BURLINGTON INDUSTRIES, INC.
DIRECTOR STOCK PLAN
1. Purpose.
The purpose of the Burlington Industries, Inc. Director Stock Plan (the
"Plan") is to enable Burlington Industries, Inc. (the "Corporation") to attract
and retain persons of outstanding competence to serve on the Corporation's Board
of Directors (the "Board") and to encourage and enable members of the Board
("Directors") who are not employees of the Corporation or a related corporation
to acquire or increase their proprietary interests in the Corporation in order
to promote a closer identification of their interests with those of the
Corporation and its shareholders, thereby further stimulating their efforts to
enhance the profitability, growth and shareholder value of the Corporation. This
purpose will be carried out through the grant of shares of the common stock of
the Corporation (the "Common Stock") to newly elected eligible Directors, the
annual grant of stock units to eligible Directors and the opportunity for
eligible Directors to defer receipt of all or a portion of their Cash Retainer
Fees and receive additional stock units in lieu thereof.
2. Administration of the Plan.
The Plan shall be administered by the Compensation and Benefits
Committee (the "Committee") of the Board. Any action of the Committee may be
taken by a written instrument signed by all of the members of the Committee and
any action so taken by written consent shall be as fully effective as if it had
been taken by a majority of the members at a meeting duly called and held.
Subject to the provisions of the Plan and to the extent necessary to preserve
the availability of an exemption under Rule 16b-3 promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), for
transactions by persons subject to Section 16 of the Exchange Act, the Committee
shall have full and final authority, in its discretion, to take action with
respect to the Plan including, without limitation, the authority to (i)
determine the terms and provisions of Awards made pursuant to the Plan; (ii) to
establish, amend and rescind rules and regulations for the administration of the
Plan; and (iii) to construe and interpret the Plan, the rules and regulations,
and to make all other determinations deemed necessary or advisable for
administering the Plan.
3. Effective Date.
The effective date of the Plan shall be April 15, 1999 (the "Effective
Date").
4. Awards.
An Award under the Plan shall be in the form of Restricted Stock or
Units.
5. Eligibility.
An Award may be made only to a Director who is a Non-Employee Director
on the date of grant of the Award. For purposes of the Plan, a "Non-Employee
Director" means a Director who is not an employee or retiree of the Corporation
or a related corporation (except that retirees or former employees who have
engaged in subsequent unrelated employment may be considered Non-Employee
Directors in the discretion of the Committee).
6. Restricted Stock Awards.
(a) Grant.
Each Non-Employee Director shall receive a one-time Award of 1,500
shares of Common Stock (the "Restricted Stock") upon initial election
or appointment to the Board. The Restricted Stock may be authorized but
unissued shares or treasury shares of Common Stock. The provisions of
this subsection may not be amended more than once every six months
other than to comport with changes in the U. S. Internal Revenue Code,
as amended, the Employee Retirement Income Security Act of 1974, as
amended, or the rules and regulations under either thereof.
(b) Vesting.
Subject to the provisions of subsection (e) of this Section 6, a
Restricted Stock Award shall vest (become non-forfeitable) one year
from the date of grant of the Award. Certificates representing
Restricted Stock Awards shall be held by the Secretary of the
Corporation and distributed to Non-Employee Directors upon vesting of
the Award.
(c) Stockholder Rights.
At all times following the date the Award is granted, a Non-Employee
Director shall have all rights as a stockholder with respect to such
shares including, without limitation, the right to vote such shares as
provided in the Corporation's Certificate of Incorporation and the
right to receive any dividends on or distributions with respect to the
Common Stock.
(d) Restrictions.
Shares of Common Stock delivered to Non-Employee Directors under the
Plan may not be sold or transferred prior to the later of (i) such
Non-Employee Director's completion of his or her service as a
Non-Employee Director, or (ii) the date which is at least six months
after acquisition of the Restricted Stock Award. Prior to becoming
transferable as aforesaid, no Restricted Stock Award shall be
anticipated, assigned, attached, garnished, optioned or made subject to
any creditor's process, whether voluntarily or involuntarily or by
operation of law. Any act in violation of this subsection shall be
deemed void and without legal effect.
(e) Termination of Service.
