EXHIBIT (10a)
[RUSSELL LETTERHEAD]
July 26, 2004
Mr. JT Taunton, Jr.
167 Seven Bark Trail
Jacksons Gap, Alabama 36861
Dear JT:
This will confirm your intention to retire as an active employee of
Russell Corporation (the "Company") as of January 2, 2005, on the following
terms and conditions:
1. Retirement. Beginning in August 2004, you will transition out of your
current position with the Company as Senior Vice President/President and
Chief Executive Officer, Fabrics and Services. This transition will be
completed by the end of September 2004. You will, however, remain an
employee of the Company at your current base salary until your retirement
on January 2, 2005 (the "Retirement Date"). You also will continue to
accrue vacation as an employee until the Retirement Date, and the Company
will include payment for your accrued but unused vacation with your final
salary payment.
2. Annual Cash Incentive Award. Under the Company's Executive Incentive Plan
(the "Incentive Plan"), you will remain eligible to receive an annual cash
incentive award for fiscal 2004 under the Company's short term bonus
program. Any award made with respect to 2004 will be for the full fiscal
year, and will not be prorated.
3. Performance Shares and Restricted Stock. As you know, during 2004 the
Company made a grant of performance shares and time-lapsed restricted
stock to you. You also received a grant of performance shares during 2003
(together with the 2004 grant, the "Incentive Grants"). The terms of the
Incentive Grants are set forth in the Incentive Plan and in the
performance share and restricted stock agreements you executed in
connection with each award, copies of which are included with this
Agreement as Attachment A-1. Because your Retirement Date will occur prior
to December 31, 2005, under the terms of the Incentive Plan and your
Incentive Grants, the entire amount of your Incentive Grants normally
would be forfeited upon your retirement. The Management Development and
Compensation Committee of the Board of Directors has, however, approved
the following arrangement with respect to your Incentive Grants. Upon your
retirement you will remain eligible to receive 50% of your Incentive
Grants, with the remaining 50% of such Incentive Grants being forfeited.
The portion of the time-vested restricted stock included in the Incentive
Grants that is not forfeited upon your retirement will vest on January 1,
2006. The portion of the performance shares included in the Incentive
Grants that is not forfeited upon your retirement will vest, if at all,
only to the degree the Company achieves the cumulative earnings per share
goals for the performance period that were set upon the grant of such
shares. The performance shares that vest upon the achievement of such
goals, if any, will be awarded in the form of Company Common
Mr. JT Taunton, Jr.
July 26, 2004
Page 2
Stock as soon as practicable after the end of 2005. Should you die before
January 1, 2006, the shares of Company Common Stock issuable to you upon
vesting of restricted stock and performance shares under the terms of this
Agreement will be issued to the beneficiary or beneficiaries you may
designate. A beneficiary designation form is attached to this Agreement as
Attachment A-2.
4. Health Benefits. You will continue to participate in the Company's health
plans until your Retirement Date. At your Retirement Date, you will have
the opportunity to elect continuation coverage of the Company's group
health plans under the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended ("COBRA"). If elected in a timely manner, COBRA
continuation coverage for you and your eligible dependents will continue
until the last day of the 18th month following your Retirement Date
(unless otherwise provided by COBRA). During COBRA continuation coverage,
you will pay the full cost of this coverage in accordance with the
procedures of the Company generally applicable to all qualified
beneficiaries receiving COBRA coverage. At the expiration of your COBRA
continuation coverage, you will be eligible to elect to continue
participation in the Company's group health plans until December 31, 2007
(the end of the month preceding the month in which you reach age 65). If
you elect such coverage, you will pay the full cost of this coverage by
paying the applicable COBRA premium, in effect at that time, for the level
of coverage you elect. You and your eligible dependents' coverage under
the Company's group health plans will be provided in accordance with the
terms and provisions of those plans, including participation in applicable
open enrollment periods. Cynthia Warren can provide you with further
information regarding this continuation coverage.
5. Pension Benefits. You are entitled to receive benefits payable to you in
accordance with the terms of the Company's Revised Pension Plan, 401(k)
Retirement Savings Plan, Flexible Deferral Plan, Pension Excess Plan and
Supplemental Executive Retirement Plan. These benefits will be paid at the
times and in the manner as you have or may elect under the terms of those
plans. Mike Piazza can answer any questions you may have regarding your
elections or benefits under the Company's retirement plans.
6. Exercise of Stock Options. Attachment B to this Agreement is a schedule of
all outstanding stock options granted by the Company to you. Such options
may be exercised by you in accordance with the provisions of the
applicable stock option agreements between the Company and you and in the
manner specified in the plan pursuant to which such grants were made
(whether the Company's 2000 Stock Option Plan, the Incentive Plan, or a
predecessor stock option plan). You should be aware that your options will
remain exercisable in whole or in part for the period of time after your
Retirement Date that is set forth in each such stock option agreement (but
only during the term of each such option).
Mr. JT Taunton, Jr.
July 26, 2004
Page 3
7. Notices. Any notice required or permitted to be given under this Agreement
shall be in writing and placed in the United States Certified Mail,
addressed to the party entitled to receive said notice, at the following
addresses:
(1) If to You:
Mr. JT Taunton, Jr.
167 Seven Bark Trail
Jacksons Gap, Alabama 36861
(2) If to the Company:
Russell Corporation
Attn: Legal Department
3330 Cumberland Blvd., Suite 800
Atlanta, GA 30339
or at such other address as may be specified from time to time in notices
given in accordance with the provisions of this Paragraph 7.
8. Assignment. Neither this Agreement, nor the rights or obligations of any
party hereunder, may be assigned without the prior written consent of the
other party; provided that in the event the Company is acquired by another
company, is merged into another company, or all or substantially all of
the Company's assets are transferred to another company, such other
company shall assume all of the obligations of the Company hereunder, and
such transaction shall not require your consent for the rights of the
Company hereunder to be assigned to such other company.
9. Waiver of Breach. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver
of any subsequent breach by any party.
10. Paragraph Headings. The headings of the paragraphs of this Agreement are
solely for the purpose of convenience and are not a part hereof, and shall
not be used in the construction or interpretation of any provision.
11. Modifications. This Agreement may not be changed or modified, nor may any
provision hereof be waived, except by an agreement in writing executed by
the party against whom enforcement of the change, modification or waiver
is asserted.
12. Succession. This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their heirs, representatives, successors and
assigns.
13. Governing Law. To the extent not preempted by federal law, this Agreement
shall be construed and interpreted under, and the rights and obligations
of the parties hereunder shall be controlled and governed by, the laws of
the State of Alabama.
Mr. JT Taunton, Jr.
