<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
<TABLE>
<S> <C>
[ ] 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
</TABLE>
JPS INDUSTRIES, 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> 2
January 28, 2000
Dear Stockholder:
You are cordially invited to attend our Annual Meeting of stockholders,
which will be held on Tuesday, February 29, 2000, at 10:00 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 2001 Annual Meeting of Stockholders and "FOR" ratification of
the appointment of Deloitte & Touche LLP as our independent auditors for the
2000 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> 3
JPS INDUSTRIES, INC.
555 NORTH PLEASANTBURG DRIVE
SUITE 202
GREENVILLE, SOUTH CAROLINA 29607
NOTICE OF 2000 ANNUAL MEETING OF STOCKHOLDERS
Date and Time................... February 29, 2000 at 10:00 a.m., local time
Place........................... Michelangelo Hotel
152 W. 51st Street
New York, New York 10019
Items of Business............... (1) To elect five directors.
(2) To ratify the appointment of
Deloitte & Touche LLP as our
independent auditors for the 2000
fiscal year.
(3) 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
January 14, 2000.
Annual Report................... Our 1999 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.
By Order of the Board of Directors,
/s/ L. Allen Ollis
------------------------------------
L. Allen Ollis
Corporate Secretary and Controller
JPS Industries, Inc.
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROXY STATEMENT...................................................... 1
STOCKHOLDERS ENTITLED TO VOTE........................................ 2
PROXIES.............................................................. 2
VOTING PROCEDURES.................................................... 2
REQUIRED VOTE........................................................ 2
STOCKHOLDER ACCOUNT MAINTENANCE...................................... 3
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE.............. 3
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT.......... 3
ITEM 1--ELECTION OF DIRECTORS........................................ 5
NAME, AGE, PRINCIPAL OCCUPATION, BUSINESS EXPERIENCE AND OTHER
INFORMATION OF EACH DIRECTOR AND EXECUTIVE OFFICER.................. 6
COMPENSATION OF DIRECTORS .......................................... 8
BOARD OF DIRECTORS AND COMMITTEE MEMBERSHIP......................... 9
THE AUDIT COMMITTEE ................................................ 9
THE COMPENSATION COMMITTEE.......................................... 9
EXECUTIVE COMPENSATION.............................................. 9
AGREEMENTS WITH EXECUTIVE OFFICERS.................................. 11
EMPLOYEE BENEFIT AND LONG-TERM COMPENSATION PLANS................... 14
RETIREMENT PENSION PLAN............................................. 14
1999 MANAGEMENT INCENTIVE BONUS PLAN................................ 15
1997 INCENTIVE AND CAPITAL ACCUMULATION PLAN........................ 16
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION............. 17
STOCK PERFORMANCE GRAPH............................................. 21
ITEM 2--RATIFICATION OF APPOINTMENT OF AUDITORS..................... 22
STOCKHOLDER PROPOSALS FOR THE 2001 ANNUAL MEETING................... 22
ANNUAL REPORT ON FORM 10-K.......................................... 23
</TABLE>
<PAGE> 5
JPS INDUSTRIES, 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 Industries, Inc. ("JPS," the "Company,"
"we," or "us"), a Delaware corporation, of proxies to be voted at our 2000
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 January 29, 2000.
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 Industries, Inc., c/o American Stock Transfer & Trust
Company, or by calling 864-239-3900 and asking for the Secretary 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 10 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 Secretary 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.
1
<PAGE> 6
STOCKHOLDERS ENTITLED TO VOTE
Holders of record of JPS Common Stock at the close of business on
January 14, 2000 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 Secretary 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.
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
2
<PAGE> 7
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
ratify the appointment of Deloitte & Touche LLP as our auditors for the 2000
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 10% 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 10% 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 1999
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 John Sanders, an executive officer.
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT
Based upon information known to JPS as of January 14, 2000, 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 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.
3
<PAGE> 8
<TABLE>
<CAPTION>
COMMON STOCK (1)
--------------------------------------
BENEFICIAL OWNER NUMBER OF SHARES PERCENT OF CLASS
- ---------------- ---------------- ----------------
<S> <C> <C>
Magten Asset Management Corp.(2) . 1,825,738 18.3%
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
UBS AG ........................... 1,027,214 10.3
299 Park Avenue
31st Floor
New York, New York 10171
JWA Investments L.P. ............. 991,029 9.9
885 Third Ave., 34th Floor
New York, New York 10022
Master Retirement Pension ........ 1,925,685 19.3
Trust of JPS Industries, Inc.(4)
c/o Mellon Bank, N.A.
