, amended or repealed, in whole or
in part, or new Bylaws may be adopted, either by the Board or by the
stockholders of the Corporation upon the affirmative vote of the holders of at
least 66-2/3% of the outstanding capital stock entitled to vote thereon.
Exhibit 2.
BURLINGTON INDUSTRIES, INC.
DEFERRED COMPENSATION PLAN
FOR
NON-EMPLOYEE DIRECTORS
Burlington Industries, Inc., a Delaware corporation (the "Company"),
adopts the Burlington Industries, Inc. Deferred Compensation Plan for
Non-Employee Directors (the "Plan").
1. Purposes. The purpose of the Plan is to enhance the ability of the
Company to attract and retain the services of qualified individuals who are not
employees of the Company to serve as members of its Board of Directors by
providing such persons an opportunity to defer receipt of all or a portion of
their Director's Fees (as defined below) in accordance with the terms and
conditions set forth herein.
2. Definitions.
(a) "Annual Meeting" means an annual meeting of the Company's
stockholders.
(b) "Beneficiary" or "Beneficiaries" means a person or other
entity designated by a Non-Employee Director on a Beneficiary Designation Form
to receive Deferred Benefit payments in the event of the Non-Employee Director's
death.
(c) "Beneficiary Designation Form" means a document, in a form
approved by the Committee, to be used by Non-Employee Directors to name their
respective Beneficiaries.
(d) "Board" means the Board of Directors of the Company.
(e) "Cash Deferral" means a Deferred Benefit that is credited
to a Non-Employee Director's Deferred Compensation Account as a dollar amount.
(f) "Change of Control" has the meaning set forth in Paragraph
13 hereof.
(g) "Committee" means the Compensation and Benefits Committee
of the Board.
(h) "Common Stock" means the Company's common stock, par value
$0.01 per share.
(i) "Deferral Election" means the election of a Non-Employee
Director, made in accordance with the terms and conditions of the Plan, to defer
all or a portion of his or her Director's Fees for a Deferral Period.
(j) "Deferral Election Form" means a document, in a form
approved by the Committee, pursuant to which a Non-Employee Director makes a
Deferral Election.
(k) "Deferral Period" means each period commencing on the date
of an Annual Meeting and ending on the date immediately preceding the next
Annual Meeting. The first Deferral Period under the Plan shall commence on the
date of the Annual Meeting held in 1997. If an individual becomes eligible to
participate in the Plan after the commencement of a Deferral Period, the
Deferral Period for the individual shall be the remainder of such Deferral
Period.
(l) "Deferred Benefit" means an amount that will be paid on a
deferred basis under the Plan to a Non-Employee Director who has made a Deferral
Election pursuant to Paragraph 5 hereof.
(m) "Deferred Compensation Account" means the bookkeeping
record established for each Non-Employee Director. Deferred Compensation Account
is established only for purposes of measuring a Deferred Benefit and not to
segregate assets or to identify assets that may be used to pay a Deferred
Benefit.
(n) "Director's Fees" means the cash portion of any annual fee
payable to a Non-Employee Director for service on the Board.
(o) "Election Date" means December 31 of the year immediately
preceding the beginning of the Deferral Period, provided, however, that (i) if
an individual becomes a Non-Employee Director for the first time during a
Deferral Period, that Non-Employee Director's Election Date for such Deferral
Period is any day within thirty days of the date he or she becomes a
Non-Employee Director, and (ii) the Election Date for the Deferral Period
beginning with the Annual Meeting to be held on February 6, 1997, shall be
February 5, 1997.
(p) "Exchange Act" means the Securities Exchange Act of 1934,
as amended.
(q) "Fair Market Value" of a share of Common Stock means an
amount equal to the average of the high and low selling prices of a share of
Common Stock, as reported in The Wall Street Journal, for securities listed on
the New York Stock Exchange, or such other national securities exchange as may
be designated by the Committee, or in the event that the Common Stock is not
listed for trading on a national securities exchange but is quoted on an
automated quotation system, on such automated quotation system, in any such case
on the valuation date (or if there were no sales on the valuation date, the
average of the high and the low selling prices as reported on such composite
tape or automated quotation system for the most recent day during which a sale
occurred).
(r) "Non-Employee Director" means a duly-elected member of the
Board who is not an employee of the Company or any Subsidiary.
(s) "Phantom Stock Unit" means a bookkeeping unit representing
one share of Common Stock.
(t) "Phantom Stock Deferral" means a Deferred Benefit that is
credited to a Non-Employee Director's Deferred Compensation Account as a number
of Phantom Stock Units.
(u) "Subsidiary" means any corporation 50 percent or more of
the voting stock of which is owned directly or indirectly by the Company.
3. Administration.
(a) The Committee will be responsible for administering the
Plan. The Committee will have full power and authority to (i) adopt such rules
as it may deem appropriate to carry out the purposes of the Plan, (ii) interpret
and construe the provisions of the Plan and any agreements and notices
thereunder, and (iii) make determinations pursuant to any Plan provision. Each
interpretation, determination or other action made or taken by the Committee
pursuant to the Plan shall be final, conclusive and binding on all persons.
(b) Under any circumstances where the Committee is authorized
to make a discretionary decision concerning a payment of any type under this
Plan to a member of such Committee, the member of the Committee who is to
receive such payment shall take no part in the deliberations or have any voting
or other power with respect to such decision.