July 26, 2004
Page 4
14. Release. You, for yourself, your successors, administrators, heirs and
assigns, hereby fully and generally release, waive and forever discharge
the Company and its shareholders, directors, officers, employees, agents
and attorneys, whether past, present or future (the "Released Parties"),
from any and all actions, suits, debts, demands, damages, claims,
judgments, liabilities, benefits or other remedial relief of any nature,
including costs and attorneys' fees, whether known or unknown, including,
but not limited to, all claims arising out of your employment with or
separation from the Company, its subsidiaries and affiliates, their
predecessors, successors, assigns, such as (by way of example only) any
claim for compensation, severance or other benefits apart from the
benefits stated herein; breach of contract; wrongful or tortious
discharge; impairment of economic opportunity; any claim under common law
or equity; any tort; claims for reimbursements; claims for commissions;
implied or express employment contracts and/or estoppel; or claims for
employment discrimination under Title VII of the Civil Rights Act of 1964,
as amended, the Rehabilitation Act of 1973, as amended, the Americans with
Disabilities Act of 1990, as amended, the Civil Rights Act of 1866 and
1991, as amended, or any other state, federal or local law, statute, or
regulation. You acknowledge and agree that this release, the release
contained in Paragraph 15, and the covenant not to sue set forth in
Paragraph 16 are essential and material terms of this Agreement and that,
without such release and covenant not to sue, no agreement would have been
reached by the parties and no benefits under the this Agreement would have
been paid. You understand and acknowledge the significance and
consequences of this Agreement.
15. Release of Age Claims. YOU SPECIFICALLY WAIVE AND RELEASE THE COMPANY FROM
ALL CLAIMS YOU MAY HAVE AS OF THE DATE YOU SIGN THIS AGREEMENT REGARDING
CLAIMS OR RIGHTS ARISING UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF
1967, AS AMENDED, 29 U.S.C.Section 621 ("ADEA"). THIS PARAGRAPH DOES NOT
WAIVE RIGHTS OR CLAIMS THAT MAY ARISE UNDER THE ADEA AFTER THE DATE YOU
SIGN THIS AGREEMENT. YOU FURTHER AGREE: (a) THAT YOUR WAIVER OF RIGHTS
UNDER THIS RELEASE IS KNOWING AND VOLUNTARY AND IN COMPLIANCE WITH THE
OLDER WORKER'S BENEFIT PROTECTION ACT OF 1990; (b) THAT YOU UNDERSTAND THE
TERMS OF THIS RELEASE; (c) THAT THE BENEFITS CALLED FOR IN THIS AGREEMENT
WOULD NOT BE PROVIDED TO ANY EMPLOYEE TERMINATING HIS OR HER EMPLOYMENT
WITH THE COMPANY WHO DID NOT SIGN A RELEASE SIMILAR TO THIS RELEASE; (d)
THAT SUCH BENEFITS WOULD NOT HAVE BEEN PROVIDED HAD YOU NOT SIGNED THIS
RELEASE, AND THAT THE BENEFITS ARE IN EXCHANGE FOR THE SIGNING OF THIS
RELEASE; (e) THAT YOU HAVE BEEN ADVISED IN WRITING BY THE COMPANY TO
CONSULT WITH AN ATTORNEY PRIOR TO EXECUTING THIS RELEASE; (f) THAT THE
COMPANY HAS GIVEN YOU A PERIOD OF AT LEAST TWENTY-ONE (21) DAYS WITHIN
WHICH TO CONSIDER THIS RELEASE; (g) THAT YOU REALIZE THAT FOLLOWING YOUR
Mr. JT Taunton, Jr.
July 26, 2004
Page 5
EXECUTION OF THIS RELEASE YOU HAVE SEVEN (7) DAYS IN WHICH TO REVOKE THIS
RELEASE BY WRITTEN NOTICE TO THE COMPANY IN ACCORDANCE WITH PARAGRAPH 7;
AND (h) THAT THIS ENTIRE AGREEMENT SHALL BE VOID AND OF NO FORCE AND
EFFECT IF YOU CHOOSE TO SO REVOKE, AND IF YOU CHOOSE NOT TO SO REVOKE,
THAT THIS AGREEMENT AND RELEASE SHALL THEN BECOME EFFECTIVE AND
ENFORCEABLE.
16. Covenant Not to Sue. To the maximum extent permitted by law, you covenant
not to sue or to institute or cause to be instituted any action in any
federal, state, or local agency or court against any of the Released
Parties, including but not limited to, any of the claims released in
Paragraphs 14 or 15 of this Agreement.
17. Severability. Should any court of competent jurisdiction decide, hold,
adjudge or decree that any provision, paragraph, clause or term of this
Agreement is void or unenforceable in whole or as applied in a particular
situation, such determination shall not affect any other provision of this
Agreement, and all other provisions of this Agreement shall remain in full
force and effect in such situation, and all provisions of this Agreement
shall remain in full force and effect in any and all other situations.
If the terms and conditions of this letter are acceptable to you, please
sign and date both copies, have them witnessed, and return one signed copy to
me. This letter, when fully executed, shall constitute your retirement agreement
with the Company.
Sincerely,
/s/ Edsel W. Flowers
--------------------------------------
Edsel W. Flowers
Senior Vice President, Human Resources
Agreed and accepted: Date:
/s/ JT Taunton, Jr. 7/29/04
- ---------------------------------
JT Taunton, Jr.
Witness: Date:
/s/ Susan W. Turner 7/29/04
- ---------------------------------
Name: Susan W. Turner
ATTACHMENT A-1
RUSSELL CORPORATION
EXECUTIVE INCENTIVE PLAN
PERFORMANCE SHARE AGREEMENT
Russell Corporation (the "Company") grants to JT Taunton the number of
Performance Shares set forth below, all subject to the terms and conditions, in
the attached Exhibits A and B and in the Russell Corporation Executive Incentive
Plan, as it may from time-to-time be amended (the "Plan"), a copy of which is
attached. Please refer to the Plan documents for definitions of terms used in
this Agreement and Exhibits A and B.
Grant Date February 11, 2003
Target Number of
Performance Shares 12,500
Performance Period January 1, 2003 through December 31, 2005
Performance Goals Cumulative Earnings Per Share on a fully diluted basis
as determined by the Committee for 2004 and 2005
("Cumulative EPS")
% of Target Number Number of Shares
Level of Actual Performance Cumulative EPS of Performance Shares of Common Stock
- --------------------------- ---------------------- --------------------- ----------------
Below Threshold [PROVISION REDACTED](*) 0% 0
Threshold [PROVISION REDACTED](*) 50% 6,250
Target [PROVISION REDACTED](*) 100% 12,500
Maximum [PROVISION REDACTED](*) 150% 18,750
BY ACCEPTING THE GRANT OF PERFORMANCE SHARES, YOU ARE ALSO AGREEING TO BE BOUND
BY THE RESTRICTIVE COVENANTS PROVISION IN PARAGRAPH 14 OF EXHIBIT A.
Please indicate your acceptance of this Agreement and Exhibits A and B by
signing the enclosed copy in the space provided below and returning it to Floyd
G. Hoffman, Senior Vice President, Corporate Development, General Counsel and
Secretary, within 10 days of your receipt.
Russell Corporation
By: /s/Floyd G. Hoffman
------------------------
Its: Senior Vice President
ACCEPTED AND AGREED:
/s/JT Taunton, Jr.
- ---------------------------
JT Taunton
Dated: March 26, 2003
- ---------------------------
(*) Material omitted pursuant to a request for confidential treatment filed
with the Securities and Exchange Commission (the "SEC"). The omitted material
has been filed separately with the SEC.
EXHIBIT A
TO
RUSSELL CORPORATION EXECUTIVE INCENTIVE PLAN
PERFORMANCE SHARE AGREEMENT
1. Performance Share Grant. The grant of Performance Shares pursuant to
this Agreement provides you with a contractual right to receive a number of
shares of the Company's common stock, $0.01 par value ("Common Stock") based on
the extent to which the Company achieves the performance goals for the
Performance Period. You will not have any rights as a stockholder of the Company
with respect to the Performance Shares granted to you until the applicable
performance goals have been achieved and a certificate for the shares of Common
Stock which you have earned is delivered to you.
