-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FI/rsKN+kh9EuahX3Aw1Ljn616MSQ1GrHaZ4kX7NKMFO/f6O9nNw/G1b3/6jnXgt bL1IQgpNY5ltYb8qeHMRBw== 0000950144-96-009317.txt : 19961225 0000950144-96-009317.hdr.sgml : 19961225 ACCESSION NUMBER: 0000950144-96-009317 CONFORMED SUBMISSION TYPE: 10-K405 PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 19960928 FILED AS OF DATE: 19961224 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DYERSBURG CORP CENTRAL INDEX KEY: 0000884999 STANDARD INDUSTRIAL CLASSIFICATION: BROADWOVEN FABRIC MILLS, COTTON [2211] IRS NUMBER: 620188460 STATE OF INCORPORATION: TN FISCAL YEAR END: 0928 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: 1934 Act SEC FILE NUMBER: 001-11126 FILM NUMBER: 96685414 BUSINESS ADDRESS: STREET 1: 1315 E PHILLIPS ST STREET 2: P O BOX 767 CITY: DYERSBURG STATE: TN ZIP: 38025-0767 BUSINESS PHONE: 9012852323 MAIL ADDRESS: STREET 1: 1315 PHILLIPS ST STREET 2: P O BOX 767 CITY: DYERSBURG STATE: TN ZIP: 38025-0767 10-K405 1 DYERSBURG CORP. FORM 10-K 1 - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended September 28, 1996 Commission File No. 1-11126 DYERSBURG CORPORATION (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) TENNESSEE 62-1363247 (State or other jurisdiction of (I.R.S employer identification no.) incorporation or organization) 1315 PHILLIPS ST., DYERSBURG, TENNESSEE 38024 (Address of principal executive offices) (Zip Code) (901) 285-2323 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Common Stock, Par Value $.01/Share New York Stock Exchange (Title of each class) (Name of exchange on which registered) Securities registered pursuant to Section 12(g) of the Act: NONE Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO ------ ------ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ X ] As of December 3, 1996, 13,127,508 shares of common stock were outstanding. The aggregate market value of the voting stock held by non-affiliates of the registrant was approximately $73,382,000 based on the closing price of such stock on the New York Stock Exchange (NYSE) on December 3, 1996, assuming, for purposes of this report, that all executive officers and directors of the registrant are affiliates. DOCUMENTS INCORPORATED BY REFERENCE PART III Portions of the Registrant's Proxy Statement for the Annual Meeting of Shareholders to be held on January 22, 1997, are incorporated by reference into Items 10, 11, 12 and 13. 2 DYERSBURG CORPORATION FORM 10-K REPORT TABLE OF CONTENTS
Item No. Page - -------- ---- PART I 1. Business General....................................... 3 Products...................................... 4 Manufacturing/Seasonality..................... 5 Sales and Marketing........................... 6 Research and Development...................... 6 Raw Materials................................. 7 Competition................................... 7 Regulation.................................... 7 Employees..................................... 8 Forward Looking Statements/Risk Factors....... 8 Executive Officers of the Registrant.......... 8 2. Properties......................................... 10 3. Legal Proceedings.................................. 10 4. Submission of Matters to a Vote of Security Holders................................. 11 PART II 5. Market for Registrant's Common Equity and Related Stockholder Matters Market Information........................... 12 Holders...................................... 12 Dividends.................................... 12 6. Selected Financial Data............................ 13 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.... 14 8. Financial Statements and Supplementary Data........ 18 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure........... 35
1 3 PART III 10. Directors and Executive Officers of the Registrant....................................... 35 11. Executive Compensation............................. 35 12. Security Ownership of Certain Beneficial Owners and Management................. 35 13. Certain Relationships and Related Transactions..................................... 35 PART IV 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.......................... 35 Signatures................................................. 36 Index to Exhibits.......................................... 37
2 4 PART I ITEM 1. BUSINESS General Dyersburg Corporation, through its wholly-owned subsidiary Dyersburg Fabrics Inc. ("Fabrics") and the partnership referenced below, is one of the largest manufacturers of knit fleece fabrics sold to the domestic "cut-and-sew" apparel manufacturing industry and also produces jersey fabrics for women's and children's apparel. Dyersburg Corporation acquired United Knitting, Inc. ("UKI") in 1994 adding stretch fabrics and lightweight lining fabrics to its product line. UKI and the partnership referenced below supply fabrics to major brand name producers of bodywear, swimwear, active sportswear and intimate apparel. Fabrics owns all of the outstanding capital stock of Dyersburg Fabrics Investment Corporation ("DFIC"), a Delaware corporation and intermediate investment corporation. DFIC owns a 99% limited partnership interest in Dyersburg Fabrics Limited Partnership ("DFLP"). The remaining 1% partnership interest in DFLP is owned by Fabrics as a general partner (unless otherwise indicated, all references herein to Fabrics include DFIC and DFLP). UKI owns all of the outstanding capital stock of United Knitting Investment Corporation ("UKIC"), a Delaware corporation and intermediate investment corporation. UKIC owns a 99% limited partnership interest in United Knitting Limited Partnership ("UKLP"). The remaining 1% limited partnership interest in UKLP is owned by UKI as a general partner (unless otherwise indicated, all references herein to UKI include UKIC and UKLP). During 1996, Fabrics formed a wholly-owned separate subsidiary, IQUE, Inc. ("IQUE"), to provide full garment sourcing through strategic contractual alliances. IQUE owns all of the outstanding capital stock of IQUE Investment Corporation ("IIC"), a Delaware corporation and intermediate investment corporation. IIC owns a 99% limited partnerhip interest in IQUE Limited Partnership ("ILP"). The remaining 1% partnership interest in ILP is owned by IQUE as a general partner (unless otherwise indicated, all references to IQUE include IIC and ILP). Unless the context otherwise requires, the term "the Company" as used herein refers to Dyersburg Corporation and its subsidiaries. The Company was formed in 1929. Fabrics' manufacturing operation is vertically integrated, beginning with spinning yarn from fiber, combining that yarn with purchased yarns to knit fabric, dyeing and finishing that fabric, and then selling it to the "cut-and-sew" apparel industry. Fleece fabrics produced by Fabrics are used primarily in the production of children's and women's activewear (sweatshirts and sweatpants) and infant blanket sleepers. Jersey fabric produced by Fabrics is used in a broad range of children's and women's lightweight apparel, such as tops and shorts. Fabrics' outerwear fleece is designed for use in skiwear, hunting apparel and other outdoor activity products. In addition, Fabrics manufactures related knit fabrics 3 5 for certain other products, including gloves, meat stockinettes (bags used to hang hams and other meats for smoking and curing), knit orthopedic products, and knit cuffs for surgical gowns. UKI's fabrics are knit from purchased yarns of natural and synthetic fibers combined with performance yarns, including spandex, to provide specific dynamic stretch and shrinkage characteristics. UKI also produces lightweight lining fabrics for use in swimwear and women's hosiery. The Company does not have business operations in more than one industry segment and has no foreign manufacturing operations or significant export sales. Products Fleece Fleece fabric is made of acrylic, polyester, cotton, or blends of these fibers. The fabric is dyed and undergoes a series of finishing and abrading processes by which a surface is brushed or "napped" to give the fabric the "hand" or feel associated with fleece. In 1992, Fabrics introduced a new line of outerwear fleece designed for use in performance-related outdoor apparel products. In 1993, this product line was complemented by the introduction of Dyersburg E.C.O. outerwear fleece made of yarn using fibers from recycled, plastic soft drink bottles. The list of branded outerwear fleece products have grown to include Kinderfleece targeted to children's outerwear, Citifleece(TM) targeted to adult outerwear, Dyersburg E.C.O. Lite(TM), a lighter weight E.C.O. product, and Chamee(TM), a new microdenier product line. Garments manufactured from these products are primarily sold to large catalog merchants and specialty retailers. Excluding the outerwear fleece designs, a majority of the fleece fabrics historically manufactured by Fabrics are used to produce garments for discount retailers and chain stores. Fleece fabrics sales are seasonal with peak activity during the third and fourth fiscal quarters and significantly less activity during the first and second fiscal quarters. The principal use of Fabrics' fleece fabrics are in manufacturing children's activewear and infant blanket sleepers. Fleece fabrics sold by Fabrics to the children's activewear market, principally sweatshirts and sweatpants, are made of 100% acrylic fibers and polyester/cotton blends. Acrylic's low cost, ability to be dyed brighter colors, and low shrinkage are of particular importance to the children's activewear market. Fleece fabrics sold to manufacturers of women's activewear are primarily made either of 50% polyester/50% cotton blends or polyester/cotton blends with a higher cotton content. In recent years, there has been increased use in activewear apparel of 4 6 polyester/cotton blends, which management believes is attributable to increased consumer demand for natural fibers, as well as the greater receptivity of these fabrics to printing compared to 100% acrylic fabrics. Polyester/cotton blends are also typically softer and less likely to "pill" than 100% synthetics, while still offering less fabric shrinkage than 100% cotton products. Fabrics' other major fleece fabric product categories are fabrics used to manufacture infant blanket sleepers and for home furnishings. The demand for infant blanket sleepers is primarily attributable to its fire retardant characteristics. Maison Fleece(TM), headlines the product offerings in the growing home furnishings market. Jersey Fabrics markets a line of jersey fabrics for use in a broad range of women's and children's apparel, principally tops and shorts, with the objectives of increasing penetration of Fabrics' customer base and reducing the seasonal aspects of the Company's production operations. Jersey is a flat-knit fabric, which is typically made from a polyester/cotton blend or from 100% cotton fibers and, unlike fleece, is not surface-finished. Jersey fabrics are also generally lighter in weight than fleece. A majority of Fabrics' jersey fabric production and sales is concentrated in Fabrics' first two fiscal quarters and, therefore, tends to offset the seasonality of the Company's fleece fabric business. Stretch Stretch fabrics (produced at UKI's Cleveland, Tennessee facility) consist of custom formulations of cotton, spandex, nylon and other synthetic yarns designed for maximum comfort, performance and styling. To produce a variety of shades and patterns, stretch fabrics may be knit from package-dyed yarns, dyed as cloth, sold to independent printers for printing or garment-dyed by the customer. These fabrics are used in a variety of athletic products including dancewear, swimsuits, biking and running garments and intimate apparel. The majority of these fabrics are used by leading manufacturers to produce higher-priced branded sportswear products. A new stretch product, Synsation(TM), was introduced in late 1996 aimed at revitalizing the swimwear business. Manufacturing/Seasonality Fabrics has two manufacturing plants in Dyersburg and one plant in Trenton, Tennessee. The original Dyersburg plant spins 100% synthetic (acrylic or polyester) and 50% polyester/50% cotton yarns. The Trenton plant spins 100% cotton yarns as well as cotton/synthetic blends. These yarns are used along with yarns purchased from outside sources to knit fleece and jersey fabrics at the Dyersburg knitting facility prior to dyeing and finishing. UKI's plant in Cleveland, Tennessee uses yarn from Fabrics as well 5 7 as purchased yarn from outside sources to knit, dye and finish stretch and lining fabrics. The Company's revenues and earnings as well as working capital requirements fluctuate during the fiscal year due to the seasonal nature of Fabrics' and UKI's businesses. See "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations". Sales and Marketing The Company's customers negotiate their purchases from the Company through informal purchase orders that specify their anticipated fabric needs over periods as long as ten months. The orders are revocable and serve primarily to outline the customers' intentions over a specified term and permit the Company to "block out" its production schedule. Although orders are subject to cancellation by customers at any time before the Company receives color specifications from the customers, fabric produced for cancelled orders can ordinarily be used to fill other orders. Because these informal purchase orders are cancelable, the Company has no appreciable long-term backlog. Fabrics maintains sales offices in Chicago and New York and also generates some sales through independent sales agents. UKI utilizes a network of independent sales agents coordinated through its marketing organization in New York, New York. The Company's largest five customers accounted for approximately 23% of total sales in 1996 with no individual customer responsible for more than 9% of total sales. Research and Development Fabrics' research and development activities are directed toward the development of new products (i.e., varieties of fabrics) to meet the changing needs of the market. Emphasis is placed on physical characteristics that provide competitive differentiations between fabrics including "hand" or feel, warmth, fade resistance and shrinkage reduction. Efforts are also made to enhance aesthetic qualities of certain fabrics such as the E.C.O. fabrics line's consideration of the environmental impact of production processes. UKI's research and development activities are focused on providing innovative stretch fabrics that will meet the evolving needs of its customers, while developing new products to gain entry in other markets. UKI was instrumental in developing products from Dupont Lycra(R) spandex and Dupont Supplex(R) nylon to provide customers with new types of performance fabrics that exhibit unique properties. 6 8 The costs of the Company's research and development activities are not considered by management to be material to the results of operations or the financial condition of the Company. Raw Materials Fabrics uses three primary fibers as raw material for producing yarn: acrylic, polyester and cotton. Cotton makes up approximately 35%, acrylic approximately 15%, and polyester approximately 45% of the raw material fiber used in production. Cotton is an agricultural commodity, while acrylic and polyester are petroleum based. These items are subject to market price fluctuations, but supplies are not dependent on any single vendor, and management believes that sources for materials will be adequate to meet requirements. UKI purchases yarns from a number of vendors and maintains several sources for branded and non-branded spandex and synthetic blend yarns. Competition The textile industry is extremely competitive and includes numerous companies, no one of which is dominant in the industry. The Company and its competitors market their products nationwide as domestic shipping costs are not a significant competitive factor. The Company's primary competition comes from suppliers to the cut and sew trade. The Company also competes with vertically integrated manufacturers that not only produce fabric but also produce finished products from that fabric. Regulation The Company is subject to federal, state and local laws and regulations affecting its business, including those promulgated under the Occupational Safety and Health Act (OSHA), the Consumer Product Safety Act, the Flammable Fabrics Act, the Textile Fiber Product Identification Act, and the rules and regulations of the Consumer Products Safety Commission. Among other things, OSHA imposes cotton dust standards and noise level standards at all of the Company's knitting facilities. Additionally, the Company must comply with industry specific legislation. The Company's facilities generate waste water, other waste, and air emissions that are subject to local regulations and federal and state laws. The Company believes its disposition of such waste and its emissions are in substantial compliance with all applicable governmental requirements. The Company is currently assessing the effect on its competitive position of recent developments in U.S. import-export restrictions. Although no assurances can be given in this regard, the Company does not believe that the passage of the North American Free Trade Agreement and the General Agreement on Tariffs and Trade has had or will have a material effect on the Company's competitive position or results of operations. 7 9 Employees At September 28, 1996, the Company employed approximately 1,392 people in hourly, salaried, supervisory, management, and administrative positions. No labor union represents any of the Company's employees and the Company has not experienced a work stoppage in more than 50 years. Forward-Looking Statements/Risk Factors This Form 10-K contains certain forward-looking statements regarding the anticipated financial and operating results of the Company. The Company undertakes no obligation to publicly release any revisions to any forward-looking statements contained herein to reflect events or circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. In connection with the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, the Company is including the following cautionary statements identifying important factors that could cause the Company's actual results to differ materially from those projected in forward-looking statements made by, or on behalf of, the Company. These factors, many of which are beyond the Company's control, include changes in the cost and availability of raw materials, competition with other suppliers, the cost and availability of labor, governmental regulation, governmental trade policies with foreign nations and changes in demand or product mix. EXECUTIVE OFFICERS OF THE REGISTRANT The following table sets forth certain information regarding executive officers of the Company as of September 28, 1996. All positions are held with Dyersburg Corporation and Fabrics unless otherwise noted. All officers serve at the discretion of the Board of Directors.
