<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
F O R M 10-Q
For the Quarter Ended March 29, 1997 Commission File Number 1-5315
------------------------
S P R I N G S I N D U S T R I E S, I N C.
(Exact name of registrant as specified in its charter)
SOUTH CAROLINA 57-0252730
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
205 North White Street
Fort Mill, South Carolina 29715
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(803) 547-1500
------------------------
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 at least the past 90 days.
Yes X No
---- ----
------------------------
As of May 5, 1997, there were 12,761,786 shares of Class A Common Stock and
7,395,615 shares of Class B Common Stock of Springs Industries, Inc.
outstanding.
------------------------
There are 23 pages in the sequentially numbered, manually signed original of
this report.
Page 1 of 23
The Index to Exhibits is on Page 13
<PAGE> 2
TABLE OF CONTENTS TO FORM 10-Q
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION
- ------------------------------
ITEM PAGE
- ---- ----
<S> <C> <C>
1. FINANCIAL STATEMENTS 3
2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 8
PART II - OTHER INFORMATION
- ---------------------------
4. SUBMISSION OF MATTERS TO A VOTE 10
OF SECURITY HOLDERS
6. EXHIBITS 11
SIGNATURES 12
EXHIBIT INDEX 13
</TABLE>
-2-
<PAGE> 3
PART I
ITEM I - FINANCIAL STATEMENTS
SPRINGS INDUSTRIES, INC.
Consolidated Statement of Operations
and Retained Earnings
(In thousands except per share data)
(Unaudited)
<TABLE>
<CAPTION>
THIRTEEN WEEKS ENDED
---------------------------
MARCH 29, MARCH 30,
1997 1996
----------- -----------
<S> <C> <C>
OPERATIONS
Net sales ........................................ $ 543,009 $ 579,340
Cost and expenses:
Cost of goods sold .............................. 446,757 477,755
Selling, general and
administrative expenses ........................ 71,032 74,499
Restructuring and
realignment expenses ........................... 2,763 -
Interest expense ................................ 4,521 7,834
Other income, net ............................... (149) (939)
----------- -----------
Total ......................................... 524,924 559,149
----------- -----------
Income before income taxes ....................... 18,085 20,191
Income tax provision ............................. 6,874 7,885
----------- -----------
Net income ...................................... $ 11,211 $ 12,306
=========== ===========
Per share:
Net income ...................................... $ .55 $ .60
=========== ===========
Cash dividends declared:
Class A shares .................................. $ .33 $ .33
=========== ===========
Class B shares .................................. $ .30 $ .30
=========== ===========
Weighted average shares of
common stock .................................... 20,471 20,389
=========== ===========
RETAINED EARNINGS
Retained earnings at beginning
of period ..................................... $ 675,533 $ 616,347
Net income ...................................... 11,211 12,306
Cash dividends declared ......................... (6,435) (6,417)
----------- -----------
Retained earnings at end of
period ........................................ $ 680,309 $ 622,236
=========== ===========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
- 3 -
<PAGE> 4
SPRINGS INDUSTRIES, INC.
Condensed Consolidated Balance Sheet
(In thousands except share data)
(Unaudited)
<TABLE>
<CAPTION>
MARCH 29, DECEMBER 28,
1997 1996
----------- -----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents ................................ $ 1,571 $ 30,719
Accounts receivable ...................................... 357,230 350,830
Inventories .............................................. 380,140 370,896
Other .................................................... 47,046 37,177
----------- -----------
Total current assets ................................... 785,987 789,622
----------- -----------
Property, plant and equipment .............................. 1,331,344 1,320,400
Accumulated depreciation ................................. (804,188) (785,836)
----------- -----------
Property, net .......................................... 527,156 534,564
----------- -----------
Other assets ............................................... 82,464 73,770
----------- -----------
Total .................................................. $ 1,395,607 $ 1,397,956
=========== ===========
LIABILITIES AND SHAREOWNERS' EQUITY
Current liabilities:
Short-term borrowings .................................... $ 36,800 $ -
Current maturities of long-term debt ..................... 6,824 6,921
Accounts payable ......................................... 78,874 103,841
Other accrued liabilities ................................ 123,135 141,727
----------- -----------
Total current liabilities .............................. 245,633 252,489
----------- -----------
Noncurrent liabilities:
Long-term debt ........................................... 177,180 177,640
Accrued benefits and deferred
compensation ............................................ 160,994 160,535
Deferred income taxes and other deferred
credits ................................................. 26,048 26,513
----------- -----------
Total noncurrent liabilities ........................... 364,222 364,688
----------- -----------
Shareowners' equity:
Class A common stock- $.25 par value
(12,860,993 and 12,746,374 shares
issued in 1997 and 1996, respectively) ................ 3,215 3,187
Class B common stock- $.25 par value
(7,395,615 and 7,508,579 shares issued
in 1997 and 1996, respectively) ........................ 1,849 1,877
Additional paid-in capital ............................... 110,405 110,352
Retained earnings ........................................ 680,309 675,533
Cost of Class A shares in treasury
(103,533 and 106,739 shares
in 1997 and 1996, respectively) ........................ (2,323) (2,378)
Currency translation adjustment and other ................ (7,703) (7,792)
----------- -----------
Total shareowners' equity .............................. 785,752 780,779
----------- -----------
Total .................................................. $ 1,395,607 $ 1,397,956
=========== ===========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
- 4 -
<PAGE> 5
SPRINGS INDUSTRIES, INC.
