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 April 1, 2000
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Commission file number 1-10984
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BURLINGTON INDUSTRIES, INC.
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(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)
(336) 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 May 4, 2000 there were outstanding 51,623,604 shares of Common Stock,
par value $.01 per share, and 454,301 shares of Nonvoting Common Stock, par
value $.01 per share, of the registrant.
<PAGE>
Part 1 - 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
April 1, April 3, April 1, April 3,
2000 1999 2000 1999
---------- ---------- --------- ---------
Net sales $ 402,147 $ 403,905 $ 773,195 $ 811,087
Cost of sales 348,331 360,731 675,668 703,093
---------- ---------- --------- ---------
Gross profit 53,816 43,174 97,527 107,994
Selling, general and
administrative expenses 35,072 36,438 67,780 73,199
Provision for doubtful accounts 237 608 506 1,597
Amortization of goodwill 4,450 4,449 8,899 8,911
Provision for restructuring 0 65,280 0 65,280
---------- ---------- --------- ---------
Operating income (loss) before
interest and taxes 14,057 (63,601) 20,342 (40,993)
Interest expense 16,512 14,673 32,139 28,987
Equity in (income) loss
of joint ventures (2,040) 375 (3,839) (1,901)
Other expense (income) - net (2,320) (989) (9,062) (4,578)
---------- ---------- --------- ---------
Income (loss) before
income taxes 1,905 (77,660) 1,104 (63,501)
Income tax expense (benefit):
Current 2,620 (5,177) 8,261 585
Deferred (1,269) (24,600) (2,391) (24,172)
---------- ---------- --------- ---------
Total income tax
expense (benefit) 1,351 (29,777) 5,870 (23,587)
---------- ---------- --------- ---------
Net income (loss) $ 554 $ (47,883)$ (4,766)$ (39,914)
========== ========== ========= =========
Net income (loss) per common share:
Basic earnings (loss)
per share $ 0.01 $ (0.86)$ (0.09)$ (0.70)
Diluted earnings (loss)
per share $ 0.01 $ (0.86)$ (0.09)$ (0.70)
See notes to consolidated financial statements.
1
<PAGE>
BURLINGTON INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
Consolidated Balance Sheets
(Amounts in thousands)
April 1, October 2,
2000 1999
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ASSETS
Current assets:
Cash and cash equivalents $ 17,714 $ 17,402
Short-term investments 13,387 18,307
Customer accounts receivable after deductions
of $16,520 and $18,258 for the
respective dates for doubtful accounts,
discounts, returns and allowances 256,638 251,781
Sundry notes and accounts receivable 28,519 23,444
Inventories 322,085 317,554
Prepaid expenses 5,074 5,371
----------- -----------
Total current assets 643,417 633,859
Fixed assets, at cost:
Land and land improvements 31,379 31,807
Buildings 420,597 419,569
Machinery, fixtures and equipment 666,297 644,765
----------- -----------
1,118,273 1,096,141
Less accumulated depreciation and amortization 473,235 454,909
----------- -----------
Fixed assets - net 645,038 641,232
Other assets:
Investments and receivables 62,670 68,103
Intangibles and deferred charges 42,339 40,452
Excess of purchase cost over net assets acquired 485,188 492,629
----------- -----------
Total other assets 590,197 601,184
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$ 1,878,652 $ 1,876,275
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term borrowings $ 14,600 $ 0
Long-term debt due currently 308,470 470
Accounts payable - trade 73,490 80,176
Sundry payables and accrued expenses 76,280 79,612
Income taxes payable 3,288 1,166
Deferred income taxes 39,905 40,171
----------- -----------
Total current liabilities 516,033 201,595
Long-term liabilities:
Long-term debt 581,161 880,957
Other 57,477 57,657
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Total long-term liabilities 638,638 938,614
Deferred income taxes 105,063 106,817
Shareholders' equity:
Common stock issued 684 684
Capital in excess of par value 884,223 884,347
Accumulated deficit (90,109) (85,343)
Accumulated other comprehensive income (loss) (20,212) (14,658)
Cost of common stock held in treasury (155,668) (155,781)
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Total shareholders' equity 618,918 629,249
----------- -----------
$ 1,878,652 $ 1,876,275
=========== ===========
See notes to consolidated financial statements.
2
<PAGE>
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
April 1, April 3,
2000 1999
----------- -----------
Cash flows from operating activities:
Net loss $ (4,766)$ (39,914)
Adjustments to reconcile net loss to
net cash provided by operating activities:
Depreciation and amortization of fixed assets 32,065 32,325
Provision for doubtful accounts 506 1,597
Amortization of intangibles and
deferred debt expense 9,340 9,085
Equity in loss of joint ventures 861 1,319
Deferred income taxes (2,391) (24,172)
Translation gain on liquidation of subsidiary (5,507) 0
Gain on disposal of assets (990) (2,947)
Provision for restructuring 0 65,280
Changes in assets and liabilities:
Customer accounts receivable - net (5,363) 33,882
Sundry notes and accounts receivable (5,075) (616)
Inventories (4,531) (18,500)
Prepaid expenses 297 (1,163)
Accounts payable and accrued expenses (10,018) (31,172)
Change in income taxes payable 2,122 (4,484)
Other (2,405) (3,435)
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Total adjustments 8,911 56,999
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Net cash provided by operating activities 4,145 17,085
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Cash flows from investing activities:
Capital expenditures (39,240) (73,518)
Proceeds from sales of assets 5,058 36,185
Investment in joint ventures 0 (5,366)
Change in investments 7,996 432
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Net cash used by investing activities (26,186) (42,267)
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Cash flows from financing activities:
Changes in short-term borrowings 14,600 (14,200)
Repayments of long-term debt (11,445) (33,979)
Proceeds from issuance of long-term debt 19,198 103,000
Purchase of treasury shares 0 (31,994)
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Net cash provided by financing activities 22,353 22,827
----------- -----------
Net change in cash and cash equivalents 312 (2,355)
Cash and cash equivalents at beginning of period 17,402 18,163
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Cash and cash equivalents at end of period $ 17,714 $ 15,808
=========== ===========
See notes to consolidated financial statements.
3
<PAGE>
BURLINGTON INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
Notes to Consolidated Financial Statements
As of and for the six months ended April 1, 2000
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 certain international subsidiaries are included as of dates
three months or less prior to that of the consolidated balance sheets.
Note C.
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 D.
The following table sets forth the computation of basic and diluted
earnings per share (in thousands):
Three Months Ended Six Months Ended
--------------------- -------------------
April 1, April 3, April 1, April 3,
2000 1999 2000 1999
---------- ---------- ---------- --------
Numerator:
Net income (loss)............... $ 554 $(47,883) $ (4,766) $(39,914)
======== ======== ======== ========
Denominator:
Denominator for basic earnings per
share.......................... 52,072 55,944 52,072 56,887
Effect of dilutive securities:
Performance Unit awards........ 10 - - -
Contingent stock awards........ 125 - - -
Nonvested stock................ 6 - 6 -
-------- -------- -------- --------
Denominator for diluted earnings
per share...................... 52,213 55,944 52,078 56,887
======== ======== ======== ========
Awards that could potentially dilute basic earnings per share in the
future were not included in the diluted earnings per share computations in
loss periods because they would have been antidilutive. However, such
securities were not significant in these periods. During the first six months
of the 2000 fiscal year, outstanding shares changed due to the issuance of
11,834 shares of treasury stock to settle Performance Unit awards.
<PAGE>
Note E.
Inventories are summarized as follows (dollar amounts in thousands):
April 1, October 2,
2000 1999
---------- ----------
Inventories at average cost:
Raw materials............................. $ 28,916 $ 34,468
Stock in process.......................... 83,144 88,042
Produced goods............................ 224,425 207,804
Dyes, chemicals and supplies.............. 22,379 21,269
---------- ----------
358,864 351,583
Less excess of average cost over LIFO..... 36,779 34,029
---------- ----------
Total................................. $ 322,085 $ 317,554
========== ==========
Note F.
