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EXHIBIT 10.20
DYERSBURG CORPORATION
DEFERRED COMPENSATION PLAN
WHEREAS, DYERSBURG CORPORATION desires to establish a deferred
compensation plan for the purpose of providing a select group of management
employees of the Company and affiliates of the Company with retirement benefits
they would be eligible to receive under the Profit Sharing Plan but for the
limit on compensation that may be taken into account under section 401(a)(17) of
the Code, as well as the ability to defer a portion of their compensation; and
WHEREAS, it is the intention of the Company that the Plan be unfunded
for tax purposes and for purposes of Title I of ERISA;
NOW THEREFORE, the Company hereby establishes and adopts the "Dyersburg
Corporation Deferred Compensation Plan" upon the following terms and conditions.
ARTICLE 1
DEFINITIONS
When used herein, the words and phrases defined hereinafter shall have
the following meaning unless a different meaning is clearly required by the
context of the Plan.
Section 1.1. Account shall mean the individual bookkeeping account
established and maintained for each Participant, including both the SERP Account
and the Deferral Account as provided herein.
Section 1.2. Benefits Committee or Committee shall mean the person or
persons designated by the Company to administer the Plan in accordance with the
terms set forth herein.
Section 1.3. Code shall mean the Internal Revenue Code of 1986, as
amended, or as it may be amended from time to time.
Section 1.4. Company shall mean Dyersburg Corporation, or any successor
thereto. In addition, where appropriate, the term Company shall include any
Participating Company which shall adopt this Plan.
Section 1.5. Company Allocation shall mean the amount, if any,
allocated to each Participant's SERP Account each Plan Year pursuant to Section
3.1.
Section 1.6. Compensation shall mean the total wages and salary,
including overtime payments, incentive payments, bonuses, and other monetary
remuneration, if any, which is paid by the Company to a Participant during a
Plan Year. Compensation shall exclude any Company Allocations under this Plan,
any amounts contributed by the Company under any other employee benefit plan,
and any payments by the Company for group insurance, hospitalization insurance,
travel allowances, moving expenses, or like benefits, but shall include amounts
contributed by a
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Participant under this or any other employee benefit plan. Compensation shall
also exclude (a) amounts realized from the exercise of a non-qualified stock
option, or when restricted stock (or property) held by a Participant either
becomes freely transferable or is no longer subject to a substantial risk of
forfeiture; and (b) amount realized from the sale, exchange or other disposition
of stock acquired under a qualified stock option.
Section 1.7. Contribution Percentage shall mean, for each Plan Year,
the percentage equal to the percentage of compensation contributed by the
Company to the Profit Sharing Plan of which the Participant is a participant.
The percentage of compensation contributed is determined by dividing the amount
contributed by the Company to the Profit Sharing Plan by the aggregated
compensation, as defined under that plan, of all participants eligible to
receive an allocation under that plan for the Plan Year. The Contribution
Percentage of any Participant who is not eligible to receive an allocation under
the Profit Sharing Plan shall be zero.
Section 1.8. Deferral Account means the bookkeeping account established
and maintained for each Participant to which Deferred Amounts and any interest
thereon are credited.
Section 1.9. Deferred Amount means the amount withheld from a
Participant's Compensation pursuant to a deferral agreement described in Section
2.2.
Section 1.10. Disability shall mean any physical or mental condition
which renders the Participant incapable of performing properly and
satisfactorily the work for which he was employed, as evidenced by receipt of a
Social Security Award Certificate for Disability Benefits, or such other
determination of disability as the Committee shall deem appropriate under such
uniformly applied procedures as it may adopt.
Section 1.11. ERISA shall mean the Employee Retirement Income Security
Act of 1974.
Section 1.12. Excess Compensation means the amount of a Participant's
Compensation for a Plan Year that exceeds the Statutory Compensation Limit for
the Plan Year.
Section 1.13. Hour of Service means each hour for which a Participant
is directly or indirectly paid, or entitled to payment, by the Company for the
performance of duties. Hours of Service shall also include hours that would have
been earned but for an absence due to service in the Armed Forces of the United
States, provided that the Participant returns to employment with the Company
within the period during which his right to reemployment is protected by law.
