EXHIBIT 10.82

 

SECOND AMENDMENT

TO THE

RETIREMENT PLAN FOR EMPLOYEES OF GALEY & LORD, INC.

 

WHEREAS, Galey & Lord, Inc. (the “Company”) maintains The Retirement Plan for
Employees of Galey & Lord, Inc., most recently amended and restated as of
January 1, 2000 (the “Plan”).

 

WHEREAS, the Employer is obligated to amend the Plan in accordance with the
Community Renewal Tax Relief Act of 2000; and

 

WHEREAS, the Company wishes to amend the Plan to reflect certain provisions of
the Economic Growth and Tax Relief Reconciliation Act of 2001 (“EGTRRA”). The
amendments made for EGTRRA are intended as good faith compliance with the
requirements of EGTRRA and are to be construed in accordance with EGTRRA and
guidance issued thereunder.

 

WHEREAS, the Company wishes to amend the Plan, effective January 1, 2002, to
comply with EGTRRA.

 

WHEREAS, the Company wishes to amend the Plan in accordance with IRS Revenue
Ruling 2001-62 and the Model Amendment as set forth in IRS Revenue Procedure
2002-29.

 

NOW, THEREFORE, the Plan is amended as follows:

 

I. APPLICABLE MORTALITY TABLE

 

Effective December 31, 2002, the definition of “Actuarial Equivalent” in Section
1.2 of the Plan is amended by adding the following paragraph to the end of the
Section to read as follows:

 

Effective for distributions with annuity starting dates on or after December 31,
2002, and notwithstanding any other Plan provisions to the contrary, the
applicable mortality table used for purposes of converting Participants’ Accrued
Benefits into a lump sum benefit payable under the Plan and for purposes of
determining the Actuarial Equivalent of a deferred payment, shall be the
mortality table prescribed in Rev. Rul. 2001-62 for all purposes under the Plan.

 

II. EARNINGS

 

Effective for Plan years beginning after December 31, 1997, the first full
paragraph of the definition of “Earnings” in Section 1.12 of the Plan is amended
in its entirety to read as follows:

 

A participant’s gross annual non-deferred remuneration received from the
Employer and Related Companies (if any) for personal services, as reported on
Form W-2, during the Plan Year, including (to the extent applicable) bonuses,
vacation pay, overtime pay, cash awards and commissions. Earnings shall

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exclude contributions or benefits under this Plan or any other plan of deferred
compensation maintained by the Employer, disability pay and severance pay.
Notwithstanding the above, Earnings include amounts which would have been
received by the Employee as remuneration but for the employee’s election to
defer such amounts under Code Section 125, 132(f)(4), 401(k), 403(b), or 457(b).
For convenience of administration, Earnings may be rounded to the nearest $100.

 

In addition, effective for Plan years beginning after December 31, 2001, the
second full paragraph of the definition of “Earnings” in Section 1.12 of the
Plan is amended in its entirety to read as follows:

 

For any Plan Year, the amount of a Participant’s Earnings that may be taken into
account under the Plan must not exceed the “Code Section 401(a)(17) limit”. The
“Code Section 401(a)(17) limit” is $200,000, as adjusted for increases in the
cost of living in accordance with Code Section 401(a)(17)(B). If Earnings for
any prior determination period are taken into account in determining an
Employee’s Accrued Benefit, Earnings for that prior determination period are
subject to the “Code Section 401(a)(17) limit” in effect for that prior
determination period.

 

III. SECTION 415 COMPENSATION

 

Effective for Plan years beginning after December 31, 1997, the last sentence of
the definition of “Section 415 Compensation “ in Section 1.33 of the Plan is
amended in its entirety to read as follows:

 

Notwithstanding the above, Section 415 Compensation includes amounts which would
have been received by the Employee as remuneration but for the employee’s
election to defer such amounts under Code Section 125, 132(f)(4), 401(k),
403(b), or 457(b).