Comprehensive income (loss) totaled $1,066,000 and $(46,793,000) for
the three months ended April 1, 2000 and April 3, 1999, respectively, and
$(10,320,000) and $(38,882,000) for the six months ended April 1, 2000 and
April 3, 1999, respectively. Comprehensive income (loss) consists of net
income (loss), foreign currency translation adjustments during the period,
reclassification of $(5,507,000) in the December 1999 quarter for a foreign
currency translation gain included in "Other income" arising from the
liquidation of the Company's Canadian subsidiary, and unrealized gains and
losses on securities (net of income tax).
Note G.
The Company conducts its operations in three principal operating
segments: PerformanceWear, CasualWear and Interior Furnishings. The Company
evaluates performance and allocates resources based on profit or loss before
interest, amortization of goodwill, restructuring charges, certain unallocated
corporate expenses, and income taxes. The following table sets forth certain
information about the segment results (in millions):
Three months ended Six months ended
------------------- --------------------
April 1, April 3, April 1, April 3,
2000 1999 2000 1999
-------- -------- -------- --------
Net sales
PerformanceWear........ $ 152.7 $ 152.1 $ 288.9 $ 308.0
CasualWear............. 55.3 56.3 105.9 127.3
Interior Furnishings... 196.0 188.9 381.8 363.8
Other.................. 8.6 9.3 17.1 17.9
-------- -------- -------- --------
412.6 406.6 793.7 817.0
Less:
Intersegment sales.... (10.5) (2.7) (20.5) (5.9)
-------- -------- -------- --------
$ 402.1 $ 403.9 $ 773.2 $ 811.1
======== ======== ======== ========
<PAGE>
Income (loss) before
income taxes
PerformanceWear........ $ 9.3 $ (8.0) $ 14.1 $ 0.6
CasualWear............. (3.8) (1.3) (9.2) 5.7
Interior Furnishings... 19.0 17.5 34.8 34.1
Other.................. (0.6) 0.5 (0.9) 0.5
-------- -------- -------- --------
Total reportable
segments............ 23.9 8.7 38.8 40.9
Corporate expenses..... (3.3) (3.0) (5.7) (5.8)
Goodwill amortization.. (4.5) (4.4) (8.9) (8.9)
Restructuring charges.. - (65.3) - (65.3)
Interest expense....... (16.5) (14.7) (32.1) (29.0)
Other (expense)
income - net......... 2.3 1.0 9.0 4.6
-------- -------- -------- --------
$ 1.9 $ (77.7) $ 1.1 $ (63.5)
======== ======== ======== ========
Intersegment net sales for the three months ended April 1, 2000 were
primarily attributable to PerformanceWear segment sales of $8.4 million and
$2.1 million included in the "Other" category. Intersegment net sales for the
six months ended April 1, 2000 were primarily attributable to PerformanceWear
segment sales of $16.1 million and $4.3 million included in the "Other"
category. Intersegment net sales for the three and six months ended April 3,
1999 were primarily attributable to the "Other" category.
Note H.
In June 1999, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 137, "Accounting for
Derivative Instruments and Hedging Activities --Deferral of the Effective Date
of FASB Statement No. 133." Reference is made to the Company's 1999 Annual
Report to Shareholders regarding SFAS No. 133. The Company is required to
adopt SFAS No. 133 no later than October 1, 2000, and has not yet determined
what its effect will be on the earnings and financial position of the Company.
Note I.
In March 2000, the Company entered into a new three-year interest rate
cap agreement with a notional amount of $100.0 million and a fixed rate of
6.02% (the variable rate is based on three-month LIBOR). The new agreement is
with a bank that is a counterparty to two existing interest rate swap
agreements that were modified at the same time under terms that required no
premium payment for the cap instrument. These terms changed the maturity date
of the Company's 6.10%, $50 million notional swap instrument to November 2002
and the maturity date of its 5.72%, $50 million notional swap instrument to
January 2002. The fair values of the Company's interest rate instruments are
the estimated amounts that the Company would receive or pay to terminate the
agreements at the reporting date, taking into account current interest rates
and the current creditworthiness of the counterparties. At April 1, 2000, the
Company estimates it would have received $2.5 million to terminate its
interest rate agreements, and at October 2, 1999, the Company estimates it
would have paid $1.6 million to terminate its interest rate agreements.
<PAGE>
Note J.
During the March quarter of 1999, the Company implemented a
comprehensive reorganization plan primarily related to its apparel fabrics
business. The apparel fabrics operations had been running at less than full
capacity during the preceding 9-12 month period, anticipating that the surge
of low-priced garment imports from Asia might only be the temporary result of
the Asian financial crisis. The Company viewed this situation to be more
permanent in nature and therefore decided to reduce its U.S. manufacturing
capacity accordingly and utilize only its most modern facilities to be
competitive. The major elements of the plan included:
(1) The combination of two businesses that had complementary product
lines and serve many of the same customers. The merger of the two--Burlington
Klopman Fabrics and Burlington Tailored Fashions--created an organization with
an improved cost structure, called Burlington PerformanceWear. Also,
Burlington Global Denim and a portion of the former Sportswear division were
combined to form Burlington CasualWear.
(2) The reduction of U.S. apparel fabrics capacity by approximately 25
percent and the reorganization of manufacturing assets, including overhead
reductions throughout the Company. Seven plants have been or will be closed or
sold by the dates indicated: one department in Raeford, North Carolina and one
plant in Forest City, North Carolina were closed in the March 1999 quarter;
three plants in North Carolina located in Cramerton (sold in April 1999),
Mooresville, and Statesville were closed during the June 1999 quarter and one
plant in Hillsville, Virginia was sold in June 1999; one plant in Bishopville,
South Carolina and one plant located in Oxford, North Carolina were closed in
phases and closure was completed during the March quarter 2000.
(3) The plan will result in the reduction of approximately 2,900
employees, with severance benefit payments to be paid over periods of up to 12
months from the termination date depending on the employee's length of
service. As of April 1, 2000, there has been a reduction of approximately
2,670 employees.
The cost of the reorganization was reflected in a restructuring charge,
before income taxes, of $62.1 million ($58.5 million applicable to the apparel
fabrics business) recorded in the second fiscal quarter ended April 3, 1999,
as adjusted by $3.2 million in the fourth quarter of 1999. The components of
the adjusted 1999 restructuring charge included the establishment of a $19.0
million reserve for severance benefit payments, write-down of pension assets
of $3.2 million for curtailment and settlement losses, write-downs for
impairment of $37.7 million related to fixed assets resulting from the
restructuring and a reserve of $2.2 million for lease cancellations and other
exit costs expected to be paid through September 2001. Assets that have been
sold, or are held for sale at April 1, 2000 and are no longer in use, were
written down to their estimated fair values less costs of sale. Assets held
for sale continue to be included in the Fixed Assets caption on the balance
sheet in the amount of $12.4 million. Cash costs of the reorganization are
expected to be substantially offset by cash receipts from asset sales and
lower working capital needs.
Other expenses related to the 1999 restructuring (including losses on
inventories of discontinued styles, relocation of employees and equipment, and
plant carrying and other costs) of approximately $33.0 million, before income
taxes, are charged to operations as incurred. Through April 1, 2000, $31.6
million of such costs have been incurred and charged to operations, consisting
primarily of inventory losses and plant carrying costs, in the amounts of $2.6
million in the March 2000 quarter, $4.5 million for the six months ended April
1, 2000 and $27.1 million for the 1999 fiscal year.
