<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. __)
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
JPS TEXTILE GROUP, INC.
------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
JPS TEXTILE GROUP, INC. [LOGO]
555 North Pleasantburg Drive
Suite 202
Greenville, South Carolina 29607
March 12, 1999
Dear Stockholder:
You are cordially invited to attend our Annual Meeting of Stockholders,
which will be held on Wednesday, April 7, 1999, at 9:00 a.m., local time, in New
York City.
The enclosed notice and proxy statement contain details concerning the
business to come before the meeting. You will note that the Board of Directors
of the Company recommends a vote "FOR" the election of the five directors to
serve until the 2000 Annual Meeting of Stockholders, "FOR" approval of the
Company's 1997 Incentive and Capital Accumulation Plan, as amended by the
Compensation Committee of the Board of Directors on February 27, 1999, and "FOR"
ratification of the appointment of Deloitte & Touche LLP as our independent
auditors for the 1999 fiscal year. Please sign and return your proxy card in the
enclosed envelope at your earliest convenience to assure that your shares will
be represented and voted at the meeting if you cannot attend.
I look forward to seeing you at the Annual Meeting.
Sincerely,
/s/ Michael L. Fulbright
Michael L. Fulbright
Chairman, President and
Chief Executive Officer
<PAGE>
JPS TEXTILE GROUP, INC.
555 NORTH PLEASANTBURG DRIVE
SUITE 202
GREENVILLE, SOUTH CAROLINA 29607
NOTICE OF 1999 ANNUAL MEETING OF STOCKHOLDERS
<TABLE>
<S> <C>
Date and Time............................. April 7, 1999 at 9:00 a.m., local time
Place..................................... Weil, Gotshal & Manges LLP
767 Fifth Avenue, 25th Floor
New York, New York 10153
Items of Business......................... (1) To elect five directors.
(2) To consider and act upon a proposal to approve the JPS Textile
Group, Inc. 1997 Incentive and Capital Accumulation Plan, as
amended by the Compensation Committee of the Board of Directors
on February 27, 1999.
(3) To ratify the appointment of Deloitte & Touche LLP as our
independent auditors for the 1999 fiscal year.
(4) To transact such other business as may properly come before the
Annual Meeting and any adjournment or postponement.
Record Date............................... You can vote if you are a stockholder of record as of the close of
business on February 19, 1999.
Annual Report............................. Our 1998 Annual Report, which is not a part of the proxy soliciting
material, is enclosed.
Proxy Voting.............................. It is important that your stock be represented and voted at the
Annual Meeting. Please vote in the following manner: MARK, SIGN, DATE
AND PROMPTLY RETURN the enclosed proxy card in the postage-paid
envelope.
Any proxy may be revoked at any time prior to its exercise at the
Annual Meeting.
</TABLE>
By Order of the Board of Directors,
/s/ John W. Sanders, Jr.
John W. Sanders, Jr.
Executive Vice President--Finance
and Chief Financial Officer
JPS Textile Group, Inc.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROXY STATEMENT............................................................................................ 1
STOCKHOLDERS ENTITLED TO VOTE.............................................................................. 1
PROXIES.................................................................................................... 1
VOTING PROCEDURES.......................................................................................... 1
REQUIRED VOTE.............................................................................................. 2
STOCKHOLDER ACCOUNT MAINTENANCE............................................................................ 2
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE.................................................... 2
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT................................................ 2
ITEM 1--ELECTION OF DIRECTORS.............................................................................. 5
NAME, AGE, PRINCIPAL OCCUPATION, BUSINESS EXPERIENCE AND OTHER INFORMATION OF EACH DIRECTOR AND EXECUTIVE
OFFICER.................................................................................................. 5
COMPENSATION OF DIRECTORS.................................................................................. 7
BOARD OF DIRECTORS AND COMMITTEE MEMBERSHIP................................................................ 7
THE AUDIT COMMITTEE........................................................................................ 7
THE COMPENSATION COMMITTEE................................................................................. 7
EXECUTIVE COMPENSATION..................................................................................... 7
AGREEMENTS WITH EXECUTIVE OFFICERS......................................................................... 8
EMPLOYEE BENEFIT AND LONG-TERM COMPENSATION PLANS.......................................................... 10
RETIREMENT PENSION PLAN.................................................................................... 10
1998 MANAGEMENT INCENTIVE BONUS PLAN....................................................................... 11
1997 INCENTIVE AND CAPITAL ACCUMULATION PLAN............................................................... 12
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION.................................................... 12
STOCK PERFORMANCE GRAPH.................................................................................... 15
ITEM 2--PROPOSAL TO APPROVE THE AMENDED INCENTIVE PLAN..................................................... 16
ITEM 3--RATIFICATION OF APPOINTMENT OF AUDITORS............................................................ 22
STOCKHOLDER PROPOSALS FOR THE 2000 ANNUAL MEETING.......................................................... 22
ANNUAL REPORT ON FORM 10-K................................................................................. 22
</TABLE>
<PAGE>
JPS TEXTILE GROUP, INC.
555 NORTH PLEASANTBURG DRIVE
SUITE 202
GREENVILLE, SOUTH CAROLINA 29607
------------------------------
PROXY STATEMENT
------------------------------
This Proxy Statement is furnished in connection with the solicitation by
the Board (as defined below) of JPS Textile Group, Inc. ("JPS," the "Company,"
"we," or "us"), a Delaware corporation, of proxies to be voted at our 1999
Annual Meeting of Stockholders (the "Annual Meeting") and at any adjournment or
postponement thereof, to be held on the date, at the time and place, and for the
purposes set forth on the foregoing notice. This Proxy Statement, form of proxy
and voting instructions are being mailed starting on or about March 12, 1999.
An admission ticket, which is required for entry into the Annual Meeting,
is attached to your proxy card. If you plan to attend the Annual Meeting, please
vote your proxy but keep the admission ticket and bring it to the Annual
Meeting.
If your stock is held in the name of a bank, broker or other holder of
record and you plan to attend the Annual Meeting, you can obtain an admission
ticket in advance by providing proof of ownership, such as a bank or brokerage
account statement, to JPS Textile Group, Inc., c/o American Stock Transfer &
Trust Company, or by calling 864-239-3900 and asking for the Chief Financial
Officer of the Company. If you do not have an admission ticket, you must verify
ownership of JPS Common Stock (as defined below) at the door.
A list of stockholders entitled to vote at the Annual Meeting will be
available at the Annual Meeting and for ten days prior to the Annual Meeting,
between the hours of 9:00 a.m. and 5:00 p.m., at the Company's offices located
at 555 North Pleasantburg Drive, Suite 202, Greenville, South Carolina 29607, by
contacting the Chief Financial Officer of the Company. The enclosed proxy is
solicited by and on behalf of the Board. The expense of the solicitation of
proxies for the Annual Meeting, including the cost of mailing, will be borne by
the Company. The Board has no knowledge or information that any other person
will specifically engage any employees to solicit proxies.
STOCKHOLDERS ENTITLED TO VOTE
Holders of record of JPS Common Stock at the close of business on
February 19, 1999 are entitled to receive notice of and to vote their stock at
the Annual Meeting. As of that date, 10,000,000 shares of the Company's Common
Stock, par value $.01 per share ("Common Stock"), were outstanding. Each share
of Common Stock is entitled to one vote on each matter properly brought before
the Annual Meeting.
PROXIES
Your vote is important. Stockholders of record may vote their proxies by
mail. A postage-paid envelope is provided.
Proxies may be revoked at any time before they are exercised by (1) written
notice to the Chief Financial Officer of the Company, (2) timely delivery of a
valid, later-dated proxy or (3) voting by ballot at the Annual Meeting.
VOTING PROCEDURES
You are requested on behalf of the Board to simply mark your proxy, date
and sign it, and return it to American Stock Transfer & Trust Company in the
postage-paid envelope provided.
The method by which you vote now will in no way limit your right to vote at
the Annual Meeting if you later decide to attend in person. If your stock is
held in the name of a bank, broker or other holder of record, you must obtain a
proxy, executed in your favor, from the holder of record to be able to vote at
the Annual Meeting.
<PAGE>
All stock that has been properly voted and not revoked will be voted at the
Annual Meeting in accordance with your instructions. If you sign your proxy card
but do not give voting instructions, the stock represented by that proxy will be
voted as recommended by the Board.
If any other matters are properly presented at the Annual Meeting for
consideration, the persons named in the enclosed form of proxy will have the
discretion to vote on those matters for you. At the date this Proxy Statement
went to press, we do not know of any other matter to be raised at the Annual
Meeting.
Please note that if you own stock in joint name, and other stock in your
own name, you will receive a separate proxy card for the joint ownership.
REQUIRED VOTE
The presence, in person or by proxy, of the holders of a majority of the
votes entitled to be cast by the stockholders entitled to vote at the Annual
Meeting is necessary to constitute a quorum. If there is no such quorum, the
holders of a majority in voting power of such shares of Common Stock so present
or represented may adjourn the Annual Meeting from time to time, without further
notice, until a quorum is obtained. When a quorum is once present it is not
broken by the subsequent withdrawal of any stockholder. Abstentions and broker
"non-votes" are counted as present and entitled to vote for purposes of
determining a quorum.
A plurality of votes cast is required for the election of directors. The
affirmative vote of a majority in voting power of shares of Common Stock present
in person or represented by proxy at the Annual Meeting is required to approve
the 1997 Incentive and Capital Accumulation Plan, as amended by the Compensation
Committee of the Board on February 27, 1999 (the "Amended Incentive Plan"), and
to ratify the appointment of Deloitte & Touche LLP as our auditors for the 1999
fiscal year.
STOCKHOLDER ACCOUNT MAINTENANCE
Our Transfer Agent is American Stock Transfer & Trust Company. All
communications concerning accounts of stockholders of record, including address
changes, name changes, inquiries as to requirements to transfer Common Stock and
similar issues, may be handled by calling them at 800-937-5449.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of holdings
and transactions in JPS's stock with the Securities and Exchange Commission.