 

IV. BENEFIT LIMITATIONS IN GENERAL

 

Effective for limitation years ending after December 31, 2001, Section 5.8 of
the plan is amended in its entirety to read as follows:

 

5.8 Benefit Limitations In General: Notwithstanding anything in the plan to the
contrary, the annual retirement benefit provided under this Plan and under all
other qualified defined benefit plans maintained by the Employer must not exceed
an annual benefit equal to the lesser of (a) $160,000 (as adjusted by the
Secretary of the Treasury) or (b) 100% of the Participant’s average annual
Section 415 Compensation from the Employer for the three consecutive calendar
years that will produce the highest average.

 

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For purposes of this Section 5.8 and Section 5.9, the “Limitation Year” is the
Plan year and the terms “Company” and “Employer” include Related Companies. The
benefit limitations described in this Section 5.8 are set forth and governed by
Code Section 415, which is incorporated herein by reference.

 

V. LIMITATION ON ANNUAL ADDITIONS AND ACTUARIAL ASSUMPTIONS

 

Effective December 31, 2002, Section 5.8 of the Plan which pertains to the
limitation on annual benefits under Section 415 of the Code, is amended by
adding the following paragraph to the end of the Section as follows:

 

Effective for distributions with annuity starting dates on or after December 31,
2002, and notwithstanding any other plan provisions to the contrary, the
applicable mortality table used for purposes of adjusting any benefit or
limitation under Section 415 of the Internal Revenue Code as referenced in this
Section 5.8 of the plan is the table prescribed in Rev. Rul. 2001-62.

 

VI. DIRECT ROLLOVERS OF PLAN DISTRIBUTIONS

 

Effective December 31, 2001, Section 6.7 of the Plan is amended by adding the
following paragraph to the end of the Section as follows:

 

Effective December 31, 2001, notwithstanding any other provision of the Plan to
the contrary, for purposes of the direct rollover provisions in this Section 6.7
of the Plan, an eligible retirement Plan shall also mean an annuity contract
described in Code §403(b) and an eligible Plan under Code §457(b) which is
maintained by a state, political subdivision of a state, or any agency or
instrumentality of a state or political subdivision of a state and which agrees
to separately account for amounts transferred into such Plan from this Plan. The
definition of eligible retirement Plan shall also apply in the case of a
distribution to a surviving spouse, or to a spouse or former spouse who is the
alternate payee under a qualified domestic relation order, as defined in Code
§414(p).

 

Effective December 31, 2001, notwithstanding any other provision of the Plan to
the contrary, for purposes of the direct rollover provisions in this Section 6.7
of the Plan, a portion of a distribution shall not fail to be an eligible
rollover distribution merely because the portion consists of after-tax employee
contributions which are not includible in gross income. However, such portion
may be paid only to an individual retirement account or annuity described in
Code §408(a) or (b) of the Code, or to a qualified defined contribution Plan
described in Code §401(a) or 403(a) that agrees to separately account for
amounts so transferred, including separately accounting for the

 

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portion of such distribution which is includible in gross income and the portion
of such distribution which is not so includible.

 

VII. TOP HEAVY RULES

 

Effective for Plan years beginning after December 31, 2001, Section 11.1(a) is
amended by adding the following paragraphs to the end of the Section to read as
follows:

 

Effective for Plan Years beginning after December 31, 2001, and notwithstanding
any other provision of the Plan to the contrary, with respect to distributions
during the year ending on the determination date, the present values of accrued
benefits and the amounts of account balances of an employee as of the
determination date shall be increased by the distributions made with respect to
the employee under the Plan and any Plan aggregated with the Plan under Code
§416(g)(2) during the 1-year period ending on the determination date. The
preceding sentence shall also apply to distributions under a terminated Plan
which, had it not been terminated, would have been aggregated with the Plan
under Code §416(g)(2)(A)(i). In the case of a distribution made for a reason
other than separation from service, death, or disability, this provision shall
be applied by substituting “5-year period” for “1-year period.”

 

Effective for Plan Years beginning after December 31, 2001, and notwithstanding
any other provision of the Plan to the contrary, the accrued benefits and
accounts of any individual who has not performed services for the Employer
during the 1-year period ending on the determination date shall not be taken
into account.