Following is a summary of activity in the related 1999 restructuring
reserves (in millions):
Lease
Cancellations
Severance and Other
Benefits Exit Costs
---------- ------------
March 1999 restructuring charge....... $ 20.1 $ 2.2
Payments.............................. (1.5) (0.2)
------ -----
Balance at April 3, 1999.............. 18.6 2.0
Payments.............................. (5.7) (0.2)
------ -----
Balance at July 3, 1999............... 12.9 1.8
Payments.............................. (3.6) (0.1)
Adjustments........................... (1.1) -
------ -----
Balance at October 2, 1999............ 8.2 1.7
Payments.............................. (1.4) (0.3)
------ -----
Balance at January 1, 2000............ 6.8 1.4
Payments.............................. (2.9) (0.3)
------ -----
Balance at April 1, 2000.............. $ 3.9 $ 1.1
====== =====
The Company has substantially completed all of the 1997 and 1996
restructuring efforts with the exception of the divestitures of certain
machinery and equipment and real estate (one plant was disposed of during the
March 2000 quarter at its carrying amount). The carrying amount of such assets
at April 1, 2000, included in the Fixed Assets caption on the balance sheet,
is $6.5 million, and the Company does not anticipate any material adjustments
to this amount.
The Company, through its Real Estate and Purchasing departments, is
actively marketing the affected real estate and equipment. The active plan to
sell the assets includes the preparation of a detailed property marketing
package to be used in working with real estate and used equipment brokers and
other channels, including other textile companies, the local Chamber of
Commerce and Economic Development and the State Economic Development
Department. The Company anticipates that the divestitures of real estate and
equipment will be completed within 12 to 18 months from the date of closing.
However, the actual timing of the disposition of these properties may vary due
to their locations and market conditions.
<PAGE>
Item 2. Management's Discussion and Analysis of Results
of Operations and Financial Condition
Results Of Operations
Management is pleased that the Company is returning to profitability
after a very difficult year of restructuring and the costs associated with
numerous strategic initiatives in the apparel fabrics segments. The Company
expects to see continued improvement in apparel as it goes forward. The
interior furnishings segment continues to show solid growth and positive
results. The volume of business in both apparel and interior furnishings has
improved recently, and the Company is forecasting higher operating results in
the third quarter of this fiscal year.
Comparison of Three Months ended April 1, 2000 and April 3, 1999.
NET SALES: Net sales for the second quarter of the 2000 fiscal year
were $402.1 million compared to $403.9 million recorded for the second quarter
of the 1999 fiscal year. Export sales totaled $42.5 million and $63.0 million
in the 2000 and 1999 periods, respectively.
PerformanceWear: Net sales for the PerformanceWear segment for the
second quarter of the 2000 fiscal year were $152.7 million compared to $152.1
million recorded in the second quarter of the 1999 fiscal year. This increase
was primarily due to 0.3% higher selling prices/product mix and 0.1% higher
volume.
CasualWear: Net sales for the CasualWear segment for the second quarter
of the 2000 fiscal year were $55.3 million, 1.8% lower than the $56.3 million
recorded in the second quarter of the 1999 fiscal year. Excluding $6.4 million
sales reduction due to exiting the Sportswear business, net sales of products
for the CasualWear segment were 11.0% higher than in the prior year. This
increase was due primarily to 21.2% higher volume offset by 10.2% lower prices
and product mix.
Interior Furnishings: Net sales of products for interior furnishings
markets for the second quarter of the 2000 fiscal year were $196.0 million,
3.8% higher than the $188.9 million recorded in the second quarter of the 1999
fiscal year. This increase was due primarily to 0.2% higher volume and 3.6%
higher selling prices and mix.
Intersegment Sales: The increase in intersegment net sales was
primarily attributable to PerformanceWear sales to Interior Furnishings of
fabrics for end customer use of interior furnishings.
SEGMENT INCOME: Total reportable segment income for the second quarter
of the 2000 fiscal year was $23.9 million compared to $8.7 million for the
second quarter of the 1999 fiscal year.
PerformanceWear: Income (loss) of the PerformanceWear segment for the
second quarter of the 2000 fiscal year was $9.3 million compared to a loss of
$(8.0) million recorded for the second quarter of the 1999 fiscal year. This
increase was due primarily to reduced run-out costs of $9.1 million charged to
operations associated with the 1999 restructuring, improved net operating
efficiencies of $5.6 million primarily resulting from the restructuring of
manufacturing and associated capacity reductions, and higher equity earnings
from the Unifi joint venture of $2.4 million.
CasualWear: Losses from the CasualWear segment for the second quarter
of the 2000 fiscal year were $(3.8) million compared to $(1.3) million
recorded for the second quarter of the 1999 fiscal year. This increased loss
was due primarily to $6.7 million reduction in margins due to price/mix and
operating inefficiencies, partially offset by the absence of Sportswear losses
of $1.5 million, lower Mexican start-up costs of $1.8 million and lower raw
material costs of $0.9 million.
Interior Furnishings: Income of the interior furnishings products
segment for the second quarter of the 2000 fiscal year was $19.0 million
compared to $17.5 million recorded for the second quarter of the 1999 fiscal
year. This increase was due primarily to improved margins from higher volume
and manufacturing efficiencies which totaled $2.9 million, partially offset by
higher raw material costs of $1.2 million.
CORPORATE EXPENSES: General corporate expenses not included in segment
results were $3.3 million for the second quarter of the 2000 fiscal year
compared to $3.0 million in the second quarter of the 1999 fiscal year. The
increase from the prior year period is attributable mainly to higher costs
associated with installation of a new Human Resource system.
OPERATING INCOME BEFORE INTEREST AND TAXES: Operating income before
interest and taxes for the second quarter of the 2000 fiscal year was $14.1
million compared to $1.7 million for the second quarter of the 1999 fiscal
year (excluding the 1999 restructuring provision). Amortization of goodwill
was $4.5 million and $4.4 million in the 2000 and 1999 periods, respectively.
INTEREST EXPENSE: Interest expense for the second quarter of the 2000
fiscal year was $16.5 million, or 4.1% of net sales, compared with $14.7
million, or 3.6% of net sales, in the second quarter of the 1999 fiscal year.
The increase was mainly attributable to the effect of higher borrowing levels
and, to a lesser extent, higher interest rates.
OTHER EXPENSE (INCOME): Other income for the second quarter of the 2000
fiscal year was $2.3 million consisting principally of a gain on the disposal
of assets of $1.0 million and interest income of $1.3 million. Other income
for the second quarter of the 1999 fiscal year was $1.0 million consisting
principally of interest income.
INCOME TAX EXPENSE: Income tax expense of $1.4 million was recorded for
the second quarter of the 2000 fiscal year in comparison with an income tax
benefit of $29.8 million for the prior year period. Total income tax
expense/benefit is different from the amounts obtained by applying statutory
rates to the income/loss before income taxes primarily as a result of
amortization of nondeductible goodwill, which is partially offset by the
favorable tax treatment of export sales through a foreign sales corporation.
NET INCOME AND EARNINGS PER SHARE: Net income (loss) for the second
quarter of the 2000 fiscal year was $0.6 million, or $.01 per share (diluted),
in comparison with $(47.9) million, or $(0.86) per share (diluted), for the
second quarter of the 1999 fiscal year. Net losses for the second quarter of
the 2000 and 1999 fiscal years included net charges of $(0.03) per share and
$(0.84) per share, respectively, related to the 1999 restructuring provision
and related run-out costs included in cost of sales.
Comparison of Six Months ended April 1, 2000 and April 3, 1999.
NET SALES: Net sales for the first six months of the 2000 fiscal year
were $773.2 million compared to $811.1 million recorded for the first six
months of the 1999 fiscal year. Export sales totaled $88.2 million and $119.0
million in the 2000 and 1999 periods, respectively.
PerformanceWear: Net sales for the PerformanceWear segment for the
first six months of the 2000 fiscal year were $288.9 million compared to
$308.0 million recorded in the first six months of the 1999 fiscal year.
