As filed with the Securities and Exchange Commission on August 23, 1999
Registration No. 333-
=============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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JONES APPAREL GROUP, INC.
(Exact Name of Registrant as Specified in its Charter)
Pennsylvania 06-0935166
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
250 Rittenhouse Circle
Bristol, Pennsylvania 19007
(215) 785-4000
(Address of Principal Executive Offices)
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1999 STOCK OPTION PLAN
(Full Title of Plan)
IRA M. DANSKY, ESQ.
General Counsel
Jones Apparel Group, Inc.
1411 Broadway
New York, New York 10018
(Name and Address of Agent for Service)
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(212) 536-9526
(Telephone Number, Including Area Code, of Agent for Service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
=================================================================================================
Title of Proposed Maximum Proposed Maximum
Securities Amount to be Offering Price Per Aggregate Offering Amount of
to be Registered Registered (1) Share Price Registration Fee (2)
- ---------------- ----------------- ------------------ ------------------ --------------------
<S> <C> <C> <C> <C>
Common Stock,
$.01 par value 10,000,000 shares $29.3125 $293,125,000 $81,488.75
</TABLE>
(1) An indeterminate additional number of shares of Common Stock are
registered hereunder, which may be issued as a result of stock splits,
stock dividends or similar transactions pursuant to the operation of
the "Adjustments Upon Changes in Capitalization" provisions of the
1999 Stock Option Plan. No additional registration fee is included
for these shares.
(2) The registration fee is based upon the average of the high and low
sales prices for the Common Stock of $29.3125 on August 19, 1999
as prescribed by Rule 457(c).
Page 1 of 28 Pages
Exhibit Index appears on Page 8
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
ITEM 1. PLAN INFORMATION.
This Registration Statement relates to the registration of 10,000,000
shares of common stock, $0.01 par value per share ("Common Stock") of JONES
APPAREL GROUP, INC. (the "Registrant") to be issued under the 1999 Stock
Option Plan (the "Plan"). Documents containing the information required by
Part I of the Registration Statement will be sent or given to participants in
the Plan as specified by Rule 428(b). Such documents are not filed with the
Securities and Exchange Commission (the "Commission") either as part of this
Registration Statement or as prospectuses or prospectus supplements pursuant
to Rule 424 in reliance on Rule 428.
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.
The Registrant will, upon written or oral request, provide without charge
to any person to whom the Prospectus relating to this Registration Statement
is delivered, a copy of any and all of the information which has been
incorporated by reference in such Prospectus and this Registration Statement
(pursuant to Item 3 of Part II below). Such requests should be directed to
the Chief Financial Officer, Jones Apparel Group, Inc., 250 Rittenhouse
Circle, Bristol, Pennsylvania 19007 (telephone (215) 785-4000).
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents which have been filed by the Registrant with the
Commission are hereby incorporated by reference in this Registration
Statement:
1. Annual Report on Form 10-K for the fiscal year ended December
31, 1998.
2. Quarterly Report on Form 10-Q for the quarter ended July 4, 1999.
3. Current Reports on Form 8-K dated January 1, 1999, January 13,
1999, March 2, 1999, April 7, 1999 and June 15, 1999.
4. The description of the Common Stock contained in the
Registrant's Registration Statement on Form 8-A filed pursuant
to Section 12 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and any amendment or report filed for the
purpose of updating such description.
All documents filed by the Registrant pursuant to Section 13(a), 13(c), 14
and 15(d) of the Exchange Act subsequent to the date of the Registration
Statement and prior to the filing of a post-effective amendment, which
indicates that all securities offered have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be incorporated by
reference into this Registration Statement and to be a part hereof from the
respective dates of filing such documents; provided, however, that the
documents enumerated
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<PAGE> 3
above or subsequently filed by the Registrant pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act in each year during which the
offering made by this Registration Statement is in effect prior to the filing
with the Commission of the Registrant's Annual Report on Form 10-K covering
such year shall not be incorporated by reference in this Registration
Statement or be a part hereof from and after the filing of such Annual Report
on Form 10-K.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The legality of the Registrant's Common Stock being registered hereunder will
be passed upon by Ira M. Dansky, Esq., General Counsel of the Registrant. As of
August 20, 1999, Mr. Dansky owned 8,226 shares of the Registrant's Common Stock
and options to purchase 128,226 shares of the Registrant's Common Stock.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Pennsylvania Business Corporation Law provides that a corporation may
provide in its by-laws that a director is not personally liable for monetary
damages for any action taken unless (1) the director has breached or failed to
perform the duties of his or her office and the breach or failure to perform
constitutes self-dealing, willful misconduct or recklessness, (2) the
responsibility or liability arises under any criminal statute or (3) the
liability is for the payment of taxes under Federal, State or local law.
The Registrant's by-laws provide that a director shall not be personally
liable for monetary damages for any action taken or failed to be taken, other
than as expressly provided in the Pennsylvania Business Corporation Law, as
explained above.
The Pennsylvania Business Corporation Law provides that a corporation shall
have the power to indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of the corporation), by reason of the fact
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<PAGE> 4
that he or she is or was a representative of the corporation, or is or was
serving at the request of the corporation as a representative of another
domestic or foreign corporation for profit or not-for-profit, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him or her in connection with the action or proceeding if he or she
acted in good faith and in a manner he or she reasonably believed to be in, or
not opposed to, the best interests of the corporation and, with respect to any
criminal proceeding, had no reasonable cause to believe his or her conduct was
unlawful. The termination of any action or proceeding by judgment, order,
settlement or conviction or upon a plea of nolo contendere or its equivalent
shall not of itself create a presumption that the person did not act in good
faith and in a manner that he or she reasonably believed to be in, or not
opposed to, the best interests of the corporation and, with respect to any
criminal proceeding, had reasonable cause to believe that his or her conduct was
unlawful.
The Pennsylvania Business Corporation Law also provides that a corporation
shall have the power to indemnify any person who was or is a party, or is
threatened to be made a party, to any threatened, pending or completed action
by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he or she is or was a representative of the corporation
or is or was serving at the request of the corporation as a representative of
another domestic or foreign corporation for profit or not-for-profit,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees) actually and reasonably incurred by him or her in
connection with the defense or settlement of the action if he or she acted in
good faith and in a manner he or she reasonably believed to be in, or not
opposed to, the best interests of the corporation. Indemnification shall not
be made in respect of any claim, issue or matter as to which the person has been
adjudged to be liable to the corporation unless and only to the extent that the
court of common pleas of the judicial district embracing the county in which the
registered office of the corporation is located or the court in which the action
was brought determines upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, the person is fairly
and reasonably entitled to indemnity for the expenses that the court of common
pleas or other court deems proper.
The Registrant's by-laws provide that the Registrant will indemnify each
officer and director to the full extent permitted by the Pennsylvania Business
Corporation Law, as explained above, and shall pay and advance expenses for any
matters covered by such indemnification.
The Registrant has in effect insurance policies in the amount of $45 million
for general officers' and directors' liability insurance and $10 million for
fiduciary liability insurance covering all the Registrant's directors and
officers in certain instances where by law they may not be indemnified by the
Registrant.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
See Exhibit Index at page 8.
ITEM 9. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
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<PAGE> 5
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination
of the offering.