(c) No member of the Committee shall be liable for anything
whatsoever in connection with the administration of the Plan, except for such
member's own willful misconduct. Under no circumstances shall any member of the
Committee be liable for any act or omission of any other member of the
Committee. In the performance of its functions with respect to the Plan, the
Committee shall be entitled to rely upon information and advice furnished by the
Company's officers, the Company's accountants, the Company's counsel and any
other party the Committee deems necessary, and no member of the Committee shall
be liable for any action taken or not taken in reliance upon any such advice.
4. Eligibility. Any Non-Employee Director may participate in the
Plan.
5. Deferral Elections.
(a) Payment of Deferral Elections. A Non-Employee Director may
elect to defer receipt of all or a specified portion of his or her Director's
Fees with respect to a Deferral Period in the manner provided in this Paragraph
5. A Non-Employee Director's Deferred Benefit is at all times non-forfeitable.
(b) Deferral Election Forms. Before the Election Date
applicable to a Deferral Period, each Non-Employee Director will be provided
with a Deferral Election Form and a Beneficiary Designation Form. In order for a
Non-Employee Director to participate in the Plan for a given Deferral Period, a
Deferral Election Form, completed and signed by the Non-Employee Director must
be delivered to the Secretary of the Board on or prior to the applicable
Election Date. A Non-Employee Director electing to participate in the Plan for a
given Deferral Period shall indicate on his or her Deferral Election Form:
(i) the amount of the Director's Fees for the
applicable Deferral Period to be deferred;
(ii) whether such deferred Director's Fees are to be
credited to the Non-Employee Director's Deferred Compensation Account as a Cash
Deferral or as a Phantom Stock Deferral; and
(iii) the Non-Employee Director's election either to
have distribution of his or her Deferred Benefit commence following termination
of service as a Non-Employee Director or to have such distribution commence as
of a date specified by him or her on such Form, provided, however, that any such
election concerning the commencement of distribution of a Non-Employee
Director's Deferred Benefit shall be subject to the terms and conditions of
Paragraph 6(e) hereof.
(c) Effect of No Deferral Election. A Non-Employee Director
who does not submit a completed and signed Deferral Election Form to the
Secretary of the Board on or prior to the applicable Election Date may not defer
his or her Director's Fees for the Deferral Period.
(d) Revocation of Deferral Election.
(i) A Non-Employee Director may revoke a Deferral
Election applicable to a Deferral Period, but only pursuant to the procedure
described in subparagraph (ii) below. Any purported revocation that does not
comply with subparagraph (ii) below will not be given effect.
(ii) To be effective, a revocation must (A) be in
writing and signed by the Non-Employee Director, (B) express the Non-Employee
Director's intention to revoke his or her Deferral Election applicable to that
Deferral Period, and (C) be delivered to the Secretary of the Board before the
close of business on the Election Date applicable to such Deferral Period.
6. Deferred Benefits and Distributions.
(a) Establishment of Deferred Compensation Accounts; Credits
to Accounts. A Non-Employee Director's deferrals will be credited to a Deferred
Compensation Account set up for that Non-Employee Director as a Cash Deferral
and/or a Phantom Stock Deferral, as applicable, on the dates such Director's
Fees are otherwise payable (e.g. the date of the Annual Meeting during the
Deferral Period and the August 1st immediately following such Annual Meeting).
Each Deferred Compensation Account will also be credited with earnings as
provided in Paragraph 6(d) hereof.
(b) Phantom Stock Deferrals. In the case of Phantom Stock
Deferrals, the number of Phantom Stock Units credited to a Non-Employee
Director's Deferred Compensation Account (including fractions of Phantom Stock
Units) will be determined by dividing (i) the amount of Director's Fees deferred
by (ii) the average Fair Market Value of a share of Common Stock for the 15
business days immediately preceding the date of crediting determined pursuant to
Paragraph 6(a) above. Upon the earliest to occur of the dates specified in
Paragraph 6(f) hereof if being paid in a lump sum (or if being paid in
installments, on each installment payment date), Phantom Stock Units credited to
a Non-Employee Director's Deferred Compensation Account which are payable on
such date will be converted into a cash amount which will be determined by
multiplying (i) the number of such Phantom Stock Units (including fractions of
Phantom Stock Units) by (ii) the average Fair Market Value of a share of Common
Stock for the 15 business days immediately preceding such date. The crediting of
Phantom Stock Units to a Non-Employee Director's Deferred Compensation Account
shall not confer on the Non-Employee Director any rights as a stockholder of the
Company.
(c) Account Statements. The Company will furnish each
Non-Employee Director participating in the Plan with a statement setting forth
the value of such Non-Employee Director's Deferred Compensation Account as of
the end of each Deferral Period and all credits to and payments from the
Deferred Compensation Account during such Deferral Period. Such statement will
be furnished no later than 60 days after the end of each Deferral Period.
(d) Earnings.
(i) Interest Equivalents on Cash Deferrals. Cash
Deferrals credited to a Non-Employee Director's Deferred Compensation Account
will accrue interest, compounded quarterly, at a rate of interest to be
established prior to December 31st of each year by the Board. The initial
interest rate shall be the four quarter moving average of Moody's Domestic
Corporate Bond Yield, and such rate shall remain in effect until changed by the
Board in accordance with the immediately preceding sentence. The rate will be
adjusted quarterly with the compounding and crediting of interest. The interest
earnings on the Cash Deferrals will be paid only at the time the right to
payment occurs.