Name Age Position ---- --- --------------------- T. Eugene McBride 53 President, Chief Executive Officer and Chairman James E. Herring 51 President - IQUE Jerome M. Wiggins 56 President - Operations Janice L. Whitlock 45 President - Marketing William S. Shropshire, Jr. 39 Executive Vice President, Chief Financial Officer, Secretary and Treasurer Stephen J. Dauer 55 Sr. Vice President- Sales Paul L. Hallock 48 Vice President-Finance Jerry W. Miller 45 Vice President - Manufacturing Jerry W. Patton 49 Vice President - Administration
8 10 Margaret Schenck 48 Vice President - Operations/Customer Development, UKI
The following is additional information with respect to the above-named executive officers. Mr. McBride joined the Company in September 1988 as Executive Vice President. He had previously been employed by Pannill Knitting Mills as Vice President-Operations since December 1986. He was named President and Chief Operating Officer in January 1989. He was named Chief Executive Officer in September 1990 and Chairman of the Board of Directors in July 1995. Mr. Herring has been President of IQUE since December 1996. Prior to becoming President of IQUE, he was President and Chief Executive Officer of UKI since January, 1994 when it was acquired by the Company. Mr. Herring was also elected as a director of the Company, Fabrics and UKI since January 1994. Mr. Herring served as President of UKI from 1983 to 1991 and as Chairman of the Board and Chief Executive Officer from 1991 until its acquisition by the Company. Mr. Wiggins has been President - Operations since January 1996. He joined the Company in August 1989 as Vice President and Chief Financial Officer, Treasurer and Secretary. He had previously been employed by VF Corporation (a manufacturer of apparel) since 1975 and in 1982 became Vice President of Finance and Chief Financial Officer of that company. Ms. Whitlock, President - Marketing since December 1995, joined the Company in September 1994 as Vice President of Merchandising. Previously, she was Vice President of Merchandising at Flynt Fabrics and Burlington Industries. Mr. Shropshire, a certified public accountant, joined the Company as Executive Vice President, Chief Financial Officer, Secretary and Treasurer on September 28, 1996. For the previous five years, he was Chief Financial Officer and Senior Vice President for Charter Bancshares, Inc. Mr. Dauer became the Sr. Vice President - Sales in January 1996, after joining the Company as Vice President-Marketing in June 1984. He had previously been employed since 1966 by Burlington Industries (a diversified textile company) and, in 1980, became Vice President of Sales and Marketing-Women's Apparel in that company's Knitted Fabric Division. Mr. Hallock joined the Company in April 1977. He was named Assistant Secretary in October 1978, Assistant Secretary- Treasurer in October 1981, and was named Vice President-Finance in March 1987. 9 11 Mr. Miller joined the Company in August 1993 as Director of Manufacturing and was named Vice President of Manufacturing in May 1994. Before coming to Dyersburg, he was Director of Manufacturing with Sara Lee Products, which included textiles and apparel manufacturing. Mr. Patton joined the Company in 1966 in the production area. He was named MIS Director in May 1990. In September, 1994, he was named Vice President-MIS. Since January, 1996, Mr. Patton has been Vice President - Administration. Ms. Schenck has been Vice President - Operations/Customer Development, UKI, since January 1994, when UKI was acquired by the Company. For more than five years prior to that time, she was Vice President - Operations/Customer Service at UKI. ITEM 2. PROPERTIES The Company's business is conducted primarily through facilities located in Dyersburg, Trenton and Cleveland, Tennessee. All of these facilities and the property on which they are located are owned by the Company. The Company leases selling offices in Chicago, Illinois, and New York, New York with square footage of approximately 716 and 7,364, respectively. The Company leases approximately 1,000 square feet in Cleveland, Tennessee, for its IQUE corporate offices. The primary Dyersburg facility was built in 1929 with 275,000 square feet of floor space. After several expansions, it now contains 888,350 square feet of plant space situated on 30 acres of land. The knitting facility (completed December 1993) encompasses 155,000 square feet situated on 30 acres in the Dyersburg Industrial Park. The floor space is distributed as follows: 682,800 square feet for manufacturing, 273,300 square feet for warehousing and distribution, 27,800 square feet for offices, and 59,500 square feet for maintenance shops and boiler space. The Trenton facility was built in the 1930's with 94,000 square feet of floor space and has been expanded to 187,919 square feet. The floor space is distributed as follows: 97,881 square feet for manufacturing, 61,296 square feet for warehousing, 23,837 square feet for office space, and 4,905 square feet for maintenance and boiler space. The Cleveland facility was built in 1986 with 70,000 square feet of floor space followed by a 38,000 square foot expansion in 1991. A 45,000 square foot addition (primarily warehouse, distribution, and laboratory facilities) was completed in December 1994. ITEM 3. LEGAL PROCEEDINGS The Company is a party to various routine lawsuits arising out of the conduct of its business, none of which are expected by the Company to have a material adverse effect upon the Company. 10 12 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matters were submitted to a vote of shareholders during the fourth quarter of the fiscal year ended September 28, 1996. 11 13 PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS Market Information The Company's Common Stock is traded on the New York Stock Exchange under the symbol "DBG." The range of high and low sales prices of the Common Stock during each quarter of the last two years are presented below:
High Low ------- ------- 1995 First........ $6 5/8 $5 1/8 Second....... 6 1/4 5 1/4 Third........ 6 4 5/8 Fourth....... 5 1/2 4 1/4 1996 First........ $6 1/4 $4 1/4 Second...... 5 3 7/8 Third........ 5 1/2 4 3/8 Fourth....... 6 4 1/2
Holders As of December 3, 1996, the Company had approximately 2,700 shareholders based on the number of record holders of the Company's Common Stock and an estimate of the number of individual participants represented by security position listings. Dividends During each quarter of fiscal 1996 and fiscal 1995, the Company declared and paid regular quarterly cash dividends of $.01 per share of Common Stock. The documents relating to the Company's primary credit facility and institutional notes permit dividends and certain other payments, including stock repurchases, by the Company provided that, after such payments, the Company is in compliance with certain financial covenants. As of September 28, 1996, the Company was in compliance with such financial covenants, and management of the Company does not believe that such restrictions are likely to limit materially the anticipated future payments of dividends on the Common Stock. 12 14 ITEM 6. SELECTED FINANCIAL DATA SELECTED FINANCIAL DATA DYERSBURG CORPORATION 1996 ANNUAL REPORT
1996 1995 1994(1) 1993 1992(2) - ------------------------------------------------------------------------------------------------------- (In Thousands, except ratios, percentages and per share data) -------------------------------------------------------------- SUMMARY OF OPERATIONS: Net sales $195,866 $199,413 $180,520 $151,283 $151,497 Income before income taxes and extraordinary item 14,254 12,542(3) 17,844 17,846 14,343 Income taxes 5,854 5,982 7,496 7,738 6,619 Income before extraordinary item 8,400 6,560 10,348 10,108 7,724 Extraordinary item --- --- --- (472) (2,238) Net income 8,400 6,560 10,348 9,636 5,486 PER SHARE OF COMMON STOCK: Income before extraordinary item $ 0.62 $ 0.46 $ 0.74 $ 0.74 $ 0.72 Extraordinary item --- --- --- (0.03) (0.21) Net income 0.62 0.46 0.74 0.71 0.51 Cash dividend (pre-IPO)(4) --- --- --- --- 0.58 Cash dividend (post-IPO) 0.04 0.04 0.04 0.04 0.02 Stock range: High 6 1/4 6 5/8 8 3/4 8 5/8 9 7/8 Low 3 7/8 4 1/4 6 3/8 5 1/2 5 7/8 Book value 6.75 6.08 5.65 4.80 4.10 Weighted average common shares outstanding 13,643 14,196 14,010 13,573 10,721 CAPITAL EXPENDITURES AND DEPRECIATION: Capital expenditures $ 11,778 $ 12,816 $ 14,278 $ 6,632 $ 10,256 Depreciation 9,573 10,001 8,630 7,948 7,172 STATISTICAL DATA: Income before extraordinary item to average shareholders' equity(5) 9.76% 7.90% 14.40% 17.10% 22.90% Inventory turnover(6) 5.20 5.96 5.74 6.22 7.22 Accounts receivable turnover(7) 5.63 5.53 5.68 5.89 5.97 Interest coverage(8) 3.31 3.03 4.58 5.14 2.40 Current ratio 4.37 3.79 3.65 4.01 3.11 SELECTED BALANCE SHEET DATA: Working capital $ 52,083 $ 45,227 $ 47,219 $ 33,747 $ 26,294 Total assets 195,007 188,872 194,192 148,040 145,322 Long-term obligations 80,950 76,800 87,276 64,900 70,400 Shareholders' equity 88,742 86,258 80,266 65,161 55,700
(1)Includes operations of United Knitting, Inc., effective January 19, 1994. (2)Fifty-three weeks. (3)Includes a pre-tax write-down of fixed assets of $2,153. (4)This represents a one-time dividend paid prior to the initial public offering and does not reflect the future intent of the Company with respect to dividends. (5)Income before extraordinary item divided by quarterly average of shareholders' equity. (6)Cost of goods sold divided by monthly average inventory. (7)Net sales divided by monthly average net accounts receivable. (8)Net income before interest, taxes and extraordinary item divided by the sum of annual interest and amortization of debt costs. 13 15 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OPERATIONS The Company's fiscal year ends on the Saturday closest to September 30. Results for 1994 include the operations of Dyersburg Fabrics Inc. ("Fabrics") and those of United Knitting, Inc. ("UKI") from January 19, 1994, the date of its acquisition by the Company. 1996 As Compared With 1995 Net income increased to $.62 per share for 1996, as compared to $.46 per share in the prior year. Results for the year ended September 30, 1995, included an after-tax charge of $1.5 million, or $0.11 per share, principally related to the replacement of certain manufacturing equipment. Driving this increase in earnings per share was an increase in the gross margin to 21.9% in 1996, as compared to 20.1% in 1995. Margin increases were the result of a product shift to higher margin fabrics in 1996. This increase in gross margins more than offset a modest decline in net sales dollars for the current year. Net sales approximated $196 million in 1996. The decline from 1995's peak of $199 million was primarily due to a decreased demand for jersey and sleeper fabrics. The Company's successful marketing initiative to produce and sell new products was supported by significant investments in capital expenditures. Purchased and leased equipment during the previous five years have approximated $67 million. These expenditures included an expanded distribution facility, a separate knitting facility, expanded finishing and dyeing facilities and installing modern, high-efficiency yarn manufacturing equipment. These expenditures for manufacturing equipment allow the Company to produce more technically complex fabrics, which in turn provide higher gross margins. Higher customer satisfaction and lower production costs also have resulted from improvements in delivery and the quality of production. In addition to the Company's investment in manufacturing equipment, the Company undertook a significant investment in an expanded marketing program. The expansion of the marketing staff, and to a lesser degree increased promotions, contributed to an increase in selling, general and administrative costs to $20,707,000, or 10.6% of sales in 1996 versus 8.7% in 1995. The return on the investment in additional marketing initiatives already has been reflected in our fourth quarter sales, which increased by 11%, to $59 million. These initiatives will continue into 1997 as the Company calls on new customers offering new products. 14 16 Interest and debt amortization expense for 1996 was unchanged from 1995 at $6.2 million. Average outstanding debt and interest rates were substantially level for 1995 and 1996. The provisions for income taxes of $5.9 million for 1996 and $6.0 million for 1995 were higher than the federal statutory rate due to state income taxes and the nondeductibility of amortization of goodwill. The effective tax rate declined from 47.7% in 1995 to 41.1% in 1996, primarily due to a legal restructuring implemented by the Company at mid- year which resulted in a reduction in certain state taxes. The lower effective tax rate should continue into future periods. 1995 As Compared With 1994 Net sales increased 10.5% in 1995 compared to 1994. A majority of the increase was due to a shift in sales toward higher priced cotton and outerwear fleece products. The remainder of the increase was primarily attributable to the inclusion of UKI for the full 12-month period in 1995. Gross margins declined from 22.6% in 1994 to 20.1% in 1995. The decline in gross margins resulted from significant increases in raw material costs which the Company was unable to fully recover through price increases. Selling, general and administrative costs decreased as a percent of sales to 8.7% in 1995 versus 9.0% in 1994. The decline relative to sales resulted from reduced incentive compensation payments and a lower contribution to the Company's profit sharing plans, which was partially offset by higher commissions and sales-related expenses. During the fourth quarter of 1995, the Company committed to replace certain yarn manufacturing equipment with more modern and efficient machinery. The write-down of the book value of existing equipment, net of proceeds from its sale, resulted in an after-tax charge to operations of $1.5 million, or $0.11 per share. Interest and debt amortization expense for 1995 was $6.2 million compared with $5.0 million in 1994. This increase resulted primarily from 1995's higher interest rates. The average balance on long-term debt outstanding for 1995 approximated that of 1994. LIQUIDITY AND CAPITAL RESOURCES Funds generated from the Company's operations are the major source of liquidity. Net cash provided by operating activities totaled $13.6 million, $23.3 million, and $15.2 million in 1996, 1995 and 1994, respectively. These cash flows are supplemented primarily by borrowings, including a bank-funded revolving line of credit of $80 million maturing on July 16, 1998. Amounts outstanding on this credit facility bear interest at variable rates. The average balances outstanding and the average interest rates paid for 1996, 15 17 1995 and 1994 were approximately $50,884,000, $51,731,000, and $46,783,000, respectively, and 7.2%, 7.1% and 5.4%, respectively. At September 28, 1996, the Company had unused revolving credit of $23.8 million. Further reference is made to Note 4 to the consolidated financial statements beginning on page 27. Working capital at September 28, 1996 was $52.1 million versus $45.2 million at September 30, 1995. The Company's current ratio was 4.4:1 and its debt-to-capital ratio was 48% at September 28, 1996, compared to 3.8:1 and 47%, respectively, at September 30, 1995. Net accounts receivable were $5.5 million higher at September 28, 1996 than September 30, 1995, due primarily to higher sales volume in the fourth quarter of 1996. Inventories increased slightly from $22.2 million at September 30, 1995 to $23.2 million at September 28, 1996, principally as a result of higher per-unit costs due to shifts in product mix. The Company's business has a pronounced seasonal pattern with the majority of sales occurring during the third and fourth fiscal quarters. The following table sets forth the net sales and percentage of net sales for the Company by fiscal quarter for the last three fiscal years.
1996 1995 1994(a) - ------------------------------------------------------------------------ First Quarter $30,088 15.4% $ 40,679 20.4% $ 22,918 12.7% Second Quarter 42,344 21.6 48,370 24.2 37,875 21.0 Third Quarter 64,142 32.7 57,021 28.6 61,937 34.3 Fourth Quarter 59,292 30.3 53,343 26.8 57,790 32.0 -------- ------ -------- ------ -------- ------ $195,866 100.0% $199,413 100.0% $180,520 100.0% ======== ====== ======== ====== ======== ======
(a) Includes the following UKI sales (in thousands): $8,358, second quarter; $10,828, third quarter and $10,341, fourth quarter. Due to this seasonal pattern of the Company's sales, inventories are lowest at the end of the fiscal year and gradually increase over the following six months in anticipation of the peak selling period. Receivables tend to decline during the first fiscal quarter and are at their lowest point during December through February. The net result is increased working capital requirements from January through late in the fourth quarter. On October 4, 1995, the Company approved a plan to repurchase up to 2,000,000 shares of Dyersburg Corporation common stock. During 1996, the Company repurchased 1,051,275 shares at a total cost of $5.4 million. 16 18 Capital expenditures during 1996, 1995 and 1994 were $11.8 million, $12.8 million and $14.3 million, respectively. Capital spending is anticipated to approximate $11.5 million in 1997. The Company believes that cash flow from operations and the existing revolving credit facility will be sufficient to meet operating needs and fund the capital spending and stock repurchase program. INFLATION Similar to other textile and apparel manufacturers, the Company is dependent on the prices and supplies of certain principal raw materials including cotton, acrylic and polyester fibers. During 1996, raw material prices for polyester and acrylic stabilized after significant increases in 1996, while prices for cotton continued to increase. Heretofore in 1997, there has been a reduction in raw material prices. The long-term impact of subsequent raw material price fluctuations on the Company's performance is, however, uncertain. The Company intends to support margins through continued efforts to improve the product mix and improve product pricing as market conditions permit. Quarterly Financial Information (Unaudited)
1996 First Second Third Fourth (In thousands, except per share data) Net sales $30,088 $42,344 $64,142 $59,292 Gross profit 5,750 7,896 14,638 14,698 Net income (124) 848 3,881 3,795 Net income per share (0.01) 0.06 0.28 0.29 Market prices of common stock: High 6 1/4 5 5 1/2 6 Low 4 1/4 3 7/8 4 3/8 4 1/2
1995 First Second Third Fourth (In thousands, except per share data) Net sales $40,679 $48,370 $57,022 $53,342 Gross profit 6,998 9,603 12,382 11,185 Net income 403 1,871 3,065 1,221(a) Net income per share 0.03 0.13 0.22 0.09 Market prices of common stock: High 6 5/8 6 1/4 6 5 1/2 Low 5 1/8 5 1/4 4 5/8 4 1/4
(a) Includes pre-tax write-down of fixed assets of $2,153. 17 19 Item 8. Financial Statements and Supplementary Data The financial statements set forth below are included on pages 19-33.
Page of Form 10-K Report of Independent Auditors 19 Consolidated Balance Sheets as of September 28, 1996 and September 30, 1995 20 Consolidated Statements of Income for the year 21 ended September 28, 1996, September 30, 1995, and October 1, 1994 Consolidated Statements of Shareholders' Equity 22 for the years ended September 28, 1996, September 30, 1995, and October 1, 1994 Consolidated Statements of Cash Flows for the 23 years ended September 28, 1996, September 30, 1995, and October 1, 1994 Notes to Consolidated Financial Statements 24 Schedules: Schedule II - Valuation and Qualifying Accounts 34 All other financial statement schedules are omitted as the information is not required or because the required information is presented in the financial statements or the notes thereto.
18 20 REPORT OF INDEPENDENT AUDITORS The Board of Directors and Shareholders Dyersburg Corporation We have audited the accompanying consolidated balance sheets of Dyersburg Corporation as of September 28, 1996 and September 30, 1995, and the related consolidated statements of income, shareholders' equity, and cash flows for each of the three years in the period ended September 28, 1996. Our audits also included the financial statement schedule listed in the Index at Item 14(a). These financial statements and schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Dyersburg Corporation at September 28, 1996 and September 30, 1995, and the consolidated results of its operations and its cash flows for each of the three years in the period ended September 28, 1996, in conformity with generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein. /s/ Ernst & Young LLP Memphis, Tennessee October 22, 1996 19 21 Dyersburg Corporation Consolidated Balance Sheets
September 28, 1996 September 30, 1995 ---------------------------------------- (In thousands, except share data) Assets Current assets: Cash $ 983 $ 974 Accounts receivable, net of allowance for doubtful accounts of $1,500 in 1996 and $1,170 in 1995 42,427 36,920 Inventories 23,248 22,238 Prepaid expenses and other 858 1,286 -------------------------------- Total current assets 67,516 61,418 Property, plant and equipment, net 67,758 65,834 Goodwill, net 59,097 60,954 Deferred debt costs and other, net 636 666 -------------------------------- $ 195,007 $ 188,872 ================================ LIABILITIES AND SHAREHOLDERSG EQUITY Current liabilities: Trade accounts payable $ 8,296 $ 10,515 Accrued expenses 6,700 5,676 Income taxes payable 437 - -------------------------------- Total current liabilities 15,433 16,191 Long-term obligations 80,950 76,800 Deferred income taxes 8,765 8,305 Other liabilities 1,117 1,318 Commitments and contingencies ShareholdersG equity: Common stock, $.01 par value, authorized 40,000,000 shares; issued and outstanding shares -13,154,508 in 1996 and 14,196,228 in 1995 132 142 Additional paid-in capital 41,460 46,821 Retained earnings 47,150 39,295 -------------------------------- Total shareholders' equity 88,742 86,258 -------------------------------- $ 195,007 $ 188,872 ================================
See accompanying notes. 20 22 Dyersburg Corporation Consolidated Statements of Income
YEAR ENDED -------------------------------------------------------- SEPTEMBER 28, SEPTEMBER 30, OCTOBER 1, 1996 1995 1994 -------------------------------------------------------- (IN THOUSANDS, EXCEPT SHARE DATA) Net sales $195,866 $199,413 $ 180,520 Cost of sales 152,884 159,245 139,754 General and administrative expenses 20,707 17,447 16,223 Goodwill amortization 1,857 1,857 1,721 Interest and amortization of debt costs 6,164 6,169 4,978 Write-down of fixed assets - 2,153 - ----------------------------------------------------- 181,612 186,871 162,676 ----------------------------------------------------- Income before income taxes 14,254 12,542 17,844 Federal and state income taxes 5,854 5,982 7,496 ----------------------------------------------------- Net income $ 8,400 $ 6,560 $ 10,348 ===================================================== Weighted average common and common equivalent shares outstanding 13,643 14,196 14,010 ===================================================== Net income per share $ .62 $ .46 $ .74 =====================================================
See accompanying notes. 21 23 Dyersburg Corporation Consolidated Statements of ShareholdersG Equity
ADDITIONAL SUBSCRIPTION COMMON PAID-IN RETAINED NOTES STOCK CAPITAL EARNINGS RECEIVABLE TOTAL ---------------------------------------------------------------------------- (IN THOUSANDS, EXCEPT SHARE DATA) Balance at October 3, 1993 $136 $41,839 $23,516 $(330) $65,161 Net income 10,348 10,348 Cash dividends paid (561) (561) ($.04 per share) Principal collections 330 330 on subscription notes receivable Issuance of 623,536 shares of Common Stock in purchase 6 4,982 4,988 of United Knitting, Inc. --------------------------------------------------------------------------- Balance at October 1, 1994 142 46,821 33,303 - 80,266 Net income 6,560 6,560 Cash dividends paid (568) (568) ($.04 per share) --------------------------------------------------------------------------- Balance at September 30, 1995 142 46,821 39,295 - 86,258 Net income 8,400 8,400 Cash dividends paid (545) (545) ($.04 per share) Acquisition and retirement of 1,051,275 shares of common stock (10) (5,404) (5,414) Exercise of stock options 43 43 --------------------------------------------------------------------------- Balance at September 28, 1996 $132 $41,460 $47,150 $ - $88,742 ===========================================================================
See accompanying notes. 22 24 Dyersburg Corporation Consolidated Statements of Cash Flows