Excluding $4.2 million sales reduction due to the sale of the Burlington
Madison Yarn division, net sales of products for the PerformanceWear segment
were 4.9% lower than in the prior year. This decrease was due primarily to
2.6% lower prices and product mix and 2.3% lower volume.
CasualWear: Net sales for the CasualWear segment for the first six
months of the 2000 fiscal year were $105.9 million, 16.8% lower than the
$127.3 million recorded in the first six months of the 1999 fiscal year.
Excluding $14.2 million sales reduction due to exiting the Sportswear
division, net sales of products for the CasualWear segment were 6.4% lower
than in the prior year. This decrease was due primarily to 10.9% lower prices
and product mix, offset by 4.5% higher volume.
Interior Furnishings: Net sales of products for interior furnishings
markets for the first six months of the 2000 fiscal year were $381.8 million,
4.9% higher than the $363.8 million recorded in the first six months of the
1999 fiscal year. This increase was due primarily to 3.4% higher volume and
1.5% higher selling prices and mix.
Intersegment Sales: The increase in intersegment net sales was
primarily attributable to PerformanceWear sales to Interior Furnishings of
fabrics for end customer use of interior furnishings.
SEGMENT INCOME: Total reportable segment income for the first six
months of the 2000 fiscal year was $38.8 million compared to $40.9 million for
the first six months of the 1999 fiscal year.
PerformanceWear: Income of the PerformanceWear segment for the first
six months of the 2000 fiscal year was $14.1 million compared to $0.6 million
recorded for the first six months of the 1999 fiscal year. This increase was
due primarily to reduced run-out costs charged to operations associated with
the 1999 restructuring of $7.9 million, improved net operating efficiencies
resulting from the restructuring of manufacturing and associated capacity
reductions of $7.1 million, and higher equity earnings from the Unifi joint
venture of $1.5 million, partially offset by higher raw material costs of $3.1
million.
CasualWear: Income (loss) of the CasualWear segment for the first six
months of the 2000 fiscal year was $(9.2) million compared to $5.7 million
recorded for the first six months of the 1999 fiscal year. This decrease was
due primarily to $19.9 million lower margins resulting from price/mix and
manufacturing inefficiencies, partially offset by the absence of Sportswear
losses of $2.5 million and lower Mexican start-up costs of $2.8 million.
Interior Furnishings: Income of the interior furnishings products
segment for the first six months of the 2000 fiscal year was $34.8 million
compared to $34.1 million recorded for the first six months of the 1999 fiscal
year. This increase was due primarily to $3.1 million lower raw material costs
offset by $2.2 million of manufacturing inefficiencies.
CORPORATE EXPENSES: General corporate expenses not included in segment
results were $5.7 million for the first six months of the 2000 fiscal year
compared to $5.8 million in the first six months of the 1999 fiscal year. The
decrease from the prior year period is attributable mainly to lower
compensation expense resulting from cost reductions and restructuring
partially offset by higher costs associated with the installation of a new
Human Resources system.
OPERATING INCOME BEFORE INTEREST AND TAXES: Operating income (loss)
before interest and taxes for the first six months of the 2000 fiscal year was
$20.3 million compared to $24.3 million for the first six months of the 1999
fiscal year (excluding the 1999 restructuring provision). Amortization of
goodwill was $9.0 million and $8.9 million in the 2000 and 1999 periods,
respectively.
INTEREST EXPENSE: Interest expense for the first six months of the 2000
fiscal year was $32.1 million, or 4.2% of net sales, compared with $29.0
million, or 3.6% of net sales, in the first six months of the 1999 fiscal
year. The increase was mainly attributable to the effect of higher borrowing
levels and, to a lesser extent, higher interest rates.
OTHER EXPENSE (INCOME): Other income for the first six months of the
2000 fiscal year was $9.1 million consisting principally of a $5.5 million
translation gain on the liquidation of the Company's Canadian subsidiary, a
gain on the disposal of assets of $1.0 million and interest income of $2.6
million. Other income for the first six months of the 1999 fiscal year was
$4.6 million consisting principally of a gain of $2.7 million on the disposal
of the Burlington Madison Yarn division and interest income of $1.6 million.
INCOME TAX EXPENSE: Income tax expense of $5.9 million was recorded for
the first six months of the 2000 fiscal year in comparison with an income tax
benefit of $23.6 million for the prior year period. The 2000 period includes a
$5.7 million charge related to the liquidation of the Company's Canadian
subsidiary and U.S. taxes on income previously considered permanently
invested. Excluding the tax on the Canadian liquidation, total income tax
expense/benefit is different from the amounts obtained by applying statutory
rates to the income/loss before income taxes primarily as a result of
amortization of nondeductible goodwill, which is partially offset by the
favorable tax treatment of export sales through a foreign sales corporation.
NET INCOME AND EARNINGS PER SHARE: Net loss for the first six months of
the 2000 fiscal year was $(4.8) million, or $(0.09) per share (diluted), in
comparison with $(39.9) million, or $(0.70) per share (diluted), for the first
six months of the 1999 fiscal year. Net losses for the first six months of the
2000 and 1999 fiscal years included net charges of $(0.05) per share and
$(0.84) per share, respectively, related to the 1999 restructuring provision
and related run-out costs included in cost of sales.
Liquidity and Capital Resources
During the first six months of the 2000 fiscal year, the Company generated
$4.1 million of cash from operating activities, $5.0 million from the sale of
assets and $8.0 million from other investing activities, and had net
borrowings of long- and short-term debt of $22.4 million. Cash was used
primarily for capital expenditures totaling $39.2 million. At April 1, 2000,
total debt of the Company (consisting of current and non-current portions of
long-term debt and short-term borrowings) was $904.2 million compared with
$881.4 million at October 2, 1999 and $871.4 million at April 3, 1999.
The Company's principal uses of funds during the next several years will
be for capital investments (including the funding of acquisitions and
participations in joint ventures), repayment and servicing of indebtedness and
working capital needs. The Company intends to fund its financial needs
principally from net cash provided by operating activities and, to the extent
necessary, from funds provided by the credit facilities described in this
section. The Company believes that these sources of funds will be adequate to
meet the Company's foregoing needs.
In August 1997, the Company issued $150.0 million principal amount of
7.25% notes due August 1, 2027 ("Notes Due 2027"). Proceeds from the sale were
used to prepay revolving loans under its bank credit agreement on the same
date. The Notes Due 2027 will be redeemable as a whole or in part at the
option of the Company at any time on or after August 2, 2007, and will also be
redeemable at the option of the holders thereof on August 1, 2007 in amounts
at 100% of their principal amount. In September 1995, the Company issued
$150.0 million principal amount of 7.25% notes due September 15, 2005 ("Notes
Due 2005"). The Notes Due 2005 are not redeemable prior to maturity. The Notes
Due 2027 and the Notes Due 2005 are unsecured and rank equally with all other
unsecured and unsubordinated indebtedness of the Company.
The Company has a $550.0 million unsecured revolving credit facility that
expires in March, 2001. At May 4, 2000, the Company had approximately $232.0
million in unused capacity under this facility. The outstanding balance of
$308.0 million as of April 1, 2000 is classified as current in the
consolidated balance sheet. The Company intends to refinance this facility on
a long-term basis prior to maturity. The new facility could contain terms that
are more or less favorable than the current facility. The Company also
maintains $42.0 million in additional overnight borrowing availability under
bank lines of credit.