Officers, directors and persons who own more than ten percent of a registered
class of the Company's equity securities are required by regulation to furnish
the Company with copies of all Section 16(a) forms they file. Based on the
Company's records and other information, we believe that in the 1998 fiscal year
the Company's directors and executive officers met all applicable Securities and
Exchange Commission filing requirements, except that a Form 3 was inadvertently
filed late by each of the directors and executive officers.
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT
Based upon information known to JPS as of March 1, 1999, the following
table sets forth the ownership of the shares of Common Stock issued and
outstanding as of such date by (a) each person or group that, to JPS' knowledge,
is the beneficial owner of more than 5% of such shares on such date, (b) each
director of JPS on such
2
<PAGE>
date, (c) each of the executive officers whose names appear in the summary
compensation table and (d) all directors and executive officers of JPS as a
group on such date.
<TABLE>
<CAPTION>
COMMON STOCK(1)
------------------------------------
BENEFICIAL OWNER NUMBER OF SHARES PERCENT OF CLASS
- -------------------------------------------------------------------- ---------------- ----------------
<S> <C> <C>
Magten Asset Management Corp. (2)................................... 1,897,738 19.0%
35 East 21st Street
New York, New York 10010
Northeast Investors Trust........................................... 1,038,823 10.4
50 Congress Street, 10th Floor
Boston, Massachusetts 02109
The TCW Group, Inc. (3)............................................. 645,023 6.4
865 South Figueroa Street
Los Angeles, California 90017
UBS AG.............................................................. 1,027,214 10.3
299 Park Avenue
31st Floor
New York, New York 10171
Merrill Lynch, Pierce, Fenner & Smith Incorporated.................. 925,685 9.3
250 Vesey Street
World Financial Center-North Tower
New York, New York 10281
Daystar L.L.C....................................................... 1,679,360 16.8
411 Theodore Fremd Avenue
Rye, New York 10580
Robert J. Capozzi (5)............................................... 1,897,738 19.0
Jeffrey S. Deutschman............................................... 10,000(4) 0.1
Nicholas P. DiPaolo................................................. 10,000(4) 0.1
Michael L. Fulbright................................................ 176,668(4)(9) 1.7
Jerry E. Hunter (7)................................................. 128,685 1.3
John M. Sullivan.................................................... 10,000(4) 0.1
David H. Taylor (8)................................................. 20,984 0.2
Carl Rosen.......................................................... 5,000 *
Monnie L. Broome.................................................... 19,810 0.2
Bruce R. Wilby...................................................... 5,000 *
James H. Gully...................................................... 5,000 *
Directors and executive officers as a group......................... 2,288,885(6) 22.2%
</TABLE>
- ------------------
* Constitutes less than one-tenth of one percent.
(1) Includes shares of Common Stock which the following person has the right to
acquire within 60 days through the exercise of new warrants issued on the
Effective Date (as defined below): The TCW Group, Inc., 76,647. Also
includes shares of Common Stock which the following persons have the right
to acquire within 60 days through the exercise of stock options: Jeffrey S.
Deutschman, 10,000; Nicholas P. DiPaolo, 10,000; Michael L. Fulbright,
176,668; Jerry E. Hunter, 95,833; John M. Sullivan, 10,000; Carl Rosen,
5,000; Monnie L. Broome, 5,000; Bruce R. Wilby, 5,000; James H. Gully,
5,000. The aggregate number of shares of Common Stock that all directors and
executive officers as a group have the right to acquire within 60 days is
322,501. In each case, the percent of class is calculated on the basis that
such shares (in respect of the person
(Footnotes continued on next page)
3
<PAGE>
(Footnotes continued from previous page)
being reported on only) are deemed outstanding. No voting or investment
power exists with respect to such shares of Common Stock prior to
acquisition.
(2) Includes shares of the Common Stock held by Magten in accounts managed by
Magten on behalf of various investment advisory clients, including the City
of Los Angeles Fire and Police Pension Systems (719,411 shares, or 7.2%, of
the Common Stock) and Hughes Retirement Plans Trust (575,617 shares, or
5.8%, of the Common Stock). Certain of such shares are held for the benefit
of family interests of Talton R. Embry, the Chairman, a director and
controlling shareholder of Magten, or in employee plans with respect to
which Mr. Embry serves as a trustee. Magten has shared voting and investment
power over all of such 1,897,738 shares.
(3) Various persons other than included above, including the TCW Shared
Opportunities Fund II, L.P., have the right to receive or the power to
direct the receipt of dividends from, or the proceeds from the sale of, the
Common Stock. The general partner and investment advisor of TCW Shared
Opportunity Fund II, L.P. ("SHOP II") is TCW Investment Management Company.
Messrs. Mark L. Attanasio, Robert D. Beyer, Jean-Marc Chapus and Mark L.
Gold are portfolio managers of SHOP II and exercise voting and dispositive
power on its behalf. Messrs. Attanasio, Beyer, Chapus and Gold disclaim any
beneficial ownership of Common Stock.
(4) Represents, or in the case of Mr. Fulbright includes options granted to
non-employee directors of JPS (other than Robert J. Capozzi) on the
Effective Date. See "EXECUTIVE COMPENSATION--Compensation of Directors."
(5) By virtue of 1,897,738 shares of Common Stock of JPS beneficially owned by
Magten, of which Mr. Capozzi is Managing Director. See Note 2. Mr. Capozzi
disclaims beneficial ownership of all of these shares. Mr. Capozzi waived
his entitlement to receive any options to purchase shares of Common Stock to
which each non-employee director will be entitled on the Effective Date. See
"EXECUTIVE COMPENSATION--Compensation of Directors."
(6) Includes 1,897,738 shares of Common Stock beneficially owned by Magten. See
Note 5.
(7) Jerry E. Hunter served as Chairman of the Board, President and Chief
Executive Officer of the Company until February 27, 1999.
(8) David H. Taylor served as Executive Vice-President, Chief Financial Officer
and Secretary of the Company until November 11, 1998.
(9) Includes 166,668 shares under options granted, subject to stockholder
approval of the Amended Incentive Plan, to Michael L. Fulbright by the
Compensation Committee of the Board on February 28, 1999. See
"ITEM 2--PROPOSAL TO APPROVE THE AMENDED INCENTIVE PLAN." The Compensation
Committee granted Mr. Fulbright options covering a total of 500,000 shares,
of which options covering 166,668 shares vested as of March 1, 1999.
4
<PAGE>
ITEM 1--ELECTION OF DIRECTORS
At a meeting held on January 26, 1999, the Company's Board of Directors
(the "Board"), in accordance with the Company's Bylaws, unanimously voted to
reduce the number of directors on the Company's Board from 7 to 6 members.
Subsequently, at a meeting held on February 27, 1999, the Board unanimously
voted to accept the resignation of Jerry E. Hunter and to reduce the number of
directors on the Board from 6 to 5 members.
Five directors, constituting the entire Board, will be elected at the
Annual Meeting to serve for a one-year term expiring at our annual meeting in
the year 2000. The Board recommends the reelection of Messrs. Capozzi,
Deutschman, DiPaolo, Fulbright and Sullivan, the incumbents, as directors of the
Company.
The persons named in the enclosed proxy intend to vote the proxy for the
election of each of the incumbent directors, unless you indicate on the proxy
card that your vote should be withheld from any or all of such nominees. Each
director took office on October 9, 1997, the date on which JPS's plan of
reorganization became effective (the "Effective Date"). Each director reelected
will continue in office until his or her successor has been elected, or until
his earlier death, resignation or retirement.
We expect each incumbent director to be able to serve if reelected. If any
director is not able to serve, proxies will be voted in favor of the remainder
of those nominated and may be voted for substitute nominees, unless the Board
chooses to reduce the number of directors serving on the Board.
The principal occupation and certain other information about the directors
to be reelected at the Annual Meeting is set forth below.
THE BOARD RECOMMENDS A VOTE FOR THE REELECTION
OF THE FIVE INCUMBENT DIRECTORS
NAME, AGE, PRINCIPAL OCCUPATION, BUSINESS EXPERIENCE AND OTHER INFORMATION OF
EACH DIRECTOR AND EXECUTIVE OFFICER
The following table sets forth certain information with respect to the
persons who are members of the Board or executive officers of JPS.
<TABLE>
<CAPTION>
NAME AGE POSITION(S) HELD
- ---- --- ----------------
<S> <C> <C>
Robert J. Capozzi.............................. 34 Director
Jeffrey S. Deutschman.......................... 42 Director
Nicholas P. DiPaolo............................ 57 Director
Michael L. Fulbright........................... 49 Chairman of the Board, President,
Chief Executive Officer and Director
John M. Sullivan, Jr........................... 53 Director
John W. Sanders, Jr............................ 44 Executive Vice President-Finance and
Chief Financial Officer
Carl Rosen..................................... 69 President, Marketing and Sales for
the Apparel Group of JPS Converter
and Industrial Corp.
Bruce R. Wilby................................. 48 President, JPS Elastomerics Corp.
James H. Gully................................. 49 Vice-President-Operations, JPS
Converter and Industrial Corp.
</TABLE>
The business experience of each of the directors and executive officers
during the past five years is as follows:
Mr. Capozzi is a Managing Director of Magten Asset Management Corp.
("Magten"), an investment advisory firm established in 1978. Magten, a
registered investment adviser under the Investment Advisers Act of 1940, as
amended, beneficially owns approximately 19.0% of Common Stock as of March 1,
1999. Mr. Capozzi has been with Magten since 1986. Currently, Mr. Capozzi serves
as a member of the Board of Directors of Magten Offshore Fund Ltd.
5
<PAGE>
Mr. Deutschman is a private investor and merchant banker. Mr. Deutschman
has been a Managing Director of Crown Capital Group, Inc. since 1998, and is
Chief Executive Officer of ISG Holdings, a privately held company engaged in
manufacturing samples for home fashion and consumer products companies. From
1992 to 1995, he was a Managing Director with Aurora Capital Partners, L.P.
Prior to that, he was a Managing Director and principal of Deutschman Clayton &
Company. Mr. Deutschman has been Co-Chairman of the Board of Directors of The
Cherokee Group, a designer, manufacturer, and marketer of casual apparel, and an
officer and director of Fair Holdings Corporation and Fair Lanes, Inc., a
manager and operator of bowling centers.