The undersigned Registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act of 1933, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act
of 1934) that is incorporated by reference in the Registration Statement shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers or controlling persons of the
Registrant, pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act, and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication
of such issue.
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<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Bristol, State of Pennsylvania, on this 20th day
of August, 1999.
JONES APPAREL GROUP, INC.
By: /s/ Wesley R. Card
Wesley R. Card
Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints Ira M. Dansky, Wesley R. Card and Patrick M. Farrell,
and each of them, his true and lawful attorneys-in-fact and agent with full
power of substitution for him and in his name, place and stead, in any and all
capacities to sign any and all amendments (including pre-effective and post-
effective amendments) to this Registration Statement on Form S-8, and to file
the same with all exhibits thereto and other documents in connection therewith
with the Securities and Exchange Commission, grants unto said attorneys-in-fact
and agents full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully to
all intents and purposes as he might and could do in person, and hereby ratifies
and confirms all that said attorneys-in-fact and agents or their substitutes may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities and on the
date indicated.
Signature Title Date
- ---------------- ------------------------------------- ---------------
/s/ Sidney Kimmel Chairman and Director August 20, 1999
Sidney Kimmel (Chief Executive Officer)
/s/ Jackwyn Nemerov President and Director August 20, 1999
Jackwyn Nemerov
/s/ Wesley R. Card Chief Financial Officer August 20, 1999
Wesley R. Card (Principal Financial Officer)
/s/ Patrick M. Farrell Vice President and Corporate August 20, 1999
Patrick M. Farrell Controller (Principal Accounting
Officer)
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<PAGE> 7
Signature Title Date
- ---------------- ------------------------------------- ---------------
/s/ Irwin Samelman Executive Vice President, August 20, 1999
Irwin Samelman Marketing and Director
_______________ Director
Geraldine Stutz
_______________ Director
Howard Gittis
/s/ Eric A. Rothfeld Director August 20, 1999
Eric A. Rothfeld
/s/ Mark J. Schwartz Director August 20, 1999
Mark J. Schwartz
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<PAGE> 8
EXHIBIT INDEX
Exhibit Nos. Description Page
- ------------ -------------------------------------------------------- ----
4.1 Amended and Restated Articles of Incorporation of the
Registrant (incorporated by reference to Exhibit 3.1
to the Registrant's Annual Report on Form 10-K for the
period ended December 31, 1998).
4.2 By-Laws of the Registrant (incorporated by reference to
Exhibit 3.2 to the Registrant's Registration Statement
on Form S-1, filed April 3, 1991, SEC File No. 33-39742).
4.3 Amendment to the By-Laws of the Registrant (incorporated
by reference to Exhibit 3.3 to the Registrant's Annual
Report on Form 10-K, filed March 30, 1994, SEC File No.
1-10746).
4.4 Specimen certificate of the Registrant's common stock,
par value $0.01 (incorporated by reference to Exhibit
4.1 to the Registrant's Registration Statement on Form
S-3, filed October 28, 1998, SEC File No. 333-66223).
4.5* 1999 Stock Option Plan and Form of Stock Option
Agreements of the Registrant. 9
5.1* Opinion of Ira M. Dansky, Esq. with respect to legality. 26
23.1* Consent of BDO Seidman, LLP. 27
23.2* Consent of Deloitte & Touche LLP. 28
23.3 Consent of Ira M. Dansky, Esq. (included in Exhibit 5.1
hereto).
24 Power of Attorney (included on signature page hereof).
__________________
*Filed herewith.
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<PAGE> 9
EXHIBIT 4.5
JONES APPAREL GROUP, INC.
1999 STOCK OPTION PLAN
1. Purpose of the 1999 Stock Option Plan. Jones Apparel Group, Inc. (the
"Company") desires to attract and retain the best available talent and to
encourage the highest level of performance. The 1999 Stock Option Plan (the
"Stock Option Plan") is intended to contribute significantly to the attainment
of these objectives by (i) providing long-term incentives and rewards to all key
employees of the Company (including officers and directors who are key employees
of the Company and also including key employees of any subsidiary of the Company
which may include officers or directors of any subsidiary of the Company who are
also key employees of said subsidiary), and those directors and officers,
consultants, advisers, agents or independent representatives of the Company or
of any subsidiary (together, "Eligible Individuals"), who are contributing or
in a position to contribute to the long-term success and growth of the Company
or of any subsidiary, (ii) assisting the Company and any subsidiary in
attracting and retaining Eligible Individuals with experience and ability, and
(iii) associating more closely the interests of such Eligible Individuals with
those of the Company's stockholders.
2. Scope and Duration of the Stock Option Plan. Under the Stock Option Plan,
Options ("Options") to purchase Shares of common stock, par value $.01 per share
("Common Stock"), may be granted to Eligible Individuals. Options granted to
employees (including officers and directors who are employees) of the Company
or a subsidiary corporation thereof, may, at the time of grant, be designated
by the Company's Board of Directors either as incentive stock options ("ISOs"),
with the attendant tax benefits as provided for under Sections 421 and 422 of
the Internal Revenue Code of 1986, as amended (the "Code") or as nonqualified
stock options. Stock appreciation rights (the "Rights") may be granted in
association with Options. The aggregate number of shares of Common Stock
reserved for grant from time to time under the Stock Option Plan is 10,000,000
shares of Common Stock, which shares of Common Stock may be authorized but
unissued shares of Common Stock or shares of Common Stock, which shall have been
or which may be reacquired by the Company, as the Board of Directors of the
Company shall from time to time determine. Such aggregate numbers shall be
subject to adjustment as provided in Paragraph 12. If an Option shall expire
or terminate for any reason without having been exercised in full or surrendered
in full in connection with the exercise of a Right, the shares of Common Stock
represented by the portion thereof not so exercised or surrendered shall (unless
the Stock Option Plan shall have been terminated) become available for other
Options under the Stock Option Plan. Subject to Paragraph 14, no Option or
Right shall be granted under the Stock Option Plan after May 19, 2009. The
grant of an Option and/or a Right is sometimes referred to herein as an Award
thereof.
3. Administration of the Stock Option Plan. This Stock Option Plan will be
administered by the Board of Directors of the Company (the "Board of
Directors"). The Board of Directors, in its discretion, may designate an Option
committee (the "Option Committee" or "Committee") composed of at least two
members of the Board of Directors to administer this Stock Option Plan. Members
of the Stock Option Committee shall meet such qualifications as the Board of
Directors may determine; provided, however that each member shall qualify as a
"Non-Employee Director" under Section 16 of the Securities Exchange Act of 1934,
as amended and as an "Outside Director" as defined in Code Section 162(m) and
any regulations promulgated thereunder. Subject to the express provisions of
this Plan, the Board of Directors or the Committee (hereinafter, the terms
"Option Committee" or "Committee", shall mean the Board of Directors whenever
no such Option Committee has been designated); shall have authority in its
discretion, subject to and not inconsistent with the express provisions of this
Stock Option Plan, to direct the grant of Options; to determine the purchase
price of the Common Stock covered by each Option; the Eligible Individuals to
whom, and the
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<PAGE> 10
time or times at which, Options shall be granted and subject to the maximum set
forth in Paragraph 4 hereof, the number of shares of Common Stock to be covered
by each Option; to designate Options as ISOs; to direct the grant of Rights in
connection with any Option; to interpret the Stock Option Plan; to determine the
time or times at which Options may be exercised; to prescribe, amend and rescind
rules and regulations relating to the Stock Option Plan, including, without
limitation, such rules and regulations as it shall deem advisable, so that
transactions involving Options may qualify for exemption under such rules and
regulations as the Securities and Exchange Commission may promulgate from time
to time exempting transactions from Section 16(b) of the Securities and Exchange
Act of 1934; to determine the terms and provisions of and to cause the Company
to enter into agreements with Eligible Individuals in connection with Options
(Awards) granted under the Stock Option Plan (the "Agreements"), which
Agreements may vary from one another as the Committee shall deem appropriate;
and to make all other determinations it may deem necessary or advisable for the
administration of the Stock Option Plan.