 

Effective for Plan years beginning after December 31, 2001, the definition of
“Key Employee” in Section 11.1(b) is amended in its entirety to read as follows:

 

A Key Employee is any Employee or former Employee (including any deceased
employee) who at any time during the Plan year that includes the determination
date was an officer of the Employer having annual compensation greater than
$130,000 (as adjusted under Code §416(i)(1) for Plan years beginning after
December 31, 2002), a 5-percent owner of the Employer, or a 1-percent owner of
the Employer having annual compensation of more than $150,000. For this purpose,
annual compensation means compensation within the meaning of Code §415(c)(3).
The determination of who is a key employee will be made in accordance with Code
§416(i)(1) and the applicable regulations and other guidance of general
applicability issued thereunder.

 

Effective for Plan years beginning after December 31, 2001, Section 11.2 is
amended by adding the following paragraph to the end of the Section to read as
follows:

 

Effective for Plan years beginning after December 31, 2001, notwithstanding any
other provision of the Plan to the contrary,

 

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for purposes of satisfying the minimum benefit requirements of Code §416(c)(1)
and the Plan, in determining years of service with the Employer, any service
with the Employer shall be disregarded to the extent that such service occurs
during a Plan year when the Plan benefits (within the meaning of Code §410(b))
no key employee or former key employee.

 

VIII. The Plan is hereby amended by adding Addendum A (as attached hereto)
immediately following the last page of the Plan.

 

IX. Unless otherwise amended herein, the provisions of the Plan are hereby
ratified and confirmed.

 

THIS AMENDMENT IS EXECUTED this 12th day of December, 2002.

 

GALEY & LORD, INC.

By

 

/s/    Leonard F. Ferro

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ADDENDUM A

MINIMUM REQUIRED DISTRIBUTIONS

 

(Model Amendment as set forth in Revenue Procedure 2002-29)

 

Section 1. General Rules

 

1.1. Effective Date. Unless an earlier effective date is specified in the
adoption agreement, the provisions of this article will apply for purposes of
determining required minimum distributions for calendar years beginning with the
2003 calendar year.

 

1.3. Precedence. The requirements of this article will take precedence over any
inconsistent provisions of the plan.

 

1.4. Requirements of Treasury Regulations Incorporated. All distributions
required under this article will be determined and made in accordance with the
Treasury regulations under section 401(a)(9) of the Internal Revenue Code.

 

1.5. TEFRA Section 242(b)(2) Elections. Notwithstanding the other provisions of
this article, distributions may be made under a designation made before January
1, 1984, in accordance with section 242(b)(2) of the Tax Equity and Fiscal
Responsibility Act (TEFRA) and the provisions of the plan that relate to section
242(b)(2) of TEFRA.

 

Section 2. Time and Manner of Distribution.

 

2.1. Required Beginning Date. The participant’s entire interest will be
distributed, or begin to be distributed, to the participant no later than the
participant’s required beginning date.

 

2.2. Death of Participant Before Distributions Begin. If the participant dies
before distributions begin, the participant’s entire interest will be
distributed, or begin to be distributed, no later than as follows:

 

(a) If the participant’s surviving spouse is the participant’s sole designated
beneficiary, then, except as provided in the adoption agreement, distributions
to the surviving spouse will begin by December 31 of the calendar year
immediately following the calendar year in which the participant died, or by
December 31 of the calendar year in which the participant would have attained
age 70½, if later.

 

(b) If the participant’s surviving spouse is not the participant’s sole
designated beneficiary, then, except as provided in the adoption agreement,
distributions to the designated beneficiary will begin by December 31 of the
calendar year immediately following the calendar year in which the participant
died.

 

(c) If there is no designated beneficiary as of September 30 of the year
following the year of the participant’s death, the participant’s entire interest
will be distributed by December 31 of the calendar year containing the fifth
anniversary of the participant’s death.

 

(d) If the participant’s surviving spouse is the participant’s sole designated
beneficiary and the surviving spouse dies after the participant but before
distributions to the surviving spouse begin, this section 2.2, other than
section 2.2(a), will apply as if the surviving spouse were the participant.

