Burlington Industries Equity Inc.
Amended and Restated Equity Incentive Plan
1. Purpose; Effective Date.
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(a) Purpose. The Burlington Industries Equity Inc. Equity
Incentive Plan (the "Plan") is intended to provide an incentive to certain
officers and key employees of Burlington Industries Equity Inc., a Delaware
corporation (the "Company"), and its subsidiaries and affiliates to remain in
the employ of the Company and its subsidiaries and affiliates and to increase
their interest in the success of the Company by offering them an opportunity to
obtain a proprietary interest in the Company through the grant of options
("Options") to purchase shares of Common Stock, par value $0.01 per share, of
the Company ("Common Stock"), through the grant or offering of restricted shares
of Common Stock ("Restricted Shares"), and through the grant of deferred cash
rights with a value based upon the change in the value of Common Stock
("Deferred Cash Rights").
(b) Effective Date. This amendment and restatement of the Plan
shall, contingent upon the approval thereof by the holders of a majority of the
outstanding shares of Common Stock of the Company, be effective as of the date
immediately prior to the date on which the Company's Registration Statement on
Form S-1 (Registration No. 33-45149) becomes effective (the "Effective Date").
2. Definitions.
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As used in the Plan, the following terms shall be defined as follows:
"Agreement" means an agreement between the Company and a
Participant pursuant to which an Award is granted or offered, as such
agreement may be amended from time to time;
"Awards" means Options, Restricted Shares and Deferred Cash
Rights;
"Beneficially Own" means to be a "beneficial owner" within the
meaning of Rule 13d-3 Under the Securities Exchange Act of 1934, as
amended (the "Exchange Act");
"Beneficiary" or "Beneficiaries" shall be defined as the
person or persons designated by the Participant pursuant to the
provisions of the Agreement to receive payments pursuant to such
Agreement upon the Participant's death. If no Beneficiary is so
designated by the Participant or if no Beneficiary is living at the
time a payment is due pursuant to such Agreement, payments shall be
made to the estate of the Participant. The Agreement shall provide the
Participant with the right to change the designated Beneficiaries from
time to time by written instrument executed by the Participant and
filed with the Committee (as defined in Section 3(a) hereof) in
accordance with such rules as may be specified by the Committee;
"BICI Plan" means the Burlington Industries Capital Inc.
Equity Incentive Plan, adopted effective as of July 9, 1989, as
amended, and terminated effective as of October 23, 1990.
Termination for "Cause" means a termination of employment with
any of the Company or any of its subsidiaries or affiliates which, as
determined by the Committee, is by reason of (i) the commission by the
Participant of a felony or the perpetration by the Participant of a
dishonest act, material misrepresentation or common law fraud against
the Company or any subsidiary or affiliate thereof, (ii) any other act
or omission which is materially injurious to the financial condition or
business reputation of the Company or any subsidiary or affiliate
thereof or (iii) the wilful failure or refusal of the Participant to
substantially perform the material duties of his position with the
Company or any of its subsidiaries or affiliates;
"Eligible Persons" means officers and key employees of the
Company or any of its subsidiaries or affiliates;
"Legended Certificate" means a certificate evidencing a number
of shares of Common Stock issued in connection with an Award and
imprinted with a legend to indicate that, if the offer and sale of such
shares have not been registered under the Securities Act of 1933, as
amended(the "Securities Act"), such shares may be sold only pursuant to
a registration statement under the Securities Act or an exemption from
registration under the Securities Act that the Company has determined
is available for such sale;
"Participants" means Eligible Persons to whom Awards have been
sold or granted; and
"The Public Value" of a share of Common Stock on a given date
shall be the closing price of a share of Common Stock on such date (or
the most recent trading date if such given date is not a trading date)
on the New York Stock Exchange, or in the event the Common Stock is not
listed on such exchange, on such other national securities exchange or
the NASDAQ/National Market System as may be designated by the
Committee.
3. Administration of the Plan.
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(a) Members of the Committee. The Plan shall be administered
hereunder by the Compensation Committee (the "Committee") of the Board
of Directors of the Company (the "Board"), which shall consist of at
least three individuals, a majority of whom shall not be employed by
the Company or any of its subsidiaries or affiliates.