If a Non-Employee Director terminated service as a Director prior to
vesting of the Restricted Stock Award other than by reason of death or
permanent physical or mental disability, such Director shall be
entitled to receive, on a pro rata basis, the portion of the Restricted
Stock Award attributable to such service through the Termination Date,
provided that if such termination is voluntary on the part of the
Non-Employee Director or is a removal of such Director for cause, all
rights to any unvested Restricted Stock Award shall be forfeited. If
such termination is caused by the Director's death or permanent
physical or mental disability, the unvested Restricted Stock Award
shall vest immediately, and the Director (or, in the case of death, his
or her designated beneficiary or, if none is named, the estate of the
Director) shall be entitled to receive the entire amount of such
Restricted Stock Award.
7. Units.
An Award of Units shall entitle the recipient to a cash-only payment
based on the value of the Common Stock. No actual shares of Common Stock shall
be issued in connection with Awards of Units under the Plan, and no participant
shall be entitled to receive shares of Common Stock pursuant to the grant of
awards hereunder. The number of Units credited to a Director's Account pursuant
to the Award of Units shall be fully vested at all times.
(a) Quarterly Grants.
Each Non-Employee Director who is a member of the Board at any time
during any fiscal quarter of the Corporation, beginning with the fiscal
quarter in which the Effective Date occurs, shall receive a quarterly
Award of Units (a "Quarterly Award") on the last day of each such the
fiscal quarter (a "Quarterly Award Date"). The number of Units
represented by each such Quarterly Award for each Non-Employee Director
shall be equal to that number of whole or fractional shares of the
Common Stock of the Corporation as may be purchased for $7,500 on the
Quarterly Award Date (or, with respect to the initial Quarterly Award
made for the fiscal quarter in which the Effective Date occurs,
$15,000), based on the Fair Market Value (as defined in Section 8 of
the Plan) of the shares.
(b) Deferred Retainer Award.
Each Non-Employee Director may elect to defer all or 50% of the
retainer fee payable in cash to the Director (the "Cash Retainer Fee")
by making a deferral election prior to the commencement of the calendar
period for which such Cash Retainer Fee is payable or, with respect to
Non-Employee Directors first elected after the beginning of a calendar
year, within 30 days of the date he or she becomes a Non-Employee
Director. Each Non-Employee Director who makes the deferral election
shall receive in lieu of the Cash Retainer Fee an Award of Units (the
"Deferred Retainer Award") on the Quarterly Award Date coincident with
or next following the date as of which a Cash Retainer Fee otherwise
would be paid. The Deferred Retainer Award shall equal the number of
whole or fractional shares of the Common Stock of the Corporation as
may be purchased for the amount of the deferred Cash Retainer Fee on
the Quarterly Award Date, based on the Fair Market Value of the shares
as determined on the Quarterly Award Date.
(c) Deferred Compensation Plan Election.
Amounts previously deferred by Non-Employee Directors who had elected
to defer payment of the Cash Retainer Fee pursuant to the Phantom Stock
Deferral option as defined in the Burlington Industries, Inc. Deferred
Compensation Plan for Non-Employee Directors shall be transferred to
such Directors' Accounts under the Plan. Any Non-Employee Directors who
previously deferred Cash Retainer Fees into the Cash Deferral option
under such plan or under any other deferred compensation plans
sponsored by the Corporation or its subsidiaries for its directors may
make a one-time election to transfer such account balance to this Plan.
Such election must be made by a Non-Employee Director on or within 30
days after the Effective Date or after the date such Director first is
elected to the Board. A Director who makes such election shall receive
as of the Quarterly Award Date coincident with or next following such
election a Deferred Retainer Award equal to that number of whole or
fractional shares of the Common Stock of the Corporation as may be
purchased for the amount of the transferred account balance of the
Director as of such Quarterly Award Date, based on the Fair Market
Value of the shares as determined on such Quarterly Award Date.
(d) Dividend Equivalent Awards.
Upon payment of any dividend with respect to the Common Stock, each
Non-Employee Director shall be granted an Award of Units ("Dividend
Equivalent Awards") calculated by (i) multiplying the number of Units
credited to a Non-Employee Director as of the record date for such
dividend by the dividend then paid on a share of the Common Stock, then
(ii) dividing that result by the closing price per share of Common
Stock on the New York Stock Exchange as reported in The Wall Street
Journal for the trading day prior to the date the dividend is paid (the
"Dividend Payment Date"). Dividend Equivalent Awards will be granted to
each Non-Employee Director as of the Quarterly Award Date coincident
with or next following the Dividend Payment Date to which the Dividend
Equivalent Award relates.
(e) Director's Accounts.