YEAR ENDED SEPTEMBER 28, SEPTEMBER 30, OCTOBER 1, 1996 1995 1994 ----------------------------------------------------- (IN THOUSANDS) OPERATING ACTIVITIES Net income $ 8,400 $ 6,560 $ 10,348 Adjustments: Depreciation 9,573 10,001 8,630 Amortization 2,029 2,029 1,903 Write-down of fixed assets - 2,153 - Deferred income taxes and other 554 (98) 787 Changes in operating assets and liabilities: Accounts receivable (5,507) 6,087 (5,321) Inventories (1,010) (1,601) (1,481) Trade accounts payable and other current liabilities (758) (1,604) 270 Other 288 (207) 98 ----------------------------------------------------- Net cash provided by operating activities 13,569 23,320 15,234 INVESTING ACTIVITIES Purchases of property, plant and equipment (11,778) (12,816) (14,278) Purchase of United Knitting, Inc. - - (5,426) Other 187 108 101 ----------------------------------------------------- Net cash used in investing activities (11,591) (12,708) (19,603) FINANCING ACTIVITIES Net borrowings (payments) on long-term obligations 4,150 (9,400) 2,853 Dividends paid (545) (568) (561) Exercise of stock options 43 - - Acquisition of common stock (5,414) - - Other (203) (230) 1,368 ----------------------------------------------------- Net cash provided by (used in) financing activities (1,969) (10,198) 3,660 ----------------------------------------------------- Net increase (decrease) in cash 9 414 (709) Cash at beginning of year 974 560 1,269 ----------------------------------------------------- Cash at end of year $ 983 $ 974 $ 560 =====================================================
See accompanying notes. 23 25 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. ACCOUNTING POLICIES PRINCIPLES OF CONSOLIDATION The accompanying consolidated financial statements include the accounts of Dyersburg Corporation and its wholly-owned subsidiaries (the Company). All significant intercompany balances and transactions have been eliminated. OPERATIONS The Company is a textile manufacturer of knit fabrics with customers concentrated in the domestic apparel industry. The Company does not require collateral for accounts receivable and is partially insured on certain customer balances. The level of insurance varies by customer based upon third party credit ratings. USE OF ESTIMATES The preparation of the consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates and assumptions. INTANGIBLE ASSETS Goodwill, which consists of costs in excess of net assets acquired, is amortized by the straight-line method over forty years. Deferred debt costs are amortized by the interest method over the life of the related debt. Goodwill is net of accumulated amortization of $15,193,000 and $13,336,000 and deferred debt costs and other is net of accumulated amortization of $672,000 and $500,000, at September 28, 1996 and September 30, 1995, respectively. The carrying value of goodwill is reviewed if the facts and circumstances suggest that it may be impaired. If this review indicated that goodwill was not recoverable, as determined based on the estimated undiscounted cash flows of the entity acquired over the remaining amortization period, the Company's carrying value of the goodwill would be reduced by the estimated shortfall of cash flows. 24 26 1. ACCOUNTING POLICIES (CONTINUED) INVENTORIES Cotton raw material inventory and the cotton component of work in process and finished goods inventory are valued at the lower of average cost or market. Other inventories are valued at the lower of cost (first-in, first-out method) or market. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment is stated at cost. Depreciation is computed on the straight-line basis over the estimated useful lives of the assets: buildings - 25 years, machinery and equipment - 5 to 15 years. INCOME TAXES The Company has provided for income taxes under the liability method. Accordingly, deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. STOCK BASED COMPENSATION The Company grants stock options for a fixed number of shares to employees with an exercise price equal to the fair value of the shares at the date of grant. The Company accounts for stock option grants in accordance with APB Opinion No. 25, Accounting for Stock Issued to Employees, and accordingly, recognizes no compensation expense for the stock option grants. EARNINGS PER COMMON SHARE Earnings per common share is computed using the weighted average number of common shares outstanding during each period, including common stock equivalents, consisting of stock options calculated using the treasury stock method, when dilutive. 25 27 1. ACCOUNTING POLICIES (CONTINUED) ACCOUNTING PRONOUNCEMENTS In March 1995, the Financial Accounting Standards Board issued Statement No. 121, Accounting for the Impairment of Long- Lived Assets and for Long-Lived Assets to Be Disposed Of, which requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amount. Statement 121 also addresses the accounting for long-lived assets that are expected to be disposed of. The Company will adopt Statement 121 in the first quarter of 1997 and, based on current circumstances, does not believe the effect of adoption will be material. The write-down of fixed assets in 1995 would not have been materially different had the Company adopted Statement 121. RECLASSIFICATIONS Certain amounts in the 1994 and 1995 financial statements have been reclassified to conform with the 1996 financial statement presentation. Such reclassifications had no effect on net income as previously reported. 2. INVENTORIES Inventories consist of the following:
SEPTEMBER 28, SEPTEMBER 30, 1996 1995 ---------------------------------- (IN THOUSANDS) Raw materials $ 4,649 $4,947 Work in process 8,530 7,621 Finished goods 9,145 8,937 Supplies and other 924 733 ---------------------------------- $23,248 $22,238 ==================================
26 28 3. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consists of the following:
SEPTEMBER 28, SEPTEMBER 30, 1996 1995 ------------------------------------ (IN THOUSANDS) Land $ 673 $ 673 Buildings 32,612 24,198 Machinery and equipment 88,370 85,701 121,655 110,572 Less allowance for depreciation 53,897 44,738 ---------------------------------- $ 67,758 $ 65,834 ==================================
In 1995, the Company committed to replace certain spinning and drawing machinery with leased equipment. Concurrently, the Company wrote down machinery and equipment with original cost of $11,760,000 and accumulated depreciation of $9,468,000. The write-down, less the proceeds from the sale of the assets, resulted in a loss of $2,153,000. 4. LONG-TERM OBLIGATIONS Long-term obligations consist of the following:
SEPTEMBER 28, SEPTEMBER 30, 1996 1995 --------------------------------- (IN THOUSANDS) Revolving credit $48,050 $43,900 Industrial revenue bonds 7,900 7,900 Senior notes 25,000 25,000 ------------------------------ $80,950 $76,800 ==============================
27 29 4. LONG-TERM OBLIGATIONS (CONTINUED) The Company has a revolving line of credit (the Revolver) with current availability of $80,000,000, declining to $70,000,000 on April 1, 1997, and maturing on July 16, 1998. Amounts outstanding under the Revolver bear interest at variable rates (approximately 6.5% at September 28, 1996 and 6.9% at September 30, 1995). In addition, the Company is required to pay a commitment fee of 1/4% on the average unused portion of the Revolver and a letter of credit fee of approximately 1% on average outstanding letters of credit. Letters of credit outstanding under the Revolver are $8,122,000 at September 28, 1996 and September 30, 1995. The unused portion of the Revolver is $23,828,000 at September 28, 1996. All amounts outstanding under the Revolver are unsecured, except for the letters of credit which are secured by real property and equipment with a carrying value of approximately $3,704,000 at September 28, 1996. Pursuant to the terms of the Revolver, the Company is required to maintain certain financial ratios, minimum shareholders' equity and working capital levels. The Industrial Revenue Bonds bear interest at adjustable rates (4.0% at September 28, 1996 and 3.9% at September 30, 1995) and mature November 1, 2002. The bonds are secured by a letter of credit of $8,057,000 issued under the Revolver. The Senior Notes bear interest at 6.78% and require annual principal payments of $3,125,000 from 1998 to 2005. The Senior Note agreement requires the Company to maintain certain financial ratios and limits the payment of dividends. At September 28, 1996, the amount of retained earnings available for the payment of dividends was approximately $12,306,000. The schedule of debt maturities presented below assumes borrowings under the Revolver are outstanding until maturity:
YEAR AMOUNT ---- ------ 1997 $ - 1998 51,175 1999 3,125 2000 3,125 2001 3,125 Thereafter 20,400 ---------- Total $ 80,950 ==========
28 30 4. LONG-TERM OBLIGATIONS (CONTINUED) Total interest paid was $5,930,000 in 1996, $5,777,000 in 1995 and $4,431,000 in 1994. The Company has additional letters of credit outstanding of $2,066,000 for workers' compensation insurance. In 1995, the Company entered into two interest rate swap agreements to reduce the impact of changes in interest rates on the Revolver. The two interest rate swap agreements have a total notional principal amount of $20,000,000. The differential paid or received is recognized as an adjustment to interest expense. The Company agreed to make interest payments based on a fixed rate of 7.06% and 6.17% on $10,000,000 and $10,000,000 notional principal, respectively, in exchange for payments based on a floating rate of three-month LIBOR. The agreements terminate April 26, 2002 and June 9, 2002, respectively. The fair values of the swap agreements are not recognized in the financial statements. The fair value of long-term obligations is estimated using discounted cash flow analyses based on the CompanyGs current incremental borrowing rate. The carrying value and fair value of long-term obligations at September 28, 1996, is $80,950,000 and $79,483,000, respectively, and at September 30, 1995 was $76,800,000 and $75,343,000, respectively. The fair value of the CompanyGs interest rate swaps was based on pricing models and formulas using current assumptions. The fair value of the CompanyGs interest rate swaps was $24,000 and $(312,000) at September 28, 1996 and September 30, 1995, respectively. For all other financial instruments, the carrying amounts approximate fair value due to their short maturities. 5. SHAREHOLDERSG EQUITY The Company has 5,000,000 authorized shares of no par value preferred stock. The preferences and rights of the Preferred Stock will be fixed at the discretion of the Board of Directors upon issuance. On October 4, 1995, the Company approved a plan to repurchase up to 2,000,000 shares of Dyersburg Corporation common stock. Purchases are made at the discretion of the Company as warranted based on market pricing. As of September 28, 1996, a total of 29 31 5. SHAREHOLDERS' EQUITY (CONTINUED) 1,051,275 shares had been purchased under the repurchase plan at an aggregate cost of approximately $5,414,000. The Company's Stock Option Plans (the Option Plans) provide for the granting of stock options to management, key employees and outside directors. Options are subject to terms and conditions determined by the Compensation Committee of the Board of Directors, and generally are exercisable in increments of 20% per year beginning one year from date of grant and expire 10 years from date of grant. Shares reserved for future grants under the Option Plans were approximately 277,000 and 143,000 at September 28, 1996 and September 30, 1995, respectively. In 1996, the Company repriced certain stock options through the cancellation of approximately 737,000 outstanding options and the simultaneous granting of 367,000 options at a reduced exercise price equal to market at the date of repricing. Except for the repricing, no other terms of the stock options were changed. Information pertaining to the Option Plans summarized in the table below is in thousands except per share amounts:
NUMBER OF SHARES UNDER OPTION PRICE PER SHARE AGGREGATE PRICE Balance at October 3, 1993 273 $6.75N$9.00 $2,376 Options granted 528 $6.625N$8.125 4,164 Options canceled (42) $8.25N$9.00 (351) Balance at October 1, 1994 759 $6.625N$9.00 6,189 Options granted 2 $5.625 11 Options canceled (4) $6.00 (24) Balance at September 30, 1995 757 $5.625N$9.00 6,176 Options granted 369 $4.50N4.625 1,663 Options exercised (10) $4.50 (43) Options canceled (740) $4.50N$9.00 (6,038) Balance at September 28, 1996 376 $4.50N$9.00 $1,758
At September 28, 1996, 250,829 of these options were exercisable. 30 32 6. PROFIT SHARING PLANS The Company has two separate defined contribution plans that, collectively, cover substantially all of its employees. Contributions to one plan equal 7.5% of adjusted income, as defined, plus additional amounts which the Board of Directors may authorize. Contributions to the other plan are at the discretion of the Board of Directors. The contribution for either plan shall not exceed the maximum amount deductible for federal income tax purposes. Profit- sharing expense was $1,875,000, $1,902,000 and $2,171,000 for fiscal years 1996, 1995 and 1994, respectively. 7. INCOME TAXES Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred tax liabilities and assets are as follows:
SEPTEMBER 28, SEPTEMBER 30, 1996 1995 (IN THOUSANDS) Deferred tax liabilities: Depreciation $ 7,944 $ 8,105 Other 2,167 1,684 ------------------------------------------- Total deferred tax liabilities 10,111 9,789 Deferred tax assets 1,728 1,866 ------------------------------------------- Net deferred tax liabilities $ 8,383 $ 7,923 ===========================================
Significant components of the provision for income taxes are as follows:
YEAR ENDED ------------------------------------------------------ SEPTEMBER 28, SEPTEMBER 30, OCTOBER 1, 1996 1995 1994 ------------------------------------------------------ (IN THOUSANDS) Current: Federal $5,240 $5,570 $5,646 State 154 590 1,038 Deferred, federal 460 (178) 812 ----------------------------------------------------- $5,854 $5,982 $7,496 =====================================================
31 33 7. INCOME TAXES (CONTINUED) The provision for income taxes differed from the amount computed by applying the statutory federal income tax rate of 35% to income before income taxes due to the following:
YEAR ENDED ---------------------------------------------------- SEPTEMBER 28, SEPTEMBER 30, OCTOBER 1, 1996 1995 1994 ---------------------------------------------------- (IN THOUSANDS) Computed federal tax expense at statutory rate $4,989 $4,390 $6,245 State taxes, net of federal income tax benefit 100 383 702 Effect of nondeductibility of amortization of goodwill 650 650 602 Other 115 559 (53) ----------------------------------------------- $5,854 $5,982 $7,496 ===============================================
Income tax payments were $4,885,000, $5,996,000 and $7,853,000 for fiscal years 1996, 1995, and 1994, respectively. 8. ACCRUED EXPENSES Accrued expenses consist of the following:
SEPTEMBER 28, SEPTEMBER 30, 1996 1995 ------------------------------------ (IN THOUSANDS) Accrued bonuses and commissions $1,473 $ 838 Workers' compensation 2,485 2,288 Other 2,742 2,550 ------------------------------------ $6,700 $5,676 ====================================
32 34 9. LEASES The Company leases certain equipment and office space under noncancelable operating leases. Most of these leases include renewal options and some include purchase options. Rent expense was $3,050,000 in 1996, $2,089,000 in 1995 and $1,930,000 in 1994. Future minimum payments under these leases are as follows at September 28, 1996: $3,212,000 in 1997, $2,978,000 in 1998, $3,004,000 in 1999, $2,398,000 in 2000, $1,906,000 in 2001 and $5,080,000 thereafter. Total aggregate future minimum lease payments are $18,578,000. 10. PURCHASE OF UNITED KNITTING, INC. On January 19, 1994, the Company acquired all of the outstanding capital stock of United Knitting, Inc. for $5,426,000 in cash and approximately $5,000,000 of common stock (623,536 shares) in a transaction accounted for under the purchase method. Goodwill resulting from the transaction was approximately $16,800,000. United Knitting, Inc. is a textile manufacturer which produces stretch fabrics. On a pro forma basis, net sales, net income and net income per share would have been $192,691,000, $10,437,000, and $0.74, respectively, for the year ended October 1,1994, assuming the acquisition occurred at the beginning of such fiscal year. 33 35 SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS (IN THOUSANDS) DYERSBURG CORPORATION
- ---------------------------------------------------------------------------------------------------------------------------- COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E - ---------------------------------------------------------------------------------------------------------------------------- Additions Description Balance at Charged to Charged to Other Deductions-- Balance at Beginning of Costs and Accounts- describe End of Period Expenses Describe Period - ---------------------------------------------------------------------------------------------------------------------------- YEAR ENDED SEPTEMBER 28, 1996 Allowance for doubtful accounts $1,170 $1,057 $727(1) $1,500 ======================================================================================= YEAR ENDED SEPTEMBER 30, 1995 Allowance for doubtful accounts $1,000 $ 558 $388(1) $1,170 ======================================================================================= YEAR ENDED OCTOBER 1, 1994 Allowance for doubtful accounts $ 775 $ 390 $150(2) $315(1) $1,000 =======================================================================================
1) Write-offs, net of recoveries. 2) Allowance for doubtful accounts of United Knitting, Inc. at acquisition_ 34 36 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT Information with respect to directors of the Company is included in the Company's definitive Proxy Statement for the Annual Meeting of Shareholders to be held January 22, 1997, (the "Proxy Statement") under the caption "Proposal One: Election of Class II Directors," which information is herein incorporated by reference. Pursuant to General Instruction G(3), information concerning executive officers of the Company is included in Part I of this Form 10-K under the caption "Executive Officers of the Registrant." ITEM 11. EXECUTIVE COMPENSATION Information with respect to the executive compensation is included in the Proxy Statement under the caption "Executive Compensation," which information is herein incorporated by reference. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Information with respect to the security ownership of certain beneficial owners and management is included in the Proxy Statement under the caption "Security Ownership of Management and Certain Beneficial Owners," which information is herein incorporated by reference. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS None. PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (a)(1) Financial Statements. See Item 8. (a)(2) Supplemental Schedules Supporting Financial Statements. See Item 8. (a)(3) Exhibits. See Index to Exhibits, page 37. (b) Reports on Form 8-K. None (c) Exhibits. See Index to Exhibits, page 37. (d) Financial Statement Schedules. See Item 8. 35 37 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned duly authorized. DYERSBURG CORPORATION Date: December 16, 1996 /s/ T. Eugene McBride ----------------------------- T. Eugene McBride President and Chief Executive Officer (Principal executive officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant and in the capacities indicated on December 16, 1996. /s/ T. Eugene McBride /s/ John D. Howard - ------------------------------- ------------------------------- T. Eugene McBride John D. Howard Director Director /s/ Jerome M. Wiggins /s/ Julius Koppelman - ------------------------------- ------------------------------- Jerome M. Wiggins Julius Koppelman President - Operations Director Director /s/ Wm. S. Shropshire, Jr. /s/ Daniel W. Miller - ------------------------------- ------------------------------- William S. Shropshire, Jr. Daniel W. Miller Executive Vice President, Director Chief Financial Officer and Secretary-Treasurer (Principal financial officer) /s/ Paul L. Hallock /s/ Marvin B. Crow - ------------------------------- ------------------------------- Paul L. Hallock Marvin B. Crow Vice President - Finance Director (Principal accounting officer) /s/ James E. Herring /s/ L.R. Jalenak, Jr. - ------------------------------- ------------------------------- James E. Herring L. R. Jalenak, Jr. Director Director /s/ Patricia Hilsberg /s/ Julius Lasnick - ------------------------------- ------------------------------- Patricia Hilsberg Julius Lasnick Director Director
36 38 INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION - ------- --------------------------------------------- 2 Stock Purchase Agreement, dated as of January 19, 1994, including certain exhibits, relating the acquisition of the outstanding capital stock of United Knitting Acquisition Corp. (incorporated by reference to Exhibit 2 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on February 2, 1994). 3.1 Amended and Restated Charter of Dyersburg Corporation (incorporated by reference to Exhibit 3(a) to the Registration Statement on Form S-1 (Registration No. 33-46331)). 3.2 Bylaws of Dyersburg Corporation (incorporated by reference to Exhibit 3(b) to the Registration Statement on Form S-1 (Registration No. 33-46331)). 10.4 Amended and Restated Reducing Revolving Credit Agreement, including form of Amended and Restated Revolving Credit Note, dated as of July 16, 1993 among Dyersburg Fabrics I Inc., Dyersburg Corporation and Trust Company Bank, as agent, and certain banks named therein (incorporated by reference to Exhibit 10.4 to Dyersburg Corporation's Form 10-K for the fiscal year ended October 2, 1993). 10.5 Note Purchase Agreement, including form of Note, dated as of September 29, 1993 between Dyersburg Corporation and Dyersburg Fabrics Inc. and each of several purchasers relating to the sale of $25,000,000 of Dyersburg Fabrics Inc.'s 6.78% Senior Notes Due 2005 (incorporated by reference to Exhibit 10.5 to Dyersburg Corporation's Form 10-K for the fiscal year ended October 2, 1993).
37 39 INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION - ------- --------------------------------------------- 10.6 Loan Agreement between The Industrial Revenue Board of the City of Trenton, Tennessee and Dyersburg Fabrics Inc. dated as of July 1, 1990 (incorporated by reference to Dyersburg Fabrics Inc.'s Form 10-K for the fiscal year ended September 29, 1990). 10.7 Tax Sharing Agreement dated July 24, 1990 between Dyersburg Fabrics Inc. and Dyersburg Corporation (incorporated by reference to Dyersburg Fabrics Inc.'s Form 10-K for the fiscal year ended September 29, 1990). 10.8 Amended and Restated Letter of Credit Agreement dated as of July 1, 1990 and executed on May 14, 1992, by and among Dyersburg Fabrics Inc., Dyersburg Corporation, and Trust Company Bank relating to the $7,900,000 Industrial Development Bond of the City of Trenton, Tennessee Industrial Development Bonds (Dyersburg Fabrics Inc. Project), Series 1990 (incorporated by reference to Dyersburg Corporation's Form 10-K for fiscal year ended October 3, 1992). 10.9 First Amendment to Amended and Restated Letter of Credit Agreement dated November 30, 1992 by and among Dyersburg Fabrics Inc., Dyersburg Corporation and Trust Company Bank (incorporated by reference to Dyersburg Corporation's Form 10-K for the fiscal year ended October 2, 1992). 10.10 Second amendment to Amended and Restated Letter of Credit Agreement dated October 29, 1993 by and among Dyersburg Fabrics Inc., Dyersburg Corporation and Trust Company Bank, (incorporated by reference to Dyersburg Corporation's Form 10-K for the fiscal year ended October 2, 1993).
38 40 INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION - ------- --------------------------------------------------- 10.11 Amended and Restated Working Capital Agreement dated as of May 14, 1992, by and among Dyersburg Fabrics Inc., Dyersburg Corporation, and Trust Company Bank (incorporated by reference to Dyersburg Corporation's Form 10-K for the fiscal year ended October 3, 1992). 10.12 First Amendment to Amended and Restated Working Capital Agreement dated as of November 30, 1992 among Dyersburg Fabrics Inc., Dyersburg Corporation and Trust Company Bank (incorporated by reference to Exhibit 10.12 to Dyersburg Corporation's Form 10-K for the fiscal year ended October 2, 1993). 10.13 Second Amendment to amended and Restated Working Capital Agreement dated as of October 29, 1993 among Dyersburg Fabrics, Inc., Dyersburg Corporation and Trust Company Bank (incorporated by reference to Exhibit 10.13 to Dyersburg Corporation's Form 10-K for the fiscal year ended October 2, 1993). 10.14 Amended and Restated Guaranty of Dyersburg Corporation in favor of Trust Company Bank and certain banks named therein dated as of July 16, 1993 (incorporated by reference to Exhibit 10.14 to Dyersburg Corporation's Form 10-K for the fiscal year ended October 2, 1993). 10.15 Assignment of and Amendment and Restatement of Security Agreement dated as of May 14, 1992 by and among Dyersburg Fabrics Inc., Trust Company Bank, as agent, and other banks named therein (incorporated by reference to Dyersburg Corporation's Form 10-K for the fiscal year ended October 3, 1992).
