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Form of Agreement for Grants of Performance Units
PERFORMANCE UNIT AWARD AGREEMENT
THIS PERFORMANCE UNIT AWARD AGREEMENT (the "Agreement") is
made and entered into between SPRINGS INDUSTRIES, INC., a South Carolina
corporation ("Springs"), and _____________________________ (the "Participant").
THE PARTIES AGREE AS FOLLOWS:
1. Grant. Springs hereby grants to Participant, effective
_______________ (the "Effective Date"), pursuant to the Springs Industries,
Inc., 1991 Incentive Stock Plan, as amended effective November 1, 1996 (the
"Plan"), a Performance Unit Award (the "Award") of <# of performance units>
Performance Units (the "Target Amount") subject to the terms, restrictions and
conditions set forth in this Agreement and in the Plan. The Plan is incorporated
into and made a part of this Agreement and a copy is available upon request in
writing to the Corporate Secretary of Springs. Unless otherwise defined in this
Agreement, capitalized terms in this Agreement shall have the same meaning as
defined in the Plan. Participant's receipt of this Award does not entitle
Participant to an award for any other performance cycle. Awards for other
performance cycles may only be granted by the Committee as set forth in a
written award agreement.
2. Vesting. Subject to the provisions of ss.6 with respect to
forfeiture of awards in the event a Participant engages in competition with
Springs or its subsidiaries (the "Noncompetition Provisions"):
(a) The Award shall be earned and vest only upon Participant's
continuous and active employment with Springs (including employment with any
Subsidiary) from the Effective Date through the end of the Performance Cycle (as
defined in ss.5) unless any failure to remain continuously and actively employed
is caused by (i) Retirement under the Springs of Achievement Partnership Plan
(the "Partnership Plan"), (ii) Disability [as defined in the Long-Term
Disability Plan of Springs], (iii) termination of employment for economic
reasons [as defined in the Partnership Plan] or (iv) death;
(b) If Participant's employment is terminated during the
Performance Cycle for reasons (i), (ii) or (iii) in ss.2(a) above, Participant
shall be entitled to a proportionate share of the Award which would otherwise be
distributable to Participant for the Performance Cycle based upon the period of
time Participant was continuously and actively employed by Springs (including
employment with any Subsidiary) during such Performance Cycle; and
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(c) In case of Participant's death during the Performance
Cycle, the Participant's beneficiary or estate, as provided in ss.6(f), shall be
entitled to a proportionate share of the Award which would otherwise be
distributable to Participant for the Performance Cycle based upon the period of
time Participant was continuously and actively employed by Springs (including
employment with any Subsidiary) during such Performance Cycle and such Award
shall be distributed in the form of cash and Springs' Class A Common Stock (the
"Common Stock") [or solely in the form of cash if required pursuant to the
provision set forth in ss.6(b) below] as soon as practicable following
completion of the Performance Cycle.
3. Award Entitlement. A Participant shall be entitled to receive a
settlement of the Performance Units vested pursuant to Section 2 only to the
extent such Performance Units are earned. Subject to satisfaction of the
Noncompetition Provisions, a Participant shall earn the Performance Units based
upon the Percentile Ranking of Springs' Total Shareholder Return attained by
Springs on the Common Stock for the Performance Cycle as set forth in Exhibit A
to this Agreement. Percentile Ranking and Total Shareholder Return are defined
in ss.4.
4. (a) Total Shareholder Return. Total Shareholder Return ("TSR") for a
company shall be determined by dividing (i) the sum of (A) the cumulative amount
of dividends paid for the performance period assuming dividend reinvestment and
(B) the difference between the fair market value of the company's common stock
on the first day of the period and the fair market value of the company's common
stock on the last date of the period by (ii) the fair market value of the
company's common stock on the first day of the period. Fair Market Value for the
Common Stock shall be determined as provided in the Plan. Fair market value for
other companies shall be determined pursuant to procedures approved by the
Committee.
(b) Percentile Ranking. Percentile Ranking shall equal the
percentile of Springs' TSR for the Performance Cycle within the TSR for the
corresponding period of the companies included in Standard & Poor's 500 stock
index (the "S & P 500") on the last day of the period.
5. Performance Cycle. The period over which Springs' TSR shall be
measured shall begin on the first day of Springs' 1998 fiscal year and shall end
on the last day of its 2000 fiscal year (the "Performance Cycle"). The period
over which TSR for the S & P 500 is measured shall correspond as closely as
reasonably practicable to the Performance Cycle.
6. Distribution. The Performance Units actually earned by Participant
for the Performance Cycle (as determined in accordance with Section 3) shall
become vested and settled as follows:
(a) Subject to ss.8 and subsections (b) and (c) of this ss.6 and
except as otherwise provided above in ss.2(c), one-half of the Performance Units
earned by Participant shall be credited as Deferred Stock, with each such
Performance Unit credited as one share of Deferred Stock.