One Mellon Bank Center, Rm. 930
Pittsburgh, Pennsylvania 15258
Robert J. Capozzi(5) ............. 1,825,738 18.3
Jeffrey S. Deutschman ............ 15,000(3) 0.1
Nicholas P. DiPaolo .............. 25,000(3) 0.2
Michael L. Fulbright ............. 448,334(3) 4.3
John M. Sullivan, Jr. ............ 15,000(3) 0.1
Monnie L. Broome ................. 29,810 0.3
Jerry E. Hunter (6) .............. 32,852 0.3
Reid A. McCarter ................. 15,000 0.1
M. Gary Wallace .................. 4,495 *
Bruce R. Wilby ................... 15,000 0.1
Directors and executive
officers as a group ............. 2,426,229(7) 23.23%
</TABLE>
- ----------------
* Constitutes less than one-tenth of one percent.
(1) 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, 15,000; Nicholas P. DiPaolo, 15,000;
Michael L. Fulbright, 348,334; John M. Sullivan, 15,000; Monnie L.
Broome, 15,000; Bruce R. Wilby, 15,000; M. Gary Wallace, 4,495; and
Reid A. McCarter, 15,000.
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 442,829. In each case, the percent of class is calculated on the
basis that such shares of the person being reported on only are deemed
outstanding. No voting or power exists with respect to such shares of
Common Stock prior to acquisition.
(Footnotes continued on next page)
4
<PAGE> 9
(Footnotes continued from previous page)
(2) Includes shares of the Common Stock held by Magten in accounts managed
by Magten on behalf of various investment advisory clients. 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
shares.
(3) Represents, or in the case of Mr. Fulbright and Mr. DiPaolo, includes
options granted to non-employee directors of JPS (other than Robert J.
Capozzi) on the Effective Date. See "EXECUTIVE COMPENSATION--
Compensation of Directors."
(4) Michael L. Fulbright has shared voting and investment power over these
shares by virtue of his position on the Investment Committee of the
retirement plan. He disclaims beneficial ownership of such shares.
(5) By virtue of 1,825,738 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) Jerry E. Hunter served as Chairman of the Board, President and Chief
Executive Officer of the Company until February 27, 1999.
(7) Includes 1,825,738 shares of Common Stock beneficially owned by Magten.
See Note 5.
ITEM 1--ELECTION OF DIRECTORS
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 2001. 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.
5
<PAGE> 10
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........ 35 Director
Jeffrey S. Deutschman.... 42 Director
Nicholas P. DiPaolo...... 58 Director
Michael L. Fulbright..... 50 Chairman of the Board, President,
Chief Executive Officer and Director
John M. Sullivan, Jr..... 54 Director
Monnie L. Broome......... 58 Vice President-Human Resources
of JPS Industries, Inc.
Reid A. McCarter......... 58 President, JPS Apparel Division
M. Gary Wallace.......... 42 President, JPS Glass Division
Bruce R. Wilby........... 49 President, JPS Elastomerics
Division
</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-Portfolio Manager 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 18.3% of Common Stock as of
December 31, 1999. Mr. Capozzi has been with Magten since 1986. Mr. Capozzi
serves as a member of the Board of Directors of Magten Offshore Fund Ltd.
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 specialty packaging and consumer products sampling. He is also a director of
Resort Theaters of America, an operator of movie theaters and Davidson Cotton
Company, an importer of bath and bed home textiles. From 1992 to 1995, he was a
Managing Director with Aurora Capital
6
<PAGE> 11
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 January 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 Bernard Chaus, a women's apparel manufacturer and has served as a
consultant to Cynthia Steffe, a women's apparel manufacturer.
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 served as Chairman, President, 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 1992 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. Broome has served as Vice President-Human Resources for JPS
Industries since May 1988. He was Vice President of Human Resources for J. P.