(ii) Dividend Equivalents on Phantom Stock Deferrals.
If the Company pays any cash or other dividend or makes any other distribution
in respect of the Common Stock, each Phantom Stock Unit credited to the Deferred
Compensation Account of a Non-Employee Director will be credited with an
additional number of Phantom Stock Units (including fractions thereof)
determined by dividing (A) the amount of cash, or the value (as determined by
the Committee) of any securities or other property, paid or distributed in
respect of one outstanding share of Common Stock, by (B) the Fair Market Value
of a share of Common Stock for the date of such payment or distribution. Such
credit shall be effective as of the date of the dividend or other distribution
in respect of the Common Stock.
(e) Manner of Payment of Deferred Benefit. All payments of
Deferred Benefits under the Plan will be in cash. The Company shall pay a
Non-Employee Director's Deferred Benefit either in a single lump sum or in a
series of installments, as the Committee in its sole discretion shall determine,
provided, however, that if the Committee elects to pay a Non-Employee Director's
Deferred Benefit in a series of installments, such installments shall be paid no
more frequently than quarterly and the Deferred Benefit must be distributed over
a period not exceeding five years. The Committee may, but shall not be required
to, consult with the Non-Employee Director prior to determining the manner of
payment of such Non-Employee Director's Deferred Benefit. If the Committee
elects to pay a Non-Employee Director's Deferred Benefit in a series of
installments, the relative size of such installments shall be determined by the
Committee in its discretion, and such installments need not be in equal amounts
or equal percentages of such Deferred Benefit. The unpaid portion of a
Non-Employee Director's Deferred Benefit shall continue to be credited with
earnings as provided in Section 6(d) until paid.
(f) Commencement of Payment of Deferred Benefit. Except as
provided in Paragraph 6(g) hereof, a Non-Employee Director's Deferred Benefit
shall be paid (if payable in a lump sum), or commence to be paid (if payable in
a series of installments), to the Non-Employee Director as soon as practicable
(but in no event more than 60 days) after the earliest to occur of:
(i) termination of service as a Non-Employee
Director;
(ii) the date specified in the Deferral Election Form
executed by the Non-Employee Director; or
(iii) the Non-Employee Director's death.
(g) Death. In the event of a Non-Employee Director's death,
the Non-Employee Director's entire Deferred Benefit (including any unpaid
portion thereof corresponding to installments not yet paid at the time of
death), to the extent not distributed earlier pursuant to Paragraph 6(f) hereof,
will be distributed in a lump sum to the Non-Employee Director's Beneficiary or
Beneficiaries (or, in the absence of any Beneficiary, to the Non-Employee
Director's estate) on a date, selected by the Committee, no more than six months
after the Non-Employee Director's date of death.
(h) Hardship Withdrawal. Notwithstanding any other provision
of the Plan, a Non-Employee Director may request a withdrawal at any time of all
or a portion of the Deferred Benefits (including accrued earnings thereon) as
shall be necessary to meet an "unforeseeable emergency" (as such term is defined
by the Internal Revenue Service). Requests for such hardship withdrawals under
such circumstances shall be made in writing to the Secretary of the Board,
identifying the nature of the emergency underlying such request.
7. Designation of Beneficiary.
(a) Beneficiary Designations. Each Non-Employee Director may
designate a Beneficiary to receive any Deferral Benefit due under the Plan upon
the Non-Employee Director's death by executing a Beneficiary Designation Form. A
Beneficiary designation is not binding on the Company until the Secretary of the
Board receives the Beneficiary Designation Form. If no designation is made or no
designated Beneficiary is alive (or in the case of an entity designated as a
Beneficiary, in existence) at the time of the Non-Employee Director's death,
payments due under the Plan will be made to the Non-Employee Director's estate.
(b) Change of Beneficiary Designation. A Non-Employee Director
may change an earlier Beneficiary designation by executing a later Beneficiary
Designation Form. The execution of a Beneficiary Designation Form revokes and
rescinds any prior Beneficiary Designation Form.
8. Amendments.
(a) General Power of the Board. Subject to Paragraph 8(b)
hereof, the Board may, in its sole discretion at any time and from time to time,
terminate, modify, amend or suspend the Plan. The term of the Plan shall end on
the effective date of termination of the Plan by the Board.
(b) When Non-Employee Directors' Consents Required. The Board
may not modify, amend, suspend or terminate the Plan without the consent of any
Non-Employee Director to the extent that such action would result in the
distribution to such Non-Employee Director of amounts then credited to his or
her Deferred Compensation Account in any manner other than as provided in the
Plan or could reasonably be expected to result in the immediate taxation of such
Non-Employee Director's Deferred Benefits.
9. Company's Obligation. The Plan is unfunded. A Deferred Benefit
represents at all times an unfunded and unsecured contractual obligation of the
Company and each Non-Employee Director or Beneficiary will be an unsecured
creditor of the Company. Amounts payable under the Plan will be satisfied solely
out of the general assets of the Company, subject to the claims of the Company's
creditors. No Non-Employee Director, Beneficiary or any other person shall have
any interest in any fund or in any specific asset of the Company by reason of
any amount credited to him or her hereunder, nor shall any Non-Employee
Director, Beneficiary or any other person have any right to receive any
distribution under the Plan except as, and to the extent, expressly provided in
the Plan. The Company will not segregate any funds or assets for Deferred
Benefits or issue any notes or security for the payment of any Deferred
Benefits. Any reserve or other asset that the Company may establish or acquire
to assure itself of the funds to provide benefits under the Plan shall not serve
in any way as security to any Non-Employee Director, Beneficiary or other person
for the performance of the Company under the Plan.