Hours of Service shall also include hours for which a Participant is absent on
vacation, regular holidays, or temporary illness. In computing Hours of Service
on a weekly
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basis, or when a record of Hours of Service is not available, the Participant
shall be credited with 45 Hours of Service for each week in which a Participant
is paid or entitled to payment for at least one Hour of Service, regardless of
whether the Participant has actually worked fewer hours.
Section 1.14. Normal Retirement Date means the date a Participant
reaches age 60.
Section 1.15. Participant shall mean an employee of the Company who has
become a Participant of the Plan as provided in Article 2, and shall include any
former Participant until his Account shall have been fully distributed.
Section 1.16. Participating Company shall mean any affiliate of Company
adopting this Plan and all provisions hereof.
Section 1.17. Plan shall mean the "Dyersburg Corporation Deferred
Compensation Plan" as set forth herein or any amendments hereto.
Section 1.18. Plan Year shall mean the fiscal year of the Company. This
is a 52-53 week fiscal year ending on the Saturday nearest to September 30. For
example, October 3, 1998, October 2, 1999.
Section 1.19. Profit Sharing Plan means the Dyersburg Fabrics Limited
Partnership I Profit Sharing Plan for Participants who are participants
thereunder and United Knitting Limited Partnership I Profit Sharing and 401(k)
Plan for Participants who are participants thereunder.
Section 1.20. SERP Account means the bookkeeping account established
and maintained for each Participant to which Company Allocations and any
interest thereon are credited.
Section 1.21. Statutory Compensation Limit means the dollar limit on
the amount of compensation that may be considered for a Plan Year in determining
a Participant's benefit under a defined benefit plan or a defined contribution
plan that is qualified under section 401(a) of the Code, as set forth in section
401(a)(17) of the Code and as adjusted by the Secretary of the Treasury for
changes in the cost of living.
Section 1.22. Year of Service means each 12 consecutive month period of
employment with the Company beginning on the date a Participant first works an
Hour of Service for the Company in which the Participant receives credit for at
least 1,000 Hours of Service. Years of Service with any affiliated company shall
be recognized.
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ARTICLE 2
PARTICIPATION
Section 2.1. Requirements for Participation. The only employees
eligible to become Participants in the Plan are employees of the Company who are
also (a) officers of the Company, or (b) officers of IQUE, Inc., or (c) in the
case of a Participating Company which is a limited partnership, officers of the
general partner of the limited partnership.
Section 2.2. Deferral Elections. A Participant may contribute Deferred
Amounts by filing a written election in the form designated by the Committee. A
Participant's election shall authorize the Company to withhold a fixed amount of
the Participant's Compensation, as specified in Section 3.2.1, to be allocated
to the Participant's Deferral Account for the Plan Year. When making the
election to defer Compensation, the Participant shall also elect whether future
payment of the Deferred Amount shall be in the form of a lump sum distribution
or in installment payments.
ARTICLE 3
ACCOUNTS OF PARTICIPANTS
Section 3.1 SERP Allocations.
3.1.1. Eligibility. For each Plan Year that a Participant receives
credit for a Year of Service, the Company shall allocate to the SERP Account
established for such Participant the amount, if any, determined in Section
3.1.2, provided that the Participant is employed by the Company on the last day
of the Plan Year; provided, further the Participant is eligible to receive an
allocation under the Profit Sharing Plan for the Plan Year. Company Allocations
shall be made as of the last day of the Plan Year to which they relate. No
Company Allocation shall be made to the SERP Account of any Participant who is
not a participant under the Dyersburg Fabrics Limited Partnership I Profit
Sharing Plan or the United Knitting Limited Partnership I Profit Sharing and
401(k) Plan.
3.1.2. Determination of Amount. The amount, if any, allocated to an
eligible Participant's SERP Account under Section 3.1.1 for each Plan Year shall
be equal to the percentage of the Participant's Excess Compensation for the Plan
Year that is equal to the Contribution Percentage for that Plan Year. In the
event a Participant is not eligible to receive an allocation under the Profit
Sharing Plan for the Plan Year, the Participant's Contribution Percentage shall
be zero and no amount shall be allocated to the Participant's SERP Account for
that Plan Year.
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Section 3.2 Deferred Amounts.
3.2.1. Elections to Defer Compensation. Each Participant may elect to
have his Compensation for a Plan Year reduced by a fixed amount and credited to
his Deferral Account.