Members of the Committee shall serve at the pleasure of the Board of
Directors. The Committee shall have and may exercise all of the powers of the
Board of Directors under the Stock Option Plan, other than the power to appoint
a director to Committee membership. A majority of the Committee shall
constitute a quorum, and acts of a majority of the members present at any
meeting at which a quorum is present shall be deemed the acts of the Committee.
The Committee may also act by instrument signed by a majority of the members of
the Committee.
Every action, decision, interpretation or determination by the Committee with
respect to the application or administration of this Stock Option Plan shall be
final and binding upon the Company and each person holding any Option granted
under this Stock Option Plan.
4. Eligibility: Factors to be Considered in Granting Options and Designating
ISOs (Awards). (a) Options may be granted only to (i) key employees (including
officers and directors who are employees) of the Company or any subsidiary
corporation thereof on the date of grant (Options so granted may be designated
as ISOs), and (ii) directors or officers of the Company or a subsidiary
corporation thereof on the date of grant, without regard to whether they are
employees, and (iii) consultants or advisers to or agents or independent
representatives of the Company or a subsidiary thereof. In determining the
persons to whom Options (Awards) shall be granted and the number of shares of
Common Stock to be covered by each Award, the Committee shall take into account
the nature of the duties of the respective persons, their present and potential
contributions to the Company's (including subsidiaries') successful operation
and such other factors as the Board of Directors in its discretion shall deem
relevant. Subject to the provisions of Paragraph 2, an Eligible Individual may
receive Options (Awards) on more than one occasion under the Stock Option Plan.
No person shall be eligible for an Option grant if he shall have filed with the
Secretary of the Company an instrument waiving such eligibility; provided that
any such waiver may be revoked by filing with the Secretary of the Company an
instrument of revocation, which revocation will be effective upon such filing.
(b) In the case of each ISO granted to an employee, the aggregate fair market
value (determined at the time the ISO is granted) of the Common Stock with
respect to which the ISO is exercisable for the first time by such employee
during any calendar year (under all plans of the Company and any subsidiary
corporation thereof) may not exceed $100,000.
(c) In no event shall any Eligible Individual be granted Options to purchase
more than 3,000,000 shares of Common Stock pursuant to this Stock Option Plan.
5. Option Price. (a) The purchase price per share of the Common Stock
covered by each Option shall be established by the Committee but in no event
shall it be less than the fair market value of a share of
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<PAGE> 11
the Common Stock on the date the Option is granted; provided, however, that if
an Option is granted to a director of the Company for services solely as a
director, and such grant is approved by the Board of Directors, the purchase
price may be less than such fair market value. If, at the time an Option is
granted, the Common Stock is publicly traded, such fair market value shall be
the closing price (or the mean of the latest bid and asked prices) of a share
of Common Stock on such date as reported in The Wall Street Journal (or a
publication or reporting service deemed equivalent to The Wall Street Journal
for such purpose by the Board of Directors) for any national securities exchange
or other securities market which at the time is included in the stock price
quotations of such publication. In the event that the Committee shall determine
such stock price quotation is not representative of fair market value by reason
of the lack of a significant number of recent transactions or otherwise, the
Committee may determine fair market value in such a manner as it shall deem
appropriate under the circumstances. If, at the time an Option is granted, the
Common Stock is not publicly traded, the Committee shall make a good faith
attempt to determine such fair market value.
(b) In the case of an employee who at the time an ISO is granted owns stock
possessing more than 10% of the total combined voting power of all classes of
the stock of the employer corporation or of its parent or a subsidiary
corporation thereof (a "10% Holder"), the purchase price of the Common Stock
covered by any ISO shall in no event be less than 110% of the fair market value
of the Common Stock at the time the ISO is granted.
6. Term of Options. The term of each Option shall be fixed by the Committee,
but in no event shall it be exercisable more than 10 years from the date of
grant, subject to earlier termination as provided in Paragraphs 10 and 11. An
ISO granted to a 10% Holder shall not be exercisable more than 5 years from the
date of grant.
7. Exercise of Options. (a) Subject to the provisions of the Stock Option
Plan, an Option granted to an employee under the Stock Option Plan shall become
fully exercisable at such time or times as the Committee in its sole discretion
shall determine at the time of the granting of the Option or thereafter, except
that in no event shall any such Option be exercisable later than 10 years after
its grant.
(b) An Option may be exercised as to any or all full shares of Common Stock
as to which the Option is then exercisable.
(c) The purchase price of the shares of Common Stock as to which an Option
is exercised shall be paid in full in cash at the time of exercise; provided
that, the purchase price may be paid (i) in whole or in part, by surrender or
delivery to the Company of securities of the Company having a fair market value
on the date of the exercise equal to the portion of the purchase price being so
paid, or (ii) in cash by a broker-dealer acceptable to the Company to whom the
Optionee has submitted an irrevocable notice of exercise. Fair market value
shall be determined as provided in Paragraph 5 for the determination of such
value on the date of the grant. In addition, the holder shall, upon
notification of the amount due and prior to or concurrently with delivery to the
holder of a certificate representing such shares of Common Stock, pay promptly
any amount necessary to satisfy applicable Federal, state or local tax
requirements.
(d) Except as provided in Paragraphs 10 and 11, no Option may be exercised
unless the original grantee thereof is then an Eligible Individual.
(e) The Option holder shall have the rights of a stockholder with respect to
shares of Common Stock covered by an Option only upon becoming the holder of
record of such shares of Common Stock.
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<PAGE> 12
(f) Notwithstanding any other provision of this Stock Option Plan, the
Company shall not be required to issue or deliver any share of stock upon the
exercise of an Option prior to the admission of such share to listing on any
stock exchange or automated quotation system on which the Company's Common Stock
may then be listed.
8. Award and Exercise of Rights. (a) A Right may be awarded by the
Committee in association with any Option either at the time such Option is
granted or at any time prior to the exercise, termination or expiration of such
Option. Each such Right shall be subject to the same terms and conditions as
the related Option and shall be exercisable only to the extent such Option is
exercisable, and the Right Value, as hereinafter defined, is a positive amount.
(b) A Right shall entitle the holder to surrender to the Company unexercised
the related Option (or any portion or portions thereof which the holder from
time to time shall determine to surrender for this purpose) and to receive in
exchange therefor, subject to the provisions of the Stock Option Plan and such
rules and regulations as from time to time may be established by the Committee,
a payment having an aggregate value equal to the product of (A) the Right Value
of one share of Common Stock, as hereinafter defined, and (B) the number of
shares of Common Stock called for by the Option, or portion thereof, which is
surrendered. For purposes of the Stock Option Plan: the Right Value of one
share of Common Stock shall be the excess of (i) the fair market value of one
share of Common Stock on the date on which the Right is exercised, over (ii) the
purchase price per share of the Common Stock covered by the surrendered Option.