The Corporation shall establish an account for each Non-Employee
Director (individually, a "Director's Account") to which the number of
Units represented by each Quarterly Award, Deferred Retainer Award and
Dividend Equivalent Award shall be credited.
(f) Settlement.
Upon the date that the service of a Non-Employee Director as a member
of the Board is terminated for any reason (the "Termination Date"), the
Non-Employee Director (or the beneficiary in the event of the
Director's death) shall be entitled to settlement of the number of
Units credited to the Director's Account. The settlement shall occur on
the Quarterly Award Date which follows by at least six months the last
Award (other than a Dividend Equivalent Award) granted to the
Non-Employee Director (the "Payment Date").
The settlement shall be made in a cash lump sum payment (rounded to two
decimals) equal to the Fair Market Value per share of Common Stock as
determined on the Payment Date, multiplied by the number of Units then
credited to the Director's Account; provided, that the Non-Employee
Director may at least 90 days prior to the Termination Date elect to
receive the settlement in annual cash installments (rounded to two
decimals) for a period of up to ten years beginning on the Payment Date
and continuing on the Quarterly Award Date for the same quarter each
year during the payment period (an "Installment Payment Date"). The
amount of each annual installment payment shall be calculated by (x)
multiplying the Fair Market Value per share of Common Stock as
determined on the Installment Payment Date by the number of Units
credited to the Director's Account on the Payment Date (as increased by
the Units credited to the Director's Account for Dividend Equivalent
Awards and decreased by the number of Units for which payment has been
made since the Payment Date), then (y) dividing that result by the
number of installment payments remaining in the payment period
(including the installment payment due on such Installment Payment
Date).
8. Fair Market Value.
For purposes of this Plan, the "Fair Market Value" per share of the
Common Stock shall equal the average price per share (rounded to four decimals)
of the last sale of such shares on the New York Stock Exchange as reported in
The Wall Street Journal for the last five trading days immediately preceding the
date for which value is to be determined, unless otherwise stated.
9. Non-transferability of Awards.
Awards shall not be transferable (including by pledge or hypothecation)
other than by will, the laws of intestate succession or pursuant to a qualified
domestic relations order (as defined by the Internal Revenue Code or Title I of
the Employee Retirement Income Security Act ("ERISA") or the rules thereunder).
The designation of a beneficiary does not constitute a transfer. To the extent
required pursuant to Rule 16b-3 under the Exchange Act or any successor statute
or rule, Awards granted under the Plan may not be settled or otherwise disposed
of for a period of six months from the date of grant of the Award.
10. Beneficiary.
Each Non-Employee Director may designate in writing a person or persons
as beneficiary, which beneficiary shall be entitled to receive settlement of
Awards to which the Non-Employee Director is otherwise entitled in the event of
death. In the absence of such designation by a Non-Employee Director, and in the
event of the Non-Employee Director's death, the estate of the Non-Employee
Director shall be treated as beneficiary for purposes of the Plan. The Committee
shall have sole discretion to approve the form or forms of such beneficiary
designation.
11. Tax Obligations.
To the extent required by applicable Federal, state or local law, the
recipient of any Award shall make arrangements satisfactory to the Corporation
for the satisfaction of any withholding, income or employment tax obligations
that may arise by reason of the Award.
12. Unfunded Plan.
The Plan is intended to be, for purposes of Titles I and IV of ERISA,
an unfunded plan for the benefit of a selected group of non-employee management
persons, and the Corporation shall not be required to segregate any assets that
may at any time be represented by Units made under the Plan. Any liability of
the Corporation to any person with respect to any Award made under the Plan
shall be based solely upon any contractual obligations that may be created
pursuant to the Plan, and no term or provision in the Plan shall be construed to
give any person any security, interest, lien or claim against any specific asset
of the Corporation. Neither a Non-Employee Director nor his beneficiary shall
have any rights under the Plan other than as a general creditor of the
Corporation.
13. Effect on Service.
Neither the adoption and operation of the Plan, nor the grant of Awards
hereunder, shall confer upon any Non-Employee Director any right to continue in
the service of the Corporation as a member of the Board or in any way affect the
right of the Corporation to terminate the service of the Non-Employee Director
at any time.