3.2.2. Time for Election. A Participant's election will not be
effective unless made on or before June 30 of the Plan Year before the Plan Year
in which the Compensation (other than the amount of Compensation that
constitutes a Participant's bonus) will be earned. Any election with regard to
the portion of a Participant's Compensation that constitutes his bonus must be
made on or before June 30 of the Plan Year for which the Participant's bonus is
payable and before the amount of the Participant's bonus for the Plan Year can
reasonably be determined.
3.2.3. Irrevocability; Termination. A Participant's election may not be
amended or revoked during a Plan Year. A Participant's election will not
continue in effect beyond the last day of the Plan Year for which it is made,
except to the extent that it relates to amounts earned in that Plan Year that
are payable in a following Plan Year.
Section 3.3. Interest on Account. The balance of a Participant's
Account as of the end of a calendar quarter shall be credited with interest at a
rate equal to the average rate paid during the preceding quarter on the
outstanding revolving debt portion of the Company's bank credit facility,
including any derivative products. For example, the rate of interest for the
quarter ending December 31 shall be the average of interest rates during the
prior quarter ending September 30. Interest shall be allocated quarterly.
ARTICLE 4
VESTING
Section 4.1. Vesting Based on Years of Service. A Participant is always
100% vested in his Deferral Account. A Participant's interest in his SERP
Account shall become vested in accordance with the following schedule.
Years of Service Vested Percentage
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Less than 2 0%
2 20%
3 40%
4 60%
5 80%
6 or more 100%
Section 4.2. Vesting Based on Other Factors. A Participant's interest
in his SERP Account shall in any case become 100% vested
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if, while employed by the Company, he reaches his Normal Retirement Date, incurs
a Disability, or dies.
Section 4.3. Forfeiture. If a Participant's employment is terminated
before the Participant completes six Years of Service, or reaches his Normal
Retirement Date, incurs a Disability, or dies, the Participant shall forfeit the
portion of the Participant's SERP Account that is not vested.
ARTICLE 5
DURATION OF DEFERRAL OF DEFERRED AMOUNT
Except as provided in Article 6, payment of the Deferred Amount shall
be deferred for a period of two Plan Years, commencing on the first day of the
Plan Year. For example, an election to defer a portion of a Participant's 1998
year end bonus and a portion of a Participant's 1998-1999 salary, shall be
deferred until the last day of the Plan Year in 2000 (October 2, 2000). Payment
will be made in the form of a lump sum distribution, or, if initially elected by
the Participant, in installment payments. However, a Participant may elect to
defer payment of the Deferred Amount for one or more successive two Plan Year
periods by making an election to do so on or before June 30 of the Plan Year
immediately preceding the expiration of the deferral period then in effect.
ARTICLE 6
BENEFITS PAYABLE ON RETIREMENT, DEATH,
DISABILITY OR TERMINATION
Section 6.1. Retirement Benefits. Upon retirement on or after the
Participant reaches his Normal Retirement Date, a Participant shall be entitled
to receive the entire amount credited to his Account. Payment of the Account
shall be made in the form of a single cash lump sum distribution as soon as
administratively practicable following the Participant's termination of
employment; provided, however, payment of the Deferral Account will be in the
form of installment payments if initially elected by the Participant.
Section 6.2. Death Benefits. As soon as administratively practicable
following a Participant's death, the Participant's beneficiary shall be paid a
single cash lump sum distribution equal to the entire amount credited to the
Participant's Account.
Section 6.3. Disability Benefits. Upon the Administrator's
determination that a Participant has suffered a Disability, the Participant
shall be entitled to receive the entire amount credited to his Account. Payment
of the Account shall be made in the form of a single cash lump sum distribution
as soon as administratively practicable following such determination; provided,
however,
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payment of the Deferral Account will be in the form of installment payments if
initially elected by the Participant.
Section 6.4. Vested Terminated Participants. A Participant who
terminates employment with the Company before his Normal Retirement Date shall
be entitled to receive the amount equal to the Participant's vested interest in
his Account. Payment of the vested portion of the Account shall be made in the
form of a single cash lump sum distribution as soon as administratively
practicable following his termination of employment; provided, however, payment
of the Deferral Account will be in the form of installment payments if initially
elected by the Participant.