Mr. DiPaolo has been a consultant to Cynthia Steffe, a women's apparel
manufacturer, since 1998. From March 1991 until his retirement in May 1997,
Mr. DiPaolo was Chairman of the Board, President and Chief Executive Officer of
Salant Corporation, a diversified apparel company listed on the New York Stock
Exchange. From 1985 to 1991, Mr. DiPaolo served as President of Manhattan
Industries, which was merged into Salant Corporation in 1988. Prior to that, he
was Chairman and President of the Villager, a women's sportswear company, from
1979 to 1985. Mr. DiPaolo has served on the Board of Directors of Manhattan Far
East, a trading company based in Hong Kong. He is also a member of the Board of
Directors of the American Apparel Manufacturers Association and Bernard Chaus, a
women's apparel manufacturer, in addition to other industry associations.
Mr. Fulbright was elected Chairman of the Board, President and Chief
Executive Officer of the Company on February 27, 1999, effective March 1, 1999.
Mr. Fulbright is currently a director of Buster Brown Apparel, Inc., a
children's apparel company, and served as Chief Executive Officer and a director
of The Bibb Company, a diversified textile company, from August 1996 until
October 1998. Prior to that, he served as President of the Denim Division of
Cone Mills, Inc. from December 1994 to August 1996. Prior to that,
Mr. Fulbright was employed with Springs Industries, Inc., a textile
manufacturer, serving as President of the Greige Manufacturing Division from
August 1986 to November 1994, as President of Wamsutta/Pacific Home Products
from July 1986 to July 1992, and as Executive Vice President of Wamsutta/Pacific
Home Products from December 1985 to July 1986. Prior to that, Mr. Fulbright was
employed by M. Lowenstein Corporation and WestPoint Pepperell.
Mr. Sullivan has served as President of American Silk Mills Corp. since
1985, and as President of Gerli & Co., Inc. since 1987. From 1987 to 1991,
Mr. Sullivan served as President of Cheney Brothers Inc. Prior to that, he
served as Executive Vice President (Merchandising, Marketing & Sales) of Gerli &
Co., Inc. from 1984 to 1987. Prior to that, Mr. Sullivan served as President of
A.H. Rice Company Inc., Pittsfield, Massachusetts from 1982 to 1989, as Vice
President of Marketing and Sales of Gerli & Co., Inc. from 1979- 1982, and as
Sales Manager of American Silk Mills Corp. from 1974 to 1979.
Mr. Sanders has served as Executive Vice President-Finance and Chief
Financial Officer of JPS since November 1998. From 1993 to 1998, Mr. Sanders
served as Chief Financial Officer of Spartan Mills and in addition to these
duties developed partnerships and strategic alliances to create Spartan's
European businesses based in Germany, Netherlands and Poland. From 1989 to 1993,
Mr. Sanders served as a financial and operations consultant to companies both in
senior management roles and as an independent consultant in the areas of
turnaround management, strategic repositioning and maximization of shareholder
value. From 1977 to 1989, Mr. Sanders was employed by Deloitte Haskins & Sells,
specializing in audit, SEC compliance/reporting, and strategic alliance, merger
and acquisition services.
Mr. Rosen became President of marketing and sales for the apparel group of
JPS Converter and Industrial Corp. in 1993. He was Vice-President of sales for
the apparel and home furnishings group of JPS Converter and Industrial Corp.
from 1991 to 1993. Prior to that, he was President and founder of Loomtex
Corporation, a New York converting company, for 31 years.
Mr. Wilby became President of JPS Elastomerics Corp., a wholly-owned
subsidiary of JPS, in 1993 and has served in that capacity during the past six
years. He was Vice-President of marketing and sales for Construction Products
for the Company from 1991 to 1993. Prior to that, he served in a variety of
technical and managerial positions with the Company for 25 years.
Mr. Gully became Executive Vice-President of Operations of JPS Converter
and Industrial Corp. in 1995. He was Executive Vice-President of Nazareth
Century Mills, Inc. from 1994 to 1995. Prior to that, he was
6
<PAGE>
President of Delta Apparel, a division of Delta Woodside Mills, Inc. Prior to
that, he served in various capacities with Riegel Textile Corp., Milliken and
Company and with Hanes Corporation for 28 years.
None of the directors or executive officers listed herein is related to any
other director or executive officer of the Company.
COMPENSATION OF DIRECTORS
Each director who is not an employee of the Company is paid $20,000
annually for his services as a director, $1,200 for attendance at each meeting
of the Board and each committee meeting which does not occur in conjunction with
a directors' meeting, and $1,000 annually for his or her services as the
chairman of any committee. In addition, each non-employee director received on
the Effective Date a grant of options to purchase 25,000 shares of Common Stock
(other than Robert J. Capozzi, who waived his right to receive such options) at
an exercise price based on the per share price of Common Stock as of the
Effective Date (which was $12.33 per share). With respect to the options granted
to each non-employee director on the Effective Date, options to purchase 5,000
shares of Common Stock vested on the Effective Date and, with respect to the
balance of the options so granted, options to purchase 5,000 shares of Common
Stock will vest on each of the first, second, third and fourth anniversaries of
the Effective Date. Moreover, non-employee directors are eligible to participate
in the Company's 1997 Incentive and Capital Accumulation Plan (the "Incentive
Plan"). Under the Incentive Plan, each non-employee director appointed
subsequent to the Effective Date will receive on the date such director is
appointed (the "Appointment Date") a grant of options to purchase 25,000 shares
of Common Stock at an exercise price based on the per share price of Common
Stock as of the Appointment Date. With respect to the options granted to each
non-employee director appointed subsequent to the Effective Date, options to
purchase 5,000 shares of Common Stock will vest on the applicable Appointment
Date and, with respect to the balance of the options so granted, options to
purchase 5,000 shares of Common Stock will vest on each of the first, second,
third and fourth anniversaries of such Appointment Date.
BOARD OF DIRECTORS AND COMMITTEE MEMBERSHIP
During 1998, the Board met nine times and had two ongoing committees, an
Audit Committee and a Compensation Committee. All of our directors attended at
least 75 percent of the aggregate number of meetings of the Board and Board
committees on which they served in the 1998 fiscal year.
THE AUDIT COMMITTEE
The Audit Committee, which consists of Messrs. Deutschman and Sullivan,
makes recommendations to the Board regarding the independent auditors to be
nominated for ratification by the stockholders, reviews the independence of such
auditors, approves the scope of the annual activities of the independent
auditors and reviews audit results. The Audit Committee held four meetings
during the 1998 fiscal year.
THE COMPENSATION COMMITTEE
The Compensation Committee, which during the 1998 fiscal year consisted of
Messrs. Capozzi, DiPaolo and Fulbright, recommends to the Board compensation
plans and arrangements with respect to the Company's executive officers and key
personnel. The Compensation Committee also administers the Company's Incentive
Plan. The Compensation Committee held three meetings during the 1998 fiscal
year. Effective March 11, 1999, Mr. Fulbright resigned from the Compensation
Committee in connection with his appointment as an executive officer of the
Company. Prior to his resignation, Mr. Fulbright recused himself from all
deliberations and actions relating to his compensation as Chief Executive
Officer of the Company, the adoption of the amendment to the Incentive Plan and
the grant of options to him under the Amended Incentive Plan.
EXECUTIVE COMPENSATION
The following table sets forth a summary of all compensation awarded or
paid to or earned by the chief executive officer and five other most highly
compensated executive officers of the Company in the 1998 fiscal year for
services rendered in all capacities to the Company (including its subsidiaries)
for the fiscal years ended October 31, 1998, November 1, 1997 and November 2,
1996.
7
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION AWARDS
-------------------------
ANNUAL COMPENSATION SECURITIES
NAME AND --------------------- UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY(1) BONUS OPTIONS/SAR'S PAYOUTS COMPENSATION(2)
- ------------------------------------- ---- --------- -------- -------------- ------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Jerry E. Hunter(3) .................. 1998 $ 387,729 -- -- -- $ 9,263
Chairman of the Board, 1997 361,218 $137,052 115,000(4) -- 9,059
President and Chief 1996 332,025 -- -- -- 3,371
Executive Officer
Carl Rosen .......................... 1998 283,554 10,376 -- -- 3,351
President, JPS Converter and 1997 267,650 43,195 30,000(4) -- 3,178
Industrial Corp. 1996 251,875 -- -- -- 3,131
David H. Taylor(5) .................. 1998 225,000 -- -- -- 3,012
Executive Vice President--Finance 1997 209,973 79,566 75,000(4) -- 8,025
and Secretary 1996 204,783 -- -- -- 2,291
Monnie L. Broome .................... 1998 181,331 -- -- -- 8,019
Vice President--Human Resources 1997 167,040 63,272 30,000(4) -- 8,016
1996 162,775 -- -- -- 2,295
Bruce R. Wilby ...................... 1998 173,250 -- -- -- 5,572
President, JPS Elastomerics Corp. 1997 165,000 78,779 30,000(4) $27,751 6,205
1996 161,474 57,761 -- -- 6,040
James H. Gully ...................... 1998 176,800 6,657 -- -- 1,952
Vice President--Operations, JPS 1997 171,133 27,710 30,000(4) -- 1,980
Converter and Industrial Corp. 1996 161,667 -- -- -- 1,539
</TABLE>
- ------------------
(1) With respect to Messrs. Hunter, Rosen and Broome, includes imputed income
relating to life insurance premium payments.
(2) Employer-matching 401(k) plan contribution, non-taxable employer-provided
term life insurance premiums and imputed lease value of company-provided
automobiles.
(3) Jerry E. Hunter resigned as Chairman of the Board, President and Chief
Executive Officer of the Company on February 27, 1999 in connection with his
retirement from the Company.
(4) One-third of the performance-based options (one-sixth of the total options)
granted to employees of the Company during the 1997 fiscal year were
cancelled because the Company did not meet performance goals for such year.