10. No Control by Non-Employee Director. A Non-Employee Director shall
have no control over his or her Deferred Benefit except for designating the date
of initial distribution of benefits on his or her Deferral Election Form (which
designation shall be subject to the terms and conditions of the Plan, including,
without limitation, Paragraph 6 hereof) and designating his or her Beneficiary
according to his or her Beneficiary Designation Form.
11. Restrictions on Transfer. The Company shall pay all Deferred
Benefits payable under the Plan only to the Non-Employee Director or Beneficiary
designated under the Plan to receive such amounts. Neither a Non-Employee
Director nor his or her Beneficiary shall have any right to anticipate,
alienate, sell, transfer, assign, pledge, encumber or change any benefits to
which he or she may become entitled under the Plan, and any attempt to do so
shall be void. A Deferred Benefit shall not be subject to attachment, execution
by levy, garnishment, or other legal or equitable process for a Non-Employee
Director's or Beneficiary's debts or other obligations.
12. Election and Revocation Notices. Notices of elections or
revocations of elections under the Plan must be in writing. A notice of election
or revocation of election will be deemed delivered to the Secretary of the Board
on the date it is (i) delivered personally to the Secretary of the Board at 1345
Avenue of the Americas, 17th Floor, New York, New York 10105 (or at such other
address as the Company may from time to time designate as the address for
elections and revocations of elections under the Plan, (ii) mailed by registered
or certified mail or overnight courier service to the Secretary of the Board at
such address, or (iii) sent by facsimile transmission to the Secretary of the
Board at 212-621-3470 (or such other facsimile transmission number as the
Company may designate from time to time for elections and revocations of
elections under the Plan), provided that an original signed election or
revocation of election is received by the Secretary of the Board no later than
10 business days after such transmission.
13. Change of Control.
(a) Notwithstanding any other provision of the Plan, the
Committee shall have the authority in its discretion to provide for the
accelerated payment of Deferred Benefits in the event of a Change of Control or
in the event of a determination by the Committee that a Change of Control may
occur.
(b) For purposes of this Paragraph 13, "Change of Control"
means that any of the following events shall have occurred:
(i) The Company is merged or consolidated or
reorganized into or with another corporation, person or entity, and as a result
of such merger, consolidation or reorganization less than a majority of the
combined voting power of the then outstanding securities of such corporation,
person or entity immediately after such transaction are held in the aggregate by
the holders of Voting Stock (as that term is hereafter defined) of the Company
immediately prior to such transaction;
(ii) The Company sells or otherwise transfers all or
substantially all of its assets to any other corporation, person or entity, and
less than a majority of the combined voting power of the then-outstanding
securities of such corporation, person or entity immediately after such sale or
transfer is held in the aggregate by the holders of Voting Stock of the Company
immediately prior to such sale or transfer;
(iii) There is a report filed on Schedule 13D or
Schedule 14D-1 of the Exchange Act by a person other than a person that
satisfies the requirements of Rule 13d-1(b)(1) under the Exchange Act for filing
such report on Schedule 13G, which report as filed discloses that any person (as
the term "person" is used in Section 13(d)(3) or Section 14(d)(2) of the
Exchange Act) has become the beneficial owner (as the term "beneficial owner" is
defined under Rule 13d-3 under the Exchange Act) after February 6, 1997 of
securities representing 11% or more of the combined voting power of the
then-outstanding securities entitled to vote generally in the election of
Directors of the Company ("Voting Stock");
(iv) The Company files a report or proxy statement
with the Securities and Exchange Commission pursuant to the Exchange Act
disclosing in response to Form 8-K or Schedule 14A that a change in control of
the Company has or may have occurred or will or may occur in the future pursuant
to any then-existing contract or transaction; or
(v) If during any period of two consecutive years,
individuals who at the beginning of any such period constitute the Directors of
the Company cease for any reason to constitute at least a majority thereof,
unless the election, or the nomination for election by the Company's
stockholders, of each Director of the Company first elected during such period
was approved by a vote of at least two-thirds of the Directors of the Company
then still in office who were Directors of the Company at the beginning of any
such period.
Notwithstanding the foregoing provisions of subparagraphs (iii) or (iv)
hereof, a "Change of Control" shall not be deemed to have occurred for purposes
of the Plan solely because (x) the Company, (y) an entity in which the Company
directly or indirectly beneficially owns 50% or more of the voting securities,
or (z) any Company-sponsored employee stock ownership plan or any other employee
benefit plan of the Company (or any trustee of any such plan on its behalf),
either files or becomes obligated to file a report or a proxy statement under or
in response to Schedule 13D, Schedule 14D-1, or Form 8-K or Schedule 14A under
the Exchange Act, disclosing beneficial ownership by it of shares of Voting
Stock, whether in excess of 11% or otherwise, or because the Company reports
that a Change of Control of the Company has or may have occurred or will or may
occur in the future by reason of such beneficial ownership.