39 41 INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION - ------- --------------------------------------------------- 10.16 Assignment of and Amendment and Restatement of Tennessee Deed of Trust and Security Agreement dated May 14, 1992 by and among Dyersburg Fabrics Inc. and Trust Company Bank (incorporated by reference to Dyersburg Corporation's Form 10-K for the fiscal year ended October 3, 1992). 10.17* Dyersburg Corporation 1992 Stock Incentive Plan (incorporated by reference to Exhibit 10(a).2 to the Registration Statement on Form S-1 (Registration No. 33-46331)), as amended, (incorporated by reference to Appendix A to Proxy Statement dated December 14, 1995). 10.18* Dyersburg Fabrics Inc. Deferred Compensation Plan, as amended, (incorporated by reference to Appendix A to Proxy Statement dated December 14, 1995). 10.19 Form of Purchase Agreement dated March 4, 1992 between the Company and each of the holders of the Junior Term Notes (incorporated by reference to Exhibit 10(j) to the Registration Statement on Form S-1 (Registration No. 33-46331)). 10.20 Form of Registration Rights Agreement dated as of April 30, 1992 between the Company and each shareholder of the Company (incorporated by reference to Exhibit 10(k) to the Registration Statement on Form S-1 (Registration No. 33-46331)). 10.21* Dyersburg Corporation Non-qualified Stock Option Plan for Employees of Acquired Companies (incorporated by reference to Exhibit 4(c) to the Registration Statement on Form S-8 (Registration No. 33-74350)), as amended, (incorporated by reference to Appendix A to Proxy Statement dated December 14, 1995).
40 42 INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION - ------- --------------------------------------------------- 10.22 Amended and Restated First Amendment to Amended and Restated Reducing Revolving Credit Agreement, dated as of January 13, 1994 (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q for the quarter ended January 1, 1994). 10.23 Seasonal Working Capital Agreement, dated as of January 1, 1994, by and among Dyersburg Fabrics Inc., Trust Company Bank, and Dyersburg Corporation (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q for the quarter ended January 1, 1994). 10.24 Supplement to Amended and Restated Guaranty Agreement, dated as of January 1, 1994, made by Dyersburg Corporation in favor of Trust Company Bank (incorporated by reference to Exhibit 10.3 to the Quarterly Report on Form 10-Q for the quarter ended January 1, 1994). 10.25 Second Amended and Restated Reducing Revolving Credit Agreement, dated as of April 10, 1996, by and among Dyersburg Corporation, Dyersburg Fabrics Inc., DFIC, Inc., Dyersburg Fabrics Limited Partnership, I, SunTrust Bank, Atlanta, as agent, and certain other financial institutions named therein (incorporated by reference to Exhibit 10.1 to Dyersburg Corporation's Form 10-Q for the quarter ended March 30, 1996). 10.26 Second Amended and Restated Revolving Credit Note of Dyersburg Fabrics Limited Partnership, I, dated as of April 10, 1996, payable to SunTrust Bank, Atlanta, in the principal sum of $26,400,000 (incorporated by reference to Exhibit 10.2 to Dyersburg Corporation's Form 10-Q for the quarter ended March 30, 1996).
41 43 INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION - ------- --------------------------------------------------- 10.27 Second Amended and Restated Revolving Credit Note of Dyersburg Fabrics Limited Partnership, I, dated as of April 10, 1996, payable to NBD Bank, in the principal sum of $18,000,000 (incorporated by reference to Exhibit 10.3 to Dyersburg Corporation's Form 10-Q for the quarter ended March 30, 1996). 10.28 Second Amended and Restated Revolving Credit Note of Dyersburg Fabrics Limited Partnership, I, dated as of April 10, 1996, payable to National City Bank, Kentucky, in the principal sum of $15,200,000 (incorporated by reference to Exhibit 10.4 to Dyersburg Corporation's Form 10-Q for the quarter ended March 30, 1996). 10.29 Second Amended and Restated Revolving Credit Note of Dyersburg Fabrics Limited Partnership, I, dated as of April 10, 1996, payable to The Bank of Tokyo-Mitsubishi, Ltd., Atlanta Agency, in the principal sum of $15,200,000 (incorporated by reference to Exhibit 10.5 to Dyersburg Corporation's Form 10-Q for the quarter ended March 30, 1996). 10.30 Seconded Amended and Restated Revolving Credit Note of Dyersburg Fabrics Limited Partnership, I, dated as of April 10, 1996, payable to Wachovia Bank of Georgia, N.A., in the principal sum of $5,200,000 (incorporated by reference to Exhibit 10.6 to Dyersburg Corporation's Form 10-Q for the quarter ended March 30, 1996). 10.31 Second Amended and Restated Guaranty Agreement, dated as of April 10, 1996, by Dyersburg Corporation, Dyersburg Fabrics Inc. and DFIC, Inc. in favor of SunTrust Bank, Atlanta, as agent, and certain other financial institutions named therein (incorporated by reference to Exhibit 10.7 to Dyersburg Corporation's Form 10-Q for the quarter ended March 30, 1996). 10.32 Amended and Restated Affiliate Guaranty Agreement, dated as of April 10, 1996, by United Knitting, Inc., United Knitting Limited Partnership, I, and UKIC, Inc. in favor of SunTrust Bank, Atlanta, as agent, and certain other financial institutions named therein (incorporated by reference to Exhibit 10.8 to Dyersburg Corporation's Form 10-Q for the quarter ended March 30, 1996).
42 44 INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION - ------- --------------------------------------------------- 10.33 Second Amended and Restated Working Capital Agreement, dated as of April 10, 1996, by and among Dyersburg Fabrics Limited Partnership, I, Dyersburg Corporation, Dyersburg Fabrics, Inc., DFIC, Inc. and SunTrust Bank, Atlanta (incorporated by reference to Exhibit 10-9 to Dyersburg Corporation's Form 10-Q for the quarter ended March 30, 1996). 10.34 Amended and Restated Working Capital Note of Dyersburg Fabrics Limited Partnership, I, dated as of April 10, 1996, in favor of SunTrust Bank, Atlanta, in the principal sum of $1,000,000 (incorporated by reference to Exhibit 10.10 to Dyersburg Corporation's Form 10-Q for the quarter ended March 30, 1996). 10.35 Second Amended and Restated Letter of Credit Agreement dated as of July 1, 1990, among Dyersburg Fabrics Limited Partnership, I, Dyersburg Fabrics Inc., Dyersburg Corporation, DFIC, Inc., and SunTrust Bank, Atlanta, relating to $7,900,000 The Industrial Development Board of the City of Trenton, Tennessee Industrial Development Revenue Bonds (Dyersburg Fabrics Inc. Project Series 1990)(incorporated by reference to Exhibit 10.11 to Dyersburg Corporation's Form 10-Q for the quarter ended March 30, 1996). 10.36 Amended and Restated Pledge and Security Agreement, dated as of July 1, 1990, made by, Dyersburg Fabrics Limited Partnership, I, to SunTrust Bank, Atlanta (incorporated by reference to Exhibit 10.12 to Dyersburg Corporation's Form 10-Q for the quarter ended March 30, 1996). 10.37 First Amendment to Amended and Restated Tennessee Deed of Trust and Security Agreement, dated as of April 10, 1996, by and among Dyersburg Fabrics Inc., Dyersburg Fabrics Limited Partnership, I, and SunTrust Bank, Atlanta (incorporated by reference to Exhibit 10.13 to Dyersburg Corporation's Form 10-Q for the quarter ended March 30, 1996).
43 45 INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION - ------- --------------------------------------------------- 10.38 Seconded Amended and Restated Security Agreement, dated as of April 10, 1996, by and between Dyersburg Fabrics Limited Partnership, I, and SunTrust Bank, Atlanta (incorporated by reference to Exhibit 10.14 to Dyersburg Corporation's Form 10-Q for the quarter ended March 30, 1996). 10.39 First Amendment, Limited Waiver and Consent, dated as of April 10. 1996, by and among Dyersburg Corporation, Dyersburg Fabrics Inc., Dyersburg Fabrics Limited Partnership, I, The Equitable Life Assurance Society of the United States, Equity Variable Life Insurance Company, Public Employees Retirement Association of Colorado, Northern Life Insurance Company, and Bankers Security Life Insurance Society (incorporated by reference to Exhibit 10.15 to Dyersburg Corporation's Form 10-Q for the quarter ended March 30, 1996). 10.40 Guaranty by Dyersburg Corporation of those certain 6.78% Senior Notes Dye 2005 in the aggregate principal amount of $25,000,000 originally issued by Dyersburg Fabrics Inc. (incorporated by reference to Exhibit 10.16 to Dyersburg Corporation's Form 10-Q for the quarter ended March 30, 1996). 10.41 Guaranty by Dyersburg Fabrics Inc. of those certain 6.78% Senior Notes Due 2005 in the aggregate principal amount of $25,000,000 originally issued by Dyersburg Fabrics Inc. (incorporated by reference to Exhibit 10.17 to Dyersburg Corporation's Form 10-Q for the quarter ended March 30, 1996). 10.42 Guaranty by DFIC, Inc. of those certain 6.78% Senior Notes Due 2005 kin the aggregate principal amount of $25,000,000 originally issued by Dyersburg Fabrics Inc. (incorporated by reference to Exhibit 10.18 to Dyersburg Corporation's Form 10-Q for the quarter ended March 30, 1996).
44 46 INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION - ------- --------------------------------------------------- 10.43 Guaranty by United Knitting Limited Partnership, I, of those certain 6.78% Senior Notes Due 2005 in the aggregate principal amount of $25,000,000 originally issued by Dyersburg Fabrics Inc. of those certain 6.78% Senior Notes Due 2005 in the aggregate principal amount of $25,000,000 originally issued by Dyersburg Fabrics Inc. (incorporated by reference to Exhibit 10.19 to Dyersburg Corporation's Form 10-Q for the quarter ended March 30, 1996). 10.44 Guaranty by UKIC, Inc. of those certain 6.78% Senior Notes Due 2005 in the aggregate principal amount of 25,000,000 originally issued by Dyersburg Fabrics Inc. (incorporated by reference to Exhibit 10.20 to Dyersburg Corporation's Form 10-Q for the quarter ended March 30, 1996). 10.45 First Amendment to Second Amended and Restated Reducing Revolving Credit Agreement (incorporated by reference to Exhibit 10.2 to Dyersburg Corporation's Form 10-Q for the quarter ended June 29, 1996). 10.46 Second Amendment to Second Amended and Restated Reducing Revolving Credit Agreement dated as of September 25, 1996, by and among Dyersburg Corporation, Dyersburg Fabrics Inc., DFIC, Inc., Dyersburg Fabrics Limited Partnership, I, SunTrust Bank, Atlanta, as agent, and certain other financial institutions named therein. 10.47 Limited Waiver and Consent dated as of September 26, 1996, by and among Dyersburg Corporation, Dyersburg Fabrics Inc., Dyersburg Fabrics Limited Partnership, I. The Equitable Life Assurance Society of the United States, Equitable Variable Life Insurance Company, Public Employees Retirement Association of Colorado, Northern Life Insurance Company and Reliastar Bankers Security Life Insurance Company. 11 Computation of earnings per share. 21 Subsidiaries 23 Consent of Independent Auditors 27 Financial Data Schedule (for SEC use only)
*Compensatory Plan. 45 EX-10.46 2 SECOND AMENDMENT TO REVOLVING CREDIT AGREEMENT 1 EXHIBIT 10.46 SECOND AMENDMENT TO SECOND AMENDED AND RESTATED REDUCING REVOLVING CREDIT AGREEMENT THIS SECOND AMENDMENT TO SECOND AMENDED AND RESTATED REDUCING REVOLVING CREDIT AGREEMENT (this "Amendment") dated as of September 25,1996, by and among DYERSBURG FABRICS LIMITED PARTNERSHIP, I, a Tennessee limited partnership (the "Borrower"), DYERSBURG CORPORATION, a Tennessee corporation ("Holding Company"), DYERSBURG FABRICS INC., a Tennessee corporation ("DFI"), DFIC, INC., a Delaware corporation ("Investment"; Holding Company, DFI and Investment collectively referred to herein as "Guarantors"), SUNTRUST BANK, ATLANTA (formerly known as Trust Company Bank), a Georgia banking corporation, NATIONAL CITY BANK, KENTUCKY, a national banking association, NBD BANK, an Illinois banking corporation, THE BANK OF TOKYO-MITSUBISHI, LTD., ATLANTA AGENCY, the Atlanta Branch of a Japanese banking association and WACHOVIA BANK OF GEORGIA, N.A., a national banking association (collectively, the "Banks") and SUNTRUST BANK, ATLANTA, in its capacity as agent for the Banks (in such capacity, the "Agent"); W I N E S S E T H WHEREAS, the Borrower, the Guarantors, the Banks and the Agent are parties to a certain Second Amended and Restated Reducing Revolving Credit Agreement dated as of April 10, 1996, as amended by that certain First Amendment to Second Amended and Restated Reducing Revolving Credit Agreement dated as of June 25, 1996 (as so amended, the "Credit Agreement"; all terms used herein without definition shall have the meanings ascribed to such terms in the Credit Agreement); WHEREAS, the Borrower and the Guarantors have requested, and the Banks and the Agent have agreed, to modify the description of the transactions leading to the formation of the Borrower and to allow the amendment of the partnership agreement to accomplish the same, nunc pro tunc, and that such amendment be effective as of April 10, 1996, the deemed effective date of such amendments, as more particularly set forth below; NOW, THEREFORE, for and in consideration of the mutual premises contained herein and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows: 1. The Second Recital of the Credit Agreement is hereby amended by deleting such recital in its entirety and substituting the following in lieu thereof: "WHEREAS, DFI and the Holding Company have requested that the Agent and the Banks consent to the reorganization of the companies as follows (the "Transaction"): 2 (a) Investment, a wholly-owned subsidiary of DFI, will be incorporated as a Delaware corporation and DFI will contribute approximately eighty percent (80%) of its tangible assets (other than stock of its Subsidiaries) to Investment in exchange for all stock of Investment; (b) the Borrower will be formed as a Tennessee limited partnership with DFI contributing substantially all its tangible assets (other than stock of its Subsidiaries) to the partnership in exchange for a one percent (1%) general partnership interest and a nineteen percent (19%) limited partnership interest in the Borrower and Investment will contribute its intangible assets to the Borrower in exchange for an eighty percent (80%) limited partnership interest; (c) DFI will contribute its nineteen percent (19%) limited partnership interest to Investment as a contribution to capital; (d) UKIC, Inc., a wholly-owned subsidiary of United Knitting, Inc. will be incorporated as a Delaware corporation and United Knitting, Inc. will contribute approximately sixty-five percent (65%) of its tangible and intangible assets (other than stock of its Subsidiaries) to UKIC, Inc. in exchange for all its stock; (e) United Knitting Limited Partnership, I will be formed as a Tennessee limited partnership with United Knitting, Inc. contributing substantially all its tangible assets (other than stock of its Subsidiaries) to the partnership in exchange for a one percent (1%) general partnership interest and a thirty-four percent (34%) limited partnership interest and UKIC, Inc. will contribute its assets to the limited partnership in exchange for a sixty-five percent (65%) limited partnership interest therein (United Knitting Limited Partnership, I, United Knitting, Inc. and UKIC, Inc. collectively referred to herein as the "Affiliate Guarantors"); (f) United Knitting, Inc. will contribute its thirty-four percent (34%) limited partnership interest to UKIC, Inc. as a contribution to capital; and (g) In order to simplify the overall corporate structure, United Knitting Acquisition Corp. will be liquidated and dissolved, with its assets transferred to DFI;" 2. Each of the Banks hereby waives any restriction set forth in the Credit Agreement preventing the execution and delivery of the amendments to the formation 2 3 documents of the Borrower, the Guarantors or the Affiliate Guarantors attached hereto as Exhibit "A", including without limitation, Section 8.13 of the Credit Agreement. 3. Each of the Guarantors and the Borrower hereby agrees that nothing herein shall constitute a waiver by the Banks of any Default or Event of Default, whether known or unknown, which may exist under the Credit Agreement. Each of the Guarantors and the Borrower represents and warrants to the Banks that as of the date hereof, no Default or Event of Default exists pursuant to the Credit Agreement which is not expressly waived herein. In addition, each of the Guarantors and the Borrower acknowledges and agrees that it has no knowledge of any defenses, counterclaims, offsets or objections in its favor against the Banks with regard to any of the obligations due under the terms of the Credit Agreement as of the date of this Amendment. 4. Except as expressly amended and modified herein, all terms and covenants and provisions of the Credit Agreement shall remain unaltered and in full force and effect, and the parties hereto do expressly ratify and confirm the Credit Agreement as modified herein. All future references to the Credit Agreement shall be deemed to refer to the Credit Agreement as amended hereby. Furthermore, pursuant to the terms of the Working Capital Agreement and Letter of Credit Agreement, this Amendment shall automatically amend the provisions of such agreements incorporated by reference therein. 5. This Amendment shall be effective upon receipt by the Agent of fully executed counterparts of this Amendment in its offices in Atlanta, Georgia. 6. This Amendment shall be binding upon and inure to the benefit of the parties hereto, their respective heirs, successors, successors-in-titles, and assigns. 7. This Amendment shall be governed by and construed in accordance with the laws of the State of Georgia, notwithstanding any principles regarding conflicts of laws thereof. 8. This Agreement sets forth the entire understanding of the parties with respect to the matters set forth herein, and shall supersede any prior negotiations or agreements, whether written or oral, with respect thereto. 9. This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts and may be delivered by telecopier. Each counterpart so executed and delivered shall be deemed an original and all of which taken together shall constitute but one and the same instrument. 3 4 IN WITNESS WHEREOF, the parties hereto have executed this Amendment through their authorized officers as of the date first above written. DYERSBURG FABRICS LIMITED PARTNERSHIP, I, a Tennessee limited partnership By: DYERSBURG FABRICS INC., its sole General Partner By: /s/ -------------------------------- Title: Vice President Finance Attest: /s/ -------------------------------- Title: Treasurer [CORPORATE SEAL] DYERSBURG CORPORATION By: /s/ ------------------------------------ Title: Vice President Finance Attest: /s/ ------------------------------------ Title: Treasurer [CORPORATE SEAL] DYERSBURG FABRICS INC. By: /s/ ------------------------------------ Title: Vice President Finance Attest: /s/ ------------------------------------ Title: Treasurer [CORPORATE SEAL] 4 5 DFIC, INC. By: /s/ ------------------------------------- Title: Secretary Attest: /s/ ------------------------------------- Title: Vice President and Treasurer [CORPORATE SEAL] SUNTRUST BANK, ATLANTA By: /s/ ------------------------------------- Title: Vice President By: /s/ ------------------------------------- Title: Banking Officer NATIONAL CITY BANK, KENTUCKY By: /s/ ------------------------------------- Title: Vice President NBD BANK By: /s/ ------------------------------------- Title: Vice President 5 6 THE BANK OF TOKYO-MITSUBISHI, LTD., ATLANTA AGENCY By: /s/ ------------------------------------- Title: Assistant Vice President WACHOVIA BANK OF GEORGIA, N.A. By: /s/ ------------------------------------- Title: Vice President SUNTRUST BANK, ATLANTA, AS AGENT By: /s/ ------------------------------------- Title: Vice President By: /s/ ------------------------------------- Title: Banking Officer 6 7 CONSENT AND RATIFICATION OF AFFILIATE GUARANTORS Each of the undersigned Affiliate Guarantors acknowledges its receipt of and consent to the First Amendment to Second Amended and Restated Reducing Revolving Credit Agreement attached hereto and incorporated herein by this reference and further acknowledges and agrees that nothing contained therein shall release, discharge, modify, change or affect the original liability of the Affiliate Guarantors under the Affiliate Guaranty and each Affiliate Guarantor ratifies and affirms the terms and conditions of the Affiliate Guaranty which remains in full force and effect. IN WITNESS WHEREOF, each Affiliate Guarantor has executed this Consent and Ratification under seal as of this 25th day of September, 1996. UNITED KNITTING, INC. By: /s/ ---------------------------------- Jerome M. Wiggins Treasurer Attest: /s/ ---------------------------------- Paul Hallock Assistant Secretary [CORPORATE SEAL] UNITED KNITTING LIMITED PARTNERSHIP, I, a Tennessee limited partnership BY: UNITED KNITTING, INC., ITS SOLE GENERAL PARTNER By: /s/ ---------------------------------- Jerome M. Wiggins Treasurer Attest: /s/ ---------------------------------- Paul Hallock Assistant Secretary [CORPORATE SEAL] 7 8 UKIC, INC. By: /s/ ---------------------------------- Barbara Steen Secretary Attest: /s/ ---------------------------------- Title: Vice President & Treasurer [CORPORATE SEAL] 8 9 EXHIBIT A 10 THIS INSTRUMENT PREPARED BY: BASS, BERRY & SIMS PLC 2700 First American Center Nashville, Tennessee 37238 AMENDMENT TO ASSIGNMENT AND BILL OF SALE WHEREAS, United Knitting, Inc., a Tennessee corporation (the "Company"), executed an Assignment and Bill of Sale (the "Original Assignment") dated April 10, 1996, effective as of the 26th day of February, 1996 in favor of UKIC, Inc., a Delaware corporation ("UKIC"); and WHEREAS, the Company and UKIC desire to amend the Original Assignment as set forth herein nunc pro tunc, and that such amendment be deemed effective as of the 26th day of February, 1996; NOW, THEREFORE, for and in consideration of $10 and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Partnership, intending to be legally bound, agree that the Original Assignment shall be amended and restated as follows: 1. Amendment. The Company and UKIC agree that Schedule A to the Original Assignment shall be deleted in its entirety and that Schedule A attached hereto shall be substituted therefor. 