Exhibit 10.3
STOCK OPTION AGREEMENT
GRANTED TO: Xxxxxxx X. Xxxxxxxxx
DATE OF GRANT: February 28, 1999
GRANTED PURSUANT TO: JPS Textile Group, Inc. 1997 Incentive and
Capital Accumulation Plan
NUMBER OF UNDERLYING
SHARES OF COMMON
STOCK: 500,000 Shares
EXERCISE PRICE: $3.125 per share
Stock Options as defined in the Company's 1997 Incentive and Capital
Accumulation Plan (the "Plan") are referred to herein as "an Option" or "the
Options".
1. This Stock Option Agreement (the "Agreement") is made and entered into
as of February 28, 1999, between JPS Textile Group, Inc., a Delaware corporation
(the "Company"), and Xxxxxxx X. Xxxxxxxxx ("Employee").
2. Employee is granted an Option by the Compensation Committee of the
Company's Board of Directors (the "Committee") to purchase an aggregate of
500,000 shares of Common Stock pursuant to the Plan. Capitalized terms not
defined herein shall have the meanings ascribed thereto in the Plan.
3. Subject to Paragraphs 4 and 5 below, the Options shall be exercisable,
on a cumulative basis, as follows:
166,668 shares shall vest as of March 1, 1999 and 166,666 shares
shall vest on each of March 1, 2000 and March 1, 2001.
NYFS09...:\75\55175\0004\1924\AGR2239J.46C
4. Subject to Paragraph 5 below, the unexercised portion of the Option,
unless sooner terminated, shall expire on the tenth anniversary of the Effective
Date (the "Expiration Date") and, notwithstanding anything contained herein to
the contrary, no portion of the Option may be exercised after such date.
5. If prior to the Expiration Date, Employee's employment with the Company
or any subsidiary corporation terminates, the Option will terminate on the
applicable date as described below, provided, however, that none of the events
described below shall extend the period of exercisability beyond the Expiration
Date:
(a) If the employment of Employee is terminated by reason of
Employee's death either while in the employ of the Company or any subsidiary
corporation, the Employee shall retain all Options that are vested as of the
date of termination, which Options shall remain exercisable for twelve (12)
months after Employee's death and shall be exercisable by the executor or
administrator of the estate of the deceased Employee or the person or persons to
whom the deceased Employee's rights under the Option shall pass by will or the
laws of descent or distribution;
(b) If the employment of Employee is terminated by the Company for
reason of Employee's "permanent disability" (as defined below), the Employee
shall retain all Options that are vested as of the date of termination, which
Options shall remain exercisable for twelve (12) months after Employee became
permanently disabled; provided, however, that if Employee dies within six months
following such disability and Employee has not exercised the Option, the Option
shall remain exercisable for an additional twelve (12) months after Employee's
death and shall be exercisable by the executor or administrator of Employee's
estate or the person or persons to whom Employee's rights under the Option shall
pass by will or the laws of descent or distribution;
(c) If the employment of Employee is terminated by the Company other
than for "Cause" (as defined below) or is terminated by the Employee for "Good
Reason" (as defined below), the Option to the extent not theretofore exercised
shall become fully vested and remain exercisable for twelve (12) months after
the date of termination of employment; and
(d) If the employment of Employee is terminated (i) by the Company
for "Cause" or (ii) by the Employee for other than "Good Reason," the
2
Option shall, to the extent not theretofore exercised, immediately become null
and void.
(e) Upon the occurrence of a "Change in Control" (as defined below),
the Option shall fully vest and shall remain exercisable for twelve (12) months
after the date of termination of employment upon a Change in Control.
For purposes of this Agreement, the terms "permanent disability",
"Cause" and "Good Reason" shall have the meanings ascribed to such terms in the
Employee's employment agreement with the Company, dated February 28, 1999 as
amended from time to time (the "Employment Agreement"), and the term "Change in
Control" shall have the meaning ascribed to such term in the Employment
Agreement.