Stevens & Co., Inc. prior to that. From October 1987 to January 1988 he was Vice
President of Employee Relations for the Home Products Group of Springs
Industries and from August 1980 to October 1987 Vice President of Personnel for
M. Lowenstein Corp.
7
<PAGE> 12
Mr. McCarter became President of the JPS Apparel Division in 1999 and
has served in that capacity for seven months. He was Business Manager for the
Company from 1993 to 1999. Prior to that, he served in a variety of marketing
and managerial positions with the Company or its predecessor for 28 years.
Mr. Wallace became President of JPS Glass Division in May 1999. He was
Vice President of Marketing from October 1998 to May 1999 and Product Manager
for Composite Fabrics from 1994 to October 1998. He has served in a variety of
technical and managerial positions with the Company or its predecessor for 25
years.
Mr. Wilby became President of the JPS Elastomerics Division, 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 or
its predecessor for 25 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) as
of the Effective Date. On May 12, 1999, non-employee director options, other
than those of Mr. Fulbright, that were granted on the Effective Date were
"repriced" in accordance with actions taken by disinterested directors.
Effective on that date, new options were issued at an exercise price based on
the per share price of common stock on that date (which was $4.375 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. The repriced
options continue to vest under this schedule. 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
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<PAGE> 13
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 1999, the Board met 6 times and had two ongoing committees, an
Audit Committee and a Compensation Committee. All of the directors attended at
least 75 percent of the aggregate number of meetings of the Board and Board
committees on which they served in the 1999 fiscal year.
THE AUDIT COMMITTEE
The Audit Committee, which consists of Messrs. DiPaolo, Deutschman,
Capozzi and Sullivan, oversees management's conduct of the financial reporting
process, the system of internal, financial, and administrative controls, and the
annual independent audit of the Company's financial statements. The Committee
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 and
internal auditors, and reviews audit results. The Audit Committee held 2
meetings during the 1999 fiscal year.
THE COMPENSATION COMMITTEE
The Compensation Committee, which at the beginning of the 1999 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 3
meetings during the 1999 fiscal year. Effective March 1, 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.
Messrs. Sullivan and Deutschman were added to the Compensation Committee on
April 7, 1999.
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 1999 fiscal year for
services rendered in all capacities to the Company (including its subsidiaries)
for the fiscal years ended October 30, 1999, October 31, 1998 and November 1,
1997.
9
<PAGE> 14
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION AWARDS
-------------------
ANNUAL COMPENSATION SECURITIES
NAME AND ------------------- UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY(1) BONUS OPTIONS PAYOUTS COMPENSATION(2)
- ------------------ ---- --------- ----- ---------- ------- ---------------
<S> <C> <C> <C> <C> <C> <C>
MICHAEL L. FULBRIGHT ....... 1999 $369,157 $275,000 500,000 -- $ 343,885
CHAIRMAN OF THE BOARD, 1998 -- -- -- -- 21,000
PRESIDENT AND CHIEF 1997 -- -- 25,000 -- 6,200
EXECUTIVE OFFICER
JERRY E. HUNTER(3) ......... 1999 $134,743 -- -- -- $1,023,776
CHAIRMAN OF THE BOARD, 1998 387,729 -- -- -- 9,263
PRESIDENT AND CHIEF 1997 361,218 $137,052 115,000(4) -- 9,059
EXECUTIVE OFFICER
JOHN W. SANDERS, JR(3) ..... 1999 $215,625 -- 50,000 -- $ 350,768
EXECUTIVE VICE PRESIDENT-- 1998 -- -- -- -- --
FINANCE & CFO 1997 -- -- -- -- --
MONNIE L. BROOME ........... 1999 $181,440 -- 25,000(4) -- $ 8,390
VICE PRESIDENT-- 1998 181,331 -- -- -- 8,019
HUMAN RESOURCES 1997 167,040 -- 30,000(4) -- 8,016
REID A. MCCARTER ........... 1999 $158,722 -- 45,000(4) -- $ 2,300
PRESIDENT, JPS APPAREL 1998 136,704 3,520 -- -- 1,896
1997 129,654 14,377 30,000(4) -- 1,870
M. GARY WALLACE ............ 1999 $131,041 -- 32,491(4) -- $ 7,136
PRESIDENT, JPS GLASS 1998 103,092 -- -- -- 6,730
1997 97,800 47,053 8,990(4) -- 1,142
BRUCE R. WILBY ............. 1999 $180,180 -- 25,000(4) -- $ 7,533
PRESIDENT, JPS 1998 173,250 -- -- -- 5,572
ELASTOMERICS 1997 165,000 78,779 30,000(4) $27,751 6,205
</TABLE>
- -----------------
(1) With respect to Messrs. Fulbright, Hunter, Broome and McCarter includes
imputed income relating to life insurance premium payments.