2. Performance Goals. The performance goals for the Performance Period are
based on the Company's cumulative earnings per share on a fully diluted basis
for 2004 and 2005 as adjusted by the Committee (the "Cumulative EPS").
3. Determination of Cumulative EPS. The Committee will determine
Cumulative EPS based upon the Company's reported earnings per share on a fully
diluted basis for 2004 and 2005. However, for purposes of determining the
Cumulative EPS, the Committee:
(a) will exclude extraordinary items (as defined by generally accepted
accounting principles) which are included in the Company's calculation of
earnings per share, and
(b) may include or exclude such other unusual or nonrecurring items as it,
in its sole discretion, determines is necessary or appropriate in order to
properly determine whether the intended performance goals and awards have
been achieved.
Cumulative EPS will be determined after subtracting the costs of the awards.
4. Performance Share Benefit. If you are employed by the Company on
December 31, 2005, you will receive (except as otherwise provided in Sections 5,
8, 9 and 10 herein) a number of shares of Common Stock as soon as practicable
after the end of 2005 equal to the percentage of your Target Number of
Performance Shares based upon the degree to which the performance goals are
satisfied as follows:
LEVEL OF
% OF TARGET NUMBER NUMBER OF SHARES
PERFORMANCE CUMULATIVE EPS OF PERFORMANCE SHARES OF COMMON STOCK
- --------------- -------------- --------------------- ---------------
Below Threshold [PROVISION REDACTED](*) 0% 0
Threshold [PROVISION REDACTED](*) 50% --------
Target [PROVISION REDACTED](*) 100% --------
Maximum [PROVISION REDACTED](*) 150% --------
For performance between threshold and target and target and maximum, the
applicable percentage will be determined proportionately. For example, if
Cumulative EPS is $4.25, the applicable percentage would be 111.1% (100% plus
..10 (the Cumulative EPS in excess of $4.15) divided by .45 (the difference
between maximum and target) multiplied by 50% (the difference between the
maximum and target percentages)).
(*) Material omitted pursuant to a request for confidential treatment filed with
the Securities and Exchange Commission (the "SEC"). The omitted material has
been filed separately with the SEC.
5. Adjustment of Performance Share Benefit. In the event that the
Committee determines that any dividend or other distribution, recapitalization,
stock split, reverse stock split, subdivision, consolidation or reduction of
capital, reorganization, merger, scheme of arrangement, split-up, spin-off or
combination involving the Company or repurchase or exchange of shares of Common
Stock or other rights to purchase such shares or other securities of the
Company, or other similar corporate transaction or event affects the shares of
Common Stock such that any adjustment is determined by the Committee to be
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan, then the
Committee will, in such manner as it may deem equitable, adjust any or all of
the number and type of shares of Common Stock payable with respect to your
Performance Shares.
6. Termination of Affiliation Prior to 2006. If you have a Termination of
Affiliation prior to January 1, 2006 for any reason other than death or
Disability, you will forfeit your Performance Shares and will not be entitled to
any shares of Common Stock; provided, however, if you have a Termination of
Affiliation prior to January 1, 2006, but before July 1 , 2005 on account of
retirement, the Committee may in its sole discretion determine that you are
entitled to receive part or all of the shares of Common Stock that you would
have earned based upon achieving such performance goals as the Committee in its
sole discretion shall determine.
7. Termination of Affiliation Due to Death or Disability. If you have a
Termination of Affiliation prior to January 1, 2006 due to death or Disability,
you (or your beneficiary) will receive a pro-rata portion of the benefit (based
on the portion of the 3-year Performance Period that has elapsed prior to the
termination) that you would have earned if you had remained employed through the
end of 2005. For example, if you have a Termination of Affiliation due to death
on January 1, 2005, your beneficiary would be entitled to receive two-thirds of
the number of shares of Common Stock that you would have earned if you remained
employed through the end of 2005 as soon as practicable after the end of 2005.
8. Change of Control. If a Change of Control (as defined in the Plan)
occurs prior to January 1, 2006, you will receive on the date of the Change of
Control, in full settlement of your Performance Shares, the number of shares of
Common Stock that you would have earned based upon achieving the Maximum
performance goals.
9. Payment/Deferral of Performance Share Benefit. The number of shares of
Common Stock payable to you with respect to your Performance Shares will be
delivered to you as soon as practicable after the end of 2005 unless you have
properly elected to defer your receipt of some or all of the shares of Common
Stock. You may elect or change an election at any time prior to September 30,
2005 to defer receipt of some or all of the shares until any date on or after
the first business day in January 2007 (but not later than the first business
day of January following your Termination of Affiliation), by completing and
returning the Election Form attached hereto as Exhibit B to the Company in care
of its Secretary.
10. Mandatory Deferral of Performance Share Benefit. If any portion of the
value of the Common Shares payable to you in any year is not deductible by the
Company in such year under Internal Revenue Code Section 162(m), the
nondeductible portion will be paid to you, in the
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earliest year or years in which such amount would be deductible subject to any
election made by you under Section 9 deferring receipt of the shares to a later
date.
11. Dividends on Deferred Shares. If dividends are declared on outstanding
shares of Common Stock after the date on which your earned shares would have
been paid to you except for your deferral election under Section 9 above, or the
mandatory deferral under Section 10 above, the number of your deferred shares
will be increased by a number of shares of Common Stock equal to the dividends
that you would have received on your deferred shares (assuming they were
outstanding shares of Common Stock) divided by the per share price of Common
Stock on the date the dividend is declared.
12. Whole Shares. The number of shares of Common Stock payable with
respect to Performance Shares will in all instances be rounded down to the
nearest whole number of shares. Any fractional shares will be paid for in cash.
13. Performance Shares Non-Transferable. The Performance Shares and any
shares of Common Stock for which your receipt has been deferred are not
transferable except by will or the laws of descent and distribution.
14. Restrictive Covenants. As a condition of receiving the Performance
Shares, you agree as follows:
(a) Confidentiality. You acknowledge that it is the policy of the Company
and its subsidiaries to maintain as secret and confidential all valuable
and unique information and techniques acquired, developed or used by the
Company and its subsidiaries relating to their businesses, operations,
employees and customers ("Confidential Information"). You recognize that
the Confidential Information is the sole and exclusive property of the
Company and its subsidiaries, and that disclosure of Confidential
Information would cause damage to the Company and its subsidiaries. You
shall not at any time disclose or authorize anyone else to disclose any
Confidential Information or proprietary information that is (i) disclosed
to or known by you as a result or consequence of or through your
employment with the Company, (ii) not publicly or generally known outside
the Company, and (iii) relates in any manner to the Company's business.
(b) Non-Competition. You agree that during the period beginning on the
date of your Termination of Affiliation and ending on the first
anniversary of your Termination of Affiliation, you shall not, without the
prior written consent of the Company, engage directly or indirectly, as a
licensee, owner, manager, consultant, officer, employee, director,
investor or otherwise, in any business in material competition with the
Company or any of its subsidiaries. This Section 14(b) shall not apply to
a passive investment by you constituting ownership of less than five
percent (5%) of the equity of any entity engaged in any business described
in this Section 14(b) or in Attachment 1 attached hereto.