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(b) Subject to ss.8 and subsection (c)(i) of this ss.6, the
remaining one-half of the Performance Units earned (or all of the Performance
Units earned, if the total value of all Performance Units earned by all
Participants, based on the Fair Market Value of the Common Stock on the last day
of the Performance Cycle, is less than $500,000) shall be paid in cash, with the
amount of such cash payment equal to the number of such Performance Units
multiplied by the greater of (i) the Fair Market Value of the Common Stock on
the first day of the Performance Cycle or (ii) Fair Market Value of the Common
Stock on the last day of the Performance Cycle. All cash amounts shall be paid
as soon as practicable after the Determination Date as defined in Section 7.
(c) (i) Notwithstanding any other provision of the Plan to the
contrary, in the event a Participant engages in competition with
Springs or any of its subsidiaries prior to the end of the Performance
Cycle, then the entire Award shall be forfeited.
(ii) Notwithstanding any other provision of the Plan to the
contrary, the portion of an Award credited pursuant to ss.6(a) as
Deferred Stock shall not become vested and earned until the second
anniversary of the last day of the Performance Cycle. (The two-year
period beginning on the last day of the Performance Cycle is referred
to as the "Restricted Period.") If prior to the end of the Restricted
Period the Participant engages in competition with Springs or any of
its subsidiaries, then the Deferred Stock shall be forfeited;
otherwise, all restrictions on the Deferred Stock shall lapse on the
day following the last day of the Restricted Period, except that in the
event of the Participant's death during the Restricted Period, all
restrictions on the Deferred Stock shall immediately lapse. Upon lapse
of restrictions on the Deferred Stock, the Participant shall receive a
distribution of shares of Common Stock equal to the number of shares of
Deferred Stock credited hereunder as soon as practicable; provided,
however, if the Participant has elected to have the stock portion of
the Award deferred as Deferred Stock under the Plan pursuant to ss.8,
then the Deferred Stock shall be distributed as provided in ss.8(c).
(d) The Committee shall have the sole discretion to determine
whether a Participant is competing with Springs or its subsidiaries pursuant to
rules and procedures that may be adopted by the Committee from time to time.
Upon termination of employment of a Participant, the Participant may make
written request to the Committee for a determination whether prospective
employment by the Participant would be considered competition with Springs or
its subsidiaries. The Committee shall make a determination and respond in
writing to the Participant regarding the request as soon as practicable after
receipt of the Participant's written request for a determination. The
Committee's decision shall be final and binding.
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(e) During the Restricted Period, cash payments shall be made to the
Participant with respect to the Deferred Stock in an amount equal to the
dividends payable by Springs on an equivalent number of shares of Common Stock;
provided, however, if the Participant has elected to defer the stock portion of
an Award, then credits shall be made to the Participant's dividend account
established pursuant to ss.8.
(f) A Participant may file a written designation of beneficiary with
Springs' chief human resources officer to receive an Award payable hereunder in
case of the Participant's death. If no beneficiary is designated, any payment on
behalf of a deceased Participant shall be made to the Participant's estate.
7. Determination of Awards. The determination of Percentile Ranking of
Springs TSR for the Performance Cycle shall be made by the Committee as soon as
practicable following public announcement by Springs of the financial results of
its operations for the fiscal year ending on the last day of the Performance
Cycle. The date of such determination is the "Determination Date." The
determination of the Committee shall be final and conclusive.
8. (a) Deferral of Awards. Participant may elect to defer all or any
portion of an Award in increments of 25%, 50%, 75% or 100% of either or both of
the cash and stock portions of an Award. The cash portion of the Award earned by
Participant may be deferred under the Springs Deferred Compensation Plan or any
successor plan. The portion of the Award earned by Participant which is credited
as Deferred Stock during the Restricted Period may be deferred, following
completion of the Restricted Period, as Deferred Stock under the Plan. Any
election to defer all or any portion of an Award must be made in writing and
must be submitted to Springs's chief human resources officer no later than sixty
(60) days after the date of this Agreement.
(b) Dividend Account. Springs will establish a dividend account in
respect of the stock portion of Participant's Award that is deferred as Deferred
Stock under this ss.8. The dividend account will be credited with dividend
equivalents and interest in accordance with the following procedures:
(i) As of the payment date for each dividend paid on the Common
Stock with a record date occurring after the date of crediting Deferred
Stock under this ss.8 and prior to the final distribution from the
Participant's dividend account, there shall be credited to
Participant's dividend account an amount determined by multiplying the
amount of the cash dividend per share of Common Stock declared for such
dividend record date by the number of shares of Deferred Stock credited
to Participant and which have not been distributed to Participant as of
the record date. Amounts equivalent to dividends which are credited to
Participant's dividend account hereunder shall be distributed as
provided in paragraph (c) below.