The date on which the Committee shall receive notice from the holder of the
exercise of a Right shall be considered the date on which the Right is
exercised.
Upon exercise of a Right, a holder shall indicate to the Committee what
portion of the payment he desires to receive in cash and what portion in shares
of Common Stock of the Company; provided, that the Board of Directors shall have
sole discretion to determine in any case or cases that payment will be made in
the form of all cash, all shares of Common Stock, or any combination thereof.
If the holder is to receive a portion of such payment in shares of Common Stock,
the number of shares of Common Stock shall be determined by dividing the amount
of such portion by the fair market value of one share of Common Stock on the
date on which the Right is exercised. The number of shares of Common Stock
which may be received pursuant to the exercise of a Right may not exceed the
number of shares of Common Stock covered by the related Option, or portion
thereof, which is surrendered. No fractional shares of Common Stock will be
issued, but instead cash will be paid for any such fractional share of Common
Stock.
No payment will be required from the holder upon exercise of a Right, except
that the holder shall, upon notification of the amount due and prior to or
concurrently with delivery to the holder of cash or a certificate representing
shares of Common Stock, pay promptly any amount necessary to satisfy applicable
Federal, state or local tax requirements, and the Company shall have the right
to deduct from any payment any taxes required by law to be withheld by the
Company with respect to such payment.
(c) The fair market value of one share of Common Stock for the date on which
a Right is exercised shall be determined as provided in Paragraph 5 for the
determination of such value on the date of grant.
(d) Upon exercise of a Right, the number of shares of Common Stock subject
to exercise under the related Option shall automatically be reduced by the
number of shares of Common Stock represented by the Option, or portion thereof,
which is surrendered. Shares of Common Stock subject to Options, or portions
thereof, which are surrendered in connection with the exercise of Rights shall
not be available for subsequent Option grants under the Stock Option Plan.
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<PAGE> 13
(e) Whether payments upon exercise of Rights are made in cash, shares of
Common Stock or a combination thereof, the Committee shall have the sole
discretion as to the timing of the payments, including whether payment shall be
made in a lump sum or installments, but payments may not be deferred beyond the
first business day of the twenty-fifth calendar month next following the month
of exercise of a Right. Deferred payments may bear interest at a rate
determined by the Committee, provided that such rate of interest shall not be
less than the lowest rate which avoids imputation of interest at a higher rate
under the Code. The Board of Directors may make such further provisions and
adopt such rules and regulations as it shall deem appropriate, not inconsistent
with the Stock Option Plan, related to the timing of the exercise of a Right and
the determination of the form and timing of payment to the holder upon such
exercise.
9. Nontransferability of Options. No Options or Rights granted under the
Stock Option Plan shall be transferable, other than by will or by the laws of
descent and distribution, except that all or any portion of an Option (other
than Options which are ISOs) may be transferred to or for the benefit of (by
trust) the spouse or lineal descendants of a holder of such Option, subject to
such restrictions on transfer which may be imposed by federal and state
securities laws, and if prior thereto the transferee agrees to be bound by the
terms of the Stock Option Plan and the Options, as the case may be ("Permitted
Transferee"). Options which are ISOs may be exercised, during the lifetime of
the holder, only by the holder, or by his guardian or legal representative.
10. Termination of Relationship to the Company. (a) In the event that any
original grantee shall cease to be an Eligible Individual of the Company (or any
subsidiary thereof), except as set forth in Paragraph 11, such Option may
(subject to the provisions of the Stock Option Plan) be exercised (to the extent
that the original grantee was entitled to exercise such Option at the
termination of his employment or service as a director, officer, consultant,
adviser, agent or independent representative, as the case may be) at any time
within three months after such termination (or for such other period following
termination as the grantee and the Company may have agreed to in writing), but
not more than 10 years (five years in the case of a 10% Holder) after the date
on which such Option was granted or the expiration of the Option, if earlier.
Notwithstanding the foregoing, except as provided in Paragraph 11, if the
position of an original grantee shall be terminated by the Company or any
subsidiary thereof for cause or if the original grantee terminates his
employment or position voluntarily and without the written consent of the
Company or any subsidiary Company thereof, as the case may be, the Options
granted to such person, whether held by such person or by a Permitted Transferee
shall, to the extent not theretofore exercised, forthwith terminate immediately
upon such termination.
(b) Other than as provided in Paragraph 10(a), Options granted under the
Stock Option Plan shall not be affected by any change of duties or position so
long as the holder remains an Eligible Individual.
(c) Any Option Agreement may contain such provisions as the Committee shall
approve with reference to the determination of the date employment terminates
or the date other positions or relationships terminate for purposes of the Stock
Option Plan and the effect of leaves of absence, which provisions may vary from
one another.
(d) Nothing in the Stock Option Plan or in any Option granted pursuant to the
Stock Option Plan shall confer upon any Eligible Individual or other person any
right to continue in the employ of the Company or any subsidiary corporation (or
the right to be retained by, or have any continued relationship with the Company
or any subsidiary corporation thereof), or affect the right of the Company or
any such subsidiary corporation, as the case may be, to terminate his
employment, retention or relationship at any time. The grant of any Option
pursuant to the Stock Option Plan shall be entirely in the discretion of the
Committee and
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<PAGE> 14
nothing in the Stock Option Plan shall be construed to confer on any Eligible
Individual any right to receive any Option under the Stock Option Plan.
11. Death, Disability or Retirement of Optionee. (a) If a person to whom
an Option has been granted under the Stock Option Plan shall (i) die (and the
conditions in sub-paragraph (b) below are met) or (ii) become permanently and
totally disabled or enter retirement (as such terms are defined below) while
serving as an Eligible Individual, the Option shall become immediately fully
exercisable and the period for exercise provided in Paragraph 10 shall be
extended to (i) one year after the date of death of the original grantee, or
(ii) in the case of the permanent and total disability of the original grantee,
to one year after the date of permanent and total disability of the original
grantee, or (iii) three years in the case of a retirement (as defined below),
but, in any case, not more than 10 years (five years in the case of a 10%
Holder) after the date such Option was granted, or the expiration of the Option,
if earlier, as shall be prescribed in the original grantee's Option Agreement.
An Option may be exercised as set forth herein in the event of the original
grantee's death, by a Permitted Transferee or the person or persons to whom the
holder's rights under the Option pass by will or applicable law, or if no such
person has the right, by his executors or administrators; or in the event of the
original grantee's permanent and total disability, by the holder or his
guardian.
(b) In the case of death of a person to whom an Option was originally
granted, the provisions of subparagraph (a) apply if such person dies (i) while
in the employ of the Company or a subsidiary corporation thereof or while
serving as an Eligible Individual of the Company or a subsidiary corporation
thereof or (ii) within three months after the termination of such position other
than termination for cause, or voluntarily on the original grantee's part and
without the consent of the Company or a subsidiary corporation thereof, or (iii)
within three years following his retirement.
(c) The term "permanent and total disability" as used above shall have the
meaning set forth in Section 22(e)(3) of the Code.