(b) Authority of the Committee. The Committee shall adopt such
rules as it may deem appropriate in order to carry out the purpose of
the Plan. All questions of interpretation, administration and
application of the Plan shall be determined by a majority of the
members of the Committee then in office, except that the Committee may
authorize any one or more of its members, or any officer of the
Company, to execute and deliver documents on behalf of the Committee.
The determination of such majority shall be final and binding in all
matters relating to the Plan.
(c) Board Authority. Anything herein to the contrary
notwithstanding, the Board shall be entitled to exercise any of the
authority assigned to the Committee hereunder.
4. Number of Shares Subject to the Plan. Subject to adjustment
under Section 8(a) and 8(b), a total of 2,043,005 shares of Common Stock are
subject to the Plan.
5. Terms of Restricted Shares. The Restricted Shares granted
or offered for sale under the Plan shall comply with the following terms and
conditions:
(a) Vesting. Each Restricted Share shall vest immediately
following the forfeiture and surrender of Restricted Shares described
in Section 6(a) below. Notwithstanding the foregoing, Restricted Shares
issued in exchange for previously granted awards as described in
Section 11(b) shall vest in three substantially equal annual
installments beginning one year following the date of grant.
(b) Delivery of Certificate. At the time of grant or sale of
Restricted Shares to a Participant, a Legended Certificate evidencing
the appropriate number of shares of Common Stock granted or sold to the
Participant as Restricted Shares shall be issued in the Participant's
name but shall be held by the Company for the account of the
Participant until six months after the Effective date, at which time
the Legended Certificate evidencing the such shares of shall be
delivered to the participant.
(c) Stockholder Rights. The Participant shall have all rights
of a stockholder as to the Restricted Shares, including the right to
receive dividends and the right to vote upon all matters in accordance
with the Company's Certificate of Incorporation, subject to the
restrictions on transfer set forth in Section 5(e).
(d) Dividends and Distributions. Any shares of Common Stock
received as a result of a stock distribution to holders of Restricted
Shares or as a stock dividend on Restricted Shares shall be subject to
the same restrictions as such Restricted Shares.
(e) Restrictions on Transfer. None of the Restricted Shares
may be sold, transferred, assigned, pledged, or otherwise encumbered or
disposed of prior to the date which occurs six months and one day
following the Effective Date, except in accordance with Section 11 of
the Plan or by will or the laws of descent and distribution.
6. Terms of Options. The Options granted under the Plan shall
comply with the following terms and conditions:
(a) Grant. On the Effective Date, each Participant who
incurred a loan in connection with a prior grant of a Restricted Share
shall unconditionally and irrevocably agree to forfeit and surrender to
the Company, on the eight day after the Effective Date, a number of
Restricted Shares having an aggregate tax basis equal to the
outstanding principal amount of all such loans. Each such Participant
shall receive one Option to purchase one share of Common Stock in
exchange for each such Restricted Share so surrendered. Such forfeiture
and surrender of Restricted Shares and grant of Options pursuant to
this Section 6(a) shall be deemed to have occurred on the Effective
Date.
(b) Exercise Price. The exercise price of each such Option
shall be equal to the Participant's tax basis with respect to the
Restricted Share surrendered in exchange therefor.
(c) Loan Forgiveness. On the Effective Date, the aggregate
principal amount of such loans shall be forgiven by the Company.
(d) Vesting; Exercisability. Each Option shall vest on the
Effective Date and become exercisable six months and one day
thereafter.
(e) Exercise. Upon the exercise of an Option and payment of
the exercise price of such Option (in such form and in such manner as
the Committee may approve), a Legended Certificate evidencing a share
of Common Stock shall be delivered to the Participant.
(f) Duration of Options; Termination of Employment
(i) Generally. Unless a Participant's
employment with the Company shall have terminated,
such Participant's Options shall expire on the tenth
anniversary of the Effective Date.
(ii) Termination by the Company for Cause.
Notwithstanding subsection (f)(i), if a
Participant's employment is terminated by the
Company for Cause (as defined below), such
Participant's Options shall expire on the earliest
to occur of (A) the tenth anniversary of the
Effective Date or (B) 90 days from such date of
termination.
(iii) Termination for Other Reasons.