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(ii) At the end of each calendar quarter subsequent to the quarter
in which the first credit is made to Participant's dividend account
pursuant to subparagraph (i) above, there shall further be credited to
the dividend account an additional amount determined by multiplying the
credit balance in the dividend account as of the beginning of such
quarter [reduced by distributions, if any, from such account during such
quarter] by the prime rate of interest per annum, as defined below, in
effect on the 15th day of the last month of such quarter. The prime rate
of interest to be credited as aforesaid shall be the prime rate
announced by Wachovia Bank of North Carolina, N.A., or any successor or
in the absence of such public announcement, the prime rate quoted in The
Wall Street Journal's money rates column.
(c) Distributions of Deferred Awards. Distribution of the cash portion
of an Award which is deferred shall be paid in accordance with the provision of
the Springs Deferred Compensation Plan. Distributions of Deferred Stock which
are deferred pursuant to this ss.8 and amounts credited to the Participant's
related dividend account shall be made upon termination of Participant's
full-time, active employment with Springs and its subsidiaries in three annual
installments, commencing in the month next following the first anniversary of
Participant's termination of employment with Springs and its subsidiaries. The
three installments distributions shall be as follows:
(i) the first installment shall be one-third of the amount of
Deferred Stock and one-third of the amount in the Participant's dividend
account and shall be distributed on the first anniversary of the
Participant's termination of employment;
(ii) the second installment shall be one-third of the Deferred
Stock and one-half of the amount in the Participant's dividend account
and shall be distributed on the first anniversary date of the first
distribution; and
(iii) the third installment shall be one-third of the Deferred Stock
and the amount remaining in the Participant's dividend account and shall
be distributed on the second anniversary date of the first distribution;
provided, however, if Participant's termination of employment shall occur
because of Participant's death, then distribution of Participant's Deferred
Stock and dividend account shall be made in one distribution on the January 31st
following the date of Participant's death or as soon as practicable thereafter.
9. Withholding. Whenever Participant is entitled to a distribution of
Common Stock, Springs may require Participant to remit to Springs an amount
sufficient to satisfy any federal, state and local withholding tax requirements.
Cash distributions shall be net of an amount sufficient to satisfy any federal,
state and local withholding tax
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requirements. Participant may elect with respect to a distribution of Common
Stock to surrender or authorize Springs to withhold shares of Common Stock
(valued at Fair Market Value on the date of surrender or withholding of the
Common Stock) in satisfaction of such withholding requirements in accordance
with the terms and conditions of the Plan.
10. Subject to Plan. This Agreement, Participant's Award hereunder, and
Participant's rights to receive distributions of Common Stock, Deferred Stock,
and cash are subject to the terms and conditions of the Plan.
11. Transferability. This Award is not transferable or assignable by
Participant except by will or pursuant to the laws of descent and distribution
and may not be pledged or otherwise encumbered. Rights in connection with this
Award may be exercised during Participant's lifetime only by Participant or by
Participant's legal representative or guardian.
12. Rights as a Shareholder. Participant shall have no rights as a
shareholder with respect to any shares of Common Stock distributable in
connection with an earned Award until the date of issuance of a certificate to
Participant for such shares.
13. Restrictions on Issuance of Shares. Springs shall not be obligated
to issue any Common Stock pursuant to this Agreement if such issuance would
result in the violation of any laws, including the Securities Act of 1933 (the
"Act") or any applicable state securities laws (the "State Acts"). As provided
in the Plan, in the event that the offering of shares with respect to the Award
is not registered under the Act or the State Acts, but exemption is available
which requires an investment representation or other representation, Participant
shall, as a condition to receipt of Common Stock, be required to execute such
documents as may be necessary in the opinion of counsel for Springs to comply
with the Act and the State Acts. The stock certificate evidencing such
unregistered shares acquired upon receipt of the Award shall bear a restrictive
legend in substantially the following form and such other restrictive legends as
are required or advisable under the provision of any applicable laws:
This stock certificate and the shares represented hereby have not
been registered under the Securities Act of 1933, as amended (the
"Act"), nor under any state securities laws and shall not be
transferred at any time in the absence of (i) an effective
registration statement under the Act and applicable state securities
laws with respect to such shares at such time or (ii) an opinion of
counsel satisfactory to the Company and its counsel, to the effect
that such transfer at such time will not violate the Act or any
applicable state securities law.
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14. No Employment Rights. This Agreement shall not confer upon
Participant any right with respect to continued employment by Springs or any
Subsidiary or affect the right of Springs or any Subsidiary to terminate such
employment at any time.
15. Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of South Carolina.
16. Notices. All notices and other communications under this Agreement
shall be in writing, and shall be deemed to have been duly given on the date of
delivery if delivered personally or when received if mailed to the party to whom
notice is to be given, by certified mail, return receipt required, postage
prepaid, to the following address, or any other address specified by notice duly
given:
To Participant at:
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To Springs at:
Springs Industries, Inc.
205 North White Street
Fort Mill, South Carolina 29715
Attention: Corporate Secretary
Executed and delivered this _____ day of ________, 19__.
SPRINGS INDUSTRIES, INC.
By:
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Title:
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PARTICIPANT:
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(Name)