 

Addendum A—Page 1 of 4 (PN005)

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For purposes of this section 2.2 and section 5, distributions are considered to
begin on the participant’s required beginning date (or, if section 2.2(d)
applies, the date distributions are required to begin to the surviving spouse
under section 2.2(a)). If annuity payments irrevocably commence to the
participant before the participant’s required beginning date (or to the
participant’s surviving spouse before the date distributions are required to
begin to the surviving spouse under section 2.2(a)), the date distributions are
considered to begin is the date distributions actually commence.

 

2.3. Form of Distribution. Unless the participant’s interest is distributed in
the form of an annuity purchased from an insurance company or in a single sum on
or before the required beginning date, as of the first distribution calendar
year distributions will be made in accordance with sections 3, 4 and 5 of this
article. If the participant’s interest is distributed in the form of an annuity
purchased from an insurance company, distributions thereunder will be made in
accordance with the requirements of section 401(a)(9) of the Code and the
Treasury regulations. Any part of the participant’s interest which is in the
form of an individual account described in section 414(k) of the Code will be
distributed in a manner satisfying the requirements of section 401(a)(9) of the
Code and the Treasury regulations that apply to individual accounts.

 

Section 3. Determination of Amount to be Distributed Each Year.

 

3.1. General Annuity Requirements. If the participant’s interest is paid in the
form of annuity distributions under the plan, payments under the annuity will
satisfy the following requirements:

 

(a) the annuity distributions will be paid in periodic payments made at
intervals not longer than one year;

 

(b) the distribution period will be over a life (or lives) or over a period
certain not longer than the period described in section 4 or 5;

 

(c) once payments have begun over a period certain, the period certain will not
be changed even if the period certain is shorter than the maximum permitted;

 

(d) payments will either be nonincreasing or increase only as follows:

 

(1) by an annual percentage increase that does not exceed the annual percentage
increase in a cost-of-living index that is based on prices of all items and
issued by the Bureau of Labor Statistics;

 

(2) to the extent of the reduction in the amount of the participant’s payments
to provide for a survivor benefit upon death, but only if the beneficiary whose
life was being used to determine the distribution period described in section 4
dies or is no longer the participant’s beneficiary pursuant to a qualified
domestic relations order within the meaning of section 414(p);

 

(3) to provide cash refunds of employee contributions upon the participant’s
death; or

 

(4) to pay increased benefits that result from a plan amendment.

 

3.2. Amount Required to be Distributed by Required Beginning Date. The amount
that must be distributed on or before the participant’s required beginning date
(or, if the participant dies before distributions begin, the date distributions
are required to begin under section 2.2(a) or (b)) is the payment that is
required for one payment interval. The second payment need not be made until the
end of the next

 

Addendum A—Page 2 of 4 (PN005)

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payment interval even if that payment interval ends in the next calendar year.
Payment intervals are the periods for which payments are received, e.g.,
bi-monthly, monthly, semi-annually, or annually. All of the participant’s
benefit accruals as of the last day of the first distribution calendar year will
be included in the calculation of the amount of the annuity payments for payment
intervals ending on or after the participant’s required beginning date.

 

3.3. Additional Accruals After First Distribution Calendar Year. Any additional
benefits accruing to the participant in a calendar year after the first
distribution calendar year will be distributed beginning with the first payment
interval ending in the calendar year immediately following the calendar year in
which such amount accrues.

 

Section 4. Requirements For Annuity Distributions That Commence During
Participant’s Lifetime.

 

4.1. Joint Life Annuities Where the Beneficiary Is Not the Participant’s Spouse.
If the participant’s interest is being distributed in the form of a joint and
survivor annuity for the joint lives of the participant and a nonspouse
beneficiary, annuity payments to be made on or after the participant’s required
beginning date to the designated beneficiary after the participant’s death must
not at any time exceed the applicable percentage of the annuity payment for such
period that would have been payable to the participant using the table set forth
in Q&A-2 of section 1.401(a)(9)-6T of the Treasury regulations. If the form of
distribution combines a joint and survivor annuity for the joint lives of the
participant and a nonspouse beneficiary and a period certain annuity, the
requirement in the preceding sentence will apply to annuity payments to be made
to the designated beneficiary after the expiration of the period certain.