(d) The term "retirement" as used above shall mean voluntary termination of
employment with the Company or a subsidiary corporation thereof by the Eligible
Individual after attaining age 55 with at least 10 years of service with the
approval of the Company or, if the individual has not attained age 55 and/or has
less than 10 years of service, the Company determines that circumstances exist
that warrant the granting of retirement status.
12. Adjustments upon Changes in Capitalization. Notwithstanding any other
provision of the Stock Option Plan, each Agreement may contain such provisions
as the Committee shall determine to be appropriate for the adjustment of the
number and class of shares of Common Stock covered by such Option, the Option
prices and the number of shares of Common Stock as to which Options shall be
exercisable at any time, in the event of changes in the outstanding Common Stock
of the Company by reason of stock dividends, stock splits, reverse stock splits,
recapitalizations, mergers, consolidations, combinations or exchanges of shares,
spin-offs, reorganizations, liquidations and the like. In the event of any such
change in the outstanding Common Stock of the Company, the aggregate number of
shares of Common Stock as to which Options may be granted under the Stock Option
Plan to any Eligible Individual shall be appropriately adjusted by the Committee
whose determination shall be conclusive. In the event of (i) the dissolution,
liquidation, merger or consolidation of the Company or a sale of all or
substantially all of the assets of the Company, or (ii) the disposition by the
Company of substantially all of the assets or stock of a subsidiary of which the
original grantee is then an employee, officer or director, consultant, adviser,
agent or independent representative or (iii) a change in control (as hereinafter
defined) of the Company has occurred or is about to occur, then, if the
Committee shall so determine, each Option under the Stock Option Plan, if such
event shall occur with respect to the Company, or each Option granted to an
employee, officer, director, consultant,
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<PAGE> 15
adviser, agent or independent representative of a subsidiary respecting which
such event shall occur, shall (x) become immediately and fully exercisable or
(y) terminate simultaneously with the happening of such event, and the Company
shall pay the Optionee in lieu thereof an amount equal to (a) the excess of the
fair market value over the exercise price of one share on the date on which such
event occurs, multiplied by (b) the number of shares subject to the Option,
without regard to whether the Option is then otherwise exercisable.
13. Effectiveness of the Stock Option Plan. Options may be granted under the
Stock Option Plan, subject to its authorization and adoption by stockholders of
the Company, at any time or from time to time after its adoption by the
Committee, but no Option shall be exercised under the Stock Option Plan until
the Stock Option Plan shall have been authorized and adopted by a majority of
the votes properly cast thereon at a meeting of stockholders of the Company duly
called and held within 12 months from the date of adoption of the Stock Option
Plan by the Board of Directors. If so adopted, the Stock Option Plan shall
become effective as of the date of its adoption by the Board of Directors. The
exercise of the Options shall also be expressly subject to the condition that
at the time of exercise a registration statement under the Securities Act of
1933, as amended (the "Act") shall be effective, or other provisions
satisfactory to the Committee shall have been made to ensure that such exercise
will not result in a violation of such Act, and such other qualification under
any state or Federal law, rule or regulation as the Company shall determine to
be necessary or advisable shall have been effected. If the shares of Common
Stock issuable upon exercise of an Option are not registered under such Act, and
if the Committee shall deem it advisable, the Optionee may be required to
represent and agree in writing (i) that any shares of Common Stock acquired
pursuant to the Stock Option Plan will not be sold except pursuant to an
effective registration statement under such Act or an exemption from the
registration provisions of the Act and (ii) that such Optionee will be acquiring
such shares of Common Stock for his own account and not with a view to the
distribution thereof and (iii) that the holder accepts such restrictions on
transfer of such shares, including, without limitation, the affixing to any
certificate representing such shares of an appropriate legend restricting
transfer as the Company may reasonably impose.
14. Termination and Amendment of the Stock Option Plan. The Board of
Directors of the Company may, at any time prior to the termination of the Stock
Option Plan, suspend, terminate, modify or amend the Stock Option Plan; provided
that any increase in the aggregate number of shares of Common Stock reserved for
issue upon the exercise of Options, any amendment which would materially
increase the benefits accruing to participants under the Stock Option Plan, or
any material modification in the requirements as to eligibility for
participation in the Stock Option Plan, shall be subject to the approval of
stockholders in the manner provided in Paragraph 13, except that any such
increase, amendment or change that may result from adjustments authorized by
Paragraph 12 or adjustments based on revisions to the Code or regulations
promulgated thereunder (to the extent permitted by such authorities) shall not
require such approval. No suspension, termination, modification or amendment
of the Stock Option Plan may, without the express written consent of the
Eligible Individual (or his Permitted Transferee) to whom an Option shall
theretofore have been granted, adversely affect the rights of such Eligible
Individual (or his Permitted Transferee) under such Option.
15. Financing for Investment in Stock of the Company. The Board of Directors
may cause the Company or any subsidiary to give or arrange for financing,
including direct loans, secured or unsecured, or guaranties of loans by banks
which loans may be secured in whole or in part by assets of the Company or any
subsidiary, to any Eligible Individual under the Stock Option Plan who shall
have been so employed or so served for a period of at least six months at the
end of the fiscal year ended immediately prior to arranging such financing; but
the Board of Directors may, in any specific case, authorize financing for an
Eligible Individual who shall not have served for such a period. Such financing
shall be for the purpose of providing funds for the purchase by the Eligible
Individual of shares of Common Stock pursuant to the exercise of an
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<PAGE> 16
Option and/or for payment of taxes incurred in connection with such exercise,
and/or for the purpose of otherwise purchasing or carrying a stock investment
in the Company. The maximum amount of liability incurred by the Company and its
subsidiaries in connection with all such financing outstanding shall be
determined from time to time in the discretion of the Board of Directors. Each
loan shall bear interest at a rate not less than that provided by the Code and
other applicable law, rules, and regulations in order to avoid the imputation
of interest at a higher rate. Each recipient of such financing shall be
personally liable for the full amount of all financing extended to him. Such
financing shall be based upon the judgment of the Board of Directors that such
financing may be reasonably be expected to benefit the Company, and that such
financing as may be granted shall be consistent with the Certificate of
Incorporation and By-Laws of the Company or such subsidiary, and applicable
laws.
If any such financing is authorized by the Board of Directors, such financing
shall be administered by the Board of Directors.
16. Severability. In the event that any one or more provisions of the Stock
Option Plan or any Agreement, or any action taken pursuant to the Stock Option
Plan or such Agreement, should, for any reason, be unenforceable or invalid in
any respect under the laws of the United States, any state of the United States
or any other government, such unenforceability or invalidity shall not affect
any other provision of the Stock Option Plan or of such or any other Agreement,
but in such particular jurisdiction and instance the Stock Option Plan and the
affected Agreement shall be construed as if such unenforceable or invalid
provision had not been contained therein or if the action in question had not
been taken thereunder.
17. Applicable Law. The Stock Option Plan shall be governed and interpreted,
construed and applied in accordance with the laws of the State of Pennsylvania.
18. Withholding. A holder shall, upon notification of the amount due and
prior to or concurrently with delivery to such holder of a certificate
representing such shares of Common Stock, pay promptly any amount necessary to
satisfy applicable Federal, state, local or other tax requirements.