Accordingly, 19,167 options granted to Mr. Hunter, 12,500 options granted to
Mr. Taylor, and 5,000 options granted to each of Messrs. Rosen, Broome,
Wilby and Gully were cancelled.
(5) David H. Taylor resigned as Executive Vice President, Chief Financial
Officer and Secretary of the Company on November 11, 1998.
AGREEMENTS WITH EXECUTIVE OFFICERS
This section sets forth descriptions of certain employment agreements in
effect between the Company and its current or former executive officers. Where
the terms "cause," "good reason" and "change in control" are used in relation to
events of termination, such terms are used as defined in the respective
employment agreements.
On the Effective Date, JPS entered into an employment agreement with Jerry
E. Hunter. The agreement provided that Mr. Hunter would serve as President and
Chief Executive Officer of JPS until the third anniversary of the Effective Date
(the "Termination Date"). Mr. Hunter's base salary under the agreement was
$380,000 per
8
<PAGE>
year. In addition, under the agreement on the Effective Date Mr. Hunter received
a retention grant cash payment of $256,274 and 32,852 shares of Common Stock.
Mr. Hunter was eligible for an annual bonus up to 50% of his base salary based
upon the Company's attainment of certain performance goals specified in the
Company's annual Management Incentive Bonus Plan (the "Management Incentive
Bonus Plan"). Mr. Hunter resigned from the Company effective February 27, 1999
in connection with his retirement from the Company. His resignation will be
treated as a good reason event under his employment agreement, which provides
for him to receive (a) his annual base salary continued through the Termination
Date, (b) a lump sum payment of his target annual bonus computed through the
Termination Date (without regard to whether the performance goals are met), and
(c) continuation of all health and life insurance benefits for twenty-four
months following the termination of his employment. In addition, Mr. Hunter
became fully vested in options covering 76,666 shares, with such options
remaining exercisable for six months from the date of his termination of
employment.
On May 1, 1993, the Company entered into an employment agreement with Carl
Rosen. This agreement, as amended, provides that Mr. Rosen will serve as
President of marketing and sales for the apparel group of JPS Converter and
Industrial Corp. until April 30, 2001. Mr. Rosen's base salary under the
agreement is currently $265,000 per year and may be increased but not reduced
over the term of the agreement. Mr. Rosen is eligible for an annual bonus with a
target level equal to 50% of his base salary. If the Company terminates
Mr. Rosen's employment for reasons other than for cause or if Mr. Rosen leaves
for good reason, he is entitled to severance benefits equal to his annual base
salary in effect at the time of such termination including normal fringe
benefits payable in the ordinary course, plus a pro rata bonus amount up to the
date of termination. In the event the Company reduces Mr. Rosen's base salary or
bonus or materially changes the requirements of his position, Mr. Rosen may
voluntarily terminate his employment with the Company with such termination
being treated, for purposes of severance benefits, as a termination by the
Company other than for cause.
On the Effective Date, JPS entered into substantially similar employment
agreements with David H. Taylor and Monnie L. Broome, with Mr. Taylor serving as
Executive Vice President--Finance and Secretary of JPS and Mr. Broome serving as
Vice President--Human Resources of JPS. Under the agreements, base salary for
Mr. Taylor was $225,000 per year and for Mr. Broome is $180,000 per year. In
addition, under the employment agreements, Mr. Taylor received a retention grant
cash payment of $163,694 and 20,984 shares of Common Stock and Mr. Broome
received a retention grant cash payment of $115,531 and 14,810 shares of Common
Stock. Mr. Broome is also eligible for an annual bonus of up to 50% of his base
salary based upon the Company's attainment of certain performance goals
specified in the Management Incentive Bonus Plan. Mr. Taylor resigned from JPS,
effective November 11, 1998.
JPS Elastomerics Corp. is a party to an employment agreement dated
December 23, 1991, as amended, with Bruce R. Wilby. This agreement provides
severance benefits in the event that Mr. Wilby's employment is terminated by his
employer prior to December 23, 1999 other than for cause. Such severance
benefits will be an amount equal to his annual base salary in effect at the time
of such termination including normal fringe benefits payable in the ordinary
course as if his employment had not been terminated.
On January 26, 1998, JPS Converter and Industrial Corp. entered into an
employment agreement with James H. Gully. This agreement provides severance
benefits in the event that Mr. Gully's employment is terminated by his employer
prior to January 26, 2001 other than for cause. Such severance benefits will be
an amount equal to his annual base salary in effect at the time of such
termination including normal fringe benefits payable in the ordinary course as
if his employment had not been terminated.
On November 11, 1998, the Company entered into an employment agreement with
John W. Sanders, Jr. This agreement provides that Mr. Sanders will serve as
Executive Vice President-Finance and Chief Financial Officer of the Company
commencing on November 11, 1998 and ending on the first anniversary thereof,
provided that the employment period will be extended automatically for an
additional year on each such anniversary date unless the Company or Mr. Sanders
gives written notice to the other not to extend the employment period. Under the
agreement, the base salary for Mr. Sanders is $225,000 per year and may be
increased annually by the Board. In addition, Mr. Sanders is eligible to
participate in the Management Incentive Bonus Plan and receive a bonus
thereunder, as well as participate in any incentive compensation or plan adopted
and approved by the Board. Mr. Sanders may terminate his employment with the
Company for good reason. In the event that the Company terminates Mr. Sander's
employment other than for cause or Mr. Sanders terminates
9
<PAGE>
his employment with the Company for good reason, the Company will (i) continue
to pay Mr. Sanders his base salary for one year from such termination of
employment, (ii) pay Mr. Sanders a lump sum payment equal to the sum of (a) any
accrued but unpaid bonus earned under the Management Incentive Bonus Plan,
(b) the pro rata portion of the target bonus (not in excess of fifty percent
(50%) of base salary) payable under the Management Incentive Bonus Plan (without
regard to whether the performance goals for such year are met) and (c) an amount
equal to the target bonus (not in excess of fifty percent (50%) of base salary)
under the Management Incentive Bonus Plan (without regard to whether the
performance goals for such year are met) and (iii) continue to provide all
health and life insurance benefits for up to twenty-four months following the
termination of employment. In addition, pursuant to a separate employment letter
agreement entered into between Mr. Sanders and the Company on November 9, 1998,
Mr. Sanders was guaranteed 50% of his target bonus amount for the 1999 fiscal
year (without regard to whether the performance goals for such year are met).
On February 28, 1999, JPS entered into an employment agreement with Michael
L. Fulbright. The agreement provides that Mr. Fulbright will serve as Chairman
of the Board (subject to the election by the stockholders of the Company),
President and Chief Executive Officer of the Company commencing on March 1, 1999
and ending on October 31, 2001 (the "Employment Period"). Under the agreement,
Mr. Fulbright's initial base salary is $550,000 per year and may be increased
but not reduced during the Employment Period. In addition, the agreement
provides that unless Mr. Fulbright voluntarily terminates employment for other
than good reason, or his employment is terminated by the Company for cause, he
will be eligible to participate in the Management Incentive Bonus Plan based
upon the attainment by the Company of certain performance goals. Mr. Fulbright
is eligible for a bonus of not less than 50% but not more than 200% of his base
salary for each of the 1999, 2000 and 2001 fiscal years, provided the bonus for
the 1999 fiscal year will be not less than 50% of his base salary for the 1999
fiscal year (without regard to whether the performance goals for such year are
met). Subject to stockholder approval of the Amended Incentive Plan, the
Compensation Committee of the Board granted Mr. Fulbright options to acquire
500,000 shares of Common Stock under the Amended Incentive Plan at $3.125 per
share (the fair market value per share, as determined by the Compensation
Committee of the Board pursuant to the Amended Incentive Plan, on February 28,
1999 (the "Grant Date")). See "ITEM 2--PROPOSAL TO APPROVE THE AMENDED INCENTIVE
PLAN." For financial reporting purposes, the excess, if any, of the price per
share on the date of stockholder approval over the price per share on the Grant
Date will be recognized by the Company as compensation expense over the vesting
period of the options. In addition, Mr. Fulbright received a relocation grant
cash payment of $325,000. If Mr. Fulbright's employment is terminated by the
Company other than for cause or is terminated by Mr. Fulbright for good reason,
the Company will continue to pay his base salary without interest and he will
continue to receive his target bonus (i.e., 50% of his base salary) through the
later of (a) October 31, 2001 or (b) one year from the date of termination,
provided that Mr. Fulbright will have the option to receive such salary and
target bonus in one lump sum on the business day immediately following the
termination date if he terminates his employment by reason of a change in
control.
EMPLOYEE BENEFIT AND LONG-TERM COMPENSATION PLANS
RETIREMENT PENSION PLAN
The Company maintains a Retirement Pension Plan for all employees (the
"Pension Plan"), including its salaried employees. The Pension Plan is a defined
benefit pension plan providing a formula benefit with contributions determined
on an actuarial basis. The Pension Plan generally covers all employees 21 years
of age or older who have completed one year of service with the Company. The
Pension Plan generally takes into account annual compensation earned under
certain predecessor plans of J.P. Stevens.
The following table indicates the approximate amounts of annual retirement
income that would be payable to a salaried employee under the Pension Plan based
on the compensation levels and years of credited service shown. There would be
no social security or other offset deducted from the amounts shown.
10
<PAGE>
PENSION PLAN TABLE*
<TABLE>
<CAPTION>
YEARS OF SERVICE
--------------------------------------------------------
REMUNERATION 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
- ------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$125,000................................................... $ 19,698 $ 26,265 $ 32,831 $ 39,397 $ 45,963
150,000................................................... 24,198 32,265 40,331 48,397 56,463
160,000 and above......................................... 25,998 34,665 43,331 51,997 60,663
</TABLE>
- ------------------
* Assumes individual retires at age 65 in 1998 with the indicated years of
service and compensation. The social security integration level of such
individuals would be $31,128. The social security integration level is
adjusted annually.
