AMENDMENT TO
SPLIT DOLLAR INSURANCE AGREEMENT
AMENDMENT NO. 1, dated as of December ___, 1999, to the Split Dollar
Insurance Agreement dated , 1993, between QUAKER FABRIC CORPORATION OF FALL
RIVER, a corporation duly organized and existing under the laws of Massachusetts
(the "Corporation"), and _____________ (the "Employee").
W I T N E S S E T H:
WHEREAS, the Corporation and the Employee entered into a Split Dollar
Insurance Agreement (the "Agreement") to assist the Employee in providing
protection for the beneficiaries of his choice in the event of the Employee's
death;
WHEREAS, the Corporation has applied for, and is the owner of, New England
Variable Life Insurance Company insurance policy no. ________ with a guaranteed
minimum death benefit of $___________ (the "Policy"), which policy insures the
life of the Employee;
WHEREAS, the Corporation has assigned its entire interest in the Policy to
the Quaker Fabric Corporation Deferred Compensation Trust (the "Trust") pursuant
to the Trust Agreement by and between the Company and State Street Bank and
Trust Company, as Trustee (the "Trust Agreement") under the Quaker Fabric
Corporation Deferred Compensation Plan (the "Deferred Compensation Plan"), for
the purpose of accumulating the amounts needed to pay benefits under the
Deferred Compensation Plan; and
WHEREAS, the parties wish to amend certain of the terms of the Agreement
as set forth in this Amendment.
NOW, THEREFORE, the Company, the Trust and the Employee agree as follows:
1. The last sentence of Section 1.2 of the Agreement is hereby amended to
read as follows:
"If the Employee terminates employment with the Corporation for any
reason other than death or Disability (as defined herein), the Trust
shall then automatically and immediately become the sole beneficiary
of the Policy."
2. Section 1.2 of the Agreement is hereby further amended by adding the
following language to the end thereof:
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" 'Disability' shall mean the Employee's disability pursuant to the
Corporation's Long-term Disability Plan (the "LTD Plan"), provided
that the Employee is eligible for, and receiving benefits under, the
LTD Plan."
3. Section 1.3 of the Agreement is hereby amended in its entirety to read
as follows:
"The Trust shall be the beneficiary of the Policy in an amount equal
to the Policy's aggregate net cash surrender value, as calculated
immediately prior to the Employee's death, with respect to any death
benefit payable under Article III hereof; and an amount equal to the
aggregate death benefit of the Policy less the aggregate net cash
surrender value paid to the Trust (the "Excess Death Benefit") shall
be paid directly to the beneficiary(ies) designated by the
Employee."
4. Section 3.1 of the Agreement is hereby amended in its entirety to read
as follows:
"In the event of the Employee's death while he is either employed by
the Corporation or Disabled, the Trust shall be the beneficiary of
the Policy in an amount equal to the Policy's aggregate net cash
surrender value, as calculated immediately prior to the Employee's
death; and an amount equal to the Excess Death Benefit (as defined
in Section 1.3) shall be paid directly to the beneficiary(ies)
designated by the Employee. In the event of the death of the
Employee before he designates a beneficiary or if all named
beneficiaries are deceased, such Excess Death Benefit shall be paid
directly to the Employee's estate."
5. Section 5.1 of the Agreement is hereby amended by adding the following
sentence to the end thereof:
"In the event of a Change in Control (as defined in Exhibit A), this
Agreement shall remain in full force and effect and shall not be
extinguished until all obligations to the Employee under the
Deferred Compensation Plan are fully satisfied in accordance with
the provisions thereunder; and this Agreement shall inure to the
benefit of, and be enforceable by, the Employee's personal or legal
representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees."
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the day and year first written above.
QUAKER FABRIC CORPORATION
By: __________________________________
Name: ________________________________
Title: _______________________________
STATE STREET BANK AND
TRUST COMPANY
By: __________________________________
Name: ________________________________
Title: _______________________________
Employee: ____________________________
Address: _____________________________
______________________________________
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EXHIBIT A
A "Change in Control" shall mean the occurrence of any of the
following:
(i) any person (as defined in Section 3(a)(9) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and as used in Sections
13(d) and 14(d) thereof), excluding the Company, any subsidiary of the Company,
any employee benefit plan sponsored or maintained by the Company or its
subsidiaries (including any trustee of any such plan acting in his capacity as
trustee), and Nortex Holdings, Inc, Xxxxx X. Xxxxxxxx (or his estate,
beneficiaries or heirs) and any Affiliate (as such term is defined in Rule 12b-2
of the Exchange Act) of Xxxxx X. Xxxxxxxx, becoming the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act) of securities of the Company
representing twenty-five percent (25%) of the total combined voting power of the
Company's then outstanding securities;
(ii) the merger, consolidation or other business combination of the
Company (a "Transaction"), other than a Transaction involving only the Company
and one or more of its subsidiaries, or a Transaction immediately following
which the stockholders of the Company immediately prior to the Transaction
continue to have a majority of the voting power in the resulting entity and no
person other than Nortex Holdings, Inc., Xxxxx X. Xxxxxxxx (or his estate,
beneficiaries or heirs) or any Affiliate of Xxxxx X. Xxxxxxxx is the beneficial
owner of securities of the resulting entity representing more than twenty-five
percent (25%) of the voting power in the resulting entity;
(iii) during any period of two (2) consecutive years beginning on or
after the date hereof, the persons who were members of the Board immediately
before the beginning of such period (the "Incumbent Directors") ceasing (for any
reason other than death) to constitute at least a majority of the Board or the
board of directors of any successor to the Company, provided that, any director
who was not a director as of the date hereof shall be deemed to be an Incumbent
Director if such director was elected to the board of directors by, or on the
recommendation of or with the approval of, at least a majority of the directors
who then qualified as Incumbent Directors either actually or by prior operation
of the foregoing unless such election, recommendation or approval occurs as a
result of an actual or threatened election contest (as such terms are used in
Rule 14a-11 of Regulation 14A promulgated under the Exchange Act or any
successor provision) or other actual or threatened solicitation of proxies or
contests by or on behalf of a person other than a member of the Board; or
(iv) the approval by the stockholders of the Company of an agreement
for the sale of all or substantially all of the Company's assets other than the
sale of all or substantially all of the assets of the Company to Nortex
Holdings, Inc., or Xxxxx Xxxxxxxx (or his estate, beneficiaries or heirs) or to
a person or persons who beneficially own, directly or indirectly, at least fifty
percent (50%) or more of the combined voting power of the outstanding voting
securities of the Company or Nortex Holdings, Inc. at the time of such sale.
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