Condensed Consolidated Statement of Cash Flows
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
THIRTEEN WEEKS ENDED
---------------------------
MARCH 29, MARCH 30,
1997 1996
----------- -----------
<S> <C> <C>
Operating activities:
Net income ............................................... $ 11,211 $ 12,306
Adjustments to reconcile net income to net
cash provided (used) by operating activities:
Depreciation and amortization ........................... 22,721 26,568
Changes in operating assets and liabilities,
net of effects of business acquisitions and
sale of businesses ..................................... (52,778) (35,658)
Other, net .............................................. (4,799) (2,251)
Net cash provided (used) by operating ----------- -----------
activities .......................................... (23,645) 965
----------- -----------
Investing activities:
Purchase of property, plant and
equipment .............................................. (15,465) (19,549)
Business acquisitions .................................... (6,400) (1,900)
Other, net ............................................... (7,022) 2,648
----------- -----------
Net cash used by investing activities................. (28,887) (18,801)
----------- -----------
Financing activities:
Proceeds from short-term borrowings, net ................. 36,800 33,600
Proceeds from long-term borrowings ....................... - 2,261
Repayment of long-term debt .............................. (557) (5,645)
Cash dividends paid....................................... (12,859) (12,834)
----------- -----------
Net cash provided by financing activities ............ 23,384 17,382
----------- -----------
Decrease in cash and cash equivalents....................... $ (29,148) $ (454)
=========== ===========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
- 5 -
<PAGE> 6
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Significant Accounting Policies:
The accompanying condensed consolidated financial statements should be
read in conjunction with the financial statements presented in the
Springs Industries, Inc. ("Springs" or "the Company") 1996 Annual
Report on Form 10-K.
In the opinion of the management of Springs, these unaudited condensed
consolidated financial statements contain all adjustments of a normal
recurring nature necessary for their fair presentation. The results for
interim periods reflect estimates for certain items which can be
definitively determined only on an annual basis. These items include
the valuation of a substantial portion of inventories on a LIFO cost
basis and the provision for income taxes. These interim financial
statements reflect applicable portions of the estimated annual amounts
for such items.
The results of operations for interim periods are not necessarily
indicative of operating results to be expected for the remainder of the
year.
2. Inventory:
Inventories are summarized as follows (in thousands):
<TABLE>
<CAPTION>
March 29, Dec. 28,
1997 1996
----------- -----------
<S> <C> <C>
Standard cost (which approximates
average cost) or average cost:
Finished goods ................................. $ 256,751 $ 242,650
In process ..................................... 186,922 185,307
Raw materials and supplies ..................... 59,919 67,925
----------- -----------
503,592 495,882
Less LIFO reserve ............................... (123,452) (124,986)
----------- -----------
Total .......................................... $ 380,140 $ 370,896
=========== ===========
</TABLE>
3. Reclassification:
Certain prior-year amounts have been reclassified to conform with the
1997 presentation, including classification in net sales of certain
promotional costs which were previously included in selling, general
and administrative expenses.
4. Commitments:
The Company enters into forward delivery contracts and futures
contracts for raw material purchases, consistent with the size of its
business, to reduce the Company's exposure to price volatility.
Management assesses these contracts on a continuous basis to determine
if contract prices will be recovered through subsequent sales.