19. Miscellaneous.
1. The terms "parent," "subsidiary" and "subsidiary corporation" shall have
the meanings set forth in Sections 424(e) and (f) of the Code, respectively.
2. The term "terminated for cause" shall mean termination by the Company (or
a subsidiary thereof) of the employment of or other relationship with, the
original grantee by reason of the grantee's (i) willful refusal to perform his
obligations to the Company (or a subsidiary thereof), (ii) willful misconduct,
contrary to the interests of the Company (or a subsidiary thereof), or (iii)
commission of a serious criminal act, whether denominated a felony, misdemeanor
or otherwise. In the event of any dispute regarding whether a termination for
cause has occurred, the Board of Directors may by resolution resolve such
dispute and such resolution shall be final and conclusive on all parties.
3. The term "change in control" shall mean an event or series of events that
results in (i) a person, partnership, joint venture, corporation or other
entity, or two or more of any of the foregoing acting as a "person" within the
meaning of Sections 13(d)(3) of the Securities Exchange Act of 1934, as amended
(the "Act"), other than the Company, a majority-owned subsidiary of the Company
or an employee benefit plan of the Company or such subsidiary (or such plan's
related trust), become(s) the "beneficial owner" (as defined in Rule 13d-3 under
the Act) of 20% or more of the then outstanding voting stock of the Company;
(ii) during any period of two consecutive years, individuals who at the
beginning of such period constitute the
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<PAGE> 17
Company's Board of Directors (together with any new director whose election by
the Company's Board or whose nomination for election by the Company's
shareholders, was approved by a vote of at least two-thirds of the directors
then still in office who either were directors at the beginning of such period
or whose election or nomination for election was previously so approved) cease
for any reason to constitute a majority of the directors then in office; (iii)
all or substantially all of the business of the Company is disposed of pursuant
to a merger, consolidation or other transaction in which the Company is not the
surviving corporation or the Company combines with another company and is the
surviving corporation (unless the shareholders of the Company immediately
following such merger, consolidation, combination, or other transaction
beneficially own, directly or indirectly, more than 50% of the aggregate voting
stock or other ownership interests of (x) the entity or entities, if any, that
succeed to the business of the Company or (y) the combined company).
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<PAGE> 18
JONES APPAREL GROUP, INC.
STOCK OPTION AGREEMENT
(NON-QUALIFIED STOCK OPTION)
THIS AGREEMENT, made as of this ___ day of _______ [1999] by JONES APPAREL
GROUP, INC., a Pennsylvania corporation (hereinafter called the "Company"),
with __________________________ (hereinafter called the "Holder"):
The Company has adopted a 1999 Stock Option Plan (the "Plan"). Said Plan,
as it may hereafter be amended and continued, is incorporated herein by
reference and made part of this Agreement.
The Committee, which is charged with the administration of the Plan
pursuant to Section 3 thereof, has determined that it would be to the
advantage and interest of the Company to grant the option provided for herein
to the Holder as an inducement to remain in the service of the Company or one
of its subsidiaries, and as an incentive for increased efforts during such
service.
NOW, THEREFORE, pursuant to the Plan, the Company with the approval of the
Committee hereby grants to the Holder as of the date hereof an option (the
"Option") to purchase all or any part of _______ shares of Common Stock of
the Company, par value $[ ] per share, at a price per share of $_________,
[which price is not less than the fair market value of a share of Common
Stock on the date hereof,] and upon the following terms and conditions:
1. The Option shall continue in force through _______ ___, ____ (the
"Expiration Date"), unless sooner terminated as provided herein and in the
Plan. Subject to the provisions of the Plan, the Option shall become
exercisable as to [20%] of the number of shares originally covered thereby
upon the first anniversary of the date of grant of the Option, and as to
[20%] of the number of shares originally covered thereby upon the second,
[third and fourth] anniversaries of the date of grant of the Option, and on
the [fifth] anniversary, the Option shall become fully exercisable. Such
installments shall be cumulative, subject to the following:
a. Except as provided hereinbelow, the Option may not be exercised
unless the Holder is then an employee (including directors and officers who
are employees), director or officer of the Company or any subsidiary of the
Company, in each case, on the date of grant, or a consultant, advisor, agent
or independent representative of the Company or any subsidiary of the
Company, or any combination thereof.
2. In the event that the employment or service of the Holder shall be
terminated prior to the Expiration Date (otherwise than by reason of death or
disability), the Option may, subject to the provisions of the Plan, be
exercised (to the extent that the Holder was entitled to do so at the
termination of this employment or service) at any time within three months
after such termination, but not after the Expiration Date, provided, however,
that if such termination shall have been for cause or voluntarily by the
Holder and without the written consent of the Company or any subsidiary
corporation thereof, as the case may be, the Option and all rights of the
Holder hereunder, to the extent not theretofore exercised, shall forthwith
terminate immediately upon such termination. Nothing in this Agreement shall
confer upon the Holder any right to continue in the employ or service of the
Company or any subsidiary of the Company or affect the right of the Company
or any subsidiary to terminate his employment or service at any time.
3. If the Holder shall (a) die while he is employed by or serving the
Company or a corporation which is a subsidiary thereof or within three months
after the termination of such position (other than termination for cause, or
voluntarily on his part and without the consent of the Company or subsidiary
corporation thereof, as the case may be,) or within three years following his
retirement (as such term is
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<PAGE> 19
defined in the Plan), or (b) become permanently and totally disabled within
the meaning of Section 22(e)(3) of the Internal Revenue Code of 1986, as
amended, while employed by or serving any such company, or (c) enter
retirement, then the Option shall become immediately fully exercisable, as
set forth herein by the Holder or by the person or persons to whom the
Holder's rights under the Option pass by will or applicable law, or if no
such person has such right, by his executors or administrators, at any time
within one year after the date of death of the original Holder, or one year
after the date of permanent and total disability, or three years after the
date of retirement, but in each case, not later than the Expiration Date.
4. a. The Holder may exercise the Option with respect to all or any part
of the shares then purchasable hereunder by giving the Company written notice
in the form annexed, as provided in paragraph 8 hereof, of such exercise.
Such notice shall specify the number of shares as to which the Option is
being exercised and shall be accompanied by payment in full in cash of an
amount equal to the exercise price of such shares multiplied by the number of
shares as to which the Option is being exercised; provided that, if permitted
by the Board, the purchase price may be paid, in whole or in part, by
surrender or delivery to the Company of securities of the Company having a
fair market value on the date of the exercise equal to the portion of the
purchase price being so paid. In such event fair market value should be
determined pursuant to paragraph 5 of the Plan.
b. Prior to or concurrently with delivery by the Company to the Holder
of a certificate(s) representing such shares, the Holder shall, upon
notification of the amount due, pay promptly any amount necessary to satisfy
applicable federal, state or local tax requirements. In the event such
amount is not paid promptly, the Company shall have the right to apply from
the purchase price paid any taxes required by law to be withheld by the
Company with respect to such payment and the number of shares to be issued by
the Company will be reduced accordingly.
5. Notwithstanding any other provision of the Plan, in the event of a
change in the outstanding Common Stock of the Company by reason of a stock
dividend, split-up, split-down, reverse split, recapitalization, merger,
consolidation, combination or exchange of shares, spin-off, reorganization,
liquidation or the like, then the aggregate number of shares and price per
share subject to the Option shall be appropriately adjusted by the Board,
whose determination shall be conclusive.