ARTICLE 7
BENEFICIARY DESIGNATION
Section 7.1. Designation of Beneficiary. A Participant at the time he
joins the Plan shall designate a beneficiary or beneficiaries to receive the
sums credited to his Account in the event of his death, which designation may be
changed by the Participant from time to time. To be effective, the original
designation of beneficiaries and any subsequent change must be in writing on the
form provided for that purpose by the Committee. Further, the beneficiary
designation of a married Participant shall be ineffective unless (a) the
designation names the spouse as the sole recipient of benefits or (b) the spouse
executes such documents as the Committee may require to waive spousal rights and
consent to the designation of some third party as the beneficiary.
Section 7.2. Failure to Designate Beneficiary. In the event that no
beneficiary is properly designated or in the event that a beneficiary designated
by the Participant predeceases the Participant and no new designation of
beneficiary is made, the Committee shall direct payment of all sums to which the
deceased Participant is entitled to the Participant's spouse, if known and
living; if not, to the legal representative of the estate of the deceased
Participant.
ARTICLE 8
BENEFITS COMMITTEE
Section 8.1. Benefits Committee. The Benefits Committee shall serve
without compensation and perform the following functions in the administration
of the Plan:
(a) Maintain a file on all elections made by a Participant to
defer Compensation;
(b) Conduct its business and hold meetings as determined by it
from time to time. A majority of the Committee shall have the power to
act, and the concurrence of any member may be by telephone, wire,
cablegram or letter;
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(c) Interpret the Plan to determine the status of any Employee
for eligibility to participate in the Plan or receive benefits
therefrom;
(d) Maintain a record of all its proceedings, which shall be
open to inspection by the Participants and the Company;
(e) Adopt such rules and regulations as in the opinion of the
Committee are necessary or advisable to implement the Plan and transact
its business;
(f) Administer the claims procedure;
(g) Provide each Participant with an informal statement every
six months indicating the balance of his Account, including accumulated
interest to date, and the interest rate to be used for the following
six-month period.
(h) Direct the Company to make payments to Participants and
beneficiaries according to the provisions of the Plan; and
(i) Perform such other functions as directed by the Company.
Section 8.2. Claims Procedure.
Section 8.2.1. Initial Determination. Upon presentation to the
Committee of a claim for benefits under the Plan, the Committee shall make a
determination of the validity thereof. If the determination is adverse to the
claimant, the Committee shall furnish to the claimant within 90 days after the
receipt of the claim a written notice setting forth the following:
a) the specific reason or reasons for the denial;
b) specific references to pertinent provisions of the Plan on
which the denial is based;
c) a description of any additional material or information
necessary for the claimant to perfect the claim and an
explanation of why such material or information is necessary;
and
d) appropriate information as to the steps to be taken if the
claimant wishes to submit his or her claim for review.
Section 8.2.2. Appeal Procedure. In the event of a denial of a claim,
the claimant or his or her duly authorized representative may appeal such denial
to the Committee for a full and fair review of the adverse determination. The
claimant's request for review must be in writing and made to the Committee
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within 60 days after receipt by claimant of the written notification described
in Section 8.2.1; provided, however, that such sixty-day period shall be
extended if circumstances so warrant. The claimant or his or her duly authorized
representative may submit issues and comments in writing which shall be given
full consideration by the Committee in its review. The Committee may, in its
sole discretion, conduct a hearing. A request for a hearing made by the claimant
will be given full consideration. At such hearing, the claimant shall be
entitled to appear and present evidence and be represented by counsel.
Section 8.2.3. Decision on Appeal. A decision on a request for review
shall be made by the Committee not later than 60 days after receipt of the
request; provided, however, in the event of a hearing or other special
circumstances, such decision shall be made not later than 120 days after receipt
of such request. If it is necessary to extend the period of time for making a
decision beyond 60 days after the receipt of the request, the claimant shall be
notified in writing of the extension of time prior to the beginning of such
extension. The Committee's decision on review shall state in writing the
specific reasons and references to the Plan provisions on which it is based.
Such decision shall be promptly provided to the claimant.