- 6 -
<PAGE> 7
5. Divestiture:
On April 17, 1996, the Company sold Clark-Schwebel, Inc., a business in
the specialty fabrics segment, for $193 million in cash. During the
first quarter of 1996, Clark-Schwebel contributed about 10 percent of
Springs' sales of $579.3 million and had record earnings of $10.1
million before interest expense and taxes. During the five years ended
in 1995, Clark-Schwebel's average contribution was 13 percent of
Springs' sales and 9 percent of its earnings before interest expense
and taxes.
6. Restructuring and Realignment Costs:
During the second quarter of 1996, the Company adopted a plan to
consolidate and realign its fabric manufacturing operations. In
connection with this plan, the Company closed three fabric
manufacturing plants, added production in other plants, and increased
outside purchases of grey fabric. A pretax restructuring charge of
$30.4 million was recorded in the second quarter, which included $6.6
million for the severance expense arising from the elimination of
approximately 850 positions, $16.3 million for write-offs of plant and
equipment, and $7.5 million for certain other expenses associated with
the plan.
Through March 29, 1997, the Company has recorded approximately $6.1
million of actual cash expenditures against the restructuring accrual,
which includes $2.4 million of severance expense and $3.7 million for
certain other expenses associated with the plan. In addition, the
Company has incurred $2.8 million in the current quarter and $6.3
million to date for equipment relocation and other realignment expenses
and has made capital investments of $2.3 million related to the plan.
Over the next three years, Springs plans to make future capital
investments of $15.0 million and incur future expenses of approximately
$16.8 million for equipment relocation and other realignment costs
which do not qualify as "exit costs."
7. Legal and Environmental:
As disclosed in the 1996 Annual Report on Form 10-K, Springs is
involved in certain administrative proceedings alleging violations of
environmental laws and regulations, including proceedings under the
Comprehensive Environmental Response, Compensation, and Liability Act.
In connection with these proceedings, the Company has accrued an amount
which represents management's best estimate of Springs' probable
liability.
Springs is also involved in various other legal proceedings and claims
incidental to its business. Springs is protecting its interests in all
such proceedings.
In the opinion of management, based on the advice of counsel, the
likelihood that the resolution of the above matters would have a
material adverse impact on either the financial condition or the future
results of operations of Springs is remote.
- 7 -
<PAGE> 8
ITEM 2. - MANAGEMENT'S DISCUSSION AND ANALYSIS
GENERAL
During the second quarter of 1996, the Company adopted a plan to consolidate and
realign its fabric manufacturing operations. In connection with this plan, the
Company closed three fabric manufacturing plants, added production in other
plants, and increased outside purchases of grey fabric. A pretax restructuring
charge of $30.4 million was recorded in the second quarter, which included $6.6
million for the severance expense arising from the elimination of approximately
850 positions, $16.3 million for write-offs of plant and equipment, and $7.5
million for certain other expenses associated with the plan.
Through March 29, 1997, the Company has recorded approximately $6.1 million of
actual cash expenditures against the restructuring accrual, which includes $2.4
million of severance expense and $3.7 million for certain other expenses
associated with the plan. In addition, the Company has incurred $2.8 million in
the current quarter and $6.3 million to date for equipment relocation and other
realignment expenses and has made capital investments of $2.3 million related to
the plan. Over the next three years, Springs plans to make future capital
investments of $15.0 million and incur future expenses of approximately $16.8
million for equipment relocation and other realignment costs which do not
qualify as "exit costs."
On April 17, 1996, the Company sold Clark-Schwebel, Inc., a business in the
specialty fabrics segment, for $193 million in cash. During the first quarter of
1996, Clark-Schwebel contributed about 10 percent of Springs' sales of $579.3
million and had record earnings of $10.1 million before interest expense and
taxes. During the five years ended in 1995, Clark-Schwebel's average
contribution was 13 percent of Springs' sales and 9 percent of its earnings
before interest expense and taxes.
RESULTS OF OPERATIONS
Sales
Net sales for the first quarter of 1997 were $543.0 million, down 6 percent from
the first quarter of 1996. The 1996 figures include results for Clark-Schwebel,
Inc. Excluding Clark-Schwebel's sales from the prior year, sales for the quarter
increased by 5 percent. The home furnishings segment generated sales growth of 7
percent for the first quarter. The specialty fabrics segment's first-quarter
sales were lower than a year ago by 44 percent, primarily due to the sale of
Clark-Schwebel.