6. Employee may exercise the Option regardless of whether any other option
that Employee has been granted by the Company remains unexercised. In no event
may Employee exercise the Option for a fraction of a share or for less than 100
shares unless the number purchased is the remaining balance for which the Option
is then exercisable.
7. The Option's exercise price shall be paid by Employee on the date the
Option is exercised, in full in cash or shares of Common Stock or by delivering
a properly executed exercise notice to the Company together with a copy of
irrevocable instructions to a broker to deliver promptly to the Company the
amount of sale or loan proceeds to pay the exercise price, in accordance with
the provisions of Section 6(b) of the Plan.
8. The Company may withhold from sums due or to become due to Employee
from the Company an amount necessary to satisfy its obligation to withhold taxes
incurred by reason of the issuance or disposition of shares pursuant to the
Option, or may require Employee to reimburse the Company in such amount as a
condition to the issuance of the Common Stock issuable upon such exercise.
9. Employee shall not have any of the rights of a stockholder with respect
to the shares of Common Stock underlying the Option while the Option is
unexercised.
10. Any exercise of this Option shall be in writing addressed to the
Corporate Secretary of the Company at the principal place of business of the
3
Company, specifying the Option being exercised and the number of shares to be
purchased, accompanied by payment therefor.
11. This Option shall not be transferable otherwise than by will or the
laws of descent and distribution, and shall be exercisable, during Employee's
lifetime, only by Employee. Notwithstanding the foregoing, this Option may be
transferred by Employee solely to Employee's spouse, siblings, parents, children
and grandchildren or trusts for the benefit of such persons.
12. If the Company, in its sole discretion, shall determine that it is
necessary, to comply with applicable securities laws, the certificate or
certificates representing the shares purchased pursuant to the exercise of the
Option shall bear an appropriate legend in form and substance, as determined by
the Company, giving notice of applicable restrictions on transfer under or in
respect of such laws.
13. Employee covenants and agrees with the Company that if, at the time of
exercise of the Option, there does not exist a Registration Statement with
respect to the shares subject to the Option on an appropriate form under the
Securities Act of 1933, as amended (the "Act"), which Registration Statement
shall have become effective and shall include a prospectus that is current with
respect to the shares subject to the Option, (i) that he or she is purchasing
the shares for his or her own account and not with a view to the resale or
distribution thereof, (ii) that any subsequent offer for sale or sale of any
such shares shall be made either pursuant to (x) a Registration Statement on an
appropriate form under the Act, which Registration Statement shall have become
effective and shall be current with respect to the shares being offered and
sold, or (y) a specific exemption from the registration requirements of the Act,
but in claiming such exemption, Employee shall, prior to any offer for sale or
sale of such shares, obtain a favorable written opinion from counsel for or
approved by the Company as to the applicability of such exemption and (iii) that
Employee agrees that the certificates evidencing such shares shall bear a legend
to the effect of the foregoing.
14. This Agreement is subject to all terms, conditions, limitations and
restrictions contained in the Plan, which shall be controlling in the event of
any conflicting or inconsistent provisions.
15. This Agreement is not a contract of employment and the terms of
Employee's employment shall not be affected hereby or by any agreement referred
to herein except to the extent specifically so provided herein or therein.
Without
4
limiting Employee's rights under the Employment Agreement, nothing herein shall
be construed to impose any obligation on the Company to continue Employee's
employment, and it shall not impose any obligation on Employee's part to remain
in the employ of the Company.
16. Employee acknowledges and agrees that neither the Company, its
shareholders nor its directors and officers, has any duty or obligation to
disclose to the Employee any material information regarding the business of the
Company or affecting the value of the Common Stock before or at the time of a
termination of the employment of Employee by the Company, including, without
limitation, any information concerning plans for the Company to make a public
offering of its securities or to be acquired by or merged with or into another
firm or entity.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first written above.
JPS TEXTILE GROUP, INC.
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------
Xxxxxx X. Xxxxxxx
As Authorized Agent
ACCEPTED:
/s/