 

4.2. Period Certain Annuities. Unless the participant’s spouse is the sole
designated beneficiary and the form of distribution is a period certain and no
life annuity, the period certain for an annuity distribution commencing during
the participant’s lifetime may not exceed the applicable distribution period for
the participant under the Uniform Lifetime Table set forth in section
1.401(a)(9)-9 of the Treasury regulations for the calendar year that contains
the annuity starting date. If the annuity starting date precedes the year in
which the participant reaches age 70, the applicable distribution period for the
participant is the distribution period for age 70 under the Uniform Lifetime
Table set forth in section 1.401(a)(9)-9 of the Treasury regulations plus the
excess of 70 over the age of the participant as of the participant’s birthday in
the year that contains the annuity starting date. If the participant’s spouse is
the participant’s sole designated beneficiary and the form of distribution is a
period certain and no life annuity, the period certain may not exceed the longer
of the participant’s applicable distribution period, as determined under this
section 4.2, or the joint life and last survivor expectancy of the participant
and the participant’s spouse as determined under the Joint and Last Survivor
Table set forth in section 1.401(a)(9)-9 of the Treasury regulations, using the
participant’s and spouse’s attained ages as of the participant’s and spouse’s
birthdays in the calendar year that contains the annuity starting date.

 

Section 5. Requirements For Minimum Distributions Where Participant Dies Before
Date Distributions Begin.

 

5.1. Participant Survived by Designated Beneficiary. Except as provided in the
adoption agreement, if the participant dies before the date distribution of his
or her interest begins and there is a designated beneficiary, the participant’s
entire interest will be distributed, beginning no later than the time described
in section 2.2(a) or (b), over the life of the designated beneficiary or over a
period certain not exceeding:

 

(a) unless the annuity starting date is before the first distribution calendar
year, the life expectancy of the designated beneficiary determined using the
beneficiary’s age as of the

 

Addendum A—Page 3 of 4 (PN005)

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beneficiary’s birthday in the calendar year immediately following the calendar
year of the participant’s death; or

 

(b) if the annuity starting date is before the first distribution calendar year,
the life expectancy of the designated beneficiary determined using the
beneficiary’s age as of the beneficiary’s birthday in the calendar year that
contains the annuity starting date.

 

5.2. No Designated Beneficiary. If the participant dies before the date
distributions begin and there is no designated beneficiary as of September 30 of
the year following the year of the participant’s death, distribution of the
participant’s entire interest will be completed by December 31 of the calendar
year containing the fifth anniversary of the participant’s death.

 

5.3. Death of Surviving Spouse Before Distributions to Surviving Spouse Begin.
If the participant dies before the date distribution of his or her interest
begins, the participant’s surviving spouse is the participant’s sole designated
beneficiary, and the surviving spouse dies before distributions to the surviving
spouse begin, this section 5 will apply as if the surviving spouse were the
participant, except that the time by which distributions must begin will be
determined without regard to section 2.2(a).

 

Section 6. Definitions.

 

6.1. Designated beneficiary. The individual who is designated as the beneficiary
under Section 1.5 of the plan and is the designated beneficiary under section
401(a)(9) of the Internal Revenue Code and section 1.401(a)(9)-1, Q&A-4, of the
Treasury regulations.

 

6.2. Distribution calendar year. A calendar year for which a minimum
distribution is required. For distributions beginning before the participant’s
death, the first distribution calendar year is the calendar year immediately
preceding the calendar year which contains the participant’s required beginning
date. For distributions beginning after the participant’s death, the first
distribution calendar year is the calendar year in which distributions are
required to begin pursuant to section 2.2.

 

6.3. Life expectancy. Life expectancy as computed by use of the Single Life
Table in section 1.401(a)(9)-9 of the Treasury regulations.

 

6.4. Required beginning date. The date specified in Section 5.6 of the plan.

 

Addendum A—Page 4 of 4 (PN005)