Loans under the bank credit agreement bear interest at either (i)
floating rates generally payable quarterly based on an adjusted Eurodollar
rate plus 0.40% or (ii) Eurodollar rates or fixed rates that may be offered
from time to time by a Lender pursuant to a competitive bid request submitted
by the Company, payable up to 360 days. In addition, the Company pays an
annual facility fee of 0.225%. The interest rate and the facility fee are
based on the Company's senior unsecured debt ratings. In the event that both
of the Company's debt ratings improve, the interest rate and facility fees
would be reduced. Conversely, deterioration in both of the Company's debt
ratings would increase the interest rate and facility fees. In January 2000,
Moody's lowered the Company's debt rating from Ba1 to Ba2; the Company's debt
rating by Standard & Poor's remains at BB plus.
The 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 incurring 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.
In November 1998, the Company established a $105 million credit
facility with a group of banks used to finance the construction and working
capital needs of the Company's Mexican subsidiaries related to the expansion
projects in Mexico. The facility includes terms and covenants similar to the
$550.0 million bank credit agreement, except that the outstanding balance on
the third anniversary of the facility will convert to a two-year term loan
payable semi-annually in four equal installments. Loans under the new facility
are made directly to a Mexican financing subsidiary of the Company and are
guaranteed by the Company. At May 4, 2000, the Company had no unused capacity
under this facility.
In December 1997, the Company established a five-year, $225.0 million
Trade Receivables Financing Agreement ("Receivables Facility") with a bank.
The amount of borrowings allowable under the Receivables Facility at any time
is a function of the amount of then-outstanding eligible trade accounts
receivable up to $225.0 million. Loans under the Receivables Facility bear
interest, with terms up to 270 days, at the bank's commercial paper dealer
rate plus 0.1875%. A commitment fee of 0.125% is charged on the unused portion
of the Receivables Facility. At May 4, 2000, $184.6 million in borrowings
under this facility with original maturities of up to 154 days was
outstanding.
Because the Company's obligations under the bank credit facilities and the
Receivables Facility 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.
Commodity Price Risk
Exposure to changes in commodity prices is managed primarily through
the Company's procurement practices. The Company enters into contracts to
purchase cotton under the Southern Mill Rules ratified and adopted by the
American Textile Manufacturers Institute, Inc. and American Cotton Shippers
Association. Under these contracts and rules, nonperformance by either the
buyer or seller may result in a net cash settlement of the difference between
the current market price of cotton and the contract price. If the Company
decided to refuse delivery of its open firm commitment cotton contracts at
April 1, 2000, and market prices of cotton decreased by 10%, the Company would
be required to pay a net settlement provision of approximately $3.8 million.
However, the Company has not utilized this net settlement provision in the
past, and does not anticipate using it in the future.
Year 2000 Issue Update
The Company did not experience any significant malfunctions or errors
in its operating or business systems when the date changed from 1999 to 2000.
Based on operations since January 1, 2000, the Company does not expect any
significant impact on its ongoing business as a result of the "Year 2000
issue." However, it is possible that the full impact of the date change, which
was of concern due to computer programs that use two digits instead of four
digits to define years, has not been fully recognized. The Company believes
that any unforeseen problems are likely to be minor and correctable. In
addition, the Company could still be negatively affected if its customers or
suppliers are adversely affected by the Year 2000 or similar issues. The
Company currently is not aware of any significant Year 2000 or similar
problems that have arisen for its customers and suppliers.
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 statements that are
forward-looking statements within the meaning of applicable federal securities
laws and are based upon the company's current expectations and assumptions,
which are subject to a number of risks and uncertainties that could cause
actual results to differ materially from those anticipated. Such risks and
uncertainties include, among other things, global economic activity, the
success of the company's overall business strategy, the company's
relationships with its principal customers and suppliers, the success of the
company's expansion in other countries, the demand for textile products, the
cost and availability of raw materials and labor, the company's ability to
finance its capital expansion and modernization programs, the level of the
company's indebtedness and the exposure to interest rate fluctuations,
governmental legislation and regulatory changes, and the long-term
implications of regional trade blocs and the effect of quota phase-out and
lowering of tariffs under the WTO trade regime and of the changes in U.S.
apparel trade as a result of recently-enacted Caribbean Basin and Sub-Saharan
African trade legislation. 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.
<PAGE>
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.
----------------------------------------------------
At Registrant's Annual Meeting held on February 3, 2000, the following
actions were taken:
1. Jerald A. Blumberg, 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 2003; and
2. The selection of Ernst & Young LLP as Registrant's independent
public accountants for its 2000 fiscal year was approved.
Mr. Blumberg received 45,894,600 shares voted in favor of his election
and 979,093 shares were withheld; Mr. Englar received 45,868,669 shares voted in
favor of his election and 1,005,024 shares were withheld; and Mr. Stenberg
received 45,890,923 shares voted in favor of his election and 982,770 shares
were withheld. 46,609,637 shares were voted in favor of the selection of Ernst &
Young LLP as Registrant's independent public accountants, 185,407 shares were
voted against and 78,649 shares abstained.
Item 6. Exhibits and Reports on Form 8-K.
---------------------------------
a) Exhibits.
--------
10.10 Agreement dated as of February 3, 2000, between the
Company and George W. Henderson, III.
10.11 Agreement dated as of February 3, 2000, between the
Company and John D. Englar.
10.13 Agreement dated as of February 3, 2000, between the
Company and Charles E. Peters, Jr.
27 Financial Data Schedule.
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.
<PAGE>
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.
----------------------------
Date: May 15, 2000 Charles E. Peters, Jr.
Senior Vice President and
Chief Financial Officer
By /s/ CARL J. HAWK
------------------
Date: May 15, 2000 Carl J. Hawk
Controller
AGREEMENT, made and entered into as of the 3rd day of February, 2000,
between BURLINGTON INDUSTRIES, INC., a Delaware corporation (hereinafter
sometimes referred to as the "Corporation"), and George W. Henderson, III
(hereinafter referred to as "Executive").
WHEREAS, the Corporation and Executive desire to enter into an
Employment Agreement effective February 3, 2000, 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 Executive hereby agree as follows:
l. The Corporation agrees to employ Executive, and Executive agrees to
serve the Corporation, upon the terms hereinafter set forth.
2. The employment of Executive hereunder shall commence February 3,
2000 and continue until December 31, 2003, unless earlier terminated under the
provisions of Paragraphs 6, 7 or 8 of this Agreement.
3. Executive 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 Executive during the period of the
term hereof salary for his services at the rate (the "Annual Rate", which Annual
Rate shall refer to any subsequent increase in the rate of compensation of
Executive granted by the Corporation during the term of this Agreement) of Six
Hundred Thousand Dollars ($600,000) 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. Executive 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 Executive whatsoever. If sums are paid to Executive
as additional compensation in any year, such payment shall not create an
obligation to pay additional compensation to Executive in any past or succeeding
year. No payments to Executive of additional compensation, if any, shall reduce
or be applied against the salary to be paid to Executive pursuant to Paragraph 4
hereof.
6. If, during the term of this Agreement, Executive 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 Executive
(or Executive's legal representative if Executive is incapable of making such
determination), which determination shall be final and conclusive, the
Corporation may, upon notice to Executive, terminate this Agreement and his
employment hereunder, and upon such termination, Executive shall be entitled to
receive (i) cash compensation at the Annual Rate for a period of one year and
(ii) shall receive benefits as provided under Paragraph 7(b)(iii) below for such
one-year period. Executive 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
Executive's employment under this Agreement, whether for cause or without cause.