2. Effective Date. The Company and UKIC agree that the amendment made hereby shall be deemed effective as of February 26, 1996. IN WITNESS WHEREOF, the Company and UKIC have caused this instrument to be executed this the __ day of September, 1996. UNITED KNITTING, INC. By: ---------------------------- Name: -------------------------- Title: ------------------------- UKIC, INC. By: ---------------------------- Name: -------------------------- Title: ------------------------- 11 STATE OF ) ---------------------- COUNTY OF ) ---------------------- Personally appeared before me, the undersigned, a Notary Public, _______________, with whom I am personally acquainted, and who acknowledged that he executed the within instrument for the purposes therein contained, and who further acknowledged that he is the __________ of United Knitting, Inc., a Tennessee corporation, and is authorized by the corporation to execute this instrument on behalf of the corporation. WITNESS my hand, at office, this ___ day of September, 1996. -------------------------- Notary Public My Commission Expires: - ---------------------- STATE OF ) ---------------------- COUNTY OF ) ---------------------- Personally appeared before me, the undersigned, a Notary Public, _________________, with whom I am personally acquainted, and who acknowledged that he executed the within instrument for the purposes therein contained, and who further acknowledged that he is the ____________ of UKIC, a Delaware corporation, and is authorized by the corporation to execute this instrument on behalf of the corporation. WITNESS my hand, at office, this ___ day of September, 1996. -------------------------- Notary Public My Commission Expires: - ---------------------- 12 SCHEDULE A Accounts receivable with a value of $6,219,954 and inventories and supplies with a value of $4,178,121. 13 THIS INSTRUMENT PREPARED BY: BASS, BERRY & SIMS PLC 2700 First American Center Nashville, Tennessee 37238 AMENDMENT TO ASSIGNMENT AND BILL OF SALE WHEREAS, United Knitting, Inc., a Tennessee corporation (the "Company"), executed an Assignment and Bill of Sale (the "Original Assignment") dated April 10, 1996, effective as of the 26th day of February, 1996 in favor of UKIC, Inc., a Delaware corporation ("UKIC"); and WHEREAS, the Company and UKIC desire to amend the Original Assignment as set forth herein nunc pro tunc, and that such amendment be deemed effective as of the 26th day of February, 1996; NOW, THEREFORE, for and in consideration of $10 and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the UKIC, intending to be legally bound, agree that the Original Assignment shall be amended and restated as follows: 1. Amendment. The Company and UKIC agree that the granting language of the Original Assignment shall be deleted in its entirety and that the following shall be substituted therefor: FOR VALUE RECEIVED, the undersigned, the Company, does hereby sell, convey, transfer, assign and deliver unto UKIC, the Company's thirty-four percent (34%) limited partnership interest in United Knitting Limited Partnership, I, a Tennessee limited partnership. 2. Effective Date. The Company and UKIC agree that the amendment made hereby shall be deemed effective as of February 26, 1996. IN WITNESS WHEREOF, the Company and UKIC have caused this instrument to be executed this the __ day of September, 1996. UNITED KNITTING, INC. By: ---------------------------- Name: -------------------------- Title: ------------------------- 14 UKIC, INC. By: --------------------------- Name: ------------------------- Title: ------------------------ 15 STATE OF TENNESSEE ) COUNTY OF DYER ) Personally appeared before me, the undersigned, a Notary Public, ________, with whom I am personally acquainted, and who acknowledged that he executed the within instrument for the purposes therein contained, and who further acknowledged that he is the _____ of United Knitting, Inc., a Tennessee corporation, and is authorized by the corporation to execute this instrument on behalf of the corporation. WITNESS my hand, at office, this ___ day of September, 1996. ------------------------ Notary Public My Commission Expires: - ---------------------- STATE OF ) ------------------ COUNTY OF ) ----------------- Personally appeared before me, the undersigned, a Notary Public, _________________, with whom I am personally acquainted, and who acknowledged that he executed the within instrument for the purposes therein contained, and who further acknowledged that he is the _____ of UKIC, Inc., a Delaware corporation, and is authorized by the corporation to execute this instrument on behalf of the corporation. WITNESS my hand, at office, this ___ day of September, 1996. ------------------------ Notary Public My Commission Expires: - ---------------------- 16 THIS INSTRUMENT PREPARED BY: BASS, BERRY & SIMS PLC 2700 First American Center Nashville, Tennessee 37238 AMENDMENT TO ASSIGNMENT AND BILL OF SALE WHEREAS, United Knitting, Inc., a Tennessee Corporation, ("the Company") executed an Assignment and Bill of Sale (the "Original Assignment") dated April 10, 1996, effective as of the 26th day of February, 1996 in favor United Knitting Limited Partnership, I (the "Partnership"); and WHEREAS, the Company executed an Assignment and Bill of Sale (the "Assignment to UKIC") dated April 10, 1996, effective as of the 26th day of February, 1996 in favor of UKIC, Inc., a Delaware corporation ("UKIC"); and WHEREAS, the Company and UKIC desire to amend the Assignment to UKIC to reflect certain changes nunc pro tunc, and that such amendment be deemed effective as of the 26th day of February, 1996; and WHEREAS, the Company and the Partnership desire to amend the Original Assignment nunc pro tunc to clarify that it pertains to property of the Company after giving effect to the foregoing Assignment to UKIC, as amended, and that such amendment be deemed effective as of the 26th day of February, 1996; NOW, THEREFORE, for and in consideration of $10 and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Partnership, intending to be legally bound, agree that the Original Assignment shall be amended and restated as follows: 1. Amendment. The Partnership and the Company agree that Schedule A to the Original Assignment shall be deleted in its entirety and that Schedule A attached hereto shall be substituted therefor. 2. Effective Date. The Partnership and the Company agree that the amendment made hereby shall be deemed effective as of February 26, 1996. IN WITNESS WHEREOF, the Company and the Partnership have caused this instrument to be executed this the __ day of September, 1996. UNITED KNITTING, INC. By: ----------------------------------- 17 Name: --------------------------------- Title: -------------------------------- UNITED KNITTING LIMITED PARTNERSHIP, I By: ----------------------------------- Name: --------------------------------- Title: -------------------------------- 18 STATE OF TENNESSEE ) COUNTY OF DYER ) Personally appeared before me, the undersigned, a Notary Public, ________, with whom I am personally acquainted, and who acknowledged that he executed the within instrument for the purposes therein contained, and who further acknowledged that he is the _____ of United Knitting, Inc., a Tennessee corporation, and is authorized by the corporation to execute this instrument on behalf of the corporation. WITNESS my hand, at office, this ___ day of September, 1996. --------------------------- Notary Public My Commission Expires: - ---------------------- STATE OF ) --------------------- COUNTY OF ) --------------------- Personally appeared before me, ________________________, a Notary Public, ________________________, with whom I am personally acquainted, who acknowledged that ____________ executed the within instrument for the purposes therein contained, and who further acknowledged that ____________ is the ________________________ of UNITED KNITTING INC., the general partner of UNITED KNITTING LIMITED PARTNERSHIP, I, and is authorized by the corporation to execute this instrument on behalf of the corporation. WITNESS my hand, at office, this ____________ day of ____________, 1996. ------------------------------------- Notary Public My Commission Expires: 19 SCHEDULE A All assets of the Company except goodwill, stock of UKIC, partnership interest in the Partnership, trademarks, service marks and patents, organizational costs, accounts receivable from Dyersburg Fabrics Inc. and a 1987 Model HINO Truck. 20 THIS INSTRUMENT PREPARED BY: BASS, BERRY & SIMS PLC 2700 First American Center Nashville, Tennessee 37238 AMENDMENT TO AGREEMENT OF LIMITED PARTNERSHIP OF DYERSBURG FABRICS LIMITED PARTNERSHIP, I WHEREAS, Dyersburg Fabrics, Inc., a Tennessee corporation, as general partner (the "General Partner"), and the limited partners listed on Annex A hereto (the "Limited Partners" and individually a "Limited Partner")(the General Partner and any Limited Partner are referred to herein collectively as the "Partners") executed an Agreement of Limited Partnership of Dyersburg Fabrics Limited Partnership, I effective February 26, 1996 (the "Original Partnership Agreement"); and WHEREAS, the Partners desire to amend and restate such Original Partnership Agreement nunc pro tunc, to reflect the terms and conditions contained herein; and WHEREAS, the Partners desire that the effective date of this Amended and Restated Agreement shall be February 26, 1996; NOW, THEREFORE, for and in consideration of $10 and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Partners, intending to be legally bound, agree that the Original Partnership Agreement shall be amended and restated as follows: 1. Amendments. (a) The Partnership and the Company agree that Section 4.3 to the Original Partnership Agreement shall be deleted in its entirety and that the following shall be substituted therefor: 4.3 Transfer of Interests. Except for the transfer of the nineteen percent (19%) Limited Partnership Interest held by the General Partner to DFIC, Inc., no Partnership Interest of a Partner shall be transferred, in whole or in part, nor may any purported transferee of any Partnership Interest of a Partner be admitted as a substitute Partner. The term "transfer," when used in this Agreement with respect to a Partnership Interest, includes a sale, assignment, gift, pledge, encumbrance, hypothecation, mortgage, exchange or any other disposition. (b) The Partnership and the Company agree that Annex A to the Original Partnership Agreement shall be deleted in its entirety and that Annex A attached hereto shall be substituted therefor; and that Annex B to the Original Partnership Agreement shall be deleted in its entirety and that Annex B attached hereto shall be substituted therefor. 21 2. Effective Date. The Partnership and the Company agree that the amendment made hereby shall be deemed effective as of February 26, 1996. 3. No Other Changes. The Partners agree that, except for the amendments made hereby, the Original Partnership Agreement shall continue in full force and effect. THIS AMENDMENT TO AGREEMENT OF LIMITED PARTNERSHIP (this "Agreement") was executed by the Partners, this the __ day of September, 1996. GENERAL PARTNER: DYERSBURG FABRICS INC., a Tennessee corporation By: ------------------------------------- Name: ----------------------------------- Title: ---------------------------------- LIMITED PARTNERS: DFIC, INC., a Delaware corporation By: ------------------------------------- Name: ----------------------------------- Title: ---------------------------------- 22 ANNEX A PARTNERS AND PERCENTAGE INTERESTS
Percentage Partner Interest ------- -------- Dyersburg Fabrics Inc., 1.0% as General Partner Dyersburg Fabrics Inc., 19.0% as a Limited Partner DFIC, Inc., as a Limited Partner 80.0% ----- Total 100.0%
23 ANNEX B CAPITAL CONTRIBUTIONS BY PARTNERS
Partner Initial Contribution ------- -------------------- Dyersburg Fabrics Inc., The assets set forth on as General Partner Schedule B attached hereto and Limited Partner DFIC, Inc., Accounts receivable valued at as Limited Partner $12,000,000
24 THIS INSTRUMENT PREPARED BY: BASS, BERRY & SIMS PLC 2700 First American Center Nashville, Tennessee 37238 AMENDMENT TO ASSIGNMENT AND BILL OF SALE WHEREAS, DFIC, Inc., a Delaware corporation (the "Company"), executed an Assignment and Bill of Sale (the "Original Assignment") dated April 10, 1996, effective as of the 26th day of February, 1996 in favor of Dyersburg Fabrics Limited Partnership, I (the "Partnership"); and WHEREAS, the Company and the Partnership desire to amend the Original Assignment as set forth herein nunc pro tunc, and that such amendment be deemed effective as of the 26th day of February, 1996; NOW, THEREFORE, for and in consideration of $10 and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Partnership, intending to be legally bound, agree that the Original Assignment shall be amended and restated as follows: 1. Amendment. The Partnership and the Company agree that Schedule A to the Original Assignment shall be deleted in its entirety and that Schedule A attached hereto shall be substituted therefor. 2. Effective Date. The Partnership and the Company agree that the amendment made hereby shall be deemed effective as of February 26, 1996. IN WITNESS WHEREOF, the Company and the Partnership have caused this instrument to be executed this the __ day of September, 1996. DFIC, INC. By: ------------------------------------- Name: ----------------------------------- Title: ---------------------------------- DYERSBURG FABRICS LIMITED PARTNERSHIP, I By: ------------------------------------- Name: ----------------------------------- Title: ---------------------------------- 25 STATE OF ) -------------------- COUNTY OF ) ------------------- Personally appeared before me, the undersigned, a Notary Public, ________, with whom I am personally acquainted, and who acknowledged that he executed the within instrument for the purposes therein contained, and who further acknowledged that he is the _____ of DFIC, Inc., a Delaware corporation, and is authorized by the corporation to execute this instrument on behalf of the corporation. WITNESS my hand, at office, this ___ day of September, 1996. ------------------------- Notary Public My Commission Expires: - ---------------------- STATE OF ) -------------------- COUNTY OF ) ------------------- Personally appeared before me, ______________________, a Notary Public, ______________________, with whom I am personally acquainted, who acknowledged that ___________ executed the within instrument for the purposes therein contained, and who further acknowledged that ____________ is the _________________________ of DYERSBURG FABRICS INC., the general partner of DYERSBURG FABRICS LIMITED PARTNERSHIP, I, and is authorized by the corporation to execute this instrument on behalf of the corporation. WITNESS my hand, at office, this ______ day of _____________, 1996. ------------------------- Notary Public My Commission Expires: - ---------------------- 26 SCHEDULE A Accounts receivable with a value of $12,000,000 27 THIS INSTRUMENT PREPARED BY: BASS, BERRY & SIMS PLC 2700 First American Center Nashville, Tennessee 37238 AMENDMENT TO ASSIGNMENT AND BILL OF SALE WHEREAS, Dyersburg Fabrics, Inc., a Tennessee corporation (the "Company"), executed an Assignment and Bill of Sale (the "Original Assignment") dated April 10, 1996, effective as of the 26th day of February, 1996 in favor of DFIC, Inc., a Delaware corporation ("DFIC"); and WHEREAS, the Company and DFIC desire to amend the Original Assignment as set forth herein nunc pro tunc, and that such amendment be deemed effective as of the 26th day of February, 1996; NOW, THEREFORE, for and in consideration of $10 and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the DFIC, intending to be legally bound, agree that the Original Assignment shall be amended and restated as follows: 1. Amendment. The Company and DFIC agree that Schedule A to the Original Assignment shall be deleted in its entirety and that Schedule A attached hereto shall be substituted therefor. 2. Effective Date. The Company and DFIC agree that the amendment made hereby shall be deemed effective as of February 26, 1996. IN WITNESS WHEREOF, the Company and DFIC have caused this instrument to be executed this the __ day of September, 1996. DYERSBURG FABRICS, INC. By: ---------------------------------- Name: -------------------------------- Title: ------------------------------- DFIC, Inc. By: ---------------------------------- Name: -------------------------------- Title: ------------------------------- 28 STATE OF TENNESSEE ) COUNTY OF DYER ) Personally appeared before me, the undersigned, a Notary Public, ________, with whom I am personally acquainted, and who acknowledged that he executed the within instrument for the purposes therein contained, and who further acknowledged that he is the _____ of Dyersburg Fabrics, Inc., a Tennessee corporation, and is authorized by the corporation to execute this instrument on behalf of the corporation. WITNESS my hand, at office, this ___ day of September, 1996. ------------------------ Notary Public My Commission Expires: - ---------------------- STATE OF ) ------------------- COUNTY OF ) ------------------ Personally appeared before me, the undersigned, a Notary Public, ________, with whom I am personally acquainted, and who acknowledged that he executed the within instrument for the purposes therein contained, and who further acknowledged that he is the _____ of DFIC, Inc., a Delaware corporation, and is authorized by the corporation to execute this instrument on behalf of the corporation. WITNESS my hand, at office, this ___ day of September, 1996. ------------------------ Notary Public My Commission Expires: - ---------------------- 29 SCHEDULE A Accounts receivable with a value of $12,000,000 30 This instrument prepared by: BASS, BERRY & SIMS PLC 2700 First American Center Nashville, Tennessee 37238 AMENDMENT TO ASSIGNMENT AND ASSUMPTION AGREEMENT WHEREAS, Dyersburg Fabrics, Inc., a Tennessee corporation ("DFI") and Dyersburg Fabrics Limited Partnership, I, a Tennessee limited partnership ("DFLP") executed an Assignment and Assumption Agreement on the 10th day of April, 1996 (the "Original Assignment and Assumption Agreement"); and WHEREAS, DFI and DFLP desire to amend the foregoing Original Assignment and Assumption Agreement nunc pro tunc, and that such amendments be effective as of the 26th day of February, 1996; NOW, THEREFORE, for and in consideration of $10 and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, DFI and DFLP, intending to be legally bound, agree that the Original Assignment and Assumption Agreement shall be amended and restated as follows: 1. Amendment. DFI and DFLP agree that Section 1(b) of the Original Assignment and Assumption Agreement shall be deleted in its entirety and that the following shall be substituted therefor: b. For valid business, DFI proposes to consummate the following transactions, (the "Transaction"): DFI will incorporate DFIC, Inc., a Delaware corporation ("DFIC") and acquire all of DFIC's stock in consideration of a transfer and/or assignment of DFI's accounts receivable in the amount of $12,000,000, property equal to 80% of the value of DFI's assets. DFI and DFIC will form DFLP. Initially, DFI will transfer tangible assets and DFIC will transfer its intangible assets (other than capital stock of their respective subsidiaries) to DFLP, with DFI receiving a 1% interest as a general partner and a 19% interest as a limited partner, and DFIC receiving a 80% interest as a limited partner. After the initial transfers to DFLP, DFI will transfer its 19% limited partnership interest in DFLP to DFIC. 2. Effective Date. DFI and DFLP agree that the amendment made hereby shall be deemed effective as of February 26, 1996. IN WITNESS WHEREOF, DFI and DFLP have caused this Amendment to Assignment and Assumption Agreement to be executed this the ___ day of September, 1996. 31 DYERSBURG FABRICS, INC. By: ---------------------------------- Title: ------------------------------- DYERSBURG FABRICS LIMITED PARTNERSHIP, I By: Dyersburg Fabrics, Inc., General Partner By: ---------------------------------- Title: ------------------------------- 2 32 STATE OF ) ------------------- COUNTY OF ) ------------------ Personally appeared before me, ________________________, a Notary Public, ________________________, with whom I am personally acquainted, who acknowledged that ____________ executed the within instrument for the purposes therein contained, and who further acknowledged that ____________ is the ________________________ of DYERSBURG FABRICS, INC., a corporation, and is authorized by the corporation to execute this instrument on behalf of the corporation. WITNESS my hand, at office, this ____________ day of ____________, 1996. ------------------------------------ Notary Public My Commission Expires: - ---------------------- STATE OF ) ------------------- COUNTY OF ) ------------------ Personally appeared before me, ________________________, a Notary Public, ________________________, with whom I am personally acquainted, who acknowledged that ____________ executed the within instrument for the purposes therein contained, and who further acknowledged that ____________ is the ________________________ of DYERSBURG FABRICS, INC., the general partner of DYERSBURG FABRICS LIMITED PARTNERSHIP, I, and is authorized by the corporation to execute this instrument on behalf of the corporation. WITNESS my hand, at office, this ____________ day of ____________, 1996. ------------------------------------ Notary Public My Commission Expires: - ---------------------- 3 33 THIS INSTRUMENT PREPARED BY: BASS, BERRY & SIMS PLC 2700 First American Center Nashville, Tennessee 37238 AMENDMENT TO ASSIGNMENT AND BILL OF SALE WHEREAS, Dyersburg Fabrics, Inc., a Tennessee corporation (the "Company"), executed an Assignment and Bill of Sale (the "Original Assignment") dated April 10, 1996, effective as of the 26th day of February, 1996 in favor of DFIC, Inc., a Delaware corporation ("DFIC"); and WHEREAS, the Company and DFIC desire to amend the Original Assignment as set forth herein nunc pro tunc, and that such amendment be deemed effective as of the 26th day of February, 1996; NOW, THEREFORE, for and in consideration of $10 and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the DFIC, intending to be legally bound, agree that the Original Assignment shall be amended and restated as follows: 1. Amendment. The Company and DFIC agree that the granting language of the Original Assignment shall be deleted in its entirety and that the following shall be substituted therefor: FOR VALUE RECEIVED, the undersigned, the Company, does hereby sell, convey, transfer, assign and deliver unto DFIC, the Company's nineteen percent (19%) limited partnership interest in Dyersburg Fabrics Limited Partnership, I, a Tennessee limited partnership. 