(c) Non-Solicitation. You agree that during the period beginning on the
date of your Termination of Affiliation and ending on the first
anniversary of your Termination of Affiliation, you shall not, directly or
indirectly:
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1. other than in connection with the good-faith performance of your
duties as an officer of the Company, encourage any employee or agent
of the Company to terminate his or her relationship with the
Company;
2. solicit the employment or engagement as a consultant or adviser,
of any employee or agent of the Company (other than by the Company
or its affiliates), or cause or encourage any person or entity to do
any of the foregoing;
3. establish (or take preliminary steps to establish) a business
with, or encourage others to establish (or take preliminary steps to
establish) a business with, any employee or agent of the Company; or
4. interfere with the relationship of the Company with, or endeavor
to entice away from the Company, any person who or any entity which,
at any time during the period commencing one year prior to the date
of your Termination of Affiliation was or is a material customer or
material supplier of, or maintained a material business relationship
with, the Company.
(d) Forfeiture and Repayment. In addition to the other remedies the
Company may seek, including, without limitation, any remedies at law or in
equity, you and the Company specifically agree that, in the event that you
breach any of your obligations under this Section 14, (i) you shall
forfeit any and all Performance Shares and any shares of Common Stock
granted to you by the Company, (ii) you shall return to the Company any
and all Performance Shares and any shares of Common Stock granted to or
received by you, and (iii) to the extent any Performance Shares or shares
of Common Stock granted to you by the Company have been sold by you, you
shall pay to the Company an amount equal to the greater of (1) the fair
market value of such Performance Shares and/or shares of Common Stock on
the date of your Termination of Affiliation, or (2) the fair market value
of such Performance Shares and/or shares of Common Stock on their date or
dates of sale.
15. Taxes. The Company is not required to issue shares of Common Stock to
you unless you first pay, in cash, or by Share withholding to the Company such
amount, if any, of Required Withholding.
16. No Right to Employment or Affiliation. Nothing in this Agreement shall
interfere with or limit in any way the right of the Company to terminate your
employment at any time, nor confer upon you the right to continue in the employ
of the Company.
17. Amendments. This Agreement may be amended only by a writing executed
by the Company and you which specifically states that it is amending this
Agreement; provided that this Agreement is subject to the power of the Board to
amend the Plan as provided therein, except that no such amendment shall
adversely affect your rights under this Agreement without your consent.
18. Notices. Any notice to be given under the terms of this Agreement to
the Company shall be addressed to the Company in care of its Secretary. Any
notice to be given to you shall be addressed to you at the address listed in the
Company's records. By a notice given pursuant to
-4-
this Section, either party may designate a different address for notices. Any
notice shall have been deemed given when actually delivered.
19. Severability. If any part of this Agreement is declared by any court
or governmental authority to be unlawful or invalid, such unlawfulness or
invalidity shall not serve to invalidate any part of this Agreement not declared
to be unlawful or invalid. Any part so declared unlawful or invalid shall, if
possible, be construed in a manner which gives effect to the terms of such part
to the fullest extent possible while remaining lawful and valid. Additionally,
if any of the covenants in Section 14 are determined by a court to be
unenforceable in whole or in part because of such covenant's duration or
geographical or other scope, such court shall have the power to modify the
duration or scope of such provision as the case may be, so as to cause such
covenant, as so modified, to be enforceable.
20. Applicable Law. This Agreement shall be governed by the substantive
laws of Alabama.
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EXHIBIT B
RUSSELL CORPORATION
EXECUTIVE INCENTIVE PLAN
PERFORMANCE SHARE AGREEMENT
ELECTION FORM
I, ___________________________________, a participant in the Russell Corporation
Executive Incentive Plan (the "Plan"), hereby elect to defer receipt of the
shares that I may earn as a result of my Performance Shares, as follows:
PERFORMANCE SHARE GRANT DATE: ______________, 2003
Target Number of Performance Shares: _________________
Shares Which are to be Deferred:
(a) [ ] I elect to defer all of the shares that I earn
(b) [ ] I elect to defer ______% of all of the shares
that I earn
(Please Check One)
DEFERRED PAYMENT DATE
[ ] I elect to receive the shares that I have elected to
defer on the earlier of:
(a) _______________ (insert a date on or after the
first business day in January 2007); and
(b) the first business day of January next following
the year in which I have a Termination of
Affiliation.
[ ] I elect to receive the shares that I have elected to
defer on the first business day of January next
following the year in which I have a Termination of
Affiliation.
(Please Check One)
(By making this election or changing the election prior to September 30, 2005,
you are permitted to defer the date that you are taxed on your earned shares --
from 2006 to the deferred date that you actually receive the shares. You should
consult with your personal financial and tax advisors regarding the federal,
state and local income tax implications of making this election.) Upon a Change
of Control, all of your deferred shares will be delivered to you notwithstanding
your election herein.
Mr. JT Taunton, Jr.
July __, 2004
Page 2
_________________________________ ________________________________
Executive's Signature Date
(Please print)
_______________________ _____________________ _________________
First Name Last Name Middle Initial
_________________________________________________________________
Address (No. & Street)
_______________________ _____________________ _________________
City State Zip Code
__________________________________________
Social Security/Taxpayer Id. No.
FOR COMPANY USE ONLY:
Received by:___________________________________ Date:________________________
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RUSSELL CORPORATION
EXECUTIVE INCENTIVE PLAN
2004-2005 TIME LAPSE RESTRICTED SHARE AND
PERFORMANCE SHARE AGREEMENT
Russell Corporation (the "Company") grants to JT Taunton the number of Time
Lapse Restricted Shares and Performance Shares set forth below, all subject to
the terms and conditions, in the attached Exhibits A and B and in the Russell
Corporation Executive Incentive Plan, as it may from time-to-time be amended
(the "Plan"), a copy of which is attached. Please refer to the Plan documents
for definitions of terms used in this Agreement and Exhibits A and B.
- - Grant Date: July 20, 2004
- - Time Lapse Restricted Shares:
Number of Shares: 6,500
Vesting Date: January 1, 2006
- - Performance Shares:
Target Number of
Performance Shares: 6,000
Performance Period: January 1, 2004 through December 31, 2005
Performance Goals: Cumulative Earnings Per Share on a fully
diluted basis as determined by the
Committee for 2004 and 2005
("Cumulative EPS")
% of Target Number Number of Shares
Level of Actual Performance Cumulative EPS of Performance Shares of Common Stock
- --------------------------- -------------- --------------------- ---------------
Below Threshold [PROVISION REDACTED](*) 0.0%
Threshold [PROVISION REDACTED](*) 33.3% 2,000
Target [PROVISION REDACTED](*) 100% 6,000
Maximum [PROVISION REDACTED](*) 150% 9,000
BY ACCEPTING THE GRANT OF TIME LAPSE RESTRICTED SHARES AND PERFORMANCE SHARES,
YOU ARE ALSO AGREEING TO BE BOUND BY THE RESTRICTIVE COVENANTS PROVISION IN
PARAGRAPH D OF EXHIBIT A.
Please indicate your acceptance of this Agreement and Exhibits A and B by
signing the enclosed copy in the space provided below and returning it to Ed
Flowers, SVP Human Resources, within 10 days of your receipt.