Earnings
Net income for the first quarter of 1997 was $11.2 million, or $.55 per share,
down about 8 percent from the $.60 per share earned in 1996. Excluding the
effect of realignment expenses associated with the restructuring of the fabric
manufacturing operations, net income was $12.9 million, or $0.63 per share. In
the home furnishings segment, improved volume and margin expansion in bed, bath
and window fashions produced a 43 percent increase in operating profit over last
year. Excluding the effect of the realignment expenses, operating profit for the
home furnishings segment increased 60 percent. The specialty fabrics segment's
earnings were lower than the prior year due primarily to the sale of
Clark-Schwebel. The sales and earnings of the continuing specialty fabrics
businesses were lower than a year ago because of sluggish demand for home-sewing
fabrics and fashion apparel fabrics.
- 8 -
<PAGE> 9
CAPITAL RESOURCES AND LIQUIDITY
A normal seasonal increase in working capital since year-end resulted in
increased short-term borrowings. The company expects capital expenditures for
1997 to approximate $120 million. These investments will focus on manufacturing
equipment, distribution facilities and information systems. Springs believes its
1997 cash needs will be adequately provided from operations and borrowings from
commercial paper and committed lines.
OTHER
Certain prior-year amounts have been reclassified to conform with the 1997
presentation, including classification in net sales of certain promotional costs
which were previously included in selling, general and administrative expenses.
- 9 -
<PAGE> 10
PART II - OTHER INFORMATION
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The annual meeting of the security holders of the Company was
held on April 21, 1997.
(b) During the annual meeting, the security holders of the Company
elected the following directors to hold office until the next annual meeting of
the security holders and until a successor is duly elected and qualified:
John F. Akers John H. McArthur
Crandall Close Bowles Aldo Papone
John L. Clendenin Donald S. Perkins
Leroy S. Close Robin B. Smith
Charles W. Coker Sherwood H. Smith, Jr.
Walter Y. Elisha Stewart Turley
<TABLE>
<CAPTION>
(c)
Description of Matter For Against or Abstentions
Voted Upon Withheld
<S> <C> <C> <C>
(i)
Annual election of
directors:
John F. Akers 40,094,969 72,675
Crandall Close Bowles 40,092,703 74,941
John L. Clendenin 40,096,878 70,766
Leroy S. Close 40,092,093 75,551
Charles W. Coker 40,099,303 68,341
Walter Y. Elisha 40,097,875 69,769
John H. McArthur 40,097,799 69,845
Aldo Papone 40,099,215 69,429
Donald S. Perkins 40,096,219 71,425
Robin B. Smith 40,098,690 68,654
Sherwood H. Smith, Jr. 40,099,187 68,456
Stewart Turley 40,099,253 68,716
(ii)
Ratification of the 40,085,912 18,242 63,490
appointment of Deloitte &
Touche as the Company's
auditors
</TABLE>
(d) N/A
- 10 -
<PAGE> 11
ITEM 6 - EXHIBITS
The following exhibits are filed as part of this report:
(10) Material Contracts-Executive Compensation Plans and
Arrangements
(a) Supplemental Executive Retirement Plan
(27) Financial Data Schedule (for SEC purposes)
- 11 -
<PAGE> 12
SIGNATURES
Pursuant to the requirements of Securities Exchange Act of 1934, Springs
Industries, Inc. has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
SPRINGS INDUSTRIES, INC.
By: /s/ James F. Zahrn
-----------------------------
James F. Zahrn
Executive Vice President and
Chief Financial Officer
(Duly Authorized Officer and
Principal Financial Officer)
DATED: May 12, 1997
- 12 -
<PAGE> 13
EXHIBIT INDEX
<TABLE>
<CAPTION>
Item Page Number
- ---- -----------
<S> <C> <C>
(10)(a) Supplemental Executive Retirement Plan as approved by the Board of 14
Directors on October 19, 1996, filed herewith (9 pages)
(27) Financial Data Schedule (for SEC purposes) 23
</TABLE>
- 13 -
<PAGE> 1
SPRINGS INDUSTRIES, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
THIS INSTRUMENT is effective as of the 1st day of November, 1996 and
executed this 6th day of May, 1997, by SPRINGS INDUSTRIES, INC. (the "Company").