(b) Other than under the circumstances described in paragraph 8
below, in the event of (1) an involuntary termination of employment of Executive
without Cause or (2) a voluntary termination of employment by Executive for Good
Reason, Executive shall receive (in lieu of any payment under the Corporation's
Severance Policy), as soon as practicable following such termination:
(i) salary accrued through the date of termination at the
Annual Rate;
(ii) a lump sum payment in cash equal to (x) the salary that
would have been payable under Paragraph 4 above during the Severance Period (as
defined below) plus (y) an amount (the "Bonus Equivalent") equal to the number
of years in the Severance Period times the amount established, for the year
during which such termination occurs, as the Executive's target incentive
payment under the Corporation's annual cash incentive plan approved by the Board
of Directors with respect to such year; and
(iii) either (x) Executive 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 Executive participated
immediately prior to the date of termination or (y) the Corporation shall fund
substantially equivalent benefits to the extent participation in such plans is
not permissible, and Executive shall be guaranteed service credit in such plans
(including, without limitation, for vesting purposes of the Supplemental
Executive Retirement Plan), in either case (x) or (y) for the period equal to
the Severance Period. Executive's rights under this Clause (iii) shall cease
when Executive commences other employment and obtains coverage under other plans
on a substantially similar basis to those of the Corporation.
Except as expressly provided in this subparagraph 7(b), in all other respects,
Executive's rights under all of the benefit plans of the Corporation shall be
governed by the terms of such plans and not by the provisions of this Agreement.
(c) In the event of an involuntary termination for Cause,
Executive shall only be entitled to payments under the Severance Policy and only
if the conduct giving rise to such termination was not, in the Corporation's
sole judgment, willful.
(d) In the event that Executive's employment is terminated by
the Corporation or the Executive for any reason other than those set forth in
Paragraph 6 above, subparagraphs 7(b) or 7(c) or Paragraph 8 below, the
Corporation shall have no further obligation to Executive hereunder or under the
Severance Policy.
(e) Notwithstanding any other provisions of this Agreement,
Executive's obligations under Paragraphs 9 and 10 of this Agreement shall
survive the termination or expiration of this Agreement.
8. (a) If the employment of Executive hereunder terminates (other than
by reason of death, disability or a termination for Cause) within two years
following a Change of Control, whether initiated by Executive or by the
Corporation, the Corporation shall promptly (not later than 30 days) pay to
Executive a lump sum payment in cash equal to (i) the then salary of Executive
at the Annual Rate times the number of years in the Severance Period, plus (ii)
the Bonus Equivalent times the number of years in the Severance Period. In
addition, following such termination of employment, Executive shall continue for
the number of years in the Severance Period, in the manner set forth in
subparagraph 7(b)(iii) above, to participate in, or the Corporation shall fund
substantially equivalent benefits, under the welfare and benefit plans of the
Corporation.
(b) In the event that the payment by the Corporation of the
payments required in the preceding Paragraph would result in the Executive
becoming subject to the imposition of an excise tax under Section 4999 of the
Internal Revenue Code of 1986, as amended, then the amount of payments made
hereunder shall be reduced to an amount which would maximize the after-tax
payments to the Executive of such amount. The determination of such reduction
amount, if any, shall be made by the Executive, with the advice of Executive's
tax or financial advisor.
9. Executive 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 (1) during a period of six months following termination
of his employment, and (2) only in the event that Executive is receiving
severance payments and/or benefits under Paragraph 7(b) during the further
period commencing on the day following such six-month period and continuing
until the last day of the Severance Period, Executive 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 (Executive hereby acknowledging that
Executive 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. The period of non-competition established in clause (2)
above may be shortened, at the election of the Executive evidenced by a written
relinquishment satisfactory to the Corporation, of any remaining right to
severance payments under this Agreement, to a period ending on the last date as
of which such severance payments are earned.
10. Executive 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 strategic and 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.
Executive 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
Executive to abide by the terms of Paragraphs 9 and 10 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 or suit for restitution.
11. The following capitalized terms used in this Agreement shall have
the meanings set forth below:
(i) "Severance Policy" means the policy providing for
severance payments to salaried employees set forth in the Corporation's Policy
Manual as in effect on the date of Executive's termination of employment.
(ii) A termination for "Cause" means a termination of employment
with the Corporation or any of the subsidiaries or joint ventures which, as
determined by the Corporation, is by reason of (A) the commission by the
Executive of a felony or a perpetration by the Executive of a dishonest act,
material misrepresentation or common law fraud against the Corporation or any
subsidiary, joint venture or other affiliate thereof, (B) any other act or
omission which is injurious to the financial condition or business reputation of
the Corporation or any subsidiary, joint venture or other affiliate thereof, or
(C) the willful failure or refusal of the Executive to substantially perform the
material duties of the Executive's position with the Corporation or any of the
Corporation's subsidiaries, joint ventures or affiliates.
(iii) "Good Reason" means (A) a failure to promptly pay compensation
due and payable to the Executive in connection with his or her employment, (B) a
reduction in Executive's level of compensation (other than changes to incentive
or benefit plans affecting all executives) of the Corporation in a similar
manner, (C) unless agreed to by Executive, the assignment to the Executive of
duties inconsistent with the Executive's position as such duties were
immediately prior to such assignment which results in a diminution of such
position, authority, duties or responsibilities, or (D) a change in the
employment requirements of Executive which, in the view of the Compensation and
Benefits Committee of the Corporation's Board of Directors, subjects Executive
to an unfair change of circumstances.
(iv) "Severance Period" shall mean, for the purposes of Paragraph
7, the two year period commencing on the date of termination, and for the
purposes of Paragraph 8, the three year period commencing on the date of
termination.
(v) "Change of Control" means that any of the following events
shall have occurred:
(A) The Corporation 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 securities entitled to vote generally in the election of
Directors of the Corporation ("Voting Stock") immediately prior to such
transaction;
(B) The Corporation 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
Corporation immediately prior to such sale or transfer;
(C) If during any period of two consecutive years,
individuals who at the beginning of any such period constitute the Directors of
the Corporation cease for any reason to constitute at least a majority thereof,
unless the election, or the nomination for election by the Corporation's
stockholders, of each Director of the Corporation first elected during such
period was approved by a vote of at least two-thirds of the Directors of the
Corporation then still in office who were Directors of the Corporation at the
beginning of any such period.
12. Any notice to be given by Executive 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 Executive shall be sent
to Executive 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 Executive has hereunto set his
hand and seal, as of the day and year first above written.
BURLINGTON INDUSTRIES, INC.
By
----------------------------
Nelson Schwab III
On Behalf of the
Board of Directors
(L.S.)
----------------------------
George W. Henderson, III
AGREEMENT, made and entered into as of the 3rd day of February 3, 2000,
between BURLINGTON INDUSTRIES, INC., a Delaware corporation (hereinafter
sometimes referred to as the "Corporation"), and John D Englar (hereinafter
referred to as "Executive").
WHEREAS, the Corporation and Executive desire to enter into an
Employment Agreement effective February 3, 2000, this Agreement to supersede in
its entirety the present employment agreement, if any, between the parties;
NOW, THEREFORE, in consideration of the mutual agreements hereinafter
contained, the Corporation and Executive hereby agree as follows:
l. The Corporation agrees to employ Executive, and Executive agrees to
serve the Corporation, upon the terms hereinafter set forth.
2. The employment of Executive hereunder shall commence February 3,
2000 and continue until December 31, 2003, unless earlier terminated under the
provisions of Paragraphs 6, 7 or 8 of this Agreement.
3. Executive 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 Executive during the period of the
term hereof salary for his services at the rate (the "Annual Rate", which Annual
Rate shall refer to any subsequent increase in the rate of compensation of
Executive granted by the Corporation during the term of this Agreement) of Three
Hundred Ten Thousand Dollars ($310,000) 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. Executive 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 Executive whatsoever. If sums are paid to Executive
as additional compensation in any year, such payment shall not create an
obligation to pay additional compensation to Executive in any past or succeeding
year. No payments to Executive of additional compensation, if any, shall reduce
or be applied against the salary to be paid to Executive pursuant to Paragraph 4
hereof.
6. If, during the term of this Agreement, Executive 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 Executive
(or Executive's legal representative if Executive is incapable of making such
determination), which determination shall be final and conclusive, the
Corporation may, upon notice to Executive, terminate this Agreement and his
employment hereunder, and upon such termination, Executive shall be entitled to
receive (i) cash compensation at the Annual Rate for a period of six months and
(ii) shall receive benefits as provided under Paragraph 7(b)(iii) below for such
six-month period. Executive 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
Executive's employment under this Agreement, whether for cause or without cause.