14. Tax Withholding. The Company shall have the right, in connection
with any Deferral Election, to (i) require the Non-Employee Director to remit to
the Company an amount sufficient to satisfy any Federal, state or local tax
withholding requirements, (ii) withhold an amount necessary to satisfy such
requirements from other cash compensation owed to the Non-Employee Director or
(iii) reduce the amount of Director's Fees deferred pursuant to the Plan in
order to ensure that all such requirements are satisfied. The Company shall also
have the right to deduct from all cash payments made pursuant to the Plan any
Federal, state or local taxes required to be withheld with respect to such
payments.
15. Adjustment of and Changes in Shares.
(a) No Restriction on Right of Company to Effect Corporate
Changes. Nothing in the Plan shall affect the right or power of the Company or
its shareholders to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the Company's capital structure or its
business, or any merger or consolidation of the Company, or any issue of stock,
options, warrants or rights to purchase stock or of bonds, debentures, preferred
or prior preference stocks whose rights are superior to or affect the Common
Stock or the rights thereof or which are convertible into or exchangeable for
Common Stock, or the dissolution or liquidation of the Company, or any sale or
transfer of all or any part of its assets or business, or any other corporate
act or proceeding, whether of a similar character or otherwise.
(b) In the event of any merger, consolidation,
recapitalization, reclassification, stock dividend, special cash dividend or
other change in corporate structure affecting the Common Stock, the Committee
shall make such adjustments, if any, as it deems appropriate in the number of
Phantom Stock Units credited to a Non-Employee Director's Deferred Compensation
Account. The foregoing adjustments shall be decided by the Committee in its
discretion.
16. Effective Date. The Plan shall be effective as of its approval by
the Board, and Deferral Elections may be made beginning with the Director's Fees
to be earned during the Deferral Period beginning with the Company's 1997 Annual
Meeting.
17. Miscellaneous.
(a) No Right to Reelection. Nothing in the Plan shall be
deemed to create any obligation on the part of the Board to nominate any of its
members for reelection by the Company's stockholders, nor confer upon any
Non-Employee Director the right to remain a member of the Board for any period
of time or at any particular rate of compensation.
(b) No Stockholder Rights. The crediting of Phantom Stock
Units to a Non-Employee Director's Deferred Compensation Account shall not
confer on the Non-Employee Director any rights as a stockholder of the Company,
nor shall such Phantom Stock Units confer on any Non-Employee Director any right
to receive stock of the Company in settlement thereof.
(c) Waivers. The waiver of a breach of any provision of the
Plan shall not operate as and may not be construed as a waiver of any later
breach.
(d) Governing Law. The Plan shall be construed in accordance
with and governed by the internal laws of the State of New York.
(e) Construction. The headings in the Plan have been inserted
solely for convenience of reference and are to be ignored in any construction of
the Plan's provisions. If a provision of the Plan is not valid or enforceable,
that fact shall in no way affect the validity or enforceability of any other
provision.
Exhibit 3.
AGREEMENT, made and entered into as of the 1st day of February, 1997,
between BURLINGTON INDUSTRIES, INC., a Delaware corporation (hereinafter
sometimes referred to as the "Corporation"), party of the first part, and George
W. Henderson, III (hereinafter referred to as "Employee"), party of the second
part,
W I T N E S S E T H :
WHEREAS, the Corporation and Employee desire to enter into an Employment
Agreement effective February 1, 1997, this Agreement to supersede in its
entirety the present employment agreement between the parties;
NOW, THEREFORE, in consideration of the mutual agreements hereinafter
contained, the Corporation and Employee hereby agree as follows:
l. The Corporation agrees to employ Employee, and Employee agrees to
serve the Corporation upon the terms hereinafter set forth.
2. The employment of Employee hereunder shall commence February 1, 1997
and continue until January 31, 2000, unless earlier terminated under the
provisions of Paragraphs 6 and 7 of this Agreement.
3. Employee agrees to serve the Corporation faithfully and to the best
of his ability under the direction of the Board of Directors of the Corporation,
devoting his entire time, energy and skill during regular business hours
performing the duties assigned by the Board.
4. The Corporation agrees to pay to Employee during the period of the
term hereof salary for his services at the rate (the "Annual Rate") of Five
Hundred Forty Thousand Dollars ($540,000) per annum, payable in equal monthly or
other more frequent installments in accordance with the general practice of the
Corporation for salaried senior employees.
5. The Corporation may from time to time pay additional incentive
compensation to certain executives when and if authorized by the Board of
Directors or the appropriate Committee of the Board of Directors of the
Corporation. Employee is deemed to be a valuable executive of the Corporation
and will be considered for payment of such incentive compensation in all years
that the Board determines that such compensation should be paid to senior and
key employees generally. It is expressly understood that the amount of any
additional compensation is entirely in the discretion of the Corporation, and
nothing herein shall be construed as a promise or obligation to pay any
additional compensation to Employee whatsoever. If sums are paid to Employee as
additional compensation in any year, such payment shall not create an obligation
to pay additional compensation to Employee in any past or succeeding year. No
payments to Employee of additional compensation, if any, shall reduce or be
applied against the salary to be paid to Employee pursuant to Paragraph 4
hereof.