Background Statement
The Company has for many years maintained various qualified retirement
plans to provide long service employees of the Company and its subsidiaries with
an adequate replacement income in retirement.
Certain provisions of the Internal Revenue Code impose limitations on
the amount of retirement benefits that can be provided to the Company's
management and highly compensated employees through qualified plans.
The Company wishes to establish this Supplemental Executive Retirement
Plan ("Supplemental Plan"), effective as of November 1, 1996, as an unfunded
pension plan for a select group of management or highly compensated employees of
the Company and its subsidiaries within the meaning of section 2520.104-23 of
the regulations promulgated under the Employee Retirement Income Security Act of
1974 ("ERISA"), for the purpose of providing adequate retirement income and
related benefits to these employees.
ARTICLE I
TITLE
Section 1.01 The supplemental benefit plan set forth below shall be
known as the Springs Industries, Inc. Supplemental Executive Retirement Plan.
ARTICLE II
PARTICIPATION
Section 2.01 The Management Compensation and Organization Committee of
the Board of Directors of the Company (the "Committee") shall designate which of
the employees of the Company and its subsidiaries shall participate in this
- 14 -
<PAGE> 2
Supplemental Plan. Each individual so designated shall be referred to as a
"Participant."
ARTICLE III
RETIREMENT INCOME
Section 3.01 The retirement income payable to or on behalf of a
Participant under this Supplemental Plan ("Supplemental Benefits") shall be an
annual benefit equal to the excess, if any, of (a), adjusted, as applicable, by
Section 3.01(c) and by Section 3.03, over (b) where
(a) is sixty percent (60%) of the average yearly amount of
compensation, including base salary, any sustained performance awards, and any
bonus under the Company's Achievement Incentive Plan, or any successor plan or
plans or any similar annual bonus plan of any subsidiary of the Company, ("AIP
bonus") (unreduced by any amount not currently includible in income by reason of
the applicability of section 125 or 401(k) of the Internal Revenue Code or by
any deferrals of compensation), during the five calendar years of employment out
of the last ten years of Credited Service that will produce the highest average
("Final Average Pay") [The determination of Final Average Pay shall be
determined first on the basis of AIP bonuses paid and second on the basis on AIP
bonuses accrued, with the higher amount being used as Final Average Pay], and
(b) is the aggregate annual income received, or receivable upon
application, from the following sources:
(i) Old-age insurance benefits at age 65 under the Social
Security Act, computed as if the Participant had no further earnings
after the date of his retirement hereunder ("Retirement Date").
(ii) The deemed income amount as of the Participant's
Retirement Date (determined as a single life annuity for the
Participant) that is the actuarial equivalent to the Participant's
aggregate vested account balances as of his Retirement date in the
profit sharing fund account and the savings fund Company matching
account under (a) the Springs of Achievement Partnership Plan and any
defined contribution retirement plan maintained by a subsidiary of the
Company, (b) the Springs of Achievement Excess Benefits Partnership
Plan and (c) the Company's Deferred Compensation Plan. The deemed
income amount under this Section 3.01(b)(ii) for the profit sharing
- 15 -
<PAGE> 3
fund account under the plans shall be determined as follows:
[A] Determine the Participant's account balance in
each such plan as of December 31, 1996.
[B] Adjust the account balances in such plans for the
period January 1, 1997 to the Participant's Retirement Date by
assuming that the Company makes a contribution for each
calendar year following December 31, 1996, of five percent
(5%) on compensation and an additional two percent (2%) on
compensation in excess of fifty percent (50%) of the Social
Security taxable wage base. Such adjustment may result in an
assumed account balance (the "Assumed Account Balance") that
is greater than, or less than the Participant's actual account
balance in one of such plans.
[C] Adjust the Assumed Account Balance in each such
plan each year by the earnings rate normally credited to the
actual account balance by the terms of the plan involved.
[D] Determine the deemed income amount by applying to
the Participant's Assumed Account Balance in each such plan
such actuarial methods and assumptions as the Committee may
from time to time approve.
The deemed income amount under this item for the savings fund
Company matching account under the plans shall be determined by
applying to the Participant's balance in the Company matching account
in each plan such actuarial methods and assumptions as the Committee
may from time to time approve.