6. No options granted hereunder shall be transferable other than by will
or by the laws of descent and distribution, except that all or any portion of
the Option may be transferred to or for the benefit of (by trust) the spouse
or lineal descendents of the Holder, subject to such restrictions on transfer
which may be imposed by federal and state securities laws, and if prior
thereto the transferee agrees to be bound by the terms of the Plan and this
Agreement. Options may be exercised, during the lifetime of the Holder, only
by the Holder, or by his guardian or legal representative. In the event of
any attempt by the Holder to transfer, assign, pledge, hypothecate or
otherwise dispose of this Option or of any right hereunder, except as
provided for herein, or in the event of the levy or any attachment, execution
or similar process upon the rights or interest hereby conferred, the Company
may terminate this Option by notice to the Holder and it shall thereupon
become null and void.
7. Neither the Holder nor in the event of his death, any person entitled
to exercise his rights, shall have any of the rights of a stockholder with
respect to the shares subject to the Option until share certificates have
been issued and registered in the name of the Holder or his estate, as the
case may be.
8. Any notice to the Company provided for in this Agreement shall be
addressed to the Company in care of its Chief Financial Officer, 250
Rittenhouse Circle, Bristol, Pennsylvania 19007 and any notice to the Holder
shall be addressed to him at his address now on file with the Company, or to
such other address as
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<PAGE> 20
either may last have designated to the other by notice as provided herein.
Any notice so addressed shall be deemed to be given on the second business
day after mailing, by registered or certified mail, at a post office or
branch post office within the United States.
9. In the event that any question or controversy shall arise with respect
to the nature, scope or extent of any one or more rights conferred by this
Option, the determination by the Committee (as constituted at the time of
such determination) of the rights of the Holder shall be conclusive, final
and binding upon the Holder and upon any other person who shall assert any
right pursuant to this Option.
JONES APPAREL GROUP, INC.
By: _____________________
Name: ___________________
Title: __________________
ACCEPTED AND AGREED
____________________
Holder
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<PAGE> 21
FORM OF NOTICE OF EXERCISE
TO: JONES APPAREL GROUP, INC.
250 Rittenhouse Circle
Bristol, Pennsylvania 19007
The undersigned hereby exercises his/her option to purchase _____ shares of
Common Stock of Jones Apparel Group, Inc. (the "Company"), as provided in the
Stock Option Agreement dated as of _______, 199_ at $ _______ per share, a total
of $_____________, and makes payment therefor as follows:
(a) To the extent of $_______ of the purchase price, the undersigned hereby
surrenders to the Company certificates for shares of its Common Stock, which,
valued at $__________________ per share, the fair market value thereof, equals
such portion of the purchase price.
(b) To the extent of the balance of the purchase price, the undersigned has
enclosed a certificate or bank check payable to the order of the Company for
$________________.
A stock certificate or certificate for the shares should be delivered in
person or mailed to the undersigned at the address shown below.
The undersigned hereby represents and warrants that it is his (her) present
intention to acquire and hold the aforesaid shares of Common Stock of the
Company for his (her) own account for investment, and not with a view to the
distribution of any thereof, and agrees that he (she) will make no sale,
thereof, except in compliance with the applicable provisions of the Securities
Act of 1933, as amended.
Signature: _______________________
Address: _______________________
_______________________
Dated: _____________________
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<PAGE> 22
JONES APPAREL GROUP, INC.
STOCK OPTION AGREEMENT
(INCENTIVE STOCK OPTION)
THIS AGREEMENT, made as of this ___ day of _______ [1999] by JONES APPAREL
GROUP, INC., a Pennsylvania corporation (hereinafter called the "Company"),
with ___________________________ (hereinafter called the "Holder"):
The Company has adopted a 1999 Stock Option Plan (the "Plan"). Said Plan,
as it may hereafter be amended and continued, is incorporated herein by
reference and made part of this Agreement.
The Committee, which is charged, with the administration of the Plan
pursuant to Section 3 thereof, has determined that it would be to the
advantage and interest of the Company to grant the option provided for herein
to the Holder as an inducement to remain in the service of the Company or one
of its subsidiaries, and as an incentive for increased efforts during such
service.
NOW, THEREFORE, pursuant to the Plan, the Company with the approval of the
Committee hereby grants to the Holder as of the date hereof an option (the
"Option") to purchase all or any part of _________ shares of Common Stock of
the Company, par value $[ ] per share, at a price per share of $_________,
which price is not less than the fair market value of a share of Common Stock
on the date hereof (or 110% of the fair market value of a share of Common
Stock if the Holder is a 10% Holder (as defined in the Plan)), and upon the
following terms and conditions:
1. The Option shall continue in force through _______________ ____, (the
"Expiration Date"), unless sooner terminated as provided herein and in the
Plan. Subject to the provisions of the Plan, the Option shall become
exercisable as to [20%] of the number of shares originally covered thereby
upon the first anniversary of the date of grant of the Option, and as to
[20%] of the number of shares originally covered thereby upon the second,
[third and fourth] anniversaries of the date of grant of the Option, and on
the [fifth] anniversary, the Option shall become fully exercisable. Such
installments shall be cumulative, subject to the following:
a. Except as provided hereinbelow, the Option may not be exercised
unless the Holder is then an employee (including directors and officers who
are employees), director or officer of the Company or any subsidiary of the
Company, in each case, on the date of grant, or a consultant, advisor, agent
or independent representative of the Company or any subsidiary of the
Company, or any combination thereof.
b. This Option is designated as an incentive stock option ("ISO")
pursuant to the Internal Revenue Code of 1986, as amended (the "Code") and
the regulations promulgated thereunder.
2. In the event that the employment or service of the Holder shall be
terminated prior to the Expiration Date (otherwise than by reason of death or
disability), the Option may, subject to the provisions of the Plan, be
exercised (to the extent that the Holder was entitled to do so at the
termination of this employment or service) at any time within three months
after such termination, but not after the Expiration Date, provided, however,
that if such termination shall have been for cause or voluntarily by the
Holder and without the written consent of the Company or any subsidiary
corporation thereof, as the case may be, the Option and all rights of the
Holder hereunder, to the extent not theretofore exercised, shall forthwith
terminate immediately upon such termination. Nothing in this Agreement shall
confer upon the Holder any
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<PAGE> 23
right to continue in the employ or service of the Company or any subsidiary
of the Company or affect the right of the Company or any subsidiary to
terminate his employment or service at any time.
3. If the Holder shall (a) die while he is employed by or serving the
Company or a corporation which is a subsidiary thereof or within three months
after the termination of such position (other than termination for cause, or
voluntarily on his part and without the consent of the Company or subsidiary
corporation thereof, as the case may be,) or within three years following his
retirement (as such term is defined in the Plan), or (b) become permanently
and totally disabled within the meaning of Section 22(e)(3) of the Code while
employed by or serving any such company, or (c) enter retirement, then the
Option shall become immediately fully exercisable, as set forth herein by the
Holder or by the person or persons to whom the Holder's rights under the
Option pass by will or applicable law, or if no such person has such right,
by his executors or administrators, at any time within one year after the
date of death of the original Holder, or one year after the date of permanent
and total disability, or three years after the date of retirement, but in
each case, not later than the Expiration Date.
