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Exhibit 99(d)(3)
AMENDMENT NO. 1 TO THE
RECAPITALIZATION AGREEMENT
BY AND BETWEEN
SPRINGS INDUSTRIES, INC.
AND
HEARTLAND SPRINGS INVESTMENT COMPANY
DATED AS OF JULY 31, 2001
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This AMENDMENT NO. 1 to the Recapitalization Agreement (this
"Amendment No. 1") is entered into as of this 31st day of July, 2001 by and
between Springs Industries, Inc., a South Carolina corporation (the "Company"),
and Heartland Springs Investment Company, a South Carolina corporation ("Merger
Subsidiary" and, together with the Company, the "Parties").
WHEREAS, the Parties have entered into a Recapitalization
Agreement, dated as of April 24, 2001 (together with the Company Disclosure
Schedule and the Merger Subsidiary Disclosure Schedule, the "Original
Recapitalization Agreement" and, as amended by this Amendment No. 1, the
"Recapitalization Agreement");
WHEREAS, the Parties desire to make certain amendments to the
Original Recapitalization Agreement;
WHEREAS, the Parties desire that, except as set forth herein,
the Original Recapitalization Agreement shall remain in full force and effect;
and
WHEREAS, capitalized terms used herein and not defined herein
shall have the respective meanings given in the Original Recapitalization
Agreement;
NOW, THEREFORE, in consideration of the representations,
warranties, covenants and agreements contained herein, the Parties agree as
follows:
SECTION 1. The term "Conversion Time" corresponding to section
"2.05" is hereby added to the table in Section 1.01(b).
SECTION 2. Subsection 2.05(a)(2) is hereby deleted in its
entirety and Subsection 2.05(a)(3) is hereby renumbered Subsection 2.05(a)(2).
SECTION 3. Section 2.05(b)(ii) is hereby deleted in its
entirety and replaced with the following language:
(ii) Cash-Out of Options. Any In-the-Money Option with respect
to which a Cash-Out Election is made or deemed made shall be converted
at the time established by the Company (the "CONVERSION TIME") into the
right to receive from the Surviving Corporation (subject to any
applicable withholding taxes) an amount equal to the product of (A) the
excess of the Cash Merger Consideration over the exercise price per
Class A Share of such In-the-Money Option times (B) the number of Class
A Shares subject to such In-the-Money Option (the "CASH-OUT PAYMENT"),
and such In-the-Money Option shall be canceled at the Conversion Time.
The Cash-Out Payment shall be due and paid at (or as soon as
practicable following) the Conversion Time.
SECTION 4. Section 2.05(b)(iii) is hereby deleted in its
entirety and replaced with the following language:
(iii) Rollover of Options. Any In-the-Money Option with
respect to which a Rollover Election is made or deemed made and each
option with an exercise price per Class A Share that exceeds the Cash
Merger Consideration (an "OUT-OF-THE-MONEY
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OPTION") shall be retained after the Conversion Time on such terms and
conditions as are specified in the Management Equity Schedule or
otherwise determined pursuant to the terms of the Rollover Election.
Any such retained option held by a Management Shareholder shall vest
and be fully exercisable immediately following the Conversion Time.
Such option shall also include an Appreciation Right after the
Conversion Time, unless it was converted from an In-the-Money Option
held by a person who is not a Management Shareholder. An "APPRECIATION
RIGHT" means the right to receive upon exercise of such option, in lieu
of Class A Shares, a cash payment from the Surviving Corporation
(subject to any applicable withholding taxes) equal to the product of
(I) the excess of the fair market value (to be determined based on a
reasonable methodology to be developed by the Company, with the consent
of Merger Subsidiary) of a Class A Share at the time of exercise over
the exercise price per Class A Share of such option times (II) the
number of Class A Shares as to which such option is exercised, subject
to such other terms and conditions as may be provided in the Management
Equity Schedule.
SECTION 5. Section 2.05(d) is hereby deleted in its entirety
and replaced with the following language:
(d) Performance Units. With respect to all
outstanding performance unit award agreements, the performance cycle
(as defined in such agreements) shall be deemed to have terminated 10
Business Days prior to the Company Shareholders Meeting; provided that
the Merger is consummated. The determination of the Company's
performance for the applicable performance cycle shall be made by the
Management Compensation and Organization Committee of the Company's
Board of Directors prior to the Effective Time and, if the Merger is
consummated, any cash amounts payable with respect to such performance
unit awards shall be paid as soon as practicable thereafter. Class A
Shares payable following the Effective Time with respect to any such
performance unit awards shall be paid in accordance with the terms and
conditions set forth in the Management Equity Schedule.
SECTION 6. Section 2.05(f) is hereby deleted in its entirety
and replaced with the following language:
(f) Notwithstanding any provision of this Agreement,
if Merger Subsidiary and the Chief Executive Officer of the Company
determine that it would be desirable to provide for an extension of the
deadline for delivering the Management Equity Schedule, then they may
agree to extend any such deadline.
SECTION 7. Except as set forth herein, the Original
Recapitalization Agreement shall remain in full force and effect. All references
to "this Agreement" in the Original Recapitalization Agreement shall be
references to the Original Recapitalization Agreement as amended pursuant to
this Amendment No. 1.
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment No. 1 to be duly executed by their respective authorized officers as
of the day and year first above written.
SPRINGS INDUSTRIES, INC.
By: /s/ Crandall C. Bowles
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Name: Crandall C. Bowles
Title: Chairman and CEO
HEARTLAND SPRINGS INVESTMENT COMPANY
By: /s/ W. Gerald McConnell
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Name: W. Gerald McConnell
Title: Vice President and Secretary
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