(*) Material omitted pursuant to a request for confidential treatment filed with
the Securities and Exchange Commission (the "SEC"). The omitted material has
been filed separately with the SEC.
Russell Corporation
By: /s/ Edsel W. Flowers
----------------------------------
Its: Senior Vice President, Human
Resources
ACCEPTED AND AGREED:
/s/ JT Taunton, Jr.
- -----------------------------------
[name]
Dated: July 29, 2004
-2-
EXHIBIT A
TO
RUSSELL CORPORATION EXECUTIVE INCENTIVE PLAN
2004-2005 TIME LAPSE RESTRICTED SHARE AND PERFORMANCE SHARE
AWARD AGREEMENT
A. TIME LAPSE RESTRICTED SHARES
1. GRANT OF RESTRICTED SHARES. The Grant of Time Lapse Restricted Shares
pursuant to this Agreement provides you with ownership in a number of shares of
the Corporation's Common Stock, $0.01 par value ("Common Stock") which will
become fully vested and non-forfeitable on January 1, 2006. While the
restrictions are in effect, the shares covered by the restricted stock award are
not transferable by you by means of sale, assignment, exchange, pledge, or
otherwise.
2. STOCK CERTIFICATES. A stock certificate evidencing this award will be
registered in your name on the Corporation's books as of the Award Date and
maintained in the custody of the Corporation until the Time Lapse Restricted
Shares are vested (i.e., the restrictions lapse) [unless you have elected to
convert to Deferred Shares pursuant to Section 10.2 of the Incentive Plan by
executing the attached Deferred Share Election Form.] While the restrictions are
in effect, you will be entitled to all rights of a shareholder, except as noted
in the Incentive Plan or elsewhere in this Agreement.
3. PAYMENT/DEFERRED SHARE BENEFIT/TAXES.
(a) The number of shares of Common Stock payable to you with respect to
your Time Lapse Restricted Shares will be delivered to you as soon
as practicable after January 1, 2006, unless you have elected to
defer your receipt of some or all of the shares of Common Stock by
completing and returning the Election Form attached hereto as
Exhibit B to the Corporation in care of its Secretary.
(b) The Corporation is not required to issue shares of Common Stock to
you unless you first pay, in cash, or by Share withholding to the
Corporation such amount, if any, of Required Withholding.
4. CASH DIVIDENDS. Subject to the restrictions and conditions as described in
the Incentive Plan, cash dividends payable on the Restricted Shares will be
escrowed on your behalf at the time that dividends are paid to other holders of
the Common Stock. Interest will be credited to escrowed dividend balances at a
rate equal to the 3-month LIBOR rate as quoted in The Wall Street Journal on the
day dividends are paid on the Restricted Shares. The escrowed dividends and
accumulated interest attributable to the Restricted Shares upon which the
restrictions have lapsed will be paid to you upon the lapse of the restrictions
and any escrowed dividends and accumulated interest attributable to Restricted
Shares which have been forfeited shall also be forfeited.
1
5. WHOLE SHARES. The number of shares of Common Stock payable with respect to
Time Lapse Restricted Shares will in all instances be rounded down to the
nearest whole number of shares. Any fractional shares will be paid for in cash.
6. ADJUSTMENT OF TIME LAPSE RESTRICTED SHARES. In the event that the Committee
determines that any dividend or other distribution, recapitalization, stock
split, reverse stock split, subdivision, consolidation or reduction of capital,
reorganization, merger, scheme of arrangement, split-up, spin-off or combination
involving the Corporation or repurchase or exchange of shares of Common Stock or
other rights to purchase such shares or other securities of the Corporation, or
other similar corporate transaction or event affects the shares of Time Lapse
Restricted Shares such that any adjustment is determined by the Committee to be
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan, then the
Committee will, in such manner as it may deem equitable, adjust any or all of
the number and type of shares of Common Stock payable with respect to your Time
Lapse Restricted Shares.
B. PERFORMANCE SHARES
1. PERFORMANCE SHARE GRANT. The grant of Performance Shares pursuant to this
Agreement provides you with a contractual right to receive a number of shares of
the Corporation's common stock, $0.01 par value ("Common Stock") based on the
extent to which the Corporation achieves the performance goals for the
Performance Period. You will not have any rights as a stockholder of the
Corporation with respect to the Performance Shares granted to you until the
applicable performance goals have been achieved and a certificate for the shares
of Common Stock which you have earned is delivered to you.
2. PERFORMANCE GOALS. The performance goals for the Performance Period are
based on the Corporation's cumulative earnings per share on a fully diluted
basis for 2004 and 2005 as adjusted by the Committee (the "Cumulative EPS").
3. DETERMINATION OF CUMULATIVE EPS. The Committee will determine Cumulative EPS
based upon the Corporation's reported earnings per share on a fully diluted
basis for 2004 and 2005. However, for purposes of determining the Cumulative
EPS, the Committee:
(a) will exclude extraordinary items (as defined by generally accepted
accounting principles) which are included in the Corporation's
calculation of earnings per share, and
(b) may include or exclude such other unusual or nonrecurring items as
it, in its sole discretion, determines is necessary or appropriate
in order to properly determine whether the intended performance
goals and awards have been achieved.
Cumulative EPS will be determined after subtracting the costs of the awards.
-2-
4. PERFORMANCE SHARE BENEFIT. If you are employed by the Corporation on
December 31, 2005, you will receive (except as otherwise provided in Sections 5,
8, 9 and 10 herein) a number of shares of Common Stock as soon as practicable
after the end of 2005 equal to the percentage of your Target Number of
Performance Shares based upon the degree to which the performance goals are
satisfied as follows:
LEVEL OF % OF TARGET NUMBER NUMBER OF SHARES
PERFORMANCE CUMULATIVE EPS OF PERFORMANCE SHARES OF COMMON STOCK
- ----------- -------------- --------------------- ----------------
Below Threshold [PROVISION REDACTED](*) 0.0% 0
Threshold [PROVISION REDACTED](*) 33.3% 2,000
Target [PROVISION REDACTED](*) 100% 6,000
Maximum [PROVISION REDACTED](*) 150% 9,000
- -----------------
(*) Material omitted pursuant to a request for confidential treatment
filed with the Securities and Exchange Commission (the "SEC"). The
omitted material has been filed separately with the SEC.
For performance between threshold and target and target and maximum, the
applicable percentage will be determined proportionately. Exhibit C is an
example of possible payouts.
5. ADJUSTMENT OF PERFORMANCE SHARE BENEFIT. In the event that the
Committee determines that any dividend or other distribution, recapitalization,
stock split, reverse stock split, subdivision, consolidation or reduction of
capital, reorganization, merger, scheme of arrangement, split-up, spin-off or
combination involving the Corporation or repurchase or exchange of shares of
Common Stock or other rights to purchase such shares or other securities of the
Corporation, or other similar corporate transaction or event affects the shares
of Common Stock such that any adjustment is determined by the Committee to be
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan, then the
Committee will, in such manner as it may deem equitable, adjust any or all of
the number and type of shares of Common Stock payable with respect to your
Performance Shares.