(b) Other than under the circumstances described in paragraph 8
below, in the event of (1) an involuntary termination of employment of Executive
without Cause or (2) a voluntary termination of employment by Executive for Good
Reason, Executive shall receive (in lieu of any payment under the Corporation's
Severance Policy), as soon as practicable following such termination:
(i) salary accrued through the date of termination at
the Annual Rate;
(ii) a lump sum payment in cash equal to (x) the
salary that would have been payable under Paragraph 4 above during the Severance
Period (as defined below) plus (y) an amount (the "Bonus Equivalent") equal to
the number of years in the Severance Period times the amount established, for
the year during which such termination occurs, as the Executive's target
incentive payment under the Corporation's annual cash incentive plan approved by
the Board of Directors with respect to such year; and
(iii) either (x) Executive 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 Executive
participated immediately prior to the date of termination or (y) the Corporation
shall fund substantially equivalent benefits to the extent participation in such
plans is not permissible, and Executive shall be guaranteed service credit in
such plans (including, without limitation, for vesting purposes of the
Supplemental Executive Retirement Plan), in either case (x) or (y) for the
period equal to the Severance Period. Executive's rights under this Clause (iii)
shall cease when Executive commences other employment and obtains coverage under
other plans on a substantially similar basis to those of the Corporation.
Except as expressly provided in this subparagraph 7(b), in all other respects,
Executive's rights under all of the benefit plans of the Corporation shall be
governed by the terms of such plans and not by the provisions of this Agreement.
(c) In the event of an involuntary termination for Cause,
Executive shall only be entitled to payments under the Severance Policy and only
if the conduct giving rise to such termination was not, in the Corporation's
sole judgment, willful.
(d) In the event that Executive's employment is terminated by
the Corporation or the Executive for any reason other than those set forth in
Paragraph 6 above, subparagraphs 7(b) or 7(c) or Paragraph 8 below, the
Corporation shall have no further obligation to Executive hereunder or under the
Severance Policy.
(e) Notwithstanding any other provisions of this Agreement,
Executive's obligations under Paragraphs 9 and 10 of this Agreement shall
survive the termination or expiration of this Agreement.
8. (a) If within two years following a Change of Control, the
employment of Executive hereunder is terminated by the Corporation without
Cause, or is terminated by Executive for Good Reason, in either case other than
by reason of death or disability, the Corporation shall promptly (not later than
30 days) pay to Executive a lump sum payment in cash equal to (i) the then
salary of Executive at the Annual Rate times the number of years in the
Severance Period, plus (ii) the Bonus Equivalent times the number of years in
the Severance Period. In addition, following such termination of employment,
Executive shall continue for the number of years in the Severance Period, in the
manner set forth in subparagraph 7(b)(iii) above, to participate in, or the
Corporation shall fund substantially equivalent benefits, under the welfare and
benefit plans of the Corporation.
(b) In the event that the payment by the Corporation of the
payments required in the preceding Paragraph would result in the Executive
becoming subject to the imposition of an excise tax under Section 4999 of the
Internal Revenue Code of 1986, as amended, then the amount of payments made
hereunder shall be reduced to an amount which would maximize the after-tax
payments to the Executive of such amount. The determination of such reduction
amount, if any, shall be made by the Executive, with the advice of Executive's
tax or financial advisor.
9. Executive 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 (1) during a period of six months following termination
of his employment, and (2) only in the event that Executive is receiving
severance payments and/or benefits under Paragraph 7(b) during the further
period commencing on the day following such six-month period and continuing
until the last day of the Severance Period, Executive 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 (Executive hereby acknowledging that
Executive 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. The period of non-competition established in clause (2)
above may be shortened, at the election of the Executive evidenced by a written
relinquishment satisfactory to the Corporation, of any remaining right to
severance payments under this Agreement, to a period ending on the last date as
of which such severance payments are earned.
10. Executive 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 strategic and 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.
Executive 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
Executive to abide by the terms of Paragraphs 9 and 10 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 or suit for restitution.
11. The following capitalized terms used in this Agreement shall have
the meanings set forth below:
(i) "Severance Policy" means the policy providing for
severance payments to salaried employees set forth in the Corporation's Policy
Manual as in effect on the date of Executive's termination of employment.
(ii) A termination for "Cause" means a termination of
employment with the Corporation or any of the subsidiaries or joint ventures
which, as determined by the Corporation, is by reason of (A) the commission by
the Executive of a felony or a perpetration by the Executive of a dishonest
act, material misrepresentation or common law fraud against the Corporation or
any subsidiary, joint venture or other affiliate thereof, (B) any other act or
omission which is injurious to the financial condition or business reputation
of the Corporation or any subsidiary, joint venture or other affiliate
thereof, or (C) the willful failure or refusal of the Executive to
substantially perform the material duties of the Executive's position with the
Corporation or any of the Corporation's subsidiaries, joint ventures or
affiliates.
(iii) "Good Reason" means (A) a failure to promptly pay
compensation due and payable to the Executive in connection with his or her
employment, (B) a reduction in Executive's level of compensation (other than
changes to incentive or benefit plans affecting all executives) of the
Corporation in a similar manner, (C) unless agreed to by Executive, the
assignment to the Executive of duties inconsistent with the Executive's
position as such duties were immediately prior to such assignment which
results in a diminution of such position, authority, duties or
responsibilities, or (D) a change in the employment requirements of Executive
which, in the view of the Compensation and Benefits Committee of the
Corporation's Board of Directors, subjects Executive to an unfair change of
circumstances.
(iv) "Severance Period" shall mean, for the purposes of
Paragraph 7, the one and one-half year period commencing on the date of
termination, and for the purposes of Paragraph 8, the three year period
commencing on the date of termination.
(v) "Change of Control" means that any of the following events
shall have occurred:
(A) The Corporation 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 securities entitled to vote generally in the election of
Directors of the Corporation ("Voting Stock") immediately prior to such
transaction;
(B) The Corporation 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
Corporation immediately prior to such sale or transfer;
(C) If during any period of two consecutive years,
individuals who at the beginning of any such period constitute the Directors of
the Corporation cease for any reason to constitute at least a majority thereof,
unless the election, or the nomination for election by the Corporation's
stockholders, of each Director of the Corporation first elected during such
period was approved by a vote of at least two-thirds of the Directors of the
Corporation then still in office who were Directors of the Corporation at the
beginning of any such period.
12. Any notice to be given by Executive 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 Executive shall be sent
to Executive 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 Executive has hereunto set his
hand and seal, as of the day and year first above written.
BURLINGTON INDUSTRIES, INC.
By____________________________________
George W. Henderson III
President and Chief Executive Officer
____________________________________(L.S.)
John D. Englar
AGREEMENT, made and entered into as of the 3rd day of February 3, 2000,
between BURLINGTON INDUSTRIES, INC., a Delaware corporation (hereinafter
sometimes referred to as the "Corporation"), and Charles E. Peters, Jr.
(hereinafter referred to as "Executive").
WHEREAS, the Corporation and Executive desire to enter into an
Employment Agreement effective February 3, 2000, this Agreement to supersede in
its entirety the present employment agreement, if any, between the parties;
NOW, THEREFORE, in consideration of the mutual agreements hereinafter
contained, the Corporation and Executive hereby agree as follows:
l. The Corporation agrees to employ Executive, and Executive agrees to
serve the Corporation, upon the terms hereinafter set forth.
2. The employment of Executive hereunder shall commence February 3,
2000 and continue until December 31, 2003, unless earlier terminated under the
provisions of Paragraphs 6, 7 or 8 of this Agreement.