2. Effective Date. The Company and DFIC agree that the amendment made hereby shall be deemed effective as of February 26, 1996. IN WITNESS WHEREOF, the Company and DFIC have caused this instrument to be executed this the __ day of September, 1996. DYERSBURG FABRICS, INC. By: ------------------------------ Name: ---------------------------- Title: --------------------------- 34 DFIC, INC. By: ------------------------------ Name: ---------------------------- Title: --------------------------- 35 STATE OF TENNESSEE ) COUNTY OF DYER ) Personally appeared before me, the undersigned, a Notary Public, ________, with whom I am personally acquainted, and who acknowledged that he executed the within instrument for the purposes therein contained, and who further acknowledged that he is the _____ of Dyersburg Fabrics, Inc., a Tennessee corporation, and is authorized by the corporation to execute this instrument on behalf of the corporation. WITNESS my hand, at office, this ___ day of September, 1996. ------------------------- Notary Public My Commission Expires: - ---------------------- STATE OF ) ---------------------- COUNTY OF ) ---------------------- Personally appeared before me, the undersigned, a Notary Public, ________, with whom I am personally acquainted, and who acknowledged that he executed the within instrument for the purposes therein contained, and who further acknowledged that he is the _____ of DFIC, Inc., a Delaware corporation, and is authorized by the corporation to execute this instrument on behalf of the corporation. WITNESS my hand, at office, this ___ day of September, 1996. ------------------------- Notary Public My Commission Expires: - ---------------------- 36 THIS INSTRUMENT PREPARED BY: BASS, BERRY & SIMS PLC 2700 First American Center Nashville, Tennessee 37238 AMENDMENT TO ASSIGNMENT AND BILL OF SALE WHEREAS, Dyersburg Fabrics, Inc., a Tennessee Corporation, ("the Company") executed an Assignment and Bill of Sale (the "Original Assignment") dated April 10, 1996, effective as of the 26th day of February, 1996 in favor Dyersburg Fabrics Limited Partnership, I (the "Partnership"); and WHEREAS, the Company executed an Assignment and Bill of Sale (the "Assignment to UKIC") dated April 10, 1996, effective as of the 26th day of February, 1996 in favor of DFIC, Inc., a Delaware corporation ("DFIC"); and WHEREAS, the Company and DFIC desire to amend the Assignment to DFIC to reflect certain changes nunc pro tunc, and that such amendment be deemed effective as of the 26th day of February, 1996; and WHEREAS, the Company and the Partnership desire to amend the Original Assignment nunc pro tunc to clarify that it pertains to property of the Company after giving effect to the foregoing Assignment to DFIC, as amended, and that such amendment be deemed effective as of the 26th day of February, 1996; NOW, THEREFORE, for and in consideration of $10 and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Partnership, intending to be legally bound, agree that the Original Assignment shall be amended and restated as follows: 1. Amendment. The Partnership and the Company agree that Schedule A to the Original Assignment shall be deleted in its entirety and that Schedule A attached hereto shall be substituted therefor. 2. Effective Date. The Partnership and the Company agree that the amendment made hereby shall be deemed effective as of February 26, 1996. IN WITNESS WHEREOF, the Company and the Partnership have caused this instrument to be executed this the __ day of September, 1996. DYERSBURG FABRICS, INC. By: -------------------------------------- 37 Name: ------------------------------------ Title: ----------------------------------- DYERSBURG FABRICS LIMITED PARTNERSHIP, I By: Dyersburg Fabrics, Inc., General Partner Name: ------------------------------------ Title: ----------------------------------- 38 STATE OF ) ------------------- COUNTY OF ) ------------------ Personally appeared before me, the undersigned, a Notary Public, ________, with whom I am personally acquainted, and who acknowledged that he executed the within instrument for the purposes therein contained, and who further acknowledged that he is the __________of Dyersburg Fabrics, Inc., a Tennessee corporation, and is authorized by the corporation to execute this instrument on behalf of the corporation. WITNESS my hand, at office, this ___ day of September, 1996. ---------------------- Notary Public My Commission Expires: - ---------------------- STATE OF ) ------------------- COUNTY OF ) ------------------ Personally appeared before me, the undersigned, a Notary Public, ________, with whom I am personally acquainted, and who acknowledged that he executed the within instrument for the purposes therein contained, and who further acknowledged that he is the _____ of Dyersburg Fabrics, Inc., the general partner of Dyersburg Fabrics Limited Partnership, I, a Tennessee limited partnership, and is authorized by the corporation to execute this instrument on behalf of the corporation. WITNESS my hand, at office, this ___ day of September, 1996. ---------------------- Notary Public My Commission Expires: - ---------------------- 39 SCHEDULE A All assets of the Company except goodwill, stock of United Knitting, Inc. and DFIC, Inc., partnership interest in the Partnership, trademarks, service marks and patents, deferred tax benefits, life insurance policies, cash in the amount of $300,000 and the following:
VEHICLE ASSET NUMBER - ------- ------------ 1989 GMC pickup S #2GT 51297-000 1981 GMC Truck Model TC10703 PIC 50974-000 1989 Chevy Pickup S #1GCD 6053-000 1989 GMC Pickup S #2GR 6248-000 1984 Trailmobile Trailer 6249-000 1984 Trailmobile Trailer 6250-000 International 4900 Spotter Truck 6980-000 1994 International Model 8200 Tractor 7218-000 1985 Lufkin 48x102 Van/Trailer 7277-000 1985 Lufkin 48x102 Van/Trailer 7278-000 1985 Lufkin 48x102 Van/Trailer 7279-000 1985 Lufkin 48x102 Van/Trailer 7280-000 1985 Lufkin 48x102 Van/Trailer 7281-000 1985 Lufkin 48x102 Van/Trailer 7282-000 1995 Dorsey 48' Van Trailer 7584-000 1972 GMC 1 1/2 Ton Truck 2942-000 1963 Ford F70 Truck 2943-000 1979 Chevy 2 Ton C66 Truck 4152-000 Uniloader Wynnburg Trailer 4315-000 1970 Chevy C70 Truck 4679-000 Ford F-10 Truck S #2FTCF10E2CCA8 4729-000 1973 Truck 4900-000 Chevrolet 7-Series Diesel Truck 5519-000 Ford Model CL-45 Skip Tractor 5520-000
40 This instrument prepared by: BASS, BERRY & SIMS PLC 2700 First American Center Nashville, Tennessee 37238 AMENDMENT TO ASSIGNMENT AND ASSUMPTION AGREEMENT WHEREAS, United Knitting, Inc., a Tennessee corporation ("UKI") and United Knitting Limited Partnership, I, a Tennessee limited partnership ("UKLP") executed an Assignment and Assumption Agreement on the 10th day of April, 1996 (the "Original Assignment and Assumption Agreement"); and WHEREAS, UKI and UKLP desire to amend the foregoing Original Assignment and Assumption Agreement nunc pro tunc, and that such amendments be effective as of the 26th day of February, 1996; NOW, THEREFORE, for and in consideration of $10 and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, UKI and UKLP, intending to be legally bound, agree that the Original Assignment and Assumption Agreement shall be amended and restated as follows: 1. Amendment. UKI and UKLP agree that Section 1(b) of the Original Assignment and Assumption Agreement shall be deleted in its entirety and that the following shall be substituted therefor: b. For valid business, UKI proposes to consummate the following transactions, (the "Transaction"): UKI will incorporate UKIC, Inc., a Delaware corporation ("UKIC") and acquire all of UKIC's stock in consideration of a transfer and/or assignment of UKI's accounts receivable in the amount of $6,219,954 and inventory and supplies in the amount of $4,178,121, property equal to 65% of the value of UKI's assets. UKI and UKIC will form UKLP. Initially, UKI will transfer tangible assets and UKIC will transfer a combination of tangible and intangible assets (other than capital stock of their respective subsidiaries) to UKLP, with UKI receiving a 1% interest as a general partner and a 34% interest as a limited partner, and UKIC receiving a 65% interest as a limited partner. After the initial transfers to UKLP, UKI will transfer its 34% limited partnership interest in UKLP to UKIC. 2. Effective Date. UKI and UKLP agree that the amendment made hereby shall be deemed effective as of February 26, 1996. IN WITNESS WHEREOF, UKI and UKLP have caused this Amendment to Assignment and Assumption Agreement to be executed this the ___ day of September, 1996. 41 UNITED KNITTING, INC. By: -------------------------------- Title: ----------------------------- UNITED KNITTING LIMITED PARTNERSHIP, I By: United Knitting Inc., General Partner By: -------------------------------- Title: ----------------------------- 2 42 STATE OF ) ------------------ COUNTY OF ) ----------------- Personally appeared before me, ________________________, a Notary Public, ________________________, with whom I am personally acquainted, who acknowledged that ____________ executed the within instrument for the purposes therein contained, and who further acknowledged that ____________ is the ________________________ of UNITED KNITTING INC., a corporation, and is authorized by the corporation to execute this instrument on behalf of the corporation. WITNESS my hand, at office, this ____________ day of ____________, 1996. ------------------------------- Notary Public My Commission Expires: - ------------------------- STATE OF ) ------------------ COUNTY OF ) ----------------- Personally appeared before me, ________________________, a Notary Public, ________________________, with whom I am personally acquainted, who acknowledged that ____________ executed the within instrument for the purposes therein contained, and who further acknowledged that ____________ is the ________________________ of UNITED KNITTING INC., the general partner of UNITED KNITTING LIMITED PARTNERSHIP, I, and is authorized by the corporation to execute this instrument on behalf of the corporation. WITNESS my hand, at office, this ____________ day of ____________, 1996. ------------------------------- Notary Public My Commission Expires: - ------------------------- 3 43 THIS INSTRUMENT PREPARED BY: BASS, BERRY & SIMS PLC 2700 First American Center Nashville, Tennessee 37238 AMENDMENT TO ASSIGNMENT AND BILL OF SALE WHEREAS, UKIC, Inc., a Delaware corporation (the "Company"), executed an Assignment and Bill of Sale (the "Original Assignment") dated April 10, 1996, effective as of the 26th day of February, 1996 in favor of United Knitting Limited Partnership, I (the "Partnership"); and WHEREAS, the Company and the Partnership desire to amend the Original Assignment as set forth herein nunc pro tunc, and that such amendment be deemed effective as of the 26th day of February, 1996; NOW, THEREFORE, for and in consideration of $10 and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Partnership, intending to be legally bound, agree that the Original Assignment shall be amended and restated as follows: 1. Amendment. The Partnership and the Company agree that Schedule A to the Original Assignment shall be deleted in its entirety and that Schedule A attached hereto shall be substituted therefor. 2. Effective Date. The Partnership and the Company agree that the amendment made hereby shall be deemed effective as of February 26, 1996. IN WITNESS WHEREOF, the Company and the Partnership have caused this instrument to be executed this the __ day of September, 1996. UKIC, INC. By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- UNITED KNITTING LIMITED PARTNERSHIP, I By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- 44 STATE OF ) ------------------- COUNTY OF ) ------------------ Personally appeared before me, the undersigned, a Notary Public, ________, with whom I am personally acquainted, and who acknowledged that he executed the within instrument for the purposes therein contained, and who further acknowledged that he is the _____ of UKIC, Inc., a Delaware corporation, and is authorized by the corporation to execute this instrument on behalf of the corporation. WITNESS my hand, at office, this ___ day of September, 1996. ---------------------- Notary Public My Commission Expires: - ---------------------- STATE OF ) ------------------- COUNTY OF ) ------------------ Personally appeared before me, ________________________, a Notary Public, ________________________, with whom I am personally acquainted, who acknowledged that ____________ executed the within instrument for the purposes therein contained, and who further acknowledged that ____________ is the ________________________ of UNITED KNITTING INC., the general partner of UNITED KNITTING LIMITED PARTNERSHIP, I, and is authorized by the corporation to execute this instrument on behalf of the corporation. WITNESS my hand, at office, this ____________ day of ____________, 1996. ---------------------- Notary Public My Commission Expires: - ---------------------- 45 SCHEDULE A Accounts receivable with a value of $6,219,954 and inventories and supplies with a value of $4,178,121. 46 THIS INSTRUMENT PREPARED BY: BASS, BERRY & SIMS PLC 2700 First American Center Nashville, Tennessee 37238 AMENDMENT TO AGREEMENT OF LIMITED PARTNERSHIP OF UNITED KNITTING LIMITED PARTNERSHIP, I WHEREAS, United Knitting, Inc., a Tennessee corporation, as general partner (the "General Partner"), and the limited partners listed on Annex A hereto (the "Limited Partners" and individually a "Limited Partner")(the General Partner and any Limited Partner are referred to herein collectively as the "Partners") executed an Agreement of Limited Partnership of United Knitting Limited Partnership, I effective February 26, 1996 (the "Original Partnership Agreement"); and WHEREAS, the Partners desire to amend and restate such Original Partnership Agreement nunc pro tunc, to reflect the terms and conditions contained herein; and WHEREAS, the Partners desire that the effective date of this Amended and Restated Agreement shall be February 26, 1996; NOW, THEREFORE, for and in consideration of $10 and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Partners, intending to be legally bound, agree that the Original Partnership Agreement shall be amended and restated as follows: 1. Amendments. (a) The Partnership and the Company agree that Section 4.3 to the Original Partnership Agreement shall be deleted in its entirety and that the following shall be substituted therefor: 4.3 Transfer of Interests. Except for the transfer of the thirty-four percent (34%) Limited Partnership Interest held by the General Partner to UKIC, Inc., no Partnership Interest of a Partner shall be transferred, in whole or in part, nor may any purported transferee of any Partnership Interest of a Partner be admitted as a substitute Partner. No Partnership Interest of a General Partner shall be transferred, in whole or in part, or any purported transferee of a General Partner be admitted as a substitute General Partner. The term "transfer," when used in this Agreement with respect to a Partnership Interest, includes a sale, assignment, gift, pledge, encumbrance, hypothecation, mortgage, exchange or any other disposition. (b) The Partnership and the Company agree that Annex A to the Original Partnership Agreement shall be deleted in its entirety and that Annex A attached hereto shall be substituted therefor; and 47 that Annex B to the Original Partnership Agreement shall be deleted in its entirety and that Annex B attached hereto shall be substituted therefore. 2. Effective Date. The Partnership and the Company agree that the amendment made hereby shall be deemed effective as of February 26, 1996. 3. No Other Changes. The Partners agree that, except for the amendments made hereby, the Original Partnership Agreement shall continue in full force and effect. THIS AMENDMENT TO AGREEMENT OF LIMITED PARTNERSHIP (this "Agreement") was executed by the Partners, this the __ day of September, 1996. GENERAL PARTNER UNITED KNITTING, INC. By: ---------------------------------- Name: -------------------------------- Title: ------------------------------- LIMITED PARTNERS UKIC, INC. By: ---------------------------------- Name: -------------------------------- Title: ------------------------------- 48 ANNEX A PARTNERS AND PERCENTAGE INTERESTS
Percentage Partner Interest ------- -------- United Knitting, Inc., 1.0% as General Partner United Knitting, Inc., 34.0% as a Limited Partner UKIC, Inc., as a Limited Partner 65.0% ----- Total 100.0%
49 ANNEX B CAPITAL CONTRIBUTIONS BY PARTNERS
Partner Initial Contribution ------- -------------------- United Knitting, Inc., The assets set forth on as General Partner Schedule B attached hereto and Limited Partner UKIC, Inc. Accounts receivable valued at as Limited Partner $6,219,954; Inventories and supplies valued at $4,178,121
EX-10.47 3 LIMITED WAIVER AND CONSENT 1 EXHIBIT 10.47 LIMITED WAIVER AND CONSENT This LIMITED WAIVER AND CONSENT (this "Consent") is made as of September 26, 1996 by and among DYERSBURG CORPORATION, a Tennessee corporation (the "Holding Company"), DYERSBURG FABRICS, INC., a Tennessee corporation ("DFI"), DYERSBURG FABRICS LIMITED PARTNERSHIP, I, a Tennessee limited partnership (the "Borrower"), and THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES, EQUITABLE VARIABLE LIFE INSURANCE COMPANY, PUBLIC EMPLOYEES RETIREMENT ASSOCIATION OF COLORADO, NORTHERN LIFE INSURANCE COMPANY and RELIASTAR BANKERS SECURITY LIFE INSURANCE COMPANY, successor by merger to The North Atlantic Life Insurance Company of America (collectively the "Purchasers" and each individually a "Purchaser"). WHEREAS, the undersigned Purchasers are parties to those certain Note Purchase Agreements dated as of September 29, 1993, with DFI and the Holding Company, as amended by that certain First Amendment, Limited Waiver and Consent, dated as of April 10, 1996, by and among DFI, the Holding Company, the Borrower, and the Purchasers (the "First Amendment"; such Note Purchase Agreements, as amended by the First Amendment, being hereinafter referred to as the "Purchase Agreements"), pursuant to which, among other things, the Borrower has issued to the Purchasers its 6.78% Senior Notes Due 2005 in the aggregate principal amount of $25,000,000 (the "Notes"); and WHEREAS, pursuant to the First Amendment, the Purchasers among other things consented to the effectuation of certain reorganization transactions, described in Recital B to the First Amendment (collectively, the "Transactions"), among DFI, the Holding Company, the Borrower, DFIC, Inc., a Delaware corporation ("DFIC"), United Knitting, Inc., a Tennessee corporation ("UKI"), United Knitting Acquisition Corp., a Tennessee corporation, UKIC, Inc., a Delaware corporation ("UKIC"), and United Knitting Limited Partnership, I, a Tennessee limited partnership ("UKLP"; DFI, the Holding Company, DFIC, UKI, UKIC and UKLP being hereinafter referred to collectively as the "Guarantors"); and WHEREAS, the Borrower and the Guarantors have proposed that the Transactions be amended in certain respects, effective retroactively to the original date thereof, by the execution of amendatory documents in substantially the forms attached hereto as Exhibit A (collectively, the "Transaction Amendments"); NOW, THEREFORE, in consideration of the terms and conditions contained herein and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: Section 1. Limited Waiver and Consent. The Purchasers hereby (i) consent to the execution of the Transaction Amendments and to the effectuation of the Transactions as thereby modified, and (ii) waive any Default or Event of Default (as defined in the Purchase Agreements) by the Borrower, DFI or the Holding Company in the performance or observance 2 of the provisions of the Purchase Agreements to the extent such Default or Event of Default is the result of the performance of the Transaction Amendments. The consent and waiver set forth in this Section 1 shall be limited to the specific transactions described herein and shall not be deemed to (i) be a waiver of any other term or condition of the Purchase Agreements or (ii) prejudice any rights not specifically waived herein which any Purchaser or other holder of Notes may now or hereafter have under the Purchase Agreements, the Notes, any guarantees heretofore or hereafter executed pursuant to the Purchase Agreements by the Guarantors, or any other instrument or document executed in connection therewith. Section 2. Counterparts. This Consent may be executed in any number of counterparts, each of which shall be deemed an original, and all of which taken together shall be deemed to constitute one and the same instrument. Section 3. Payment of Fees. The Borrower agrees to pay all fees, costs and expenses incurred by the Purchasers in connection with the negotiation, preparation, execution and delivery of this Consent, including, without limitation, the reasonable fees and disbursements of Sonnenschein Nath & Rosenthal, special counsel to the Purchasers in connection herewith. Section 4. Governing Law. THIS CONSENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Section 5. Headings: Miscellaneous. Section headings are included herein for convenience of reference only and shall not constitute a part of this Consent for any other purposes. THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES By: /s/ Ina Lane ----------------------------- Its: Investment Officer EQUITABLE VARIABLE LIFE INSURANCE COMPANY By: /s/ Ina Lane ----------------------------- Its: Investment Officer 2 3 PUBLIC EMPLOYEES RETIREMENT ASSOCIATION OF COLORADO By: /s/ ----------------------------- Its: Authorized Signatory NORTHERN LIFE INSURANCE COMPANY By: /s/ ----------------------------- Its: Assistant Treasurer RELIASTAR BANKERS SECURITY LIFE INSURANCE COMPANY By: /s/ ----------------------------- Its: Vice President By: /s/ ----------------------------- Its: Assistant Treasurer ACKNOWLEDGED AND AGREED: DYERSBURG CORPORATION By: /s/ Paul Hallock ---------------------------- Its: Vice President Finance DYERSBURG FABRICS, INC. By: /s/ Paul Hallock ---------------------------- Its: Vice President Finance 3 4 DYERSBURG FABRICS LIMITED PARTNERSHIP, I By: DYERSBURG FABRICS, INC., its general partner By: /s/ Paul Hallock ----------------------------- Its: Vice President Finance DFIC, INC. By: /s/ Barbara Steen ---------------------------------- Its: Secretary UNITED KNITTING, INC. By: /s/ Paul Hallock ----------------------------------- Its: Assistant Secretary Treasurer UKIC, INC. By: /s/ Barbara Steen ----------------------------------- Its: Secretary UNITED KNITTING LIMITED PARTNERSHIP, I By: UNITED KNITTING, INC., its general partner By: /s/ Paul Hallock ----------------------------------- Its: Assistant Secretary Treasurer 4 5 EXHIBIT A 6 THIS INSTRUMENT PREPARED BY: BASS, BERRY & SIMS PLC 2700 First American Center Nashville, Tennessee 37238 AMENDMENT TO ASSIGNMENT AND BILL OF SALE WHEREAS, United Knitting, Inc., a Tennessee corporation (the "Company"), executed an Assignment and Bill of Sale (the "Original Assignment") dated April 10, 1996, effective as of the 26th day of February, 1996 in favor of UKIC, Inc., a Delaware corporation ("UKIC"); and WHEREAS, the Company and UKIC desire to amend the Original Assignment as set forth herein nunc pro tunc, and that such amendment be deemed effective as of the 26th day of February, 1996; NOW, THEREFORE, for and in consideration of $10 and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Partnership, intending to be legally bound, agree that the Original Assignment shall be amended and restated as follows: 1. Amendment. The Company and UKIC agree that Schedule A to the Original Assignment shall be deleted in its entirety and that Schedule A attached hereto shall be substituted therefor. 