6. PAYMENT/DEFERRAL OF PERFORMANCE SHARE BENEFIT. The number of shares of
Common Stock payable to you with respect to your Performance Shares will be
delivered to you as soon as practicable after the end of 2005 unless you have
properly elected to defer your receipt of some or all of the shares of Common
Stock. You may elect or change an election at any time prior to September 30,
2005 to defer receipt of some or all of the shares until any date on or after
the first business day in January 2007 (but not later than the first business
day of January following your Termination of Affiliation), by completing and
returning the Election Form attached hereto as Exhibit B to the Corporation in
care of its Secretary.
7. MANDATORY DEFERRAL OF PERFORMANCE SHARE BENEFIT. If any portion of the
value of the Common Shares payable to you in any year is not deductible by the
Corporation in such year under Internal Revenue Code Section 162(m), the
nondeductible portion will be paid to you, in the earliest year or years in
which such amount would be deductible subject to any election made by you under
Section 6 deferring receipt of the shares to a later date.
(*) Material omitted pursuant to a request for confidential treatment filed
with the Securities and Exchange Commission (the "SEC"). The omitted material
has been filed separately with the SEC.
-3-
8. DIVIDENDS ON DEFERRED SHARES. If dividends are declared on outstanding
shares of Common Stock after the date on which your earned shares would have
been paid to you except for your deferral election under Section 6 above, or the
mandatory deferral under Section 7 above, the number of your deferred shares
will be increased by a number of shares of Common Stock equal to the dividends
that you would have received on your deferred shares (assuming they were
outstanding shares of Common Stock) divided by the per share price of Common
Stock on the date the dividend is declared.
9. WHOLE SHARES. The number of shares of Common Stock payable with respect
to Performance Shares will in all instances be rounded down to the nearest whole
number of shares. Any fractional shares will be paid for in cash.
10. PERFORMANCE SHARES NON-TRANSFERABLE. The Performance Shares and any
shares of Common Stock for which your receipt has been deferred are not
transferable except by will or the laws of descent and distribution.
C. FORFEITURE OF TIME LAPSE RESTRICTED SHARES AND PERFORMANCE SHARES
(i) TERMINATION OF AFFILIATION PRIOR TO 2006. If you have a
Termination of Affiliation prior to January 1, 2006 for any reason
other than death or Disability, you will forfeit your Time Lapse
Restricted Shares and your Performance Shares; provided, however, if
you have a Termination of Affiliation prior to January 1, 2006, but
after July 1, 2005, on account of retirement, the Committee may in
its sole discretion determine that you are entitled to receive part
or all of the Time Lapse Restricted Shares and Performance Shares
that you would have earned based upon achieving such performance
goals as the Committee in its sole discretion shall determine.
(ii) TERMINATION OF AFFILIATION DUE TO DEATH OR DISABILITY. If you
have a Termination of Affiliation prior to January 1, 2006 due to
death or Disability, you (or your beneficiary) will receive a
pro-rata portion of the Time Lapse Restricted Shares and the benefit
(based on the portion of the 2-year Performance Period that has
elapsed prior to the termination) that you would have earned if you
had remained employed through the end of 2005. For example, if you
have a Termination of Affiliation due to death on January 1, 2005,
your beneficiary would be entitled to receive one half of the Time
Lapse Restricted Shares and one half of the number of shares of
Performance Shares that you would have earned if you remained
employed through the end of 2005 as soon as practicable after the
end of 2005.
(iii) CHANGE OF CONTROL. If a Change of Control (as defined in the
Plan) occurs prior to January 1, 2006, you will receive on the date
of the Change of Control, in full settlement of your Time Lapse
Restricted Shares and your Performance Shares, a cash payment equal
to the fair market value of the pro-rata portion of the Time Lapse
Restricted Shares based on the portion of the Performance Period
that has elapsed prior to the Change of Control and the shares of
Common Stock (based on the portion of the Performance
-4-
Period that has elapsed prior to the Change of Control) that you
would have earned based upon achieving Target performance goals (or
if higher, the actual performance assuming performance prior to the
Change of Control continued through the end of the Performance
Period).
D. RESTRICTIVE COVENANTS. As a condition of receiving these rights to the Time
Lapse Restricted Shares, and the Performance Shares, you agree as follows:
1. CONFIDENTIALITY. You acknowledge that the Corporation may disclose
(and/or has already disclosed) to you for use in your employment, and that
you may be provided access to and otherwise make use of, acquire, create,
or add to, certain valuable, confidential, proprietary, and secret
information of the Corporation (whether tangible or intangible and whether
or not electronically kept or stored), including financial statements,
drawings or sketches, photographs, product or other designs, manuals,
business plans, business rules, business methods, business practices,
market studies, methods, graphs, strategies, techniques, processes,
procedures, formulas, inventions, marketing and pricing data, pricing
policies or lists, customer and prospect lists and contacts, contracts,
sources and identity of vendors and contractors, financial information of
customers and the Corporation, customer buying habits or requirements,
product specifications or preferences, computer software and programs
(including object code and source code), computer database systems, and
other proprietary documents, materials, or information regarding (or
otherwise obtained by) the Corporation, its businesses and activities, or
the manner in which the Corporation does business, which is valuable to
the Corporation in conducting its business because the information is kept
confidential and is not generally known to the Corporation's competitors
or to the general public ("Confidential Information" ). Confidential
Information does not include information generally known or easily
obtained from public sources or public records (unless you cause such
Confidential Information to become generally known or easily obtained
therefrom).
You further acknowledge that (i) it is the policy of the Corporation and
its subsidiaries to maintain as secret and confidential all such
Confidential Information, (ii) the Confidential Information is the sole
and exclusive property of the Corporation and its subsidiaries, and (iii)
disclosure of Confidential Information would cause damage to the
Corporation and its subsidiaries.
Consequently, to the extent that any of the Confidential Information rises
to the level of a trade secret under applicable law, then you shall,
during your employment and for as long thereafter as such Confidential
Information remains a trade secret (or for the maximum period of time
otherwise allowed under applicable law), protect and maintain the
confidentiality of such trade secrets and refrain from disclosing,
copying, or using any
-5-
such trade secrets without the Corporation's prior written consent, except
as necessary in your performance of your duties while employed with the
Corporation.
To the extent that the Confidential Information defined above does not
rise to the level of a trade secret under applicable law, then you shall,
during your employment and for a period of two (2) years following any
voluntary or involuntary termination of your employment with the
Corporation (regardless of the reason), protect and maintain the
confidentiality of the Confidential Information and refrain from
disclosing, copying, or using any Confidential Information without the
Corporation's prior written consent, except as necessary in your
performance of your duties while employed with the Corporation.
2. NON-COMPETITION. You agree that, during your employment and for a
period of one (1) year following any voluntary or involuntary termination
of your employment with the Corporation (regardless of the reason), you
shall not, directly or indirectly, compete with the Corporation by working
for or engaging in a "Competitive Business" (as defined below), within the
Territory (as defined below) in a capacity in which you perform, or have,
duties and responsibilities that are identical to or substantially similar
to those you performed or had while you worked at the Corporation.
This Section D-2 shall not apply to a passive investment by you
constituting ownership of less than five percent (5%) of the equity of any
entity comprising a "Competitive Business."