Notwithstanding subsection (f)(i), if a
Participant's employment terminates for any reason
other than a termination by the Company for Cause,
such Participant's Options shall expire on the
earliest to occur of (A) the tenth anniversary of
the Effective Date or(B) the third anniversary of
such termination.
(iv) Definition of Cause. As used herein, a
termination for "Cause" means a termination of
employment with any of the Company's subsidiaries or
affiliates which, as determined by the Committee, is
by reason of (i) the commission by the Participant
of a felony or the perpetration by the Participant
of a dishonest act, material misrepresentation or
common law fraud against the Company or any
subsidiary or affiliate thereof, (ii) any other act
or omission which is materially injurious to the
financial condition or business reputation of the
Company or any subsidiary or affiliate thereof or
(iii) the wilful failure or refusal of the
Participant to substantially perform the material
duties of his position with any of the Company's
subsidiaries or affiliates.
(g) Restriction on Transfer. Each Option granted hereunder
shall not be transferable by the Participant otherwise than by will or
the laws of descent and distribution, and shall be exercisable during
the Participant's lifetime only by the Participant.
(h) Stockholder Rights. A Participant shall have no rights as
a stockholder with respect to any shares issuable upon exercise of an
Option until a certificate or certificates evidencing such shares shall
have been issued to such participant, and no adjustment shall be made
for dividends or distributions or other rights in respect of any share
for which the record date is prior to the date upon which the
Participant shall become the holder of record thereof.
7. Terms of Deferred Cash Rights.
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(a) Grant. As of the Effective Date, each Participant who
previously purchased restricted shares pursuant to the BICI Plan at a
price of $37.80 per restricted share ("Capital Restricted Shares")
shall be granted a number of Deferred Cash Rights that is equal to the
number of such Capital Restricted Shares purchased by such Participant,
divided by 1.5.
(b) Forfeiture. Notwithstanding anything herein to the
contrary, each Participant shall forfeit any deferred Cash Right
granted to him if his employment is terminated by the Company for Cause
prior to January 1, 1995.
(c) Value. Each Deferred Cash Right shall entitle the holder
thereof to receive from the Company an amount in cash equal to the
amount, if any, by which $56.70 exceeds the greater of (i) the Public
Value of a share of Common Stock on the Payment Date (as defined below)
or (ii) the Public Value of a share of Common Stock on the eighth day
after the Effective Date.
(d) Payment Date. The "Payment Date" with respect to any
Deferred Cash Right shall be the earlier of the Participant's
termination of employment for reasons other than a termination by the
Company for Cause or January 1, 1995.
(e) Stockholder Rights. A Participant shall have no rights as
a stockholder with respect to any Deferred Cash Right.
(f) Restrictions on Transfer. A Deferred Cash Right shall not
be transferable by a participant other than by will or the laws of
descent and distribution, and during the Participant's lifetime shall
entitle only the Participant to payment thereunder.
8. Effect of Certain Corporate Changes and Changes in Control.
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(a) Effect of Reorganization. In the event that (i) the
Company is merged or consolidated with another corporation, (ii) all or
substantially all the assets of the Company are acquired by another
corporation, person or entity, (iii) the Company is reorganized,
dissolved or liquidated (each such event in (i), (ii) or (iii) being
hereinafter referred to as a "Reorganization Event") or (iv) the Board
shall propose that the Company enter into a Reorganization Event, then
the Committee shall make such adjustments as it deems necessary or
advisable in its sole discretion to provide each Participant with a
benefit equivalent to that to which he would have been entitled had
such event not occurred.
(b) Dilution and Other Adjustments. In the event of a stock
dividend or split, the committee shall make any or all of the following
adjustments necessary to provide each Participant with a benefit
equivalent to that to which he would have been entitled had such event
not occurred: (i) adjust the number of Awards, (ii) adjust the formula
for valuing Deferred Cash Rights and (iii) make any other adjustments,
or take such action, as the Committee, in its discretion, deems
appropriate. Such adjustments shall be conclusive and binding for all
purposes. In the event of a change in the Common Stock which is limited
to a change in the designation thereof to "Capital Stock" or other
similar designation, or to a change in the par value thereof, or from
par value to no par value, without increase or decrease in the number
of issued shares, the shares resulting from any such change shall be
deemed to be Common Stock within the meaning of the Plan.