4. a. The Holder may exercise the Option with respect to all or any part
of the shares then purchasable hereunder by giving the Company written notice
in the form annexed, as provided in paragraph 8 hereof, of such exercise.
Such notice shall specify the number of shares as to which the Option is
being exercised and shall be accompanied by payment in full in cash of an
amount equal to the exercise price of such shares multiplied by the number of
shares as to which the Option is being exercised; provided that, if permitted
by the Board, the purchase price may be paid, in whole or in part, by
surrender or delivery to the Company of securities of the Company having a
fair market value on the date of the exercise equal to the portion of the
purchase price being so paid. In such event fair market value should be
determined pursuant to paragraph 5 of the Plan.
b. Prior to or concurrently with delivery by the Company to the Holder
of a certificate(s) representing such shares, the Holder shall, upon
notification of the amount due, pay promptly any amount necessary to satisfy
applicable federal, state or local tax requirements. In the event such
amount is not paid promptly, the Company shall have the right to apply from
the purchase price paid any taxes required by law to be withheld by the
Company with respect to such payment and the number of shares to be issued
by the Company will be reduced accordingly.
5. Notwithstanding any other provision of the Plan, in the event of a
change in the outstanding Common Stock of the Company by reason of a stock
dividend, split-up, split-down, reverse split, recapitalization, merger,
consolidation, combination or exchange of shares, spin-off, reorganization,
liquidation or the like, then the aggregate number of shares and price per
share subject to the Option shall be appropriately adjusted by the Board,
whose determination shall be conclusive.
6. This Option shall, during the Holder's lifetime, be exercisable only by
him, and neither this Option nor any right hereunder shall be transferable by
him, by operation of law or otherwise, except by will or by the laws of
descent and distribution. In the event of any attempt by the Holder to
transfer, assign, pledge, hypothecate or otherwise dispose of this Option or
of any right hereunder, except as provided for herein, or in the event of the
levy or any attachment, execution or similar process upon the rights or
interest hereby conferred, the Company may terminate this Option by notice to
the Holder and it shall thereupon become null and void.
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<PAGE> 24
7. Neither the Holder nor in the event of his death, any person entitled
to exercise his rights, shall have any of the rights of a stockholder with
respect to the shares subject to the Option until share certificates have
been issued and registered in the name of the Holder or his estate, as the
case may be.
8. Any notice to the Company provided for in this Agreement shall be
addressed to the Company in care of its Chief Financial Officer, 250
Rittenhouse Circle, Bristol, Pennsylvania 19007 and any notice to the Holder
shall be addressed to him at his address now on file with the Company, or to
such other address as either may last have designated to the other by notice
as provided herein. Any notice so addressed shall be deemed to be given on
the second business day after mailing, by registered or certified mail, at a
post office or branch post office within the United States.
9. In the event that any question or controversy shall arise with respect
to the nature, scope or extent of any one or more rights conferred by this
Option, the determination by the Committee (as constituted at the time of
such determination) of the rights of the Holder shall be conclusive, final
and binding upon the Holder and upon any other person who shall assert any
right pursuant to this Option.
JONES APPAREL GROUP, INC.
By: ___________________________
Name: _________________________
Title: ________________________
ACCEPTED AND AGREED
________________________
Holder
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<PAGE> 25
FORM OF NOTICE OF EXERCISE
TO: JONES APPAREL GROUP, INC.
250 Rittenhouse Circle
Bristol, PA 19007
The undersigned hereby exercises his/her option to purchase _____ shares of
Common Stock of Jones Apparel Group, Inc. (the "Company"), as provided in the
Stock Option Agreement dated as of _______, 199_ at $ _______ per share, a
total of $_____________, and makes payment therefor as follows:
(a) To the extent of $_______ of the purchase price, the undersigned
hereby surrenders to the Company certificates for shares of its Common Stock,
which, valued at $__________________ per share, the fair market value
thereof, equals such portion of the purchase price.
(b) To the extent of the balance of the purchase price, the undersigned
has enclosed a certificate or bank check payable to the order of the Company
for $________________.
A stock certificate or certificate for the shares should be delivered in
person or mailed to the undersigned at the address shown below.
The undersigned hereby represents and warrants that it is his (her) present
intention to acquire and hold the aforesaid shares of Common Stock of the
Company for his (her) own account for investment, and not with a view to the
distribution of any thereof, and agrees that he (she) will make no sale,
thereof, except in compliance with the applicable provisions of the
Securities Act of 1933, as amended.
Signature: _______________________
Address: _______________________
_______________________
Dated: _____________________
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EXHIBIT 5.1
JONES APPAREL GROUP, INC.
1411 Broadway
New York, New York 10018
August 20, 1999
Board of Directors of
Jones Apparel Group, Inc.
250 Rittenhouse Circle
Bristol, Pennsylvania 19007
Re: Registration Statement on Form S-8
Ladies and Gentlemen:
I have acted as counsel for Jones Apparel Group, Inc., a Pennsylvania
corporation (the "Company") in connection with the preparation of a
registration statement on Form S-8 (the "Registration Statement"), which is
being filed on the date hereof by the Company with the Securities and
Exchange Commission under the Securities Act of 1933, as amended.
The Registration Statement covers 10,000,000 shares (the "Shares") of
common stock, $0.01 par value per share, of the Company which may be issued
by the Company upon the exercise of options to be granted pursuant to the
Company's 1999 Stock Option Plan (the "Plan") filed as Exhibit 4.5 to the
Registration Statement.
In that connection, I have examined originals, or copies certified or
otherwise identified to my satisfaction, of such documents, corporate records
and other instruments as I have deemed necessary or appropriate for the
purposes of this opinion, including the Registration Statement and the Plan.
In such examination, I have assumed the genuineness of all signatures, the
authenticity of all documents submitted to me as originals and the conformity
to originals of all documents submitted to me as certified or reproduced
copies of originals.
Based upon such examination, I am of the opinion that:
1. The Plan and the Shares have been duly authorized by all requisite
corporate action on the part of the Company.
2. When the Shares have been issued and paid for in the manner and
for the consideration described in the Plan, the Shares will be validly
issued, fully paid and non-assessable.
I hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement. I further consent to the filing of copies of this
opinion with agencies of such states and other jurisdictions as are deemed
necessary in the course of complying with the laws of the states and
jurisdictions regarding the issuance and sale of the Shares in accordance
with the Registration Statement.
Very truly yours,
/s/ Ira M. Dansky
Ira M. Dansky
General Counsel
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<PAGE> 27
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting a part of this Registration Statement our reports dated February
5, 1999, except as to Note 19, which is dated as of March 2, 1999, relating
to the consolidated financial statements and schedules of Jones Apparel
Group, Inc. and subsidiaries appearing in the Company's Annual Report on Form
10-K for the year ended December 31, 1998.
/s/ BDO SEIDMAN, LLP
New York, New York
August 23, 1999
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<PAGE> 28
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of Jones Apparel Group, Inc. on Form S-8 of our report dated March 16, 1999
appearing in the Current Report on Form 8-K dated May 13, 1999, filed by
Jones Apparel Group, Inc.
/s/ DELOITTE & TOUCHE LLP
New York, New York
August 23, 1999
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