(iii) The deemed income amount as of the Participant's
Retirement Date (determined as a single life annuity for the
Participant) that is the actuarial equivalent to the Participant' s
aggregate account balances as of the Retirement Date under the
Company's Deferred Compensation Plan related to the Company's
discontinued Shadow Retirement Plan. The deemed income amount under
this item shall be determined by use of the same actuarial methods and
assumptions as are used in determining the income amount under item
(ii).
(iv) The deemed income amount as of the Participant's
Retirement Date (determined as a single life annuity for the
Participant) that is the actuarial
- 16 -
<PAGE> 4
equivalent to the Participant' s aggregate vested account balances
under the Company's Contingent Compensation Plan as of the Retirement
Date. The deemed income amount under this item shall be determined by
use of the same actuarial methods and assumptions as are used in
determining the income amount under item (ii) above applied to the
Participant's actual aggregate vested account balances.
V. The pension benefit (determined as a single life annuity
for the Participant) payable under any defined benefit plan (qualified
or non-qualified) of the Company or of any of its subsidiaries. If an
actuarial determination is required under this item, the methods and
assumptions selected under item (ii) above shall be applied.
(c) The percent of average compensation determined pursuant to
paragraph (a) above shall be reduced by 2.4% for each full year of Credited
Service that is less than twenty-five (25) and by 0.2% for each full month of
any partial year. (The percent of average compensation determined pursuant to
Paragraph (a) above, as reduced, if applicable, is hereafter referred to as the
"Target Benefit.") There shall be no increase in such percentage if a
Participant has more than 25 years of Credited Service. "Credited Service" for
purposes of this Supplemental Plan shall mean calendar years of full-time active
employment with the Company and its subsidiaries. Credited Service shall also
include years of full-time active employment with any other affiliated entity,
if service with the entity has been designated by the Committee to constitute
"Credited Service" for purposes of this Supplemental Plan and provided that the
Supplemental Benefit shall be reduced by any retirement benefits provided by the
affiliated entity in a manner consistent with this Section 3.01.
(d) The Committee in its discretion may provide that Credited Service
shall also include years of full-time active employment by a Participant with a
non-affiliated entity; provided, however, that the Participant's Supplemental
Benefit shall be reduced by any retirement benefits provided by the
non-affiliated entity in a manner consistent with this Section 3.01.
Section 3.02 The normal method of payment of Supplemental Benefits
shall be a straight life annuity payable monthly for the Participant's life, but
the Participant may elect to have his or her Supplemental Benefits paid in the
form of a joint and fifty percent survivor annuity for the life of the
Participant and his or her spouse in the reduced amount that is the actuarial
equivalent of the straight life annuity on the Participant's life.
- 17 -
<PAGE> 5
Section 3.03 (a) A Participant becomes vested in Supplemental Benefits
only upon attainment of age fifty-five (55) and completion of ten (10) years of
Credited Service. Upon termination of employment after such vesting, a
Participant shall be considered to be retired under this Plan and, as of the
month following termination or employment, shall begin receiving his or her
Supplemental Benefits. If the Participant has attained age sixty-two (62), no
reduction in the amount of Supplemental Benefits shall be made. If a Participant
retires hereunder prior to age sixty-two (62), the Participant's Target Benefit
shall be reduced by five percent (5%) for each full year, and 5/12% for each
full month, by which the Participant's Retirement Date precedes the
Participant's sixty-second birthday.
(b) Notwithstanding sub-section 3.03(a), a Participant shall become
vested in his Supplemental Benefits upon attainment of age 55 with completion of
less than ten (10) years of Credited Service, if the employment of the
Participant is terminated by reason of death, total disability or economic
termination, as defined in the Springs of Achievement Partnership Plan, or under
such other circumstances as the Committee may approve. The Participant's
Supplemental Benefit will become payable as of the month following termination
of employment.
(c) If a Participant who has become vested in his or her Supplemental
Benefits dies while still employed by the Company or an affiliated entity, the
surviving spouse of such Participant married to the Participant at the time of
death will begin receiving an annuity for life in an amount determined as though
the Participant had retired immediately before death and elected a joint and
fifty percent survivor annuity with his or her spouse.
Section 3.04 (a) Except for amounts paid under a joint and fifty
percent survivor annuity to a Participant's spouse, no amount shall be paid to
anyone following the death of a Participant.
