PILLOWTEX CORPORATION
EXECUTIVE MEDICAL EXPENSE REIMBURSEMENT PLAN
ARTICLE I
PURPOSE
1.01 The purpose of this Plan is to encourage and help to provide a full
and complete medical care for each participating employee and his or her spouse
and dependants. It is the intention of Pillowtex Corporation (the "Company")
that this Plan meet the requirements of a welfare benefit plan primarily for the
purpose of providing benefits for a select group of management employees under
the Employee Retirement Income Security Act of 1974, as amended.
ARTICLE II
EFFECTIVE DATE AND PLAN YEAR
2.01 The effective date of this Plan shall be January 1, 1998. The
records of the Plan shall be kept on a calendar year basis. The Plan Year shall
be the calendar year.
ARTICLE III
ELIGIBILITY
3.01 Only those officers of the Company who have the title of Chief
Executive Officer, President, Executive Vice President of Sales, Senior Vice
President and General Counsel, Vice President and Controller, or Vice President
of Human Resources (and any other officer who is designated to participate in
writing by the Company's Chief Executive Officer) shall be eligible to
participate in the Plan.
ARTICLE IV
PARTICIPATION
4.01 Each employee who is eligible to participate in the Plan under
Article III (an "Eligible Employee") shall become a participant in the Plan (a
"Participant") on the effective date of the Plan or on the first day he or she
is an Eligible Employee, whichever is earlier. Upon termination of a
Participant's employment with the Company, all rights of such Participant
(and/or a family member of the Participant) to receive benefits for claims
incurred after the termination date shall cease. Such participant (and his or
her family) shall, however, retain the right to be reimbursed hereunder for
claims incurred prior to the termination of employment. For this purpose, a
claim will be considered to be incurred when the medical services are rendered.
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ARTICLE V
BENEFITS
5.01 Subject to the limitations and exclusions set forth in this plan, the
Company shall reimburse each Participant such amounts as he or she has expended
while a Participant for himself or herself and his or her dependents for medical
care which is medically necessary and which is not covered under the Company's
other health benefit plan in which the Participant is enrolled. In addition,
the Company shall pay to each Participant its best estimate of the amount of any
federal, state, or local tax payable by the Participant due to the receipt of
benefits under this Plan. The term "dependent" means a dependent as defined
under the terms of the Company's other health benefit plan in which the
Participant is enrolled. The term "medically necessary" refers to expenses
which are provided in accordance with and are consistent with generally accepted
standards of medical practice in the United States and not primarily for the
convenience of the patient, his physician or another service provider or to
improve the appearance of the patient. Notwithstanding any other provision in
this plan to the contrary, the following expenses are excluded from coverage
hereunder: dietary and nutritional aids, services and supplies, custodial care,
counseling and therapy, treatment of adolescent behavior disorders, weight
reduction services, sterilization reversal, transsexual surgery, treatment of
sexual dysfunction, in vitro fertilization and any similar fertility treatments.
5.02 Notwithstanding any other provision in this plan to the contrary,
each Participant's lifetime, aggregate benefits under this plan shall be limited
to one million dollars ($1,000,000).
ARTICLE VI
BENEFITS FROM ANOTHER SOURCE
6.01 Reimbursement under this Plan shall be made only in the event, and to
the extent, that reimbursement for amounts expended, or payment, for medical
care is not provided for under any insurance policy or under any other plan of
the Company or other employer or under any federal or state law. If there is
such a policy, plan or law in effect providing for such reimbursement or payment
in whole or in part, then, to the extent of the coverage under such policy, plan
or law, the Company shall be relieved of any and all liability hereunder.
ARTICLE VII
CLAIMS AND CLAIMS REVIEW PROCEDURE
7.01 Benefits under this Plan ordinarily will be paid automatically based
on the explanation of benefit form ("EOB") provided by the insurer or
administrator of the Company's other health benefit plan in which the
Participant is enrolled. However, in the event that payment is not made within
60 days after an EOB is received by the Participant, a claim under this plan
should be made in writing, addressed to the Company's Vice President of Human
Resources.
7.02 If any claim for benefits under this Plan is denied in whole or in
part, the Plan Administrator shall furnish the claimant promptly with a written
notice:
(a) setting forth the reason for the denial;
(b) citing the Plan provisions upon which such denial is based;
(c) describing any additional material or information from the
claimant which is necessary in order for the claimant to perfect his or her
claim and why; and
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(d) explaining the claim review procedure set forth herein.
7.03 Failure by the Company to respond to a claim within a reasonable time
shall be deemed a denial. Within 60 days after denial of any claim for benefits
under this Plan, the claimant may request in writing a review of the denial by
the Plan Administrator.
7.04 Any claimant seeking review hereunder is entitled to examine all
pertinent documents, and to submit issues and comments in writing. The Plan
Administrator shall render a decision on review of a claim not later than 60
days after receipt of a request for review hereunder. The decision of the Plan
Administrator on review shall be in writing and shall state the reason for the
decision, referring to the Plan provisions upon which it is based.
7.05 The 90-day and 60-day periods described in this Article may be
extended by the Plan Administrator, if necessary or advisable, for additional
periods of the same length by written notice to the Participant.
ARTICLE VIII
ADMINISTRATION
8.01 The Plan Administrator shall be the Company. The Company shall have
authority and responsibility to control and manage the operation and
administration of this Plan. The Plan Administrator shall have discretion to
resolve any disputed issues and to interpret the terms of the Plan, and such
resolution or interpretation shall be binding on all parties.
8.02 This Plan at all times be entirely unfunded and no provision shall be
made with respect to segregating any assets of the Company for payment of any
amounts due hereunder.
8.03 The Company reserves the right to amend this Plan at any time to take
effect retroactively or otherwise, in any manner which it deems desirable. The
Company further reserves the right to terminate this Plan at any time. Any such
amendment or termination shall be made by the Board of Directors of the Company
or an officer duly authorized by the Board, and shall be evidenced by an
instrument in writing.
ARTICLE IX
MISCELLANEOUS
9.01 To the extent not pre-empted by the Employment Retirement Income
Security Act of 1974 (ERISA), as amended, questions concerning the proper
interpretation of the terms of this agreement shall be determined in accordance
with the laws of the State of Texas, where the Company's principal business
office is located.
9.02 This document contains all of the operative provisions of this Plan.
Any conflict between the provisions of this document and any other Company
document purporting to explain the rights, benefits, or obligations of the
parties hereunder shall be resolved in favor of this Plan document. In the
event that a tribunal of competent jurisdiction shall determine in a final
judgment or decree that one or more of the provisions of this Plan is invalid
due to the provisions of applicable law, this Plan shall be interpreted as if
the offending language had been stricken form its provisions and the remainder
of the Plan document shall continue in full force and effect.
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