9. Miscellaneous.
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(a) No Rights to Grants or Continued Employment. No
Participant shall have any claim or right to receive grants of
Restricted Shares under the Plan. Neither the Plan nor any action taken
or omitted to be taken hereunder shall be deemed to create or confer on
any Participant any right to be retained in the employ of the Company
or any subsidiary or other affiliate thereof, or to interfere with or
to limit in any way the right of the Company or any subsidiary or other
affiliate thereof to terminate the employment of such Participant at
any time.
(b) Right of Company to Assign Rights and Delegate Duties.
Notwithstanding anything in the Plan to the contrary, the Company shall
have the right to assign any of its rights and delegate any of its
duties hereunder to such of its direct or indirect subsidiaries that
have no less power, authority or ability than the Company to perform
such delegated duties.
(c) Tax Withholding. The Company and its subsidiaries shall
have the right to require any individual entitled to receive shares of
Common Stock or cash pursuant to an Award to remit to the Company,
prior to the delivery of any certificates evidencing such shares, any
amount sufficient to satisfy any Federal, state or local tax
withholding requirements. Prior to the Company's determination of such
withholding liability, such individual may make an irrevocable election
to satisfy, in whole or in part, such obligation to remit taxes by
directing the Company to withhold shares of Common Stock that would
otherwise be received by such individual. Such election may be denied
by the Committee in its discretion, or may be made subject to certain
conditions specified by the Committee, including, without limitation,
conditions intended to avoid the imposition of liability against the
individual under Section 16(b) of the Securities Exchange Act of 1934,
as amended.
(d) No Restriction on Right of Company to Effect Corporate
Changes. The Plan shall not affect in any way the right or power of the
Company or its stockholders to make or authorize any or all
adjustments, recapitalization, 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 or of 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.
10. Amendment. The Board may at any time and from time to time
alter, amend, suspend or terminate the Plan in whole or in part. Notwithstanding
the foregoing, no termination or amendment of the Plan may, without the consent
of the Participant to whom any Awards shall previously have been granted,
adversely affect the rights of such Participant in such Awards; provided,
however, that the Participant Committee (as hereinafter defined) shall have the
authority to alter, amend, suspend, termination or waive any of the rights of
the Participants under the Plan or any Agreement or any outstanding awards so
long as such alteration, amendment, suspension, termination or waiver is
uniformly applicable to all similarly situated Participants. As used herein,
"Participant Committee" means the Chairman of the Board and Chief Executive
Officer, Vice Chairman and Chief Financial Officer, General Counsel and Vice
President, personnel and Public Relations, of Burlington Industries, Inc.
11. Certain Exchanges of Awards.
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(a) Notwithstanding anything contained in the Plan or any
Agreement to the contrary, if the Board determines in its discretion
that such action is necessary or desirable, it may direct the Committee
at any time and from time to time to cause Participants to sell,
exchange, convert or exercise their outstanding Awards for Awards of a
different form. It is the intention of the Board that such sales,
exchanges, conversions or exercises shall not cause an acceleration of
taxability to the Participants. Any such change to the form of Awards
held by a Participant may be affected without such Participant's
consent; provided, however, that any such exchange or similar
transaction that adversely affects the rights of any Participant in any
outstanding Award must be approved by the Participant Committee and
must be uniformly applicable to all similarly situated Participants.
(b) Notwithstanding anything contained in the Plan (other than
Section 4) or any Agreement to the contrary, the Board at any time may
offer Participants the opportunity to exchange their outstanding Awards
for Awards of a different form, and any shares returned to the Plan as
a result of such exchange may be reissued as new grants and shall not
be considered newly granted Awards for purposes of Section 12.
12. Termination. Subject to Sections 6(a), 7(a), 8(a), 8(b)
and 11(b), with respect to further grants of Awards, the Plan has been
terminated as of the Effective Date; provided, however, that the Plan shall
continue in effect with respect to previously granted Awards until all such
Awards vest and are exercised or paid.
13. Headings. The headings of sections and subsections herein
are included solely for convenience of reference and shall not affect the
meaning of any of the provisions of the Plan.
13. Governing Law. The Plan and all rights hereunder shall be
construed in accordance with and governed by the law of the State of New York.
As amended and restated April 26, 2000