<PAGE>
2
6. If, during the term of this Agreement, Employee shall become
physically or mentally incapable of fully performing services required of him in
accordance with his obligations under Paragraph 3 of this Agreement, and such
incapacity is, or may reasonably be expected to exist, for more than two months
in the aggregate during any period of twelve consecutive months, as shall be
determined by a physician mutually agreed upon by the Corporation and Employee
(or Employee's legal representative if Employee is incapable of making such
determination), which determination shall be final and conclusive, the
Corporation may, upon notice to Employee, terminate this Agreement and his
employment hereunder, and upon such termination, Employee shall be entitled to
receive (i) cash compensation in the same amount and for the same period of time
as required under Paragraph 7(b) below and (ii) shall receive benefits as
provided under Paragraph 7(e) below. Employee agrees to accept such payment in
full discharge and release of the Corporation, its subsidiaries and their
management, of and from any and all further obligations and liabilities to him
under Paragraph 4 hereof (including any liability for payments under the
Corporation-funded disability insurance program).
7. (a) The Corporation may in its sole discretion at any time terminate
Employee's employment under this Agreement, whether for cause or without cause.
(b) In the event of (1) a voluntary termination of employment by
Employee for "good reason," (2) an involuntary termination of employment of
Employee without cause or (3) the sale of a subsidiary or a division (a
"Business") of the Corporation that employs Employee or in connection with which
he is employed, in which he is not offered reasonably comparable employment in
the Business or with the Corporation (or any of their respective affiliates)
following such sale, Employee shall receive, as soon as practicable following
such termination: (i) salary accrued through the date of termination at the
Annual Rate and (ii) a lump sum payment in cash equal to the present value of
the salary that would have been payable under Paragraph 4 above during the
Remainder of the Term of this Agreement (as defined below) plus the present
value of an amount (the "Bonus Equivalent") equal to the number of years in the
Remainder of the Term of this Agreement times the amount obtained by dividing
(x) the sum of the incentive compensation received by Employee under the
Company's annual cash incentive plan with respect to each of the last three full
fiscal years prior to the date of termination by (y) three. For purposes of this
Paragraph 7, (i) all present value calculations shall be determined using the
short term applicable federal rate in effect at the time of computation as
determined by the Internal Revenue Service for purposes of Section 1274(d) of
the Internal Revenue Code, and for the purposes of making such calculation, the
date of payment of each year's Bonus Equivalent (or a portion thereof) shall be
the last day of the year with respect to which such Bonus Equivalent would have
been paid; (ii) "Remainder of the Term of this Agreement" shall mean (a) two
years, if such termination occurs on or before January 31, 1998, or (b) one
<PAGE>
3
year, if such termination occurs after January 31, 1998; and (iii) "good reason"
shall mean a material breach of this Agreement involving the Corporation's
failure to pay compensation due under the terms of this Agreement or a failure
to be employed as a senior management employee of the Corporation.
(c) In the event of an involuntary termination for cause,
Employee shall be entitled to payments under the Severance Policy so long as the
conduct giving rise to such termination was not, in the Corporation's sole
judgment, willful.
(d) In the event that Employee's employment is terminated by the
Corporation or the Employee for any reason other than those set forth in
subparagraphs 7(b) and 7(c) or Paragraph 6 above, the Corporation shall have no
further obligation to Employee hereunder or under the Severance Policy.
(e) In the event Employee is terminated under the circumstances
described in subparagraph 7(b) above, either (i) Employee shall continue, to the
extent permitted by applicable law, as a participating member or beneficiary in
all of the benefit and welfare plans of the Corporation in which Employee
participated immediately prior to the date of termination or (ii) the
Corporation shall fund substantially equivalent benefits to the extent
participation in such plans is not permissible, and Employee shall be guaranteed
service credit in such plans (including, without limitation, for vesting
purposes of the Supplemental Executive Retirement Plan), for a period equal to
the then remaining term of this Agreement or until Employee commences other
employment and obtains coverage under other plans on a substantially similar
basis to those of the Corporation. In all other respects, Employee's rights
under all of the benefit plans of the Corporation, other than the Severance
Policy, shall be governed by the terms of such plans and not by the provisions
of this Agreement, except as provided in subparagraph 7(b) and except for the
provisions of this subparagraph 7(e) providing for continued participation and
service credit under such plans.
(f) Notwithstanding any other provisions of this Agreement,
Employee's obligations under Paragraphs 8 and 9 of this Agreement shall survive
the termination or expiration of this Agreement.
8. Employee expressly agrees, as further consideration hereof and as a
condition to the performance by the Corporation and its subsidiary companies of
their obligations hereunder, that while employed by the Corporation or its
subsidiary companies and during a period of six months following termination of
his employment, he will not directly or indirectly render advisory services to
or become employed by or participate or engage in any business materially
competitive with any of the businesses of the Corporation and its subsidiary
companies (Employee hereby acknowledging that he has had access in his executive
capacity to material information about all of the Corporation's businesses)
without first obtaining the written consent of the Corporation.
<PAGE>
4
9. Employee agrees that, both during and after his employment hereunder, he
will not disclose to any person unless authorized to do so by the Corporation,
any of the Corporation's trade secrets or other information which is
confidential or secret. Trade secrets or confidential information shall mean
information which has not been made available by the Corporation to the public,
including but not limited to business plans, product or market development
studies, plans or surveys; designs and patterns; inventions, secret processes
and developments; any cost data, including labor costs, material costs, and any
data that is a factor in costs; price, source or utilization data on raw
materials, fibers, machinery, equipment and other manufacturing supplies;
technical improvements, designs, procedures and methods developed by the
Corporation; any data pertaining to sales volume by location or by product
category; customer lists; production methods other than those licensed by
outside companies; compensation practices; and profitability, margins, asset
values, or other information relating to financial statements.