3. Executive 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 Executive during the period of the
term hereof salary for his services at the rate (the "Annual Rate", which Annual
Rate shall refer to any subsequent increase in the rate of compensation of
Executive granted by the Corporation during the term of this Agreement) of Three
Hundred Fifty Thousand Dollars ($350,000) 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. Executive 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 Executive whatsoever. If sums are paid to Executive
as additional compensation in any year, such payment shall not create an
obligation to pay additional compensation to Executive in any past or succeeding
year. No payments to Executive of additional compensation, if any, shall reduce
or be applied against the salary to be paid to Executive pursuant to Paragraph 4
hereof.
6. If, during the term of this Agreement, Executive 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 Executive
(or Executive's legal representative if Executive is incapable of making such
determination), which determination shall be final and conclusive, the
Corporation may, upon notice to Executive, terminate this Agreement and his
employment hereunder, and upon such termination, Executive shall be entitled to
receive (i) cash compensation at the Annual Rate for a period of six months and
(ii) shall receive benefits as provided under Paragraph 7(b)(iii) below for such
six-month period. Executive 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
Executive's employment under this Agreement, whether for cause or without cause.
(b) Other than under the circumstances described in paragraph 8
below, in the event of (1) an involuntary termination of employment of Executive
without Cause or (2) a voluntary termination of employment by Executive for Good
Reason, Executive shall receive (in lieu of any payment under the Corporation's
Severance Policy), as soon as practicable following such termination:
(i) salary accrued through the date of termination at
the Annual Rate;
(ii) a lump sum payment in cash equal to (x) the
salary that would have been payable under Paragraph 4 above during the Severance
Period (as defined below) plus (y) an amount (the "Bonus Equivalent") equal to
the number of years in the Severance Period times the amount established, for
the year during which such termination occurs, as the Executive's target
incentive payment under the Corporation's annual cash incentive plan approved by
the Board of Directors with respect to such year; and
(iii) either (x) Executive 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 Executive
participated immediately prior to the date of termination or (y) the Corporation
shall fund substantially equivalent benefits to the extent participation in such
plans is not permissible, and Executive shall be guaranteed service credit in
such plans (including, without limitation, for vesting purposes of the
Supplemental Executive Retirement Plan), in either case (x) or (y) for the
period equal to the Severance Period. Executive's rights under this Clause (iii)
shall cease when Executive commences other employment and obtains coverage under
other plans on a substantially similar basis to those of the Corporation.
Except as expressly provided in this subparagraph 7(b), in all other respects,
Executive's rights under all of the benefit plans of the Corporation shall be
governed by the terms of such plans and not by the provisions of this Agreement.
(c) In the event of an involuntary termination for Cause,
Executive shall only be entitled to payments under the Severance Policy and only
if the conduct giving rise to such termination was not, in the Corporation's
sole judgment, willful.
(d) In the event that Executive's employment is terminated by
the Corporation or the Executive for any reason other than those set forth in
Paragraph 6 above, subparagraphs 7(b) or 7(c) or Paragraph 8 below, the
Corporation shall have no further obligation to Executive hereunder or under the
Severance Policy.
(e) Notwithstanding any other provisions of this Agreement,
Executive's obligations under Paragraphs 9 and 10 of this Agreement shall
survive the termination or expiration of this Agreement.
8. (a) If within two years following a Change of Control, the
employment of Executive hereunder is terminated by the Corporation without
Cause, or is terminated by Executive for Good Reason, in either case other than
by reason of death or disability, the Corporation shall promptly (not later than
30 days) pay to Executive a lump sum payment in cash equal to (i) the then
salary of Executive at the Annual Rate times the number of years in the
Severance Period, plus (ii) the Bonus Equivalent times the number of years in
the Severance Period. In addition, following such termination of employment,
Executive shall continue for the number of years in the Severance Period, in the
manner set forth in subparagraph 7(b)(iii) above, to participate in, or the
Corporation shall fund substantially equivalent benefits, under the welfare and
benefit plans of the Corporation.
(b) In the event that the payment by the Corporation of the
payments required in the preceding Paragraph would result in the Executive
becoming subject to the imposition of an excise tax under Section 4999 of the
Internal Revenue Code of 1986, as amended, then the amount of payments made
hereunder shall be reduced to an amount which would maximize the after-tax
payments to the Executive of such amount. The determination of such reduction
amount, if any, shall be made by the Executive, with the advice of Executive's
tax or financial advisor.
9. Executive 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 (1) during a period of six months following termination
of his employment, and (2) only in the event that Executive is receiving
severance payments and/or benefits under Paragraph 7(b) during the further
period commencing on the day following such six-month period and continuing
until the last day of the Severance Period, Executive 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 (Executive hereby acknowledging that
Executive 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. The period of non-competition established in clause (2)
above may be shortened, at the election of the Executive evidenced by a written
relinquishment satisfactory to the Corporation, of any remaining right to
severance payments under this Agreement, to a period ending on the last date as
of which such severance payments are earned.
10. Executive 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 strategic and 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.
Executive 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
Executive to abide by the terms of Paragraphs 9 and 10 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 or suit for restitution.
11. The following capitalized terms used in this Agreement shall have
the meanings set forth below:
(i) "Severance Policy" means the policy providing for
severance payments to salaried employees set forth in the Corporation's Policy
Manual as in effect on the date of Executive's termination of employment.
(ii) A termination for "Cause" means a termination of
employment with the Corporation or any of the subsidiaries or joint ventures
which, as determined by the Corporation, is by reason of (A) the commission by
the Executive of a felony or a perpetration by the Executive of a dishonest
act, material misrepresentation or common law fraud against the Corporation or
any subsidiary, joint venture or other affiliate thereof, (B) any other act or
omission which is injurious to the financial condition or business reputation
of the Corporation or any subsidiary, joint venture or other affiliate
thereof, or (C) the willful failure or refusal of the Executive to
substantially perform the material duties of the Executive's position with the
Corporation or any of the Corporation's subsidiaries, joint ventures or
affiliates.
(iii) "Good Reason" means (A) a failure to promptly pay
compensation due and payable to the Executive in connection with his or her
employment, (B) a reduction in Executive's level of compensation (other than
changes to incentive or benefit plans affecting all executives) of the
Corporation in a similar manner, (C) unless agreed to by Executive, the
assignment to the Executive of duties inconsistent with the Executive's
position as such duties were immediately prior to such assignment which
results in a diminution of such position, authority, duties or
responsibilities, or (D) a change in the employment requirements of Executive
which, in the view of the Compensation and Benefits Committee of the
Corporation's Board of Directors, subjects Executive to an unfair change of
circumstances.
(iv) "Severance Period" shall mean, for the purposes of
Paragraph 7, the one and one-half year period commencing on the date of
termination, and for the purposes of Paragraph 8, the three year period
commencing on the date of termination.
(v) "Change of Control" means that any of the following
events shall have occurred:
(A) The Corporation 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 securities entitled to vote generally in the election of
Directors of the Corporation ("Voting Stock") immediately prior to such
transaction;
(B) The Corporation 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
Corporation immediately prior to such sale or transfer;
(C) If during any period of two consecutive years,
individuals who at the beginning of any such period constitute the Directors of
the Corporation cease for any reason to constitute at least a majority thereof,
unless the election, or the nomination for election by the Corporation's
stockholders, of each Director of the Corporation first elected during such
period was approved by a vote of at least two-thirds of the Directors of the
Corporation then still in office who were Directors of the Corporation at the
beginning of any such period.
12. Any notice to be given by Executive 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 Executive shall be sent
to Executive 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 Executive has hereunto set his
hand and seal, as of the day and year first above written.
BURLINGTON INDUSTRIES, INC.
By___________________________________
George W. Henderson III
President and Chief Executive Officer
_____________________________________(L.S.)
Charles E. Peters, Jr.
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