ARTICLE 9
MISCELLANEOUS
Section 9.1. Funding. The Company may establish a grantor trust for the
purpose of funding Account balances. The trust shall conform to the terms of the
model trust agreement set forth in Internal Revenue Service Revenue Procedure
92-64. Notwithstanding the establishment of such trust, it is the intention of
the Company and the Participants that the Plan shall be unfunded for tax
purposes and for purposes of Title I of ERISA. The Plan constitutes a mere
promise by the Company to pay benefits in the future. To the extent that any
Participant or any other person acquires a right to receive benefits under this
Plan, such right shall be no greater than the right of any unsecured general
creditor of the Company. Any assets of the trust remaining after all obligations
hereunder with respect to the Participants have been satisfied shall be paid to
the Company.
Section 9.2. Spendthrift Provisions. No interest of a Participant or
any other person or entity in, or right to receive a benefit under, the Plan
shall be subject in any manner to sale, transfer, assignment, pledge,
attachment, garnishment, or other alienation or encumbrance of any kind; nor may
such interest or right to receive a benefit be taken, either voluntarily or
involuntarily, for the satisfaction of the debts of, or other obligations or
claims for alimony, support, separate maintenance and claims in bankruptcy
proceedings.
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Section 9.3. Right to Amend or Terminate the Plan. It is the intention
of the Company to continue the Plan indefinitely. The Company reserves the right
to terminate the Plan at any time should the Company determine that business,
financial or other good causes make it necessary or desirable to do so, or to
amend the Plan at any time and in any respect; provided, however, no amendment
shall divest a Participant or his beneficiaries of the amounts credited to the
Participant's Account.
Section 9.4. Reservation of Rights by the Company. Nothing contained in
the Plan shall be deemed to give any Participant the right to be retained in the
service of the Company or to interfere with the right of the Company to
discharge any Participant at any time regardless of the effect which such
discharge shall have upon him as a Participant in the Plan.
Section 9.5. Headings. The headings are for reference only. In the
event of a conflict between a heading and the content of a Section, the content
of the section shall control.
Section 9.6. Incapacity of Recipient. If the Participant or any other
person entitled to a benefit payment under the Plan is deemed by the Committee
to be incapable of personally receiving and giving a valid receipt for such
payment, then unless and until claim therefor shall have been made by a duly
appointed guardian or other legal representative of such person, the Company may
provide for such payment or any part thereof to be made to any other person or
institution then contributing toward, or providing for the care and maintenance
of, such person. Any such payment shall be for the account of such person and a
complete discharge of any liability of the Company and the Plan therefor.
Section 9.7. Number and Gender. The masculine pronoun used shall
include the feminine pronoun and the singular number shall include the plural
number unless the context of the Plan requires otherwise.
Section 9.8. Taxes. Any taxes imposed upon a Participant shall be the
sole responsibility of the Participant. The Company shall have the right to
deduct from the Participant's Compensation or any payment made pursuant to this
Plan any federal, state, local or other taxes required to be deducted or
withheld from such compensation or payment, as the Committee may determine in
its sole discretion.
Section 9.9. Adoption by Others: Any affiliate of the Company may adopt
this Plan and thereby become a Participating Company; provided, however, that
the Board of Directors of the Company approves such adoption; and provided,
further, that the administrative powers and control of the Company as provided
herein shall not be diminished under the Plan by any other Participating
Company, and such administrative powers and control granted in
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Article 8 hereof to the Company with respect to the appointment of the Committee
and other matters shall apply only with respect to the Company and not to any
other Participating Company. Each Participating Company shall be responsible for
contributions on behalf of its own employees, and no other company shall have
such responsibility.
Section 9.10. Effect on Deferred Compensation Plans of Affiliates. This
Plan, upon its adoption by Dyersburg Fabrics Limited Partnership I and United
Knitting Limited Partnership I, shall amend and supersede the Dyersburg Fabrics
Inc. Deferred Compensation Plan dated September 3, 1993, and the United Knitting
Limited Partnership I Deferred Compensation Plan dated September 18, 1996. The
entire amount previously credited to the account of a participant under either
of these plans (including, but not limited to, any amounts previously credited
as a result of the limitations imposed under section 401(a)(17) of the Code) as
of the date of the adoption of this Plan, shall become part of the Participant's
Deferral Account under this Plan.
Approved as of the 1st day of June, 1998.
COMPANY:
DYERSBURG CORPORATION
By: /s/ T. Eugene McBride
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Its: Chairman and CEO
PARTICIPATING COMPANY:
DYERSBURG FABRICS INC.