Employee acknowledges that the disclosure of the Corporation's
trade secrets or confidential information to unauthorized persons would
constitute a clear threat to the business of the Corporation, and that the
failure of the Employee to abide by the terms of Paragraphs 8 and 9 will entitle
the Corporation to exercise any or all remedies available to it in law or
equity, including without limitation, an injunction prohibiting a breach of
these provisions.
10. Any notice to be given by Employee hereunder shall be sent to the
Corporation at its offices, 3330 West Friendly Avenue, Greensboro, North
Carolina 274l0, and any notice from the Corporation to Employee shall be sent to
Employee at the address set forth under his signature below. Either party may
change the address to which notices are to be sent by notifying the other in
writing of such changes in accordance with the terms hereof.
IN WITNESS WHEREOF, Burlington Industries, Inc. has caused this
Agreement to be executed in its corporate name by its duly authorized corporate
representative thereunto duly authorized, and George W. Henderson, III has
hereunto set his hand and seal, as of the day and year first above written.
BURLINGTON INDUSTRIES, INC.
By_________________________
Frank S. Greenberg
Chairman of the Board
___________________________(L.S.)
George W. Henderson, III
Exhibit 4.
AGREEMENT, made and entered into as of the 1st day of February, 1997,
between BURLINGTON INDUSTRIES, INC., a Delaware corporation (hereinafter
sometimes referred to as the "Corporation"), party of the first part, and John
D. Englar (hereinafter referred to as "Employee"), party of the second part,
W I T N E S S E T H :
WHEREAS, the Corporation and Employee desire to enter into an Employment
Agreement effective February 1, 1997, this Agreement to supersede in its
entirety the present employment agreement between the parties;
NOW, THEREFORE, in consideration of the mutual agreements hereinafter
contained, the Corporation and Employee hereby agree as follows:
l. The Corporation agrees to employ Employee, and Employee agrees to
serve the Corporation upon the terms hereinafter set forth.
2. The employment of Employee hereunder shall commence February 1, 1997
and continue until January 31, 2000, unless earlier terminated under the
provisions of Paragraphs 6 and 7 of this Agreement.
3. Employee agrees to serve the Corporation faithfully and to the best
of his ability under the direction of the Board of Directors of the Corporation,
devoting his entire time, energy and skill during regular business hours
performing the duties assigned by the Board.
4. The Corporation agrees to pay to Employee during the period of the
term hereof salary for his services at the rate (the "Annual Rate") of Two
Hundred Sixty-Five Thousand Dollars ($265,000) per annum, payable in equal
monthly or other more frequent installments in accordance with the general
practice of the Corporation for salaried senior employees.
5. The Corporation may from time to time pay additional incentive
compensation to certain executives when and if authorized by the Board of
Directors or the appropriate Committee of the Board of Directors of the
Corporation. Employee is deemed to be a valuable executive of the Corporation
and will be considered for payment of such incentive compensation in all years
that the Board determines that such compensation should be paid to senior and
key employees generally. It is expressly understood that the amount of any
additional compensation is entirely in the discretion of the Corporation, and
nothing herein shall be construed as a promise or obligation to pay any
additional compensation to Employee whatsoever. If sums are paid to Employee as
additional compensation in any year, such payment shall not create an obligation
to pay additional compensation to Employee in any past or succeeding year. No
payments to Employee of additional compensation, if any, shall reduce or be
applied against the salary to be paid to Employee pursuant to Paragraph 4
hereof.
<PAGE>
2
6. If, during the term of this Agreement, Employee shall become
physically or mentally incapable of fully performing services required of him in
accordance with his obligations under Paragraph 3 of this Agreement, and such
incapacity is, or may reasonably be expected to exist, for more than two months
in the aggregate during any period of twelve consecutive months, as shall be
determined by a physician mutually agreed upon by the Corporation and Employee
(or Employee's legal representative if Employee is incapable of making such
determination), which determination shall be final and conclusive, the
Corporation may, upon notice to Employee, terminate this Agreement and his
employment hereunder, and upon such termination, Employee shall be entitled to
receive (i) cash compensation in the same amount and for the same period of time
as required under Paragraph 7(b) below and (ii) shall receive benefits as
provided under Paragraph 7(e) below. Employee agrees to accept such payment in
full discharge and release of the Corporation, its subsidiaries and their
management, of and from any and all further obligations and liabilities to him
under Paragraph 4 hereof (including any liability for payments under the
Corporation-funded disability insurance program).
7. (a) The Corporation may in its sole discretion at any time terminate
Employee's employment under this Agreement, whether for cause or without cause.