2. Effective Date. The Company and UKIC agree that the amendment made hereby shall be deemed effective as of February 26, 1996. IN WITNESS WHEREOF, the Company and UKIC have caused this instrument to be executed this the __ day of September, 1996. UNITED KNITTING, INC. By: ---------------------------- Name: -------------------------- Title: ------------------------- UKIC, INC. By: ---------------------------- Name: -------------------------- Title: ------------------------- 7 STATE OF ) ---------------------- COUNTY OF ) ---------------------- Personally appeared before me, the undersigned, a Notary Public, _______________, with whom I am personally acquainted, and who acknowledged that he executed the within instrument for the purposes therein contained, and who further acknowledged that he is the __________ of United Knitting, Inc., a Tennessee corporation, and is authorized by the corporation to execute this instrument on behalf of the corporation. WITNESS my hand, at office, this ___ day of September, 1996. -------------------------- Notary Public My Commission Expires: - ---------------------- STATE OF ) ---------------------- COUNTY OF ) ---------------------- Personally appeared before me, the undersigned, a Notary Public, _________________, with whom I am personally acquainted, and who acknowledged that he executed the within instrument for the purposes therein contained, and who further acknowledged that he is the ____________ of UKIC, a Delaware corporation, and is authorized by the corporation to execute this instrument on behalf of the corporation. WITNESS my hand, at office, this ___ day of September, 1996. -------------------------- Notary Public My Commission Expires: - ---------------------- 8 SCHEDULE A Accounts receivable with a value of $6,219,954 and inventories and supplies with a value of $4,178,121. 9 THIS INSTRUMENT PREPARED BY: BASS, BERRY & SIMS PLC 2700 First American Center Nashville, Tennessee 37238 AMENDMENT TO ASSIGNMENT AND BILL OF SALE WHEREAS, United Knitting, Inc., a Tennessee corporation (the "Company"), executed an Assignment and Bill of Sale (the "Original Assignment") dated April 10, 1996, effective as of the 26th day of February, 1996 in favor of UKIC, Inc., a Delaware corporation ("UKIC"); and WHEREAS, the Company and UKIC desire to amend the Original Assignment as set forth herein nunc pro tunc, and that such amendment be deemed effective as of the 26th day of February, 1996; NOW, THEREFORE, for and in consideration of $10 and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the UKIC, intending to be legally bound, agree that the Original Assignment shall be amended and restated as follows: 1. Amendment. The Company and UKIC agree that the granting language of the Original Assignment shall be deleted in its entirety and that the following shall be substituted therefor: FOR VALUE RECEIVED, the undersigned, the Company, does hereby sell, convey, transfer, assign and deliver unto UKIC, the Company's thirty-four percent (34%) limited partnership interest in United Knitting Limited Partnership, I, a Tennessee limited partnership. 2. Effective Date. The Company and UKIC agree that the amendment made hereby shall be deemed effective as of February 26, 1996. IN WITNESS WHEREOF, the Company and UKIC have caused this instrument to be executed this the __ day of September, 1996. UNITED KNITTING, INC. By: ---------------------------- Name: -------------------------- Title: ------------------------- 10 UKIC, INC. By: --------------------------- Name: ------------------------- Title: ------------------------ 11 STATE OF TENNESSEE ) COUNTY OF DYER ) Personally appeared before me, the undersigned, a Notary Public, ________, with whom I am personally acquainted, and who acknowledged that he executed the within instrument for the purposes therein contained, and who further acknowledged that he is the _____ of United Knitting, Inc., a Tennessee corporation, and is authorized by the corporation to execute this instrument on behalf of the corporation. WITNESS my hand, at office, this ___ day of September, 1996. ------------------------ Notary Public My Commission Expires: - ---------------------- STATE OF ) ------------------ COUNTY OF ) ----------------- Personally appeared before me, the undersigned, a Notary Public, _________________, with whom I am personally acquainted, and who acknowledged that he executed the within instrument for the purposes therein contained, and who further acknowledged that he is the _____ of UKIC, Inc., a Delaware corporation, and is authorized by the corporation to execute this instrument on behalf of the corporation. WITNESS my hand, at office, this ___ day of September, 1996. ------------------------ Notary Public My Commission Expires: - ---------------------- 12 THIS INSTRUMENT PREPARED BY: BASS, BERRY & SIMS PLC 2700 First American Center Nashville, Tennessee 37238 AMENDMENT TO ASSIGNMENT AND BILL OF SALE WHEREAS, United Knitting, Inc., a Tennessee Corporation, ("the Company") executed an Assignment and Bill of Sale (the "Original Assignment") dated April 10, 1996, effective as of the 26th day of February, 1996 in favor United Knitting Limited Partnership, I (the "Partnership"); and WHEREAS, the Company executed an Assignment and Bill of Sale (the "Assignment to UKIC") dated April 10, 1996, effective as of the 26th day of February, 1996 in favor of UKIC, Inc., a Delaware corporation ("UKIC"); and WHEREAS, the Company and UKIC desire to amend the Assignment to UKIC to reflect certain changes nunc pro tunc, and that such amendment be deemed effective as of the 26th day of February, 1996; and WHEREAS, the Company and the Partnership desire to amend the Original Assignment nunc pro tunc to clarify that it pertains to property of the Company after giving effect to the foregoing Assignment to UKIC, as amended, and that such amendment be deemed effective as of the 26th day of February, 1996; NOW, THEREFORE, for and in consideration of $10 and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Partnership, intending to be legally bound, agree that the Original Assignment shall be amended and restated as follows: 1. Amendment. The Partnership and the Company agree that Schedule A to the Original Assignment shall be deleted in its entirety and that Schedule A attached hereto shall be substituted therefor. 2. Effective Date. The Partnership and the Company agree that the amendment made hereby shall be deemed effective as of February 26, 1996. IN WITNESS WHEREOF, the Company and the Partnership have caused this instrument to be executed this the __ day of September, 1996. UNITED KNITTING, INC. By: ----------------------------------- 13 Name: --------------------------------- Title: -------------------------------- UNITED KNITTING LIMITED PARTNERSHIP, I By: ----------------------------------- Name: --------------------------------- Title: -------------------------------- 14 STATE OF TENNESSEE ) COUNTY OF DYER ) Personally appeared before me, the undersigned, a Notary Public, ________, with whom I am personally acquainted, and who acknowledged that he executed the within instrument for the purposes therein contained, and who further acknowledged that he is the _____ of United Knitting, Inc., a Tennessee corporation, and is authorized by the corporation to execute this instrument on behalf of the corporation. WITNESS my hand, at office, this ___ day of September, 1996. --------------------------- Notary Public My Commission Expires: - ---------------------- STATE OF ) --------------------- COUNTY OF ) --------------------- Personally appeared before me, ________________________, a Notary Public, ________________________, with whom I am personally acquainted, who acknowledged that ____________ executed the within instrument for the purposes therein contained, and who further acknowledged that ____________ is the ________________________ of UNITED KNITTING INC., the general partner of UNITED KNITTING LIMITED PARTNERSHIP, I, and is authorized by the corporation to execute this instrument on behalf of the corporation. WITNESS my hand, at office, this ____________ day of ____________, 1996. ------------------------------------- Notary Public My Commission Expires: 15 SCHEDULE A All assets of the Company except goodwill, stock of UKIC, partnership interest in the Partnership, trademarks, service marks and patents, organizational costs, accounts receivable from Dyersburg Fabrics Inc. and a 1987 Model HINO Truck. 16 THIS INSTRUMENT PREPARED BY: BASS, BERRY & SIMS PLC 2700 First American Center Nashville, Tennessee 37238 AMENDMENT TO AGREEMENT OF LIMITED PARTNERSHIP OF DYERSBURG FABRICS LIMITED PARTNERSHIP, I WHEREAS, Dyersburg Fabrics, Inc., a Tennessee corporation, as general partner (the "General Partner"), and the limited partners listed on Annex A hereto (the "Limited Partners" and individually a "Limited Partner")(the General Partner and any Limited Partner are referred to herein collectively as the "Partners") executed an Agreement of Limited Partnership of Dyersburg Fabrics Limited Partnership, I effective February 26, 1996 (the "Original Partnership Agreement"); and WHEREAS, the Partners desire to amend and restate such Original Partnership Agreement nunc pro tunc, to reflect the terms and conditions contained herein; and WHEREAS, the Partners desire that the effective date of this Amended and Restated Agreement shall be February 26, 1996; NOW, THEREFORE, for and in consideration of $10 and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Partners, intending to be legally bound, agree that the Original Partnership Agreement shall be amended and restated as follows: 1. Amendments. (a) The Partnership and the Company agree that Section 4.3 to the Original Partnership Agreement shall be deleted in its entirety and that the following shall be substituted therefor: 4.3 Transfer of Interests. Except for the transfer of the nineteen percent (19%) Limited Partnership Interest held by the General Partner to DFIC, Inc., no Partnership Interest of a Partner shall be transferred, in whole or in part, nor may any purported transferee of any Partnership Interest of a Partner be admitted as a substitute Partner. The term "transfer," when used in this Agreement with respect to a Partnership Interest, includes a sale, assignment, gift, pledge, encumbrance, hypothecation, mortgage, exchange or any other disposition. (b) The Partnership and the Company agree that Annex A to the Original Partnership Agreement shall be deleted in its entirety and that Annex A attached hereto shall be substituted therefor; and that Annex B to the Original Partnership Agreement shall be deleted in its entirety and that Annex B attached hereto shall be substituted therefor. 17 2. Effective Date. The Partnership and the Company agree that the amendment made hereby shall be deemed effective as of February 26, 1996. 3. No Other Changes. The Partners agree that, except for the amendments made hereby, the Original Partnership Agreement shall continue in full force and effect. THIS AMENDMENT TO AGREEMENT OF LIMITED PARTNERSHIP (this "Agreement") was executed by the Partners, this the __ day of September, 1996. GENERAL PARTNER: DYERSBURG FABRICS INC., a Tennessee corporation By: ------------------------------------- Name: ----------------------------------- Title: ---------------------------------- LIMITED PARTNERS: DFIC, INC., a Delaware corporation By: ------------------------------------- Name: ----------------------------------- Title: ---------------------------------- 18 ANNEX A PARTNERS AND PERCENTAGE INTERESTS
Percentage Partner Interest ------- -------- Dyersburg Fabrics Inc., 1.0% as General Partner Dyersburg Fabrics Inc., 19.0% as a Limited Partner DFIC, Inc., as a Limited Partner 80.0% ----- Total 100.0%
19 ANNEX B CAPITAL CONTRIBUTIONS BY PARTNERS
Partner Initial Contribution ------- -------------------- Dyersburg Fabrics Inc., The assets set forth on as General Partner Schedule B attached hereto and Limited Partner DFIC, Inc., Accounts receivable valued at as Limited Partner $12,000,000
20 THIS INSTRUMENT PREPARED BY: BASS, BERRY & SIMS PLC 2700 First American Center Nashville, Tennessee 37238 AMENDMENT TO ASSIGNMENT AND BILL OF SALE WHEREAS, DFIC, Inc., a Delaware corporation (the "Company"), executed an Assignment and Bill of Sale (the "Original Assignment") dated April 10, 1996, effective as of the 26th day of February, 1996 in favor of Dyersburg Fabrics Limited Partnership, I (the "Partnership"); and WHEREAS, the Company and the Partnership desire to amend the Original Assignment as set forth herein nunc pro tunc, and that such amendment be deemed effective as of the 26th day of February, 1996; NOW, THEREFORE, for and in consideration of $10 and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Partnership, intending to be legally bound, agree that the Original Assignment shall be amended and restated as follows: 1. Amendment. The Partnership and the Company agree that Schedule A to the Original Assignment shall be deleted in its entirety and that Schedule A attached hereto shall be substituted therefor. 2. Effective Date. The Partnership and the Company agree that the amendment made hereby shall be deemed effective as of February 26, 1996. IN WITNESS WHEREOF, the Company and the Partnership have caused this instrument to be executed this the __ day of September, 1996. DFIC, INC. By: ------------------------------------- Name: ----------------------------------- Title: ---------------------------------- DYERSBURG FABRICS LIMITED PARTNERSHIP, I By: ------------------------------------- Name: ----------------------------------- Title: ---------------------------------- 21 STATE OF ) -------------------- COUNTY OF ) ------------------- Personally appeared before me, the undersigned, a Notary Public, ________, with whom I am personally acquainted, and who acknowledged that he executed the within instrument for the purposes therein contained, and who further acknowledged that he is the _____ of DFIC, Inc., a Delaware corporation, and is authorized by the corporation to execute this instrument on behalf of the corporation. WITNESS my hand, at office, this ___ day of September, 1996. ------------------------- Notary Public My Commission Expires: - ---------------------- STATE OF ) -------------------- COUNTY OF ) ------------------- Personally appeared before me, ______________________, a Notary Public, ______________________, with whom I am personally acquainted, who acknowledged that ___________ executed the within instrument for the purposes therein contained, and who further acknowledged that ____________ is the _________________________ of DYERSBURG FABRICS INC., the general partner of DYERSBURG FABRICS LIMITED PARTNERSHIP, I, and is authorized by the corporation to execute this instrument on behalf of the corporation. WITNESS my hand, at office, this ______ day of _____________, 1996. ------------------------- Notary Public My Commission Expires: - ---------------------- 22 SCHEDULE A Accounts receivable with a value of $12,000,000 23 THIS INSTRUMENT PREPARED BY: BASS, BERRY & SIMS PLC 2700 First American Center Nashville, Tennessee 37238 AMENDMENT TO ASSIGNMENT AND BILL OF SALE WHEREAS, Dyersburg Fabrics, Inc., a Tennessee corporation (the "Company"), executed an Assignment and Bill of Sale (the "Original Assignment") dated April 10, 1996, effective as of the 26th day of February, 1996 in favor of DFIC, Inc., a Delaware corporation ("DFIC"); and WHEREAS, the Company and DFIC desire to amend the Original Assignment as set forth herein nunc pro tunc, and that such amendment be deemed effective as of the 26th day of February, 1996; NOW, THEREFORE, for and in consideration of $10 and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the DFIC, intending to be legally bound, agree that the Original Assignment shall be amended and restated as follows: 1. Amendment. The Company and DFIC agree that Schedule A to the Original Assignment shall be deleted in its entirety and that Schedule A attached hereto shall be substituted therefor. 2. Effective Date. The Company and DFIC agree that the amendment made hereby shall be deemed effective as of February 26, 1996. IN WITNESS WHEREOF, the Company and DFIC have caused this instrument to be executed this the __ day of September, 1996. DYERSBURG FABRICS, INC. By: ---------------------------------- Name: -------------------------------- Title: ------------------------------- DFIC, Inc. By: ---------------------------------- Name: -------------------------------- Title: ------------------------------- 24 STATE OF TENNESSEE ) COUNTY OF DYER ) Personally appeared before me, the undersigned, a Notary Public, ________, with whom I am personally acquainted, and who acknowledged that he executed the within instrument for the purposes therein contained, and who further acknowledged that he is the _____ of Dyersburg Fabrics, Inc., a Tennessee corporation, and is authorized by the corporation to execute this instrument on behalf of the corporation. WITNESS my hand, at office, this ___ day of September, 1996. ------------------------ Notary Public My Commission Expires: - ---------------------- STATE OF ) ------------------- COUNTY OF ) ------------------ Personally appeared before me, the undersigned, a Notary Public, ________, with whom I am personally acquainted, and who acknowledged that he executed the within instrument for the purposes therein contained, and who further acknowledged that he is the _____ of DFIC, Inc., a Delaware corporation, and is authorized by the corporation to execute this instrument on behalf of the corporation. WITNESS my hand, at office, this ___ day of September, 1996. ------------------------ Notary Public My Commission Expires: - ---------------------- 25 SCHEDULE A Accounts receivable with a value of $12,000,000 26 This instrument prepared by: BASS, BERRY & SIMS PLC 2700 First American Center Nashville, Tennessee 37238 AMENDMENT TO ASSIGNMENT AND ASSUMPTION AGREEMENT WHEREAS, Dyersburg Fabrics, Inc., a Tennessee corporation ("DFI") and Dyersburg Fabrics Limited Partnership, I, a Tennessee limited partnership ("DFLP") executed an Assignment and Assumption Agreement on the 10th day of April, 1996 (the "Original Assignment and Assumption Agreement"); and WHEREAS, DFI and DFLP desire to amend the foregoing Original Assignment and Assumption Agreement nunc pro tunc, and that such amendments be effective as of the 26th day of February, 1996; NOW, THEREFORE, for and in consideration of $10 and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, DFI and DFLP, intending to be legally bound, agree that the Original Assignment and Assumption Agreement shall be amended and restated as follows: 1. Amendment. DFI and DFLP agree that Section 1(b) of the Original Assignment and Assumption Agreement shall be deleted in its entirety and that the following shall be substituted therefor: b. For valid business, DFI proposes to consummate the following transactions, (the "Transaction"): DFI will incorporate DFIC, Inc., a Delaware corporation ("DFIC") and acquire all of DFIC's stock in consideration of a transfer and/or assignment of DFI's accounts receivable in the amount of $12,000,000, property equal to 80% of the value of DFI's assets. DFI and DFIC will form DFLP. Initially, DFI will transfer tangible assets and DFIC will transfer its intangible assets (other than capital stock of their respective subsidiaries) to DFLP, with DFI receiving a 1% interest as a general partner and a 19% interest as a limited partner, and DFIC receiving a 80% interest as a limited partner. After the initial transfers to DFLP, DFI will transfer its 19% limited partnership interest in DFLP to DFIC. 2. Effective Date. DFI and DFLP agree that the amendment made hereby shall be deemed effective as of February 26, 1996. IN WITNESS WHEREOF, DFI and DFLP have caused this Amendment to Assignment and Assumption Agreement to be executed this the ___ day of September, 1996. 