Credited years of service for benefit accrual under the Pension Plan as of
November 1, 1998 for the following executive officers are:
Jerry E. Hunter............................................... 12 years
Carl Rosen.................................................... 7 years
David H. Taylor............................................... 10 years
Monnie L. Broome.............................................. 10 years
Bruce R. Wilby................................................ 23 years
James H. Gully................................................ 3 years
Annual retirement benefits for salaried employees are generally computed as
the sum of 0.6% of a participant's average compensation (the annual average of
five consecutive, complete plan years of highest compensation during the last 10
plan years of service) multiplied by the years of benefit service plus 0.6% of a
participant's compensation which exceeds the Participant's Social Security
Integration Level (equal to $31,128 in 1998), multiplied by the participant's
years of benefit service. The Pension Plan provides that each participant's
benefits fully vest after five years of service or the attainment of age 55 with
one year of service.
This table may understate the benefits available to certain participants
because salaried employees who were covered by the Pension Plan before July 1,
1989 are entitled to the greater of the benefit formula noted above or the prior
benefit formula, plus additional accrued benefits under the new formula since
July 1, 1989. Under the prior formula, a participant's annual pension payable as
of normal retirement age was equal to 1% of the portion of "final average
compensation" which was equal to the "social security integration level" in
effect for the year of retirement, plus 1.5% of the portion of the participant's
final average compensation in excess of the social security integration level,
the sum of which was multiplied by the number of years of credited service not
exceeding 35. In addition, as noted below, the table assumes that covered
compensation was limited to the current allowable amount for all years while
benefits may have been accrued in years when limitations were higher.
Compensation covered by the Pension Plan consists of all payments made to a
participant for personal services rendered as an employee of the Company which
are subject to federal income tax withholding, excluding imputed income
attributable to certain fringe benefit programs. In accordance with the Revenue
Reconciliation Act of 1993 with respect to salaried employees, plan compensation
covers up to an adjusted maximum of $160,000 per individual for the plan year
beginning November 1, 1998. Plan compensation was subject to substantially
higher limits in previous years ($235,840 for 1994). The amounts shown are also
subject to possible maximum limitations under Section 415 of the Internal
Revenue Code of 1986, as amended, and are subject to possible reduction for
amounts payable under other JPS qualified plans.
1998 MANAGEMENT INCENTIVE BONUS PLAN
The Company's 1998 Management Incentive Bonus Plan provides incentives for
key management employees of the Company and its subsidiaries based on the
financial performance of the Company. The plan is designed to provide incentives
to maximize operating earnings while minimizing the net assets required to
generate those earnings. Targets are set annually for operating earnings
(defined as earnings before interest, taxes, depreciation and amortization
before bonus expense and restructuring and reorganization expenses) and net
assets employed (defined as average total assets less average current
liabilities other than debt-related liabilities such as
11
<PAGE>
accrued interest) for each fiscal year and for each operating subsidiary. If
actual operating earnings and net assets employed are equal to the target, a
targeted bonus is paid to each participant. To the extent actual operating
earnings are greater than the target, amounts in excess of the targeted bonuses
are paid to each participant. Likewise, operating earnings lower than target
result in a bonus payment that is less then the targeted bonus. A participant's
bonus is reduced to zero if actual operating earnings are 80% (or 65% in the
case of one subsidiary) of target or less. The operating earnings target is
adjusted up or down by 12.5% of the excess or deficiency of actual net assets
employed compared to the target for net assets employed. Targeted bonus amounts
expressed as a percentage of salary for participants in the plan range from 15%
to 50%. Individuals listed on the Summary Compensation Table have targeted bonus
amounts equal to 50% of salary.
1997 INCENTIVE AND CAPITAL ACCUMULATION PLAN
The Incentive Plan is intended to provide incentives that will attract,
retain, and motivate highly competent individuals as key employees of the
Company and its subsidiaries, by providing them with opportunities to acquire
shares of Common Stock or monetary payments based on the value of such shares.
Pursuant to the Incentive Plan, 853,485 shares of Common Stock were originally
reserved for issuance to salaried key employees and non-employee directors of
the Company pursuant to benefits in the form of stock options, stock
appreciation rights, stock awards, performance awards, and stock units that may
be granted by the Compensation Committee comprised of disinterested members of
the Company's Board. On February 27, 1999, the Compensation Committee of the
Board adopted, subject to stockholder approval, an amendment to the Incentive
Plan to increase the number of shares of Common Stock reserved for issuance from
853,485 to 1,353,485, to increase the number of shares of Common Stock with
respect to which Benefits (as defined below) may be granted to any individual
during the term of the Incentive Plan from 853,485 to 1,353,485, and to increase
the number of shares of Common Stock with respect to which options and stock
appreciation rights may be granted to any individual during the term of the
Incentive Plan from 325,000 to 525,000. See "ITEM 2--PROPOSAL TO APPROVE THE
AMENDED INCENTIVE PLAN." The Incentive Plan will terminate on the tenth
anniversary of its adoption.
AGGREGATED OPTION EXERCISES IN 1998 AND OPTION VALUES AT OCTOBER 31, 1998
No executive officer of JPS and its subsidiaries exercised options in 1998.
The following table provides information with respect to the value of options
held by the executive officers of JPS and its subsidiaries at year-end measured
in terms of the closing price per share of Common Stock on October 31, 1998
($5.50 per share).
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT OCTOBER 31, 1998 OCTOBER 31, 1998 ($)(1)
--------------------- --------------------------
EXERCISABLE/ EXERCISABLE/
NAME UNEXERCISABLE UNEXERCISABLE
- ---- ------------- -------------
<S> <C> <C>
Jerry E. Hunter.......................................... 19,167/76,666 0/0
Carl Rosen............................................... 5,000/20,000 0/0
David H. Taylor.......................................... 12,500/50,000 0/0
Monnie L. Broome......................................... 5,000/20,000 0/0
Bruce R. Wilby........................................... 5,000/20,000 0/0
James H. Gully........................................... 5,000/20,000 0/0
</TABLE>
- ------------------
(1) Value of unexercised "in-the-money" options is the difference between the
market price of a share of Common Stock on October 31, 1998 and the exercise
price of the option, multiplied by the number of shares of Common Stock
underlying the option.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee is responsible for recommending to the full
Board the compensation to be paid to the Company's principal executive officers,
including the Chief Executive Officer ("CEO"), establishing the annual bonus
targets under the Management Incentive Bonus Plan and designating the persons to
whom and
12
<PAGE>
the amount in which stock options should be granted by the Company under the
Incentive Plan. As previously described, in the 1998 fiscal year, the Company
had employment agreements with Jerry E. Hunter, Carl Rosen, David H. Taylor,
Monnie L. Broome, Bruce R. Wilby and James H. Gully. Set forth below is a report
submitted by the Compensation Committee regarding the compensation policies for
the 1998 fiscal year as they relate to the Company's principal executive
officers, including the CEO.
COMPENSATION POLICIES
In October of each year, subject to the specific requirements of employment
agreements, the Compensation Committee reviews management's proposed annual
salaries for the next fiscal year for principal executive officers, including
its CEO for the 1998 fiscal year, Jerry E. Hunter.
Subject to the specific requirements of employment agreements, in
determining whether to accept management's proposed salaries, or to recommend
different salaries in respect of the executives, the Compensation Committee
considers a number of factors, including but not limited to the following: (1)
the Company's financial performance for the prior fiscal year, including whether
the Company had a net profit or loss for such year, the amount thereof, the
reasons for such performance, and whether such performance might have related to
unforeseen events or events not in the executives' control; and (2) the extent
to which an executive officer achieved certain objectives in his or her area of
primary responsibility that might have been set in the prior fiscal year, or
otherwise made a significant contribution to the Company.
The Compensation Committee believes that an important factor in attracting
and motivating JPS's executive officers is to ensure that the compensation paid
to such individuals is competitive with that paid by comparable companies. In
its review of management's proposed goals under the Management Incentive Bonus
Plan for a fiscal year, the Compensation Committee utilizes criteria similar to
that which it uses in reviewing annual salaries.
In considering the grant of stock options to employees, including the
Company's principal executive officers, the Compensation Committee considers the
responsibility level of the position, job performance and salary level, and
reviews the long-term objectives of management and the Board.
EXECUTIVE COMPENSATION FOR THE 1998 FISCAL YEAR
The Company's executive compensation program has three major components:
base salaries, annual incentive compensation, and stock options.
Employing its compensation review factors described above, the Compensation
Committee recommended to the Board that management's salary recommendations for
its senior executives and the recommendations for eligible participants in, and
the Company's goals for, the Management Incentive Bonus Plan for the fiscal year
ending October 31, 1998 be adopted.
BASE SALARIES
The Company's executive officers receive base salaries as compensation for
their job performance, abilities, knowledge and experience. Apart from any
contractual commitments, the base salaries paid to the executives are intended
to be maintained at competitive levels. This reflects the Compensation
Committee's desire to place more emphasis on the incentive portion of executive
compensation, and thereby correlating compensation to performance. The
Compensation Committee reviews base salaries annually and determines increases
based upon an executive officer's contribution to corporate performance and
competitive market conditions.
In accepting the salary recommendations for those executive officers who
had served in the prior fiscal year, the Company noted that management's
recommended salaries for such executive officers for the 1998 fiscal year were
increased in amounts ranging from 4.0% to 8.3% from the salaries for such
executive officers for the prior fiscal year.
Chairman, President and CEO: Mr. Hunter's base salary in 1998 was
$380,000. For 1997, it was set at $360,000. Mr. Hunter's base salary in 1998
represented a 5.5% increase from his 1997 base salary.
13
<PAGE>
Other Executive Officers: The 1998 salaries of the other executive
officers (the "Other Executive Officers") are shown in the "Salary" column of
the Summary Compensation Table.
ANNUAL INCENTIVE COMPENSATION
The Compensation Committee has adopted an annual incentive compensation
program, the Management Incentive Bonus Plan, based upon corporate performance
criteria to augment the base salaries received by executive officers. Under the
Management Incentive Bonus Plan, performance is measured as a function of the
Company's growth in earnings per share from year to year, whether or not set
targets are met, and in some cases a combination of return on assets, growth in
sales, cash flow and operating profit.
Chairman, President and CEO: In 1998, Mr. Hunter was not awarded any bonus
under the Management Incentive Bonus Plan. However, in 1997, he was awarded a
bonus of $137,052.
Other Executive Officers: The 1998 bonus payments to the Other Executive
Officers are shown in the "Bonus" column of the Summary Compensation Table.
STOCK OPTIONS
The Company established the Incentive Plan pursuant to which opportunities
to acquire shares of Common Stock or monetary payments based on the value of
such shares are awarded to highly competent employees of the Company.
The Compensation Committee believes these grants to be consistent with its
compensation policies by encouraging performance which contributes to the
overall profitability of the Company and which increases the price of the
Company's Common Stock.
None of the President and CEO or the Other Executive Officers received
stock options in 1998. See the table headed "Aggregated Option Exercises in 1998
and Option Values at October 31, 1998."
The Compensation Committee,
Robert J. Capozzi
Nicholas P. DiPaolo
Michael L. Fulbright
14
<PAGE>
STOCK PERFORMANCE GRAPH
The line graph below compares, in percentage terms, the cumulative total
stockholder return on the Company's Common Stock against the cumulative total
return on the NASDAQ Composite Index and the Standard & Poor's SuperCap
Specialty Textiles Index for the period beginning January 30, 1998, the date
that the Company's Common Stock began trading on the NASDAQ national market
system, and ending October 31, 1998. The comparison of total return on
investment (change in year end stock price plus reinvested dividends) for the
applicable period assumes that $100 was invested on January 30, 1998, in the
Company's Common Stock and in each of the foregoing indices.
[LINE GRAPH]
01/30/98 10/31/98
NASDAQ Composite Index $ 100 $ 109
JPS Textile Group, Inc. $ 100 $ 44
S&P SuperCap Specialty Textiles Index $ 100 $ 53
15
<PAGE>
ITEM 2--PROPOSAL TO APPROVE THE AMENDED INCENTIVE PLAN
INCENTIVE PLAN AND PROPOSED AMENDMENT
On February 27, 1999, the Compensation Committee of the Board adopted,
subject to stockholder approval, an amendment to the Incentive Plan (the
"Amendment") to increase the number of shares of Common Stock available for
issuance pursuant to Benefits thereunder from 853,485 to 1,353,485, to increase
the number of shares of Common Stock with respect to which Benefits may be
granted to any individual during the term of the Incentive Plan from 853,485 to
1,353,485, and to increase the number of shares of Common Stock with respect to
which options and stock appreciation rights may be granted to any individual
during the term of the Incentive Plan from 325,000 to 525,000.
The Incentive Plan is intended to align the interests of the Company's key
employees and non-employee directors with those of its stockholders. The
Incentive Plan is also intended to provide incentives which will attract, retain
and motivate highly competent persons as key employees of the Company and of any
subsidiary corporation now existing or hereafter formed or acquired, by
providing them opportunities to acquire shares of Common Stock or to receive
monetary payments based on the value of such Common Stock pursuant to Benefits.
The Board believes that stock options have been, and will continue to be,
an important element in attracting and retaining key employees. As of
February 26, 1999, only 202,829 shares of Common Stock remained available for
future grants of stock options under the Incentive Plan. On February 28, 1999,
the Compensation Committee of the Board granted Mr. Fulbright options to acquire
500,000 shares of Common Stock, subject to stockholder approval of the Amended
Incentive Plan. The Board believes that the increase in authorized shares and
the number of options any individual may receive during the term of the Amended
Incentive Plan is necessary because of the need to continue to make awards under
the Amended Incentive Plan to attract and retain key employees.
If the Amended Incentive Plan is approved by the Company's stockholders, it
will be effective as of February 27, 1999. If the Amended Incentive Plan is not
approved, the Amendment will not take effect and the options granted to Mr.
Fulbright on February 28, 1999 will be cancelled.
The affirmative vote of a majority in voting power of shares of Common
Stock present in person or represented by proxy at the Annual Meeting is
required for approval of this proposal.
SUMMARY OF THE AMENDED INCENTIVE PLAN
Administration. The Amended Incentive Plan provides for administration by
a committee of the Board or a subcommittee of a committee of the Board appointed
by the Board from among its members (the "Administration Committee"), which will
be comprised solely of not less than two members who are(a) "Non-Employee
Directors" within the meaning of Rule 16b-3(b)(3) (or any successor rule)
promulgated under the Securities Exchange Act of 1934, as amended, and
(b) unless otherwise determined by the Board, "outside directors" within the
meaning of Treasury Regulation Section 1.162-27(e)(3), promulgated under
Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code").
The Administration Committee is authorized, subject to the provisions of the
Amended Incentive Plan, to establish such rules and regulations as it deems
necessary for the proper administration of the Amended Incentive Plan and to
make such determinations and interpretations and to take such action in
connection with the Amended Incentive Plan and any Benefits granted as it deems
necessary or advisable. Thus, among the Administration Committee's powers are
the authority to select officers and other key employees of the Company and its
subsidiaries to receive Benefits, and determine the form, amount and other terms
and conditions of Benefits, including the power to vary the definition of
"change in control" in individual grant letters from that set forth in the
Amended Incentive Plan. The Administration Committee also has the power to
modify or waive restrictions on Benefits, to amend Benefits and to grant
extensions and accelerations of Benefits. The Compensation Committee of the
Board serves as the Administration Committee under the Amended Incentive Plan.
Eligibility for Participation. Key employees and Non-Employee Directors of
the Company or any of its subsidiaries are eligible to participate in the
Amended Incentive Plan. The selection of participants from eligible key
employees and Non-Employee Directors is within the discretion of the
Administration Committee.
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<PAGE>
Types of Benefits. The Amended Incentive Plan provides for the grant of
any or all of the following types of benefits: (1) stock options, including
incentive stock options and non-qualified stock options; (2) stock appreciation
rights; (3) stock awards; (4) performance awards; and (5) stock units
(collectively, "Benefits"). Benefits may be granted singly, in combination, or
in tandem as determined by the Administration Committee. Stock awards,
performance awards and stock units may, as determined by the Administration
Committee in its discretion, constitute Performance-Based Awards, as described
below.
Stock Options. Under the Amended Incentive Plan, the Administration
Committee may grant awards in the form of options to purchase shares of Common
Stock. Options may be either incentive stock options, qualifying for special tax
treatment, or non-qualified options. However, no incentive stock option will be
issued to a participant in tandem with a nonqualified stock option. The
Administration Committee will, with regard to each stock option, determine the
number of shares subject to the option, the manner and time of the option's
exercise (but in no event later than ten years after the date of grant) and
vesting, and the exercise price per share of stock subject to the option,
provided that the exercise price will not be less than 100% of the fair market
value of the Common Stock on the date the stock option is granted. The exercise
price may be paid in cash or, in the discretion of the Administration Committee,
by the delivery of shares of Common Stock then owned by the participant, by the
withholding of shares of Common Stock for which a stock option is exercisable,
by delivering to the Company an executed promissory note (or such other form of
indebtedness) on such terms and conditions as the Administration Committee will
determine in its sole discretion at the date of grant, or by a combination of
these methods. In the discretion of the Administration Committee, payment may
also be made by delivering a properly executed exercise notice to the Company
together with a copy of irrevocable instructions to a broker to deliver promptly
to the Company the amount of sale or loan proceeds to pay the exercise price.
The Administration Committee may prescribe any other method of paying the
exercise price that it determines to be consistent with applicable law and the
purpose of the Amended Incentive Plan. In determining which methods a
participant may utilize to pay the exercise price, the Administration Committee
may consider such factors as it determines are appropriate.
Stock Appreciation Rights ("SARs"). The Amended Incentive Plan authorizes
the Administration Committee to grant an SAR either in tandem with a stock
option or independent of a stock option. An SAR is a right to receive a payment,
in cash, Common Stock, or a combination thereof, equal to the excess of (x) the
fair market value, or other specified valuation (which will not be greater than
the fair market value), of a specified number of shares of Common Stock on the
date the right is exercised over (y) the fair market value, or other specified
valuation (which will not be less than fair market value), of such shares of
Common Stock on the date the right is granted, all as determined by the
Administration Committee. Each SAR will be subject to such terms and conditions
as the Administration Committee shall impose from time to time.
Stock Awards. The Administration Committee may, in its discretion, grant
stock awards (which may include mandatory payment of bonus incentive
compensation in stock) consisting of Common Stock issued or transferred to
participants with or without other payments therefor as additional compensation
for services to the Company. Stock awards may be subject to such terms and
conditions as the Administration Committee determines appropriate, including,
without limitation, restrictions on the sale or other disposition of such
shares, the right of the Company to reacquire such shares for no consideration
upon termination of the participant's employment or directorship within
specified periods, and may constitute Performance-Based Awards, as described
below. The stock award will specify whether the participant will have, with
respect to the shares of Common Stock subject to a stock award, all of the
rights of a holder of shares of Common Stock of the Company, including the right
to receive dividends and to vote the shares.
Performance Awards. The Amended Incentive Plan allows for the grant of
performance awards which may take the form of shares of Common Stock or stock
units, or any combination thereof and which may constitute Performance-Based
Awards. Such awards will be contingent upon the attainment over a period to be
determined by the Administration Committee of certain performance goals. The
length of the performance period, the performance goals to be achieved and the
measure of whether and to what degree such goals have been achieved will be
determined by the Administration Committee. Payment of earned performance awards
will be made in accordance with terms and conditions prescribed or authorized by
the Administration Committee. The participant may elect to defer, or the
Administration Committee may require the deferral of, the receipt of performance
awards upon such terms as the Administration Committee deems appropriate.
17
<PAGE>
Stock Units. The Administration Committee may, in its discretion, grant
Stock Units to participants, which may constitute Performance-Based Awards. A
"Stock Unit" means a notational account representing one share of Common Stock.
The Administration Committee determines the criteria for the vesting of Stock
Units and whether a participant granted a Stock Unit will be entitled to
Dividend Equivalent Rights (as defined in the Amended Incentive Plan). Upon
vesting of a Stock Unit, unless the Administration Committee has determined to
defer payment with respect to such unit or a participant has elected to defer
payment, shares of Common Stock representing the Stock Units will be distributed
to the participant unless the Administration Committee, with the consent of the
participant, provides for the payment of the Stock Units in cash, or partly in
cash and partly in shares of Common Stock, equal to the value of the shares of
Common Stock which would otherwise be distributed to the participant.
Performance-Based Awards. Certain Benefits granted under the Amended
Incentive Plan may be granted in a manner such that the Benefit qualifies for
the performance-based compensation exemption to Section 162(m) of the Code
("Performance-Based Awards"). As determined by the Administration Committee in
its sole discretion, either the granting or vesting of such Performance-Based
Awards will be based upon one of more of the following factors: net sales,
pre-tax income before allocation of corporate overhead and bonus, budget,
earnings per share, net income, division, group or corporate financial goals,
return on stockholders' equity, return on assets, attainment of strategic and
operational initiatives, appreciation in and/or maintenance of the price of the
Common Stock or any other publicly-traded securities of the Company, market
share, gross profits, earnings before interest and taxes, earnings before
interest, taxes, dividends and amortization, economic value-added models and
comparisons with various stock market indices, reductions in costs, or any
combination of the foregoing.
With respect to Performance-Based Awards, the Administration Committee
shall establish in writing, (x) the objective performance-based goals applicable
to a given period and (y) the individual employees or class of employees to
which such performance-based goals apply no later than 90 days after the
commencement of such period (but in no event after 25% of such period has
elapsed). No Performance-Based Award will be payable to, or vest with respect
to, as the case may be, any participant for a given fiscal period until the
Administration Committee certifies in writing that the objective performance
goals (and any other material terms) applicable to such period have been
satisfied.
Other Terms of Benefits. The Amended Incentive Plan provides that Benefits
will not be transferable other than by will or the laws of descent and
distribution. The Administration Committee will determine the treatment to be
afforded to a participant in the event of termination of employment or
directorship for any reason including death, disability or retirement.
Notwithstanding the foregoing, other than with respect to incentive stock
options, the Administration Committee may permit the transferability of an award
by a participant to members of the participant's immediate family or trusts for
the benefit of such person or family partnerships.
Upon the grant of any Benefit under the Amended Incentive Plan, the
Administration Committee may, by way of an agreement with the participant,
establish such other terms, conditions, restrictions and/or limitations covering
the grant of the Benefit as are not inconsistent with the Amended Incentive
Plan. No Benefit will be granted under the Amended Incentive Plan after
February 13, 2007. The Board reserves the right to amend, suspend or terminate
the Amended Incentive Plan at any time, subject to the rights of participants
with respect to any outstanding Benefits.
The Amended Incentive Plan contains provisions for equitable adjustment of
Benefits in the event of a merger, consolidation, reorganization,
recapitalization, stock dividend, stock split, reverse stock split, split up,
spinoff, combination of shares, exchange of shares, dividend in kind or other
like change in capital structure or distribution (other than normal cash
dividends) to stockholders of the Company.
In the event of a change of control of the Company, the Administration
Committee, in its discretion, may take such actions as it deems appropriate with
respect to outstanding Benefits, including, without limitation, accelerating the
exercisability or vesting of such Benefits.
In addition, the Administration Committee, in its discretion, may determine
that, upon the occurrence of a change in control of the Company, each stock
option and SAR outstanding under the Amended Incentive Plan shall terminate
within a specified number of days after notice to the holder, and such holder
shall receive, with
18
<PAGE>
respect to each share of Common Stock subject to such stock option or SAR, an
amount equal to the excess of the fair market value of such share of Common
Stock immediately prior to the occurrence of such change in control over the
exercise price per share of such stock option or SAR.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The statements in the following paragraphs of the principal federal income
tax consequences of Benefits under the AmendedIncentive Plan are based on
statutory authority and judicial and administrative interpretations, as of the
date of this Proxy Statement, which are subject to change at any time (possibly
with retroactive effect). The law is technical and complex and the discussion
below represents only a general summary.
Incentive Stock Options. Incentive stock options ("ISOs") granted under
the Amended Incentive Plan are intended to meet the definitional requirements of
Section 422(b) of the Code for "incentive stock options."
An employee who receives an ISO does not recognize any taxable income upon
the grant of such ISO. Similarly, the exercise of an ISO generally does not give
rise to federal income tax to the employee, provided that (a) the federal
"alternative minimum tax," which depends on the employee's particular tax
situation, does not apply and (b) the employee is employed by the Company from
the date of grant of the option until three months prior to the exercise
thereof, except where such employment terminates by reason of disability (where
the three month period is extended to one year) or death (where this requirement
does not apply). If an employee exercises an ISO after these requisite periods,
the ISO will be treated as an NSO (as defined below) and will be subject to the
rules set forth below under the caption "Non-Qualified Stock Options and Stock
Appreciation Rights."
Further, if after exercising an ISO, an employee disposes of the Common
Stock so acquired more than two years from the date of grant and more than one
year from the date of transfer of the Common Stock pursuant to the exercise of
such ISO (the "applicable holding period"), the employee will generally
recognize a long-term capital gain or loss equal to the difference, if any,
between the amount received for the shares and the exercise price. If, however,
an employee does not hold the shares so acquired for the applicable holding
period--thereby making a "disqualifying disposition"--the employee generally
would realize ordinary income in an amount equal to the excess of the fair
market value of the shares at the time the ISO was exercised over the exercise
price and the balance of any gain would be long-term capital gain (provided the
holding period for the shares exceeded one year). If the disqualifying
disposition is a sale or exchange that would permit a loss to be recognized
under the Code (were a loss in fact to be realized), and the sales proceeds are
less than the fair market value of the shares on the date of exercise, the
employee's ordinary income therefrom would be limited to the gain (if any)
realized on the sale.
An employee who exercises an ISO by delivering Common Stock previously
acquired pursuant to the exercise of another ISO is treated as making a
"disqualifying disposition" of such Common Stock if such shares are delivered
before the expiration of their applicable holding period. Upon the exercise of
an ISO with previously acquired shares as to which no disqualifying disposition
occurs, despite some uncertainty, it appears that the employee would not
recognize gain or loss with respect to such previously acquired shares.
The Company will not be allowed a federal income tax deduction upon the
grant or exercise of an ISO or the disposition, after the applicable holding
period, of the Common Stock acquired upon exercise of an ISO. In the event of a
disqualifying disposition, the Company generally will be entitled to a deduction
in an amount equal to the ordinary income included by the employee, provided
that such amount constitutes an ordinary and necessary business expense to the
Company and is reasonable and the limitations of Sections 280G and 162(m) of the
Code (discussed below) do not apply.
Non-Qualified Stock Options and Stock Appreciation Rights. Non-qualified
stock options ("NSOs") granted under the Amended Incentive Plan are options that
do not qualify as ISOs. An employee or director who receives an NSO or an SAR
will not recognize any taxable income upon the grant of such NSO or SAR.
However, the employee or director generally will recognize ordinary income upon
exercise of an NSO in an amount equal to the excess of (i) the fair market value
of the shares of Common Stock at the time of exercise over (ii) the exercise
price. Similarly, upon the receipt of cash or shares pursuant to the exercise of
an SAR, the individual generally will recognize ordinary income in an amount
equal to the sum of the cash and the fair market value of the shares received.
19
<PAGE>
As a result of Section 16(b) of the Exchange Act, under certain
circumstances, the timing of income recognition may be deferred (generally for
up to six months following the exercise of an NSO or SAR (the "Deferral
Period")) for any individual who is an officer or director of the Company or a
beneficial owner of more than ten percent (10%) of any class of equity
securities of the Company. Absent a Section 83(b) election (as described below
under "Other Awards"), recognition of income by the individual will be deferred
until the expiration of the Deferral Period, if any.
The ordinary income recognized with respect to the receipt of shares or
cash upon exercise of a NSO or an SAR will be subject to both wage withholding
and other employment taxes. In addition to the customary methods of satisfying
the withholding tax liabilities that arise upon the exercise of an SAR for
shares or upon the exercise of a NSO, the Company may satisfy the liability in
whole or in part by withholding shares of Common Stock from those that otherwise
would be issuable to the individual or by the employee or director tendering
other shares owned by him or her, valued at their fair market value as of the
date that the tax withholding obligation arises.
A federal income tax deduction generally will be allowed to the Company in
an amount equal to the ordinary income included by the individual with respect
to his or her NSO or SAR, provided that such amount constitutes an ordinary and
necessary business expense to the Company and is reasonable and the limitations
of Sections 280G and 162(m) of the Code do not apply.
If an individual exercises an NSO by delivering shares of Common Stock to
the Company, other than shares previously acquired pursuant to the exercise of
an ISO which is treated as a "disqualifying disposition" as described above, the
individual will not recognize gain or loss with respect to the exchange of such
shares, even if their then fair market value is different from the individual's
tax basis. The individual, however, will be taxed as described above with
respect to the exercise of the NSO as if he or she had paid the exercise price
in cash, and the Company likewise generally will he entitled to an equivalent
tax deduction.
Other Awards. With respect to other Benefits under the Amended Incentive
Plan that are settled either in cash or in shares of Common Stock that are
either transferable or not subject to a substantial risk of forfeiture (as
defined in the Code and the regulations thereunder), employees generally will
recognize ordinary income equal to the excess of the amount of cash or the fair
market value of the Common Stock received over the price paid for the award, if
any.
With respect to Benefits under the Amended Incentive Plan that are settled
in shares of Common Stock that are restricted as to transferability (within the
meaning of Section 83 of the Code) or subject to a substantial risk of
forfeiture--absent a written election pursuant to Section 83(b) of the Code
filed with the Internal Revenue Service within 30 days after the date of
transfer of such shares pursuant to the award (a "Section 83(b) election")--an
individual will recognize ordinary income at the earlier of the time at which
(a) the shares become transferable or (b) the restrictions that impose a
substantial risk of forfeiture of such shares (the "Restrictions") lapse, in an
amount equal to the excess of the fair market value (on such date) of such
shares over the price paid for the award, if any. If a Section 83(b) election is
made, the individual will recognize ordinary income, as of the transfer date, in
an amount equal to the excess of the fair market value of the Common Stock as of
that date over the price paid for such award, if any.
The ordinary income recognized with respect to the receipt of cash, shares
of Common Stock or other property under the Amended Incentive Plan will be
subject to both wage withholding and other employment taxes.
The Company generally will be allowed a deduction for federal income tax
purposes in an amount equal to the ordinary income recognized by the employee,
provided that such amount constitutes an ordinary and necessary business expense
and is reasonable and the limitations of Sections 280G and 162(m) of the Code do
not apply.
Dividends and Dividend Equivalents. To the extent Benefits under the
Amended Incentive Plan earn dividend or dividend equivalents, whether paid
currently or credited to an account established under the Amended Incentive
Plan, an individual generally will recognize ordinary income with respect to
such dividend or dividend equivalents.
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Change in Control. In general, if the total amount of payments to an
individual that are contingent upon a "change of control" of the Company (as
defined in Section 280G of the Code), including payments under the Amended
Incentive Plan that vest upon a "change in control," equals or exceeds three
times the individual's "base amount" (generally, such individual's average
annual compensation for the five calendar years preceding the change in
control), then, subject to certain exceptions, the payments may be treated as
"parachute payments" under the Code, in which case a portion of such payments
would be non-deductible to the Company and the individual would be subject to a
20% excise tax on such portion of the payments.
Certain Limitations on Deductibility of Executive Compensation. With
certain exceptions, Section 162(m) of the Code denies a deduction to publicly
held corporations for compensation paid to certain executive officers in excess
of $1 million per executive per taxable year (including any deduction with
respect to the exercise of an NSO or SAR or the disqualifying disposition of
stock purchased pursuant to an ISO). One such exception applies to certain
performance-based compensation provided that such compensation has been approved
by stockholders in a separate vote and certain other requirements are met. The
Company believes that stock options, SARs and Performance-Based Awards granted
under the Amended Incentive Plan should qualify for the performance-based
compensation exception to Section 162(m).
Regulation. The Amended Incentive Plan is neither qualified under the
provisions of Section 401(a) of the Code, nor subject to any of the provisions
of ERISA.
NEW PLAN BENEFITS UNDER THE AMENDED INCENTIVE PLAN
The following table shows the options to acquire shares of Common Stock
under the Amended Incentive Plan that have been granted to the individuals and
groups set forth below through February 28, 1999, subject to stockholder
approval at this Annual Meeting.
<TABLE>
<CAPTION>
AMENDED INCENTIVE PLAN
-----------------------
DOLLAR NUMBER
NAME AND POSITION VALUE ($) OF UNITS
- ----------------- --------- --------
<S> <C> <C>
Jerry E. Hunter ............................................................... 0 0
President and Chief Executive Officer
Carl Rosen .................................................................... 0 0
President, JPS Converter and Industrial Corp.
David H. Taylor ............................................................... 0 0
Executive Vice President--Finance and Secretary
Monnie L. Broome .............................................................. 0 0
Vice President--Human Resources
Bruce R. Wilby ................................................................ 0 0
President, JPS Elastomerics Corp.
James H. Gully ................................................................ 0 0
Vice President--Operations, JPS Converter and Industrial Corp.
Executive Officer Group ....................................................... (1) 500,000(1)
Non-Executive Officer Director Group .......................................... 0 0
Non-Executive Officer Employee Group .......................................... 0 0
</TABLE>
- ------------------
(1) Represents options to acquire shares of Common Stock that were granted to
Michael L. Fulbright on February 28, 1999, subject to approval of the
Amended Incentive Plan by the Company's stockholders. The actual value that
Mr. Fulbright may realize, if any, will depend on the amount by which the
market price of the Common Stock exceeds the exercise price of the option at
the time of exercise.
THE BOARD BELIEVES THAT THE ADOPTION OF THE AMENDED INCENTIVE PLAN
IS IN THE BEST INTERESTS OF THE COMPANY
AND THEREFORE RECOMMENDS A VOTE IN FAVOR OF
THE APPROVAL OF THE AMENDED INCENTIVE PLAN.
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ITEM 3--RATIFICATION OF APPOINTMENT OF AUDITORS
The Board, upon the recommendation of its Audit Committee, has appointed
Deloitte & Touche LLP to serve as our independent auditors for 1999, subject to
ratification by our stockholders.
Representatives of Deloitte & Touche LLP will be present at the Annual
Meeting to answer questions. They will also have the opportunity to make a
statement if they desire to do so.
The affirmative vote of a majority in voting power of shares of Common
Stock present in person or represented by proxy at the Annual Meeting is
required for the approval of this proposal.
THE BOARD RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT OF DELOITTE &
TOUCHE LLP AS OUR INDEPENDENT AUDITORS FOR THE 1999 FISCAL YEAR.
STOCKHOLDER PROPOSALS FOR THE 2000 ANNUAL MEETING
Any stockholder who wishes to present a proposal for action at the
Company's 2000 Annual Meeting of Stockholders, and who wishes to have it set
forth in the Company's proxy statement for such annual meeting and identified in
the form of proxy proposed by the Company in reliance on Rule 14a-8 under the
Securities Exchange Act of 1934, must, notify the Company in writing by notice
delivered or mailed by first class United States mail to JPS Textile Group,
Inc., 555 North Pleasantburg Drive, Suite 202, Greenville, South Carolina 29607,
Attn: Chief Financial Officer in such a manner that such notice is received by
the Company not later than November 13, 1999. Any such notice shall set forth:
(1) the name and address of the stockholder and the proposal to be introduced;
(2) the number of shares of stock held of record, owned beneficially and
represented by proxy by such stockholder as of the date of such notice; and
(3) a representation that the stockholder intends to appear in person or by
proxy at the meeting to introduce the proposal specified in the notice. The
chairman of the 2000 Annual Meeting of Stockholders may refuse to acknowledge
the introduction of any stockholder proposal not made in compliance with the
foregoing procedures.
With respect to a proposal submitted by a stockholder for the 2000 Annual
Meeting of Stockholders outside of the process of Rule 14a-8 for which notice of
the proposal is not received by the Company (at the address stated above) prior
to January 27, 2000, the proxy to be solicited on behalf of the Board for the
next annual meeting may confer discretionary authority to vote on any such
proposal properly coming before such meeting.
ANNUAL REPORT ON FORM 10-K
Copies of the Company's Annual Report on Form 10-K for its latest fiscal
year, as amended, is available without charge to stockholders upon written
request to the JPS Textile Group, Inc., 555 North Pleasantburg Drive,
Suite 202, Greenville, South Carolina 29607, Attn: Chief Financial Officer.
Whether or not you plan to attend the Annual Meeting, please mark, sign,
date and promptly return the enclosed proxy in the enclosed envelope. No postage
is required for mailing in the United States.
By Order of the Board of Directors,
/s/ John W. Sanders, Jr.
John W. Sanders, Jr.
Executive Vice President--Finance
and Chief Financial Officer
JPS Textile Group, Inc.
March 12, 1999
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---
JPS
---
<PAGE>
JPS TEXTILE GROUP, INC.
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of JPS TEXTILE GROUP, INC., a Delaware
corporation (the "Company"), hereby acknowledges receipt of the Notice of Annual
Meeting of Stockholders and Proxy Statement, each dated March 12, 1999, and
hereby appoints Michael L. Fulbright, John W. Sanders, Jr. and Allen Ollis, and
each of them, as proxies, each with full power of substitution, and hereby
authorizes them to represent and to vote, as designated on the reverse side of
this form, all the shares of Common Stock of the Company held of record by the
undersigned on February 19, 1999, and all of the shares as to which the
undersigned would be entitled to vote if personally present at the Annual
Meeting of Stockholders to be held on April 7, 1999, at 9:00 a.m., local time,
at Weil, Gotshal & Manges LLP, 767 Fifth Avenue, 25th Floor, New York, New York,
and any adjournment or postponement thereof, in accordance with the following
instructions.
IF NO OTHER INDICATION IS MADE ON THE REVERSE SIDE OF THIS FORM, THE
PROXIES SHALL VOTE (AND ANY VOTING INSTRUCTIONS TO RECORD HOLDERS SHALL BE
GIVEN) FOR ITEMS 1, 2 AND 3, AND IN THEIR DISCRETION, UPON SUCH OTHER BUSINESS
AS MAY PROPERLY COME BEFORE THE MEETING.
SEE REVERSE SIDE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
IF YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE BRING THIS ADMISSION
TICKET WITH YOU.
ADMISSION TICKET
JPS TEXTILE GROUP, INC.
ANNUAL MEETING OF STOCKHOLDERS
38
<PAGE>
PLEASE MARK YOUR
/x/ VOTES AS IN THIS EXAMPLE.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1, 2 AND 3.
1. Election of five directors. (Mark ONE box only.)
Nominees: Robert J. Capozzi, Jeffrey S. Deutschman, Nicholas P.
DiPaolo, Michael L. Fulbright, John M. Sullivan Jr.
FOR WITHHELD
All nominees listed Authority to vote
at right (except as for all nominees
indicated in the listed at right
space provided)
/_/ /_/
To withhold authority to vote for any individual nominee, write that
nominee's name on the space provided below.
-----------------------------------------
2. Approval of the Company's 1997 Incentive and Capital Accumulation Plan, as
amended. (Mark ONE box only.)
FOR AGAINST ABSTAIN
/_/ /_/ /_/
3. A proposal to ratify the appointment of Deloitte & Touche LLP as
independent auditors for 1999. (Mark ONE box only.)
FOR AGAINST ABSTAIN
/_/ /_/ /_/
PLEASE SIGN EXACTLY AS NAME APPEARS HEREON. IF ACTING AS ATTORNEY, EXECUTOR,
TRUSTEE, OR IN OTHER REPRESENTATIVE CAPACITY, PLEASE SIGN NAME AND TITLE.
________________________________________
(SIGNATURE OF STOCKHOLDER) DATE
________________________________________
(SIGNATURE OF STOCKHOLDER) DATE