(b) In the event of (1) a voluntary termination of employment by
Employee for "good reason," (2) an involuntary termination of employment of
Employee without cause or (3) the sale of a subsidiary or a division (a
"Business") of the Corporation that employs Employee or in connection with which
he is employed, in which he is not offered reasonably comparable employment in
the Business or with the Corporation (or any of their respective affiliates)
following such sale, Employee shall receive, as soon as practicable following
such termination: (i) salary accrued through the date of termination at the
Annual Rate and (ii) a lump sum payment in cash equal to the present value of
the salary that would have been payable under Paragraph 4 above during the
Remainder of the Term of this Agreement (as defined below) plus the present
value of an amount (the "Bonus Equivalent") equal to the number of years in the
Remainder of the Term of this Agreement times the amount obtained by dividing
(x) the sum of the incentive compensation received by Employee under the
Company's annual cash incentive plan with respect to each of the last three full
fiscal years prior to the date of termination by (y) three. For purposes of this
Paragraph 7, (i) all present value calculations shall be determined using the
short term applicable federal rate in effect at the time of computation as
determined by the Internal Revenue Service for purposes of Section 1274(d) of
the Internal Revenue Code, and for the purposes of making such calculation, the
date of payment of each year's Bonus Equivalent (or a portion thereof) shall be
the last day of the year with respect to which such Bonus Equivalent would have
been paid; (ii) "Remainder of the Term of this Agreement" shall mean (a) two
years, if such termination occurs on or before January 31, 1998, or (b) one
<PAGE>
3
year, if such termination occurs after January 31, 1998; and (iii) "good reason"
shall mean a material breach of this Agreement involving the Corporation's
failure to pay compensation due under the terms of this Agreement or a failure
to be employed as a senior management employee of the Corporation.
(c) In the event of an involuntary termination for cause,
Employee shall be entitled to payments under the Severance Policy so long as the
conduct giving rise to such termination was not, in the Corporation's sole
judgment, willful.
(d) In the event that Employee's employment is terminated by the
Corporation or the Employee for any reason other than those set forth in
subparagraphs 7(b) and 7(c) or Paragraph 6 above, the Corporation shall have no
further obligation to Employee hereunder or under the Severance Policy.
(e) In the event Employee is terminated under the circumstances
described in subparagraph 7(b) above, either (i) Employee shall continue, to the
extent permitted by applicable law, as a participating member or beneficiary in
all of the benefit and welfare plans of the Corporation in which Employee
participated immediately prior to the date of termination or (ii) the
Corporation shall fund substantially equivalent benefits to the extent
participation in such plans is not permissible, and Employee shall be guaranteed
service credit in such plans (including, without limitation, for vesting
purposes of the Supplemental Executive Retirement Plan), for a period equal to
the then remaining term of this Agreement or until Employee commences other
employment and obtains coverage under other plans on a substantially similar
basis to those of the Corporation. In all other respects, Employee's rights
under all of the benefit plans of the Corporation, other than the Severance
Policy, shall be governed by the terms of such plans and not by the provisions
of this Agreement, except as provided in subparagraph 7(b) and except for the
provisions of this subparagraph 7(e) providing for continued participation and
service credit under such plans.
(f) Notwithstanding any other provisions of this Agreement,
Employee's obligations under Paragraphs 8 and 9 of this Agreement shall survive
the termination or expiration of this Agreement.
8. Employee expressly agrees, as further consideration hereof and as a
condition to the performance by the Corporation and its subsidiary companies of
their obligations hereunder, that while employed by the Corporation or its
subsidiary companies and during a period of six months following termination of
his employment, he will not directly or indirectly render advisory services to
or become employed by or participate or engage in any business materially
competitive with any of the businesses of the Corporation and its subsidiary
companies (Employee hereby acknowledging that he has had access in his executive
capacity to material information about all of the Corporation's businesses)
without first obtaining the written consent of the Corporation.
<PAGE>
4
9. Employee agrees that, both during and after his employment hereunder, he
will not disclose to any person unless authorized to do so by the Corporation,
any of the Corporation's trade secrets or other information which is
confidential or secret. Trade secrets or confidential information shall mean
information which has not been made available by the Corporation to the public,
including but not limited to business plans, product or market development
studies, plans or surveys; designs and patterns; inventions, secret processes
and developments; any cost data, including labor costs, material costs, and any
data that is a factor in costs; price, source or utilization data on raw
materials, fibers, machinery, equipment and other manufacturing supplies;
technical improvements, designs, procedures and methods developed by the
Corporation; any data pertaining to sales volume by location or by product
category; customer lists; production methods other than those licensed by
outside companies; compensation practices; and profitability, margins, asset
values, or other information relating to financial statements.
Employee acknowledges that the disclosure of the Corporation's
trade secrets or confidential information to unauthorized persons would
constitute a clear threat to the business of the Corporation, and that the
failure of the Employee to abide by the terms of Paragraphs 8 and 9 will entitle
the Corporation to exercise any or all remedies available to it in law or
equity, including without limitation, an injunction prohibiting a breach of
these provisions.
10. Any notice to be given by Employee hereunder shall be sent to the
Corporation at its offices, 3330 West Friendly Avenue, Greensboro, North
Carolina 274l0, and any notice from the Corporation to Employee shall be sent to
Employee at the address set forth under his signature below. Either party may
change the address to which notices are to be sent by notifying the other in
writing of such changes in accordance with the terms hereof.
IN WITNESS WHEREOF, Burlington Industries, Inc. has caused this
Agreement to be executed in its corporate name by its duly authorized corporate
representative thereunto duly authorized, and John D. Englar has hereunto set
his hand and seal, as of the day and year first above written.
BURLINGTON INDUSTRIES, INC.
By__________________________
Frank S. Greenberg
Chairman of the Board
____________________________(L.S.)
John D. Englar
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