27 DYERSBURG FABRICS, INC. By: ---------------------------------- Title: ------------------------------- DYERSBURG FABRICS LIMITED PARTNERSHIP, I By: Dyersburg Fabrics, Inc., General Partner By: ---------------------------------- Title: ------------------------------- 2 28 STATE OF ) ------------------- COUNTY OF ) ------------------ Personally appeared before me, ________________________, a Notary Public, ________________________, with whom I am personally acquainted, who acknowledged that ____________ executed the within instrument for the purposes therein contained, and who further acknowledged that ____________ is the ________________________ of DYERSBURG FABRICS, INC., a corporation, and is authorized by the corporation to execute this instrument on behalf of the corporation. WITNESS my hand, at office, this ____________ day of ____________, 1996. ------------------------------------ Notary Public My Commission Expires: - ---------------------- STATE OF ) ------------------- COUNTY OF ) ------------------ Personally appeared before me, ________________________, a Notary Public, ________________________, with whom I am personally acquainted, who acknowledged that ____________ executed the within instrument for the purposes therein contained, and who further acknowledged that ____________ is the ________________________ of DYERSBURG FABRICS, INC., the general partner of DYERSBURG FABRICS LIMITED PARTNERSHIP, I, and is authorized by the corporation to execute this instrument on behalf of the corporation. WITNESS my hand, at office, this ____________ day of ____________, 1996. ------------------------------------ Notary Public My Commission Expires: - ---------------------- 3 29 THIS INSTRUMENT PREPARED BY: BASS, BERRY & SIMS PLC 2700 First American Center Nashville, Tennessee 37238 AMENDMENT TO ASSIGNMENT AND BILL OF SALE WHEREAS, Dyersburg Fabrics, Inc., a Tennessee corporation (the "Company"), executed an Assignment and Bill of Sale (the "Original Assignment") dated April 10, 1996, effective as of the 26th day of February, 1996 in favor of DFIC, Inc., a Delaware corporation ("DFIC"); and WHEREAS, the Company and DFIC desire to amend the Original Assignment as set forth herein nunc pro tunc, and that such amendment be deemed effective as of the 26th day of February, 1996; NOW, THEREFORE, for and in consideration of $10 and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the DFIC, intending to be legally bound, agree that the Original Assignment shall be amended and restated as follows: 1. Amendment. The Company and DFIC agree that the granting language of the Original Assignment shall be deleted in its entirety and that the following shall be substituted therefor: FOR VALUE RECEIVED, the undersigned, the Company, does hereby sell, convey, transfer, assign and deliver unto DFIC, the Company's nineteen percent (19%) limited partnership interest in Dyersburg Fabrics Limited Partnership, I, a Tennessee limited partnership. 2. Effective Date. The Company and DFIC agree that the amendment made hereby shall be deemed effective as of February 26, 1996. IN WITNESS WHEREOF, the Company and DFIC have caused this instrument to be executed this the __ day of September, 1996. DYERSBURG FABRICS, INC. By: ------------------------------ Name: ---------------------------- Title: --------------------------- 30 DFIC, INC. By: ------------------------------ Name: ---------------------------- Title: --------------------------- 31 STATE OF TENNESSEE ) COUNTY OF DYER ) Personally appeared before me, the undersigned, a Notary Public, ________, with whom I am personally acquainted, and who acknowledged that he executed the within instrument for the purposes therein contained, and who further acknowledged that he is the _____ of Dyersburg Fabrics, Inc., a Tennessee corporation, and is authorized by the corporation to execute this instrument on behalf of the corporation. WITNESS my hand, at office, this ___ day of September, 1996. ------------------------- Notary Public My Commission Expires: - ---------------------- STATE OF ) ---------------------- COUNTY OF ) ---------------------- Personally appeared before me, the undersigned, a Notary Public, ________, with whom I am personally acquainted, and who acknowledged that he executed the within instrument for the purposes therein contained, and who further acknowledged that he is the _____ of DFIC, Inc., a Delaware corporation, and is authorized by the corporation to execute this instrument on behalf of the corporation. WITNESS my hand, at office, this ___ day of September, 1996. ------------------------- Notary Public My Commission Expires: - ---------------------- 32 THIS INSTRUMENT PREPARED BY: BASS, BERRY & SIMS PLC 2700 First American Center Nashville, Tennessee 37238 AMENDMENT TO ASSIGNMENT AND BILL OF SALE WHEREAS, Dyersburg Fabrics, Inc., a Tennessee Corporation, ("the Company") executed an Assignment and Bill of Sale (the "Original Assignment") dated April 10, 1996, effective as of the 26th day of February, 1996 in favor Dyersburg Fabrics Limited Partnership, I (the "Partnership"); and WHEREAS, the Company executed an Assignment and Bill of Sale (the "Assignment to UKIC") dated April 10, 1996, effective as of the 26th day of February, 1996 in favor of DFIC, Inc., a Delaware corporation ("DFIC"); and WHEREAS, the Company and DFIC desire to amend the Assignment to DFIC to reflect certain changes nunc pro tunc, and that such amendment be deemed effective as of the 26th day of February, 1996; and WHEREAS, the Company and the Partnership desire to amend the Original Assignment nunc pro tunc to clarify that it pertains to property of the Company after giving effect to the foregoing Assignment to DFIC, as amended, and that such amendment be deemed effective as of the 26th day of February, 1996; NOW, THEREFORE, for and in consideration of $10 and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Partnership, intending to be legally bound, agree that the Original Assignment shall be amended and restated as follows: 1. Amendment. The Partnership and the Company agree that Schedule A to the Original Assignment shall be deleted in its entirety and that Schedule A attached hereto shall be substituted therefor. 2. Effective Date. The Partnership and the Company agree that the amendment made hereby shall be deemed effective as of February 26, 1996. IN WITNESS WHEREOF, the Company and the Partnership have caused this instrument to be executed this the __ day of September, 1996. DYERSBURG FABRICS, INC. By: -------------------------------------- 33 Name: ------------------------------------ Title: ----------------------------------- DYERSBURG FABRICS LIMITED PARTNERSHIP, I By: Dyersburg Fabrics, Inc., General Partner Name: ------------------------------------ Title: ----------------------------------- 34 STATE OF ) ------------------- COUNTY OF ) ------------------ Personally appeared before me, the undersigned, a Notary Public, ________, with whom I am personally acquainted, and who acknowledged that he executed the within instrument for the purposes therein contained, and who further acknowledged that he is the __________of Dyersburg Fabrics, Inc., a Tennessee corporation, and is authorized by the corporation to execute this instrument on behalf of the corporation. WITNESS my hand, at office, this ___ day of September, 1996. ---------------------- Notary Public My Commission Expires: - ---------------------- STATE OF ) ------------------- COUNTY OF ) ------------------ Personally appeared before me, the undersigned, a Notary Public, ________, with whom I am personally acquainted, and who acknowledged that he executed the within instrument for the purposes therein contained, and who further acknowledged that he is the _____ of Dyersburg Fabrics, Inc., the general partner of Dyersburg Fabrics Limited Partnership, I, a Tennessee limited partnership, and is authorized by the corporation to execute this instrument on behalf of the corporation. WITNESS my hand, at office, this ___ day of September, 1996. ---------------------- Notary Public My Commission Expires: - ---------------------- 35 SCHEDULE A All assets of the Company except goodwill, stock of United Knitting, Inc. and DFIC, Inc., partnership interest in the Partnership, trademarks, service marks and patents, deferred tax benefits, life insurance policies, cash in the amount of $300,000 and the following:
VEHICLE ASSET NUMBER - ------- ------------ 1989 GMC pickup S #2GT 51297-000 1981 GMC Truck Model TC10703 PIC 50974-000 1989 Chevy Pickup S #1GCD 6053-000 1989 GMC Pickup S #2GR 6248-000 1984 Trailmobile Trailer 6249-000 1984 Trailmobile Trailer 6250-000 International 4900 Spotter Truck 6980-000 1994 International Model 8200 Tractor 7218-000 1985 Lufkin 48x102 Van/Trailer 7277-000 1985 Lufkin 48x102 Van/Trailer 7278-000 1985 Lufkin 48x102 Van/Trailer 7279-000 1985 Lufkin 48x102 Van/Trailer 7280-000 1985 Lufkin 48x102 Van/Trailer 7281-000 1985 Lufkin 48x102 Van/Trailer 7282-000 1995 Dorsey 48' Van Trailer 7584-000 1972 GMC 1 1/2 Ton Truck 2942-000 1963 Ford F70 Truck 2943-000 1979 Chevy 2 Ton C66 Truck 4152-000 Uniloader Wynnburg Trailer 4315-000 1970 Chevy C70 Truck 4679-000 Ford F-10 Truck S #2FTCF10E2CCA8 4729-000 1973 Truck 4900-000 Chevrolet 7-Series Diesel Truck 5519-000 Ford Model CL-45 Skip Tractor 5520-000
36 This instrument prepared by: BASS, BERRY & SIMS PLC 2700 First American Center Nashville, Tennessee 37238 AMENDMENT TO ASSIGNMENT AND ASSUMPTION AGREEMENT WHEREAS, United Knitting, Inc., a Tennessee corporation ("UKI") and United Knitting Limited Partnership, I, a Tennessee limited partnership ("UKLP") executed an Assignment and Assumption Agreement on the 10th day of April, 1996 (the "Original Assignment and Assumption Agreement"); and WHEREAS, UKI and UKLP desire to amend the foregoing Original Assignment and Assumption Agreement nunc pro tunc, and that such amendments be effective as of the 26th day of February, 1996; NOW, THEREFORE, for and in consideration of $10 and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, UKI and UKLP, intending to be legally bound, agree that the Original Assignment and Assumption Agreement shall be amended and restated as follows: 1. Amendment. UKI and UKLP agree that Section 1(b) of the Original Assignment and Assumption Agreement shall be deleted in its entirety and that the following shall be substituted therefor: b. For valid business, UKI proposes to consummate the following transactions, (the "Transaction"): UKI will incorporate UKIC, Inc., a Delaware corporation ("UKIC") and acquire all of UKIC's stock in consideration of a transfer and/or assignment of UKI's accounts receivable in the amount of $6,219,954 and inventory and supplies in the amount of $4,178,121, property equal to 65% of the value of UKI's assets. UKI and UKIC will form UKLP. Initially, UKI will transfer tangible assets and UKIC will transfer a combination of tangible and intangible assets (other than capital stock of their respective subsidiaries) to UKLP, with UKI receiving a 1% interest as a general partner and a 34% interest as a limited partner, and UKIC receiving a 65% interest as a limited partner. After the initial transfers to UKLP, UKI will transfer its 34% limited partnership interest in UKLP to UKIC. 2. Effective Date. UKI and UKLP agree that the amendment made hereby shall be deemed effective as of February 26, 1996. IN WITNESS WHEREOF, UKI and UKLP have caused this Amendment to Assignment and Assumption Agreement to be executed this the ___ day of September, 1996. 37 UNITED KNITTING, INC. By: -------------------------------- Title: ----------------------------- UNITED KNITTING LIMITED PARTNERSHIP, I By: United Knitting Inc., General Partner By: -------------------------------- Title: ----------------------------- 2 38 STATE OF ) ------------------ COUNTY OF ) ----------------- Personally appeared before me, ________________________, a Notary Public, ________________________, with whom I am personally acquainted, who acknowledged that ____________ executed the within instrument for the purposes therein contained, and who further acknowledged that ____________ is the ________________________ of UNITED KNITTING INC., a corporation, and is authorized by the corporation to execute this instrument on behalf of the corporation. WITNESS my hand, at office, this ____________ day of ____________, 1996. ------------------------------- Notary Public My Commission Expires: - ------------------------- STATE OF ) ------------------ COUNTY OF ) ----------------- Personally appeared before me, ________________________, a Notary Public, ________________________, with whom I am personally acquainted, who acknowledged that ____________ executed the within instrument for the purposes therein contained, and who further acknowledged that ____________ is the ________________________ of UNITED KNITTING INC., the general partner of UNITED KNITTING LIMITED PARTNERSHIP, I, and is authorized by the corporation to execute this instrument on behalf of the corporation. WITNESS my hand, at office, this ____________ day of ____________, 1996. ------------------------------- Notary Public My Commission Expires: - ------------------------- 3 39 THIS INSTRUMENT PREPARED BY: BASS, BERRY & SIMS PLC 2700 First American Center Nashville, Tennessee 37238 AMENDMENT TO ASSIGNMENT AND BILL OF SALE WHEREAS, UKIC, Inc., a Delaware corporation (the "Company"), executed an Assignment and Bill of Sale (the "Original Assignment") dated April 10, 1996, effective as of the 26th day of February, 1996 in favor of United Knitting Limited Partnership, I (the "Partnership"); and WHEREAS, the Company and the Partnership desire to amend the Original Assignment as set forth herein nunc pro tunc, and that such amendment be deemed effective as of the 26th day of February, 1996; NOW, THEREFORE, for and in consideration of $10 and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Partnership, intending to be legally bound, agree that the Original Assignment shall be amended and restated as follows: 1. Amendment. The Partnership and the Company agree that Schedule A to the Original Assignment shall be deleted in its entirety and that Schedule A attached hereto shall be substituted therefor. 2. Effective Date. The Partnership and the Company agree that the amendment made hereby shall be deemed effective as of February 26, 1996. IN WITNESS WHEREOF, the Company and the Partnership have caused this instrument to be executed this the __ day of September, 1996. UKIC, INC. By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- UNITED KNITTING LIMITED PARTNERSHIP, I By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- 40 STATE OF ) ------------------- COUNTY OF ) ------------------ Personally appeared before me, the undersigned, a Notary Public, ________, with whom I am personally acquainted, and who acknowledged that he executed the within instrument for the purposes therein contained, and who further acknowledged that he is the _____ of UKIC, Inc., a Delaware corporation, and is authorized by the corporation to execute this instrument on behalf of the corporation. WITNESS my hand, at office, this ___ day of September, 1996. ---------------------- Notary Public My Commission Expires: - ---------------------- STATE OF ) ------------------- COUNTY OF ) ------------------ Personally appeared before me, ________________________, a Notary Public, ________________________, with whom I am personally acquainted, who acknowledged that ____________ executed the within instrument for the purposes therein contained, and who further acknowledged that ____________ is the ________________________ of UNITED KNITTING INC., the general partner of UNITED KNITTING LIMITED PARTNERSHIP, I, and is authorized by the corporation to execute this instrument on behalf of the corporation. WITNESS my hand, at office, this ____________ day of ____________, 1996. ---------------------- Notary Public My Commission Expires: - ---------------------- 41 SCHEDULE A Accounts receivable with a value of $6,219,954 and inventories and supplies with a value of $4,178,121. 42 THIS INSTRUMENT PREPARED BY: BASS, BERRY & SIMS PLC 2700 First American Center Nashville, Tennessee 37238 AMENDMENT TO AGREEMENT OF LIMITED PARTNERSHIP OF UNITED KNITTING LIMITED PARTNERSHIP, I WHEREAS, United Knitting, Inc., a Tennessee corporation, as general partner (the "General Partner"), and the limited partners listed on Annex A hereto (the "Limited Partners" and individually a "Limited Partner")(the General Partner and any Limited Partner are referred to herein collectively as the "Partners") executed an Agreement of Limited Partnership of United Knitting Limited Partnership, I effective February 26, 1996 (the "Original Partnership Agreement"); and WHEREAS, the Partners desire to amend and restate such Original Partnership Agreement nunc pro tunc, to reflect the terms and conditions contained herein; and WHEREAS, the Partners desire that the effective date of this Amended and Restated Agreement shall be February 26, 1996; NOW, THEREFORE, for and in consideration of $10 and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Partners, intending to be legally bound, agree that the Original Partnership Agreement shall be amended and restated as follows: 1. Amendments. (a) The Partnership and the Company agree that Section 4.3 to the Original Partnership Agreement shall be deleted in its entirety and that the following shall be substituted therefor: 4.3 Transfer of Interests. Except for the transfer of the thirty-four percent (34%) Limited Partnership Interest held by the General Partner to UKIC, Inc., no Partnership Interest of a Partner shall be transferred, in whole or in part, nor may any purported transferee of any Partnership Interest of a Partner be admitted as a substitute Partner. No Partnership Interest of a General Partner shall be transferred, in whole or in part, or any purported transferee of a General Partner be admitted as a substitute General Partner. The term "transfer," when used in this Agreement with respect to a Partnership Interest, includes a sale, assignment, gift, pledge, encumbrance, hypothecation, mortgage, exchange or any other disposition. (b) The Partnership and the Company agree that Annex A to the Original Partnership Agreement shall be deleted in its entirety and that Annex A attached hereto shall be substituted therefor; and 43 that Annex B to the Original Partnership Agreement shall be deleted in its entirety and that Annex B attached hereto shall be substituted therefore. 2. Effective Date. The Partnership and the Company agree that the amendment made hereby shall be deemed effective as of February 26, 1996. 3. No Other Changes. The Partners agree that, except for the amendments made hereby, the Original Partnership Agreement shall continue in full force and effect. THIS AMENDMENT TO AGREEMENT OF LIMITED PARTNERSHIP (this "Agreement") was executed by the Partners, this the __ day of September, 1996. GENERAL PARTNER UNITED KNITTING, INC. By: ---------------------------------- Name: -------------------------------- Title: ------------------------------- LIMITED PARTNERS UKIC, INC. By: ---------------------------------- Name: -------------------------------- Title: ------------------------------- 44 ANNEX A PARTNERS AND PERCENTAGE INTERESTS
Percentage Partner Interest ------- -------- United Knitting, Inc., 1.0% as General Partner United Knitting, Inc., 34.0% as a Limited Partner UKIC, Inc., as a Limited Partner 65.0% ----- Total 100.0%
45 ANNEX B CAPITAL CONTRIBUTIONS BY PARTNERS
Partner Initial Contribution ------- -------------------- United Knitting, Inc., The assets set forth on as General Partner Schedule B attached hereto and Limited Partner UKIC, Inc. Accounts receivable valued at as Limited Partner $6,219,954; Inventories and supplies valued at $4,178,121
EX-11 4 COMPUTATION OF EARNINGS PER SHARE 1 Exhibit 11 STATEMENT REGARDING COMPUTATION OF EARNINGS PER SHARE DYERSBURG CORPORATION
Fiscal Year Ended ------------------------------------------------- September 28, September 30 October 1, 1996 1995 1994 ------------------------------------------------- (in thousands, except per share data) PRIMARY Average shares outstanding 13,643 14,196 14,010 =============================================== Income before extraordinary item $ 8,400 $ 6,560 $10,348 Extraordinary item --- --- --- ----------------------------------------------- Net income $ 8,400 $ 6,560 $10,348 =============================================== PER SHARE AMOUNTS: Income before extraordinary item $ 0.62 $ 0.46 $ 0.74 Extraordinary item --- --- --- ----------------------------------------------- Net income $ 0.62 $ 0.46 $ 0.74 =============================================== FULLY DILUTED: Average shares outstanding 13,794 14,196 14.010 =============================================== Income before extraordinary item $ 8,400 $ 6,560 $10,348 Extraordinary item --- --- --- ----------------------------------------------- Net income $ 8,400 $ 6,560 $10,348 =============================================== PER SHARE AMOUNTS: Income before extraordinary item $ 0.61 $ 0.46 $ 0.74 Extraordinary item --- --- --- ----------------------------------------------- Net income $ 0.61 $ 0.46 $ 0.74 ===============================================
EX-21 5 SUBSIDIARIES 1 EXHIBIT 21 Subsidiaries 1. Dyersburg Fabrics Inc. a Tennessee corporation and direct subsidiary 2. United Knitting Acquisition Corp., a Tennessee corporation and a wholly owned subsidiary of Dyersburg Fabrics Inc. 3. United Knitting, Inc., a Tennessee corporation and a wholly owned subsidiary of United Knitting Acquisition Corp. 4. Dyersburg Fabrics Investment Corporation ("DFIC") a Delaware corporation and intermediate investment corporation 5. Dyersburg Fabrics Limited Partnership, I, ("DFLP"), a Tennessee limited partnership 6. United Knitting Investment Corporation ("UKIC"), a Delaware corporation and intermediate investment corporation 7. United Knitting Limited Partnership, I, ("UKLP"), a Tennessee limited partnership 8. IQUE, Inc. ("IQUE"), a Tennessee corporation 9. IQUE Investment Corporation ("IIC"), a Delaware corporation and intermediate investment corporation. 10. IQUE Limited Partnership ("LLP"), a Tennessee limited partnership EX-23 6 CONSENT OF INDEPENDENT AUDITORS 1 EXHIBIT 23 Consent of Independent Auditors We consent to the incorporation by reference in the Registration Statements (Form S-8, Nos. 33-57612 and 33-32852) pertaining to the Dyersburg Corporation 1992 Incentive Stock Option Plan and in the Registration Statement (Form S-8 No. 33-74350) pertaining to the Dyersburg Corporation Stock Option Plan for Employees of Acquired Companies of our report dated October 22, 1996, with respect to the consolidated financial statements and schedule of Dyersburg Corporation included in the Annual Report (Form 10-K) for the year ended September 28, 1996. /s/ ERNST & YOUNG LLP Memphis, Tennessee December 18, 1996 EX-27 7 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL STATEMENTS FOR THE PERIOD ENDED SEPTEMBER 28, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000,000 YEAR SEP-28-1996 SEP-28-1996 1 0 42 2 23 68 122 54 195 15 0 0 0 0 89 195 196 0 0 0 0 1 6 14 8 0 0 0 0 8 .62 .61
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