For purposes of this Agreement, (i) the "Territory" shall be defined to be
that geographic area within a forty (40) mile air radius from the
Corporation's office location (at which you work) at 755 Lee Street,
Alexander City, AL and (ii) "Competitive Business" shall be defined as an
enterprise that is in the business of providing services and/or products
in the apparel industry, which services and/or products are substantially
similar or identical to those offered by the Corporation during your
employment with the Corporation. You acknowledge that the Corporation
conducts its business within the Territory, that you will perform services
for and on behalf of the Corporation within the Territory, and that this
Section (and the Territory) is a reasonable limitation on your ability to
compete with the Corporation.
3. NON-SOLICITATION. You agree that, during your employment and for a
period of one (1) year following any voluntary or involuntary termination
of your employment with the Corporation (regardless of the reason), you
shall not, directly or indirectly:
(1) encourage, solicit, support, or recruit (or otherwise assist any
person or entity in encouraging, soliciting, supporting, or
recruiting) any employee or independent contractor of the
Corporation who performed work for the Corporation within the final
year of your employment with the Corporation to terminate his or her
relationship with the Corporation;
-6-
(2) hire or retain (or otherwise assist any person or entity in
hiring or retaining) any employee or independent contractor of the
Corporation who performed work for the Corporation within the final
year of your employment with the Corporation, until such employee or
independent contractor has ceased working for the Corporation for at
least six months;
(3) contact, solicit, divert, appropriate, or call upon with the
intent of doing business with the customers or suppliers of the
Corporation with whom you have had material contact during the final
year of your employment with the Corporation (including prospective
customers or suppliers of the Corporation with whom you had such
contact during such period), if the purpose of such activity is
either (1) to solicit these customers or suppliers (or prospective
customers or suppliers) for a Competitive Business as defined above
(including but not limited to any Competitive Business started by
you) or (2) to otherwise encourage any such customer or supplier to
discontinue, reduce, or adversely alter the amount of its business
with the Corporation.
You acknowledge that due to your relationship with the Corporation,
you will develop (and/or have developed) special contacts and
relationships with the Corporation's customers and suppliers (and
prospective customers and suppliers), and that it would be unfair
and harmful to the Corporation if you took advantage of these
relationships in a Competitive Business.
4. RETURN OF CORPORATION PROPERTY. Upon any voluntary or involuntary
termination of your employment with the Corporation (regardless of the
reason) and at any time upon request of the Corporation, you agree to
immediately return to the Corporation all property of the Corporation
(including but not limited to all documents, paper files, customer files,
electronic files, records, computer disks, computers, or other tangible or
intangible things that may or may not relate to or otherwise comprise
Confidential Information or trade secrets (as defined by applicable law))
that you created, used, possessed or maintained while working for the
Corporation from whatever source and whenever created, including all
reproductions or excerpts thereof.
You acknowledge that all title, right and interest to all such property
(including but not limited to Confidential Information and trade secrets)
is vested exclusively in the Corporation and that you retain no title,
right or interest to such property.
5. INJUNCTIVE RELIEF. You acknowledge that it would be difficult to
calculate the Corporation's damages from your breach of any of those
obligations in this Section, that such breach would cause the Corporation
irreparable injury and damages, and that money damages would therefore be
an inadequate remedy. Accordingly, upon such breach, you acknowledge that
the Corporation may seek and shall be entitled to temporary, preliminary,
and/or permanent injunctive relief against you, and/or other appropriate
-7-
orders to restrain such breach. Nothing in this provision shall limit the
Corporation from seeking any other damages or relief provided by
applicable law for breach of this Agreement or any section or provision of
this Agreement.
6. FORFEITURE AND REPAYMENT. In addition to any remedies the Corporation
may seek in equity, you and the Corporation specifically agree that, in
the event that you breach any of your obligations under this Section (i)
you shall forfeit any and all Time Lapse Restricted Shares and any shares
of Common Stock granted or to be granted to you by the Corporation, (ii)
you shall return to the Corporation any and all Restricted Shares and
shares of Common Stock granted to or received by you, and (iii) to the
extent any Restricted Shares or shares of Common Stock granted to you by
the Corporation have been sold by you, you shall pay to the Corporation an
amount equal to the greater of (1) the fair market value of such
Restricted Shares and/or shares of Common Stock on the date of your
Termination of Affiliation, or (2) the fair market value of such
Restricted Shares and/or shares of Common Stock on their date or dates of
sale.
E. AMENDMENTS OF PRIOR AGREEMENTS.
1. In consideration of the grant of the Time Lapse Restricted Shares, you agree
that (i) the grants under this Agreement are in lieu of any grants under the
Executive Incentive Plan or the 2000 Stock Option Plan by reason of being a new
hire or promotion, (ii) any stock option grant that you received either under
Executive Incentive Plan or the 2000 Stock Option Plan which includes reload
stock options shall be amended by deleting the right to receive Reload Stock
Option grants as described in the Agreement and in paragraph 1(b) of Exhibit A
to the Agreement, and (iii) the Performance Share Award Agreement between you
and the Corporation, shall be amended by deleting the term "50% as the threshold
percentage of target number of performance shares and in lieu thereof, the term
"0%" shall be inserted. Accordingly, as a result of this amendment, the
Performance Share Award Agreement shall provide as follows:
% of Target Number
Level of Actual Performance Cumulative EPS of Performance Shares
- --------------------------- ----------------------- ---------------------
Threshold [PROVISION REDACTED](*) 0% 0
Target [PROVISION REDACTED](*) 100% 12,500
Maximum [PROVISION REDACTED](*) 150% 18,750
F. OTHER PROVISIONS
1. NO RIGHT TO EMPLOYMENT OR AFFILIATION. Nothing in this Agreement
shall interfere with or limit in any way the right of the
Corporation to terminate your
(*) Material omitted pursuant to a request for confidential treatment filed
with the Securities and Exchange Commission (the "SEC"). The omitted material
has been filed separately with the SEC.
-8-
employment at any time, nor confer upon you the right to continue in
the employ of the Corporation.
2. AMENDMENTS. This Agreement may be amended only by a writing
executed by the Corporation and you which specifically states that
it is amending this Agreement; provided that this Agreement is
subject to the power of the Board to amend the Plan as provided
therein, except that no such amendment shall adversely affect your
rights under this Agreement without your consent.
3. NOTICES. Any notice to be given under the terms of this
Agreement to the Corporation shall be addressed to the Corporation
in care of its Secretary. Any notice to be given to you shall be
addressed to you at the address listed in the Corporation's records.
By a notice given pursuant to this Section, either party may
designate a different address for notices. Any notice shall have
been deemed given when actually delivered.
4. SEVERABILITY. If any part of this Agreement is declared by any
court or governmental authority to be unlawful or invalid, such
unlawfulness or invalidity shall not serve to invalidate any part of
this Agreement not declared to be unlawful or invalid. Any part so
declared unlawful or invalid shall, if possible, be construed in a
manner which gives effect to the terms of such part to the fullest
extent possible while remaining lawful and valid.
5. APPLICABLE LAW. This Agreement shall be governed by the
substantive laws of Alabama.
6. NO BAR. You acknowledge and agree that the existence of any
claim or cause of action against the Corporation shall not
constitute a defense to the enforcement by the Corporation of your
covenants, obligations, or undertakings in this Agreement, including
but not limited to those contained in Section D.
7. SUPERSEDE. The covenants contained in Section D hereof supersede
and take the place of any covenants contained in any prior agreement
between you and the Corporation, and any covenants in such prior
agreement shall be of no force or effect.