(2) Includes employer-matching 401(k) plan contribution, non-taxable
employer-provided term life insurance premiums, imputed lease value of
company-provided automobiles, and for Mr. Fulbright compensation as
Board Member for 1999 and 1998 of $18,867 and $27,200, respectively. In
addition for 1999, includes a $275,000 bonus paid to Mr. Fulbright in
connection with his employment with the Company and $1,016,244 and
$350,121 due to Messrs. Hunter and Sanders, respectively, in connection
with their departures.
(Footnotes continued on next page)
10
<PAGE> 15
(Footnotes continued from previous page)
(3) Mr. 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. Mr. Sanders resigned effective
November 10, 1999.
(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, and 5,000
options granted to each of Messrs. Broome and Wilby were cancelled in
1998. Per his option agreement, the options held by Mr. Hunter were
cancelled in 1999 subsequent to his departure from the Company. The
1999 grants to Messrs. Broome and Wilby reflect, and in the case of
Messrs. McCarter and Wallace, include the repricing of options granted
in 1997. In connection with the repricing, the options granted in 1997
were cancelled.
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 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 24 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. These options, along with previously vested options,
expired unexercised.
On the Effective Date, JPS entered an employment agreement with Monnie
L. Broome. The agreement provided that Mr. Broome would serve as Vice
President-Human Resources of JPS. Under the agreement, the base salary for Mr.
Broome is $180,000 per year. In addition, under the employment
11
<PAGE> 16
agreement, 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. Broome
has consented to the reduction of his eligible bonus to 35% from 50%.
JPS Elastomerics Division 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 would 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 March 17, 1998, JPS Converter and Industrial Corp. entered into an
employment agreement with Reid A. McCarter. This agreement provides severance
benefits in the event that Mr. McCarter's employment is terminated by his
employer prior to March 17, 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 provided that Mr. Sanders would 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 was $225,000 per year and may be
increased annually by the Board. In addition, Mr. Sanders was 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. In the event that the Company terminated Mr. Sander's
employment other than for cause or Mr. Sanders terminated his employment with
the Company for good reason, the Company would (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 50% of base salary) payable under the
Management Incentive Bonus Plan (without regard to whether the performance goals
for such year were met), and (c) an amount equal to the target bonus (not in
excess of 50% of base salary payable under (i) above) 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 24 months following the termination of employment. In
addition, pursuant to a separate employment letter agreement entered into
between Mr. Sanders and the Company on
12
<PAGE> 17
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 September 29, 1999, Mr. Sanders elected to terminate his
employment with the Company effective November 10, 1999. The termination of
employment was treated as a good reason event under his employment agreement.
The Company and Mr. Sanders agreed to modify certain terms of the employment
agreement, including the provisions regarding bonus payments. Pursuant to the
revised agreement, Mr. Sanders received a bonus payment of $115,582 on November
10, 1999 with such payment being equal to the year 1999 target bonus due under
the original agreement and a pro-rata portion of the year 2000 target bonus. In
addition, Mr. Sanders will, pursuant to the original agreement, continue to
receive his base salary for one year and be eligible to participate in certain
fringe benefit plans for 24 months. Outstanding stock options held by Mr.
Sanders, to the extent not previously vested, vested on November 10, 1999 and
can be exercised within six months of that date.
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
(which was subsequently obtained), 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, on February 28, 1999 (the "Grant
Date")). For financial reporting purposes, the excess, of the price per share on
the date of stockholder approval over the price per share on the Grant Date is
being 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.
13
<PAGE> 18
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.
<TABLE>
<CAPTION>
PENSION PLAN TABLE*
YEARS OF SERVICE
------------------------------------------------
REMUNERATION 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
- ------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$125,000 .............. $ 19,525 $ 26,033 $ 32,541 $ 39,049 $ 45,557
150,000 .............. 24,025 32,033 40,041 48,049 56,057
160,000 and above .... 25,825 34,433 43,041 51,649 60,257
</TABLE>
- ---------------
* Assumes individual retires at age 65 in 1999 with the indicated years
of service and compensation. The social security integration level of
such individuals would be $33,060. The social security integration
levels is adjusted annually.