14. Amendment or Termination.
The Plan may be amended, suspended or terminated by action of the Board
at any time; provided, that (i) such amendment, suspension or termination shall
not, without the consent of a Director, adversely affect the rights of the
Director with respect to an Award previously granted; and (ii) in any event, no
amendment, suspension or termination shall operate to change any previously
established settlement date (as provided in Sections 10 and 18 herein). The term
of the Plan shall end on the effective date of termination of the Plan by the
Board.
15. Adjustment of Awards.
If there is any change in the shares of Common Stock because of a
merger, consolidation or reorganization involving the Corporation or a related
corporation, or if the Board declares a stock dividend or stock split
distributable in shares of Common Stock, or if there is a change in the capital
stock structure of the Corporation or a related corporation affecting the Common
Stock, the number of shares of Restricted Stock owned by a Director and the
number of Units credited to a Director's Account shall be correspondingly
adjusted, and the Committee shall make such adjustments to Awards or to any
provisions of this Plan as the Committee deems equitable to prevent dilution or
enlargement of Awards.
16. Applicable Law.
Except as otherwise provided herein, the Plan shall be construed and
enforced according to the laws of the State of Delaware.
17. Change of Control.
(a) Accelerated Vesting/Settlement by Committee.
Notwithstanding any other provision of the Plan, the Committee shall
have the authority in its discretion to provide for the accelerated
vesting and/or settlement of Awards in the event of a Change of Control
or in the event of a determination by the Committee that a Change of
Control may occur.
(b) Accelerated Settlement Election.
Notwithstanding any other provision of the Plan, upon a Change of
Control, a Non-Employee Director may elect to obtain settlement of the
Units then credited to the Director's Account in the manner described
in Section 10, treating for this purpose the date of the Change of
Control as if it were the Termination Date of the Non-Employee
Director. An election by a Non-Employee Director to obtain settlement
pursuant to this Section 17 must be filed by the Non-Employee Director
with the Committee at least six months prior to the Payment Date. Such
an election will not affect the rights of the Non-Employee Director to
continue participation in accordance with the terms of this Plan
following the Change of Control.
(c) Definition of "Change of Control".
(i) 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 Voting Stock (as that term is hereafter
defined) of the Corporation immediately prior to such
transaction;
(ii) 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;
(iii) there is a report filed on Schedule 13D or Schedule
14D-1 of the Securities Exchange Act of 1934, as amended (the
" Exchange Act") by a person other than a person that
satisfies the requirements of Rule 13d-1(b)(1) under the
Exchange Act for filing such report on Schedule 13G, which
report as filed discloses that any person (as the term
"person" is used in Section 13(d)(3) or Section 14(d)(2) of
the Exchange Act) has become the beneficial owner (as the term
"beneficial owner" is defined under Rule 13d-3 under the
Exchange Act) of securities representing 12.5% or more of the
combined voting power of the then-outstanding securities
entitled to vote generally in the election of Directors
("Voting Stock");
(iv) the Corporation files a report or proxy statement with
the Securities and Exchange Commission pursuant to the
Exchange Act disclosing in response to Form 8-K or Schedule
14A that a change in control of the Corporation has or may
have occurred or will or may occur in the future pursuant to
any then-existing contract or transaction; or
(v) if during any period of two consecutive years, individuals
who at the beginning of any such period constitute the
Directors 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
first elected during such period was approved by a vote of at
least two-thirds of the Directors then still in office who
were Directors at the beginning of any such period.
Notwithstanding the foregoing provisions of Clause (iii) or
(iv) hereof, a Change of Control shall not be deemed to have
occurred for purposes of the Plan solely because (x) the
Corporation, (y) an entity in which the Corporation directly
or indirectly beneficially owns 50% or more of the voting
securities, or (z) any Corporation-sponsored employee stock
ownership plan or any other employee benefit plan of the
Corporation (or any trustee of any such plan on its behalf),
either files or becomes obligated to file a report or a proxy
statement under or in response to Schedule 13D, Schedule
14D-1, or Form 8-K or Schedule 14A under the
Exchange Act, disclosing beneficial ownership by it of shares
of Voting Stock, whether in excess of 12.5% or otherwise, or
because the Corporation reports that a Change of Control of
the Corporation has or may have occurred or will or may occur
in the future by reason of such beneficial ownership.
IN WITNESS WHEREOF, this Burlington Industries, Inc. Stock
Plan has been executed in behalf of the Corporation effective as of the 15th day
of April, 1999.
BURLINGTON INDUSTRIES, INC.
By: ________________________________
Chief Executive Officer
Attest:
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Secretary
[Corporate Seal]