8. CAPITALIZED TERMS. Unless otherwise indicated, capitalized terms
in this Agreement shall have the definition and meaning set forth
for such terms in the Corporation's Executive Incentive Plan.
-9-
EXHIBIT B
RUSSELL CORPORATION
EXECUTIVE INCENTIVE PLAN
PERFORMANCE SHARE AGREEMENT
ELECTION FORM
I, JT Taunton, a participant in the Russell Corporation Executive Incentive Plan
(the "Plan"), hereby elect to defer receipt of the shares that I may earn as a
result of my Performance Shares, as follows:
PERFORMANCE SHARE GRANT DATE: JULY 20, 2004
Target Number of Performance Shares: 6,000
Shares Which are to be Deferred:
(a) [ ] I elect to defer all of the shares that I earn
(b) [ ] I elect to defer ______% of all of the shares
that I earn
(Please Check One)
DEFERRED PAYMENT DATE
[ ] I elect to receive the shares that I have elected to
defer on the earlier of:
(a) _______________ (insert a date on or after the
first business day in January 2007); and
(b) the first business day of January next following
the year in which I have a Termination of
Affiliation.
[ ] I elect to receive the shares that I have elected to
defer on the first business day of January next
following the year in which I have a Termination of
Affiliation.
(Please Check One)
1
(By making this election or changing the election prior to September 30, 2005,
you are permitted to defer the date that you are taxed on your earned shares --
from 2006 to the deferred date that you actually receive the shares. You should
consult with your personal financial and tax advisors regarding the federal,
state and local income tax implications of making this election.) Upon a Change
of Control, all of your deferred shares will be delivered to you notwithstanding
your election herein.
_______________________________________ _______________________________
Executive's Signature Date
(Please print)
___________________________ _________________ ______________
First Name Last Name Middle Initial
________________________________________________________________
Address (No. & Street)
___________________________ _________________ ______________
City State Zip Code
____________________________________________
Social Security/Taxpayer Id. No.
FOR COMPANY USE ONLY:
Received by:___________________________________ Date:________________________
-2-
EXHIBIT C
FOR BETWEEN THRESHOLD AND
CUMULATIVE EPS
ASSUMPTIONS
- -----------------------------
Threshold EPS = [PROVISION REDACTED](*)
Target EPS = [PROVISION REDACTED](*)
Actual EPS = [PROVISION REDACTED](*)
Threshold % = 33.33%
Target % = 100.00%
CALCULATIONS
- -----------------------------------
Actual EPS - Threshold EPS = [PROVISION REDACTED](*)
Target EPS - Threshold EPS = [PROVISION REDACTED](*)
(Actual EPS - Threshold EPS)
= 69.4% <----- Result 1
(Target EPS - Threshold EPS)
Target % - Threshold % = 66.67% <----- Result 2
Result 1 x Result 2 + Threshold % = 80% <----- Final Payout
FOR BETWEEN TARGET AND
CUMULATIVE EPS
ASSUMPTIONS
- -----------------------------------
Target EPS = [PROVISION REDACTED](*)
Maximum EPS = [PROVISION REDACTED](*)
Actual EPS = [PROVISION REDACTED](*)
Target % = 100.0%
Max % = 150.0%
CALCULATIONS
- -----------------------------------
Actual EPS - Target EPS = [PROVISION REDACTED](*)
Maximum EPS- Target EPS = [PROVISION REDACTED](*)
(Actual EPS - Target EPS)
(Maximum EPS - Target EPS) = 10.3% <----- Result 1
Max % - Target % = 50.0% <----- Result 2
Result 1 x Result 2 = 5.13% <----- Result 3
Result 3 + Target % = 105% <----- Final Payout
(*) Material omitted pursuant to a request for confidential treatment filed
with the Securities and Exchange Commission (the "SEC"). The omitted material
has been filed separately with the SEC.
1
ATTACHMENT A-2
DESIGNATION OF BENEFICIARY FOR LONG-TERM INCENTIVE AWARDS
UNDER THE RUSSELL CORPORATION EXECUTIVE INCENTIVE PLAN
I, the undersigned JT Taunton, Jr., recipient of 2003 and 2004 grants
under the Russell Corporation Executive Incentive Plan of performance shares and
time-lapsed restricted stock (collectively, the "Incentive Grants"), do hereby
designate the following named person(s), trust(s), or estate as the beneficiary
(or beneficiaries) to receive any shares of Common Stock of Russell Corporation
payable to me pursuant to the terms of such Incentive Grants and that certain
letter agreement, dated as of July 26, 2004, by and between Russell Corporation
and me (the "Letter Agreement"), in the event of my death prior to January 1,
2006. I do further revoke any designation(s) previously made by me with respect
thereto, and I do reserve the right to change the beneficiary (beneficiaries)
designated by me herein. If more than one beneficiary is so designated, in the
event of my death prior to January 1, 2006 the total benefit payable pursuant to
the terms of the Incentive Grants and the Letter Agreement is to be divided
among the named beneficiaries (by the percentages indicated in the spaces
provided).
NAME AND ADDRESS OF PERCENTAGE
PRIMARY BENEFICIARY RELATIONSHIP OF BENEFIT
- ------------------------------------ ------------------ -----------
1. Name Nancy P. Taunton Wife 100%
Address 167 Seven Bark Trail Jacksons Gap, AL 36861
2. Name ____________________________ __________________ ___________
Address__________________________ __________________ ___________
(If additional Primary Beneficiaries are to be named, attach an additional sheet
setting forth the information requested above.)
NAME AND ADDRESS OF
ALTERNATE BENEFICIARY
(In the event the Primary Beneficiary
(Beneficiaries) is (are) not living
at the date of my death)
PERCENTAGE
RELATIONSHIP OF BENEFIT
------------------- ----------
1. Name Derek Lee Taunton Son 50%
Address 42 Tallisi Drive Alexander City, AL 35010
2. Name David Brent Taunton Son 50%
Address 3488 Essex Avenue Atlanta, GA 30339
/s/ JT Taunton, Jr.
------------------------------
Employee Signature
7/29/04
1
ATTACHMENT B
J T TAUNTON, JR
GRANT GRANT OPTIONS OPTION OPTIONS OPTIONS
DATE EXPIRATION GRANTED PRICE OUTSTANDING EXERCISABLE
---- ---------- ------- ----- ----------- -----------
1/25/1995 1/25/2005 2,267 $30.0000 2267 2,267
1/25/1995 1/25/2005 3,333 $30.0000 3333 3,333
1/24/1996 1/24/2006 2,531 $27.2500 2531 2,531
1/24/1996 1/24/2006 3,669 $27.2500 3669 3,669
1/22/1997 1/22/2007 2,862 $30.8750 2862 2,862
1/22/1997 1/22/2007 3,238 $30.8750 3238 3,238
1/28/1998 1/28/2008 3,898 $24.3750 3898 3,898
1/28/1998 1/28/2008 4,102 $24.3750 4102 4,102
2/24/1999 2/24/2009 3,000 $19.3438 3000 3,000
2/24/1999 2/24/2009 9,000 $19.3438 9000 9,000
1/18/2000 1/18/2010 14,933 $15.1250 14933 14,933
1/18/2000 1/18/2010 17,067 $15.1250 17067 17,067
TOTAL 69,900 69,900 69,900
Tuesday, June 22, 2004 Page 1 of 1