(b) Payment of Supplemental Benefits shall not be affected by the
employment of a Participant by the Company or an affiliated entity as a
consultant or independent contractor. Payment of Supplemental Benefits shall be
conditioned, however, upon the Participant's execution of, and continued
compliance with, a retirement agreement, in such form as the Committee may
approve, pursuant to which the Participant agrees not to engage in activities
competitive with, or otherwise detrimental to, the interests of the Company and
which in the Committee's discretion may require prior notice to the Committee,
and approval by the Committee, before the Participant accepts employment or
conducts consulting activities after retirement.
- 18 -
<PAGE> 6
(c) The Committee in its discretion may determine that an amount of
Supplemental Benefits is too small to pay as an annuity and direct that a lump
sum amount that is the actuarial equivalent of such Supplemental Benefits be
paid to the Participant in lieu of annuity payments.
ARTICLE IV
THE SUPPLEMENTAL PLAN COMMITTEE
Section 4.01 The Committee shall administer this Supplemental Plan and
shall cause records to be kept of individual Participants' benefits hereunder.
To the extent this Supplemental Plan is considered subject to the Employee
Retirement Income Security Act of 1974, the Committee shall be the "named
fiduciary" of this Supplemental Plan.
Section 4.02 The Committee shall from time to time establish rules for
the administration of this Supplemental Plan. Without limiting the generality of
the preceding sentence, the Committee shall set forth in writing, available for
inspection by any interested party, the procedures to be followed in presenting
claims for benefits under this Supplemental Plan. The Committee may rely on the
records of the Company, as certified to it, with respect to any and all factual
matters dealing with participation or benefits under this Supplemental Plan. In
case of any factual dispute hereunder, the Committee shall interpret this
Supplemental Plan and shall determine all questions arising in the
administration, interpretation and application of this Supplemental Plan. All
such determinations shall be final, conclusive and binding except to the extent
that they are appealed under the following claims procedure. The Committee may
delegate to a plan administrator the duties of normal administration of the
Plan, including record keeping, and the initial determination of benefits.
In the event that the claim of any person to all or any part of any
payment or benefit under this Supplemental Plan shall be denied, the Committee
shall provide to the claimant, within sixty (60) days after receipt of such
claim, a written notice setting forth, in a manner calculated to be understood
by the claimant, (i) the specific reason or reasons for the denial; (ii)
specific references to the pertinent Supplemental Plan provisions on which the
denial is based; (iii) a description of any additional material or information
necessary for the claimant to perfect the claim and an explanation as to why
such material or information is necessary; and (iv) an explanation of this
Supplemental Plan's claim procedure.
- 19 -
<PAGE> 7
Within sixty (60) days after receipt of the above material, the
claimant shall have a reasonable opportunity to appeal the denial of the claim
to the Committee for a full and fair review. The claimant or his duly authorized
representative may (i) request a review upon written notice to the Committee;
(ii) review pertinent documents; and (iii) submit issues and comments in
writing.
A decision by the Committee will be made not later than sixty (60) days
after receipt of a request for review, unless special circumstances require an
extension of time for processing, in which event a decision should be rendered
as soon as possible, but in no event later than one hundred and twenty (120)
days after such receipt. The Committee's decision on review shall be written and
shall include specific reasons for the decision written in a manner calculated
to be understood by the claimant, with specific references to the pertinent
Supplemental Plan provisions on which the decision is based.
Section 4.03 Every decision and action of the Committee shall be valid
if concurred in by a majority of the members then in office, which concurrence
may be had without a formal meeting. The Committee shall select a Secretary, who
may or may not be a member of the Committee, and any other officials deemed
necessary to carry out this Supplemental Plan, and shall adopt rules governing
its procedures not inconsistent herewith. The Committee shall keep a permanent
record of its meetings and actions.
ARTICLE V
NATURE OF COMPANY OBLIGATION AND PARTICIPANT INTEREST
Section 5.01 The interest of the Participant and/or any person claiming
by or through him under this Supplemental Plan shall not be superior to that of
an unsecured general creditor of the Company. Benefits payable under this
Supplemental Plan may be provided for either from the general assets of the
Company or by the Company establishing a trust for the benefit of Participants,
but if such trust is established, neither the Participant nor any person
claiming by or through him shall have any right to the property held in such
trust for the satisfaction of any claim for benefit payments which is superior
to the rights of general creditors of the Company.
Section 5.02 In the event any trust, escrow or other arrangement of
like force or effect is created in favor of the Participant or any person
claiming by or through him under this Supplemental Plan by virtue of the
benefits provided hereunder, the property held in such trust shall be available
to all
- 20 -
<PAGE> 8
unsecured general creditors of the Company if the Company becomes insolvent
within the meaning of the trust instrument.
ARTICLE VI
MISCELLANEOUS
Section 6.01 This Supplemental Plan may be amended or discontinued by
the Company at any time, but Supplemental Benefits which have been accrued to
date under this Supplemental Plan may not be cancelled or reduced
by any such amendment or discontinuance.
Section 6.02 The Company shall not merge, consolidate or otherwise
combine with any other business organization unless and until such successor or
other organization shall expressly assume all rights and obligations of the
Company set forth under this Supplemental Plan.
Section 6.03 This Supplemental Plan shall not be deemed to constitute a
contract between the Company and any Participant or employee for the continued
employment of any such employee with the Company. Nothing contained in this
Supplemental Plan shall be deemed to give any Participant or employee either the
right to be retained in the service of the Company or to interfere with the
right of the Company to discharge any Participant or employee at any time
regardless of the effect which such discharge shall or may have upon such
Participant or employee under this Supplemental Plan.
Section 6.04 None of the benefits under this Supplemental Plan are
subject to the claims of creditors of a Participant or any person claiming by or
through him and will not be subject to attachment, garnishment or any other
legal process. Neither a Participant nor any person claiming by or through him
may assign, sell, borrow on or otherwise encumber any of his beneficial interest
under this Supplemental Plan nor shall any such interest be in any manner liable
for or subject to the deeds, contracts, liabilities, engagements, or torts of a
Participant or any person claiming by or through him.
Section 6.05 This Supplemental Plan shall be construed in accordance
with the laws of the State of South Carolina, except where such laws are
superseded by ERISA or other federal law, in which case ERISA or such other
federal law shall control.
Section 6.06 In making any distribution to or for the benefit of any minor
or incompetent person, the Committee, in its sole, absolute and uncontrolled
discretion, may, but need not, direct such distribution to a legal or natural
guardian or other relative of such incompetent, or to any adult with whom such
- 21 -
<PAGE> 9
incompetent temporarily or permanently resides, and any such guardian, relative
or other person shall have full authority and discretion to expend such
distribution for the use and benefit of such incompetent. The receipt of such
distribution by such guardian, relative or other person shall be a complete
discharge to the Company without any responsibility on its part or on the part
of the Committee to see to the application thereof.
Section 6.07 In case any provision of this Supplemental Plan shall be
held illegal or invalid for any reason, such illegality or invalidity shall not
affect its remaining parts and this Supplemental Plan shall be construed and
enforced as if such illegal and invalid provisions had never been inserted
herein.
SIGNATURE
IN WITNESS WHEREOF, the Company has caused this Supplemental Plan to be
executed as of the 6th day of May, 1997, effective as set forth above.
SPRINGS INDUSTRIES, INC.
(CORPORATE SEAL)
By: /s/ J. Spratt White
----------------------------
J. Spratt White
Title: Senior Vice President-
Human Resources
Attest:
/s/ Robert W. Sullivan
- -------------------------
Robert W. Sullivan
Assistant Secretary
- 22 -
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF SPRINGS INDUSTRIES, INC., FOR THE QUARTER ENDED MARCH
29, 1997, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-03-1998
<PERIOD-START> DEC-29-1996
<PERIOD-END> MAR-29-1997
<CASH> 1,571
<SECURITIES> 0
<RECEIVABLES> 357,230
<ALLOWANCES> 0
<INVENTORY> 380,140
<CURRENT-ASSETS> 785,987
<PP&E> 1,331,344
<DEPRECIATION> 804,188
<TOTAL-ASSETS> 1,395,607
<CURRENT-LIABILITIES> 245,633
<BONDS> 177,180
5,064
0
<COMMON> 0
<OTHER-SE> 780,688
<TOTAL-LIABILITY-AND-EQUITY> 1,395,607
<SALES> 543,009
<TOTAL-REVENUES> 543,009
<CGS> 446,757
<TOTAL-COSTS> 446,757
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,521
<INCOME-PRETAX> 18,085
<INCOME-TAX> 6,874
<INCOME-CONTINUING> 11,211
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,211
<EPS-PRIMARY> 0.55
<EPS-DILUTED> 0.55
</TABLE>