By: /s/ W.S. Shropshire, Jr.
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Its: Executive Vice President
DYERSBURG FABRICS LIMITED PARTNERSHIP, I
By: /s/ W.S. Shropshire, Jr.
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Dyersburg Fabrics Inc., General Partner
UNITED KNITTING LIMITED PARTNERSHIP, I
By: /s/ W.S. Shropshire, Jr.
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United Knitting Inc., General Partner
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ALAMAC KNIT FABRICS, INC.
By: /s/ W.S. Shropshire, Jr.
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Its: Executive Vice President
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FIRST AMENDMENT TO THE DYERSBURG CORPORATION
DEFERRED COMPENSATION PLAN
WHEREAS, Dyersburg Corporation, established the Dyersburg Corporation
Deferred Compensation Plan (the "Plan") on June 1, 1998; and
WHEREAS, Dyersburg Corporation reserved the right to amend the Plan at
any time; and
WHEREAS, the Plan shall be amended, as hereinafter set forth, to allow
Company Allocations to be made to the SERP Account of eligible Participants who
elect to defer all or part of their Compensation.
NOW, THEREFORE, the Plan is hereby amended as follows:
1. The existing provisions of Article 1, Section 1.6 are hereby deleted
and the following inserted in place thereof:
Section 1.6. Compensation with respect to any Participant means the
Participant's total wages, salaries, fees for professional services and
other amounts received (without regard to whether or not an amount is
paid in cash) for personal services actually rendered in the course of
employment with the Company to the extent that the amounts are
includible in gross income (including, but not limited to, commissions
paid salesmen, compensation for services on the basis of a percentage
of profits, commissions on insurance premiums, tips, bonuses, fringe
benefits, and reimbursements or other expense allowances under a
nonaccountable plan (as described in Income Tax Regulation 1.62-2(c))
for a Plan Year. For purposes of this Section, Compensation shall
exclude (a) any distributions under this Plan; (b) amounts realized
from the exercise of a non-qualified stock option, or when restricted
stock (or property) held by a Participant either becomes freely
transferable or is no longer subject to a substantial risk of
forfeiture; (c) amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option; and (d)
amounts contributed pursuant to a salary reduction agreement and which
is not includible in the gross income of a Participant under Code
Section 125, 401(e)(3), 402(h), 403(b) or 457(b), and Participant
contributions described in Code Section 414(h)(2) that are treated as
Company contributions.
2. The existing provisions of Article 1, Section 1.12 are hereby
deleted and the following inserted in place thereof:
Section 1.12. Excess Compensation means the amount of a Participant's
compensation, as defined under the Profit Sharing Plan disregarding the
Statutory Compensation Limit, that exceeds the Statutory Compensation
Limit for the Plan Year.
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3. The existing provisions of Article 3, Section 3.1.2 are hereby
deleted and the following inserted in place thereof:
3.1.2. Determination of Amount. The amount, if any, allocated to an
eligible Participant's SERP Account under Section 3.1.1 for each Plan
Year shall be the sum of Participant's Excess Compensation for that
Plan Year plus the Participant's Deferred Amount for that Plan Year
multiplied by the Contribution Percentage for that Plan Year. In the
event a Participant is not eligible to receive an allocation under the
Profit Sharing Plan for the Plan Year, the Participant's Contribution
Percentage shall be zero and no Company Allocation shall be made to the
Participant's SERP Account for that Plan Year.
Approved as of the 4th day of October, 1998.
COMPANY:
DYERSBURG CORPORATION
By: /s/ W.S. Shropshire, Jr.
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Its: Executive Vice President and
Secretary
PARTICIPATING COMPANY:
DYERSBURG FABRICS, INC.
By: /s/ W.S. Shropshire, Jr.
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Its: Executive Vice President & CFO
DYERSBURG FABRICS LIMITED PARTNERSHIP, I
By: /s/ W.S. Shropshire, Jr.
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Dyersburg Fabrics Inc., General Partner
UNITED KNITTING LIMITED PARTNERSHIP, I
By: /s/ W.S. Shropshire, Jr.
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United Knitting Inc., General Partner
ALAMAC KNIT FABRICS, INC.
By: /s/ W.S. Shropshire, Jr.
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Its: Executive Vice President and CFO
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