Credited years of service for benefit accrual under the Pension Plan as
of November 1, 1999 for the following executive officers are:
<TABLE>
<S> <C>
Michael L. Fulbright.................................... 0 years
John W. Sanders, Jr..................................... 0 years
Jerry E. Hunter......................................... 12 years
Monnie L. Broome........................................ 11 years
Reid A. McCarter........................................ 5 years
M. Gary Wallace......................................... 19 years
Bruce R. Wilby.......................................... 24 years
</TABLE>
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 $33,060 in 1999), multiplied by the
participant's years of benefit service.
14
<PAGE> 19
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.
1999 MANAGEMENT INCENTIVE BONUS PLAN
The Company's 1999 Management Incentive Bonus Plan provides incentives
for key management employees of the Company and its divisions based on the
financial performance of the Company and the divisions. The plan is designed to
provide incentives to maximize operating 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)
for each operating division. If actual operating earnings 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
90%. 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.
15
<PAGE> 20
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, which was subsequently obtained,
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. The Incentive
Plan will terminate on the tenth anniversary of its adoption.
AGGREGATED OPTION EXERCISES IN 1999 AND OPTION VALUES AT OCTOBER 30, 1999
No executive officer of JPS and its subsidiaries exercised options in
1999. 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 30,
1999 ($3.00 per share).
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT OCTOBER 30, 1999 OCTOBER 30, 1999 ($)(1)
--------------------- -----------------------
EXERCISABLE/ EXERCISABLE/
UNEXERCISABLE UNEXERCISABLE
------------- -------------
NAME
- ----
<S> <C> <C>
Michael L. Fulbright........ 181,668/343,332 0/0
John W. Sanders, Jr......... 50,000/0 0/0
Monnie L. Broome............ 15,000/10,000 0/0
Reid A. McCarter............ 15,000/30,000 0/0
M. Gary Wallace............. 4,495/27,996 0/0
Bruce R. Wilby.............. 15,000/10,000 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 30, 1999 and the
exercise price of the option, multiplied by the number of shares of
Common Stock underlying the option.
16
<PAGE> 21
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 the amount in which stock options should be granted by the Company
under the Incentive Plan. As previously described, in the 1999 fiscal year, the
Company had employment agreements with Michael L. Fulbright, Jerry E. Hunter,
Monnie L. Broome, Bruce R. Wilby and Reid A. McCarter. Set forth below is a
report submitted by the Compensation Committee regarding the compensation
policies for the 1999 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 1999 fiscal year. Michael L. Fulbright was not CEO at
the beginning of the 1999 fiscal year.
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.
17
<PAGE> 22
EXECUTIVE COMPENSATION FOR THE 1999 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 not be adopted and that all salaries
be frozen at current levels for periods ranging from six to 18 months. The
Compensation Committee recommended to the Board that the recommendations for
eligible participants in, and the Company's goals for, the Management Incentive
Bonus Plan for the fiscal year ending October 30, 1999 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 at least annually and determines
increases based upon an executive officer's contribution to corporate
performance and competitive market conditions.
Chairman, President and CEO: Mr. Fulbright's base salary was set at
$550,000 at the time of his employment.
Former Chairman, President and CEO: Mr. Hunter's base salary in 1999
was $380,000. For 1998, it was also set at $380,000.
Other Executive Officers: The 1999 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 1999, Mr. Fulbright received a
guaranteed bonus of $275,000 under the plan. In 1998, Mr. Hunter, the former
Chairman, President and CEO, was not awarded any bonus under the Management
Incentive Bonus Plan.
18
<PAGE> 23
Other Executive Officers: The 1999 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.
As previously noted in 1999, Mr. Fulbright received options to purchase
500,000 shares upon his being named President, Chairman and CEO. Mr. Sanders
also received options upon his being named Executive Vice President and Chief
Financial Officer. In addition, Mr. McCarter and Mr. Wallace were granted
options in 1999 upon their being named division Presidents. For additional
information on options held by Executive Officers at October 30, 1999, see the
table headed "Aggregate Option Exercises in 1999 and Option Values at October
30, 1999."
On May 12, 1999, the Compensation Committee of the Board determined
that the unexercised options held by substantially all active employees and that
were granted on the Effective Date, be "repriced" to reflect current market
values. The Committee made this determination based on its view that these
options, which had an exercise price of $12.33 per share, no longer acted as an
incentive to maintain and motivate highly competent individuals. In addition,
the Committee felt that the decline in market value was permanent and reflected
both a permanent change in the Company and overall market in which it operates.
In addition, the Committee determined that all repriced options be time
vested. The options originally granted to employees included time vested options
and options with an annual performance requirement in addition to the time
vesting requirement. The Committee felt that the performance vesting component
was unnecessary since the stock price in relation to the option price should
reflect performance.
19
<PAGE> 24
In addition, the Compensation Committee member not holding options,
voted that options granted to outside Directors (other than Mr. Fulbright) on
the Effective Date, also be repriced. The specified options were repriced to the
Fair Market Value ($4.375 per share) as determined by the Compensation
Committee, on that date.
The Compensation Committee,
Robert J. Capozzi
Jeffrey S. Deutschman
Nicholas P. DiPaolo
Michael L. Fulbright (through 3/1/99)
John M. Sullivan, Jr.
20
<PAGE> 25
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 30, 1999. 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.
[GRAPH]
<TABLE>
<CAPTION>
01/30/98 10/31/98 10/30/99
-------- -------- --------
<S> <C> <C> <C>
NASDAQ Composite In x $100 $109 $183
JPS Industries, Inc. $100 $ 44 $ 24
S&P SuperCap Specialty Textiles Index
$100 $ 53 $ 37
</TABLE>
21
<PAGE> 26
ITEM 2--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 2000,
subject to ratification by our stockholders.
A representative of Deloitte & Touche LLP will be present at the Annual
Meeting to answer questions. He will also have the opportunity to make a
statement if he desires 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 2000 FISCAL YEAR.
STOCKHOLDER PROPOSALS FOR THE 2001 ANNUAL MEETING
Any stockholder who wishes to present a proposal for action at the
Company's 2001 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 Industries, Inc.,
555 North Pleasantburg Drive, Suite 202, Greenville, South Carolina 29607, Attn:
Secretary in such a manner that such notice is received by the Company not later
than October 3, 2000. 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 2001 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 December 16, 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.
22
<PAGE> 27
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 JPS Industries, Inc., 555 North Pleasantburg Drive, Suite
202, Greenville, South Carolina 29607, Attn: Investor Relations.
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/ L. Allen Ollis
-----------------------------------
L. Allen Ollis
Corporate Secretary
JPS Industries, Inc.
January 28, 2000
23
<PAGE> 28
<PAGE> 29
<PAGE> 30
JPS
JPS INDUSTRIES, INC.
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of JPS INDUSTRIES, INC., a Delaware
corporation (the "Company"), hereby acknowledges receipt of the Notice of Annual
Meeting of Stockholders and Proxy Statement, each dated January 28, 2000, and
hereby appoints Michael L. Fulbright and Wm. Ellis Jackson, 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
January 14, 2000, 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 February 29, 2000 at 10:00 a.m., local time, at the Michelangelo
Hotel, 152 W. 51st St., New York, New York, 10019, 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 AND 2 AND IN THEIR DISCRETION, UPON SUCH OTHER BUSINESS AS
MAY PROPERLY COME BEFORE THE MEETING.
SEE REVERSE SIDE
- --------------------------------------------------------------------------------
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<PAGE> 31
IF YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE BRING THIS ADMISSION TICKET
WITH YOU.
ADMISSION TICKET
JPS INDUSTRIES, INC.
ANNUAL MEETING OF STOCKHOLDERS
PLEASE MARK YOUR
/x/ VOTES AS IN THIS EXAMPLE.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1, AND 2.
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.
<TABLE>
<S> <C>
FOR WITHHELD
All nominees listed Authority to vote
at right (except as for all nominees
indicated in the listed at right
space provided)
/-/ /-/
</TABLE>
To withhold authority to vote for any individual nominee, write that
nominee's name on the space provided below.
----------------------------------------
2. A proposal to ratify the appointment of Deloitte & Touche LLP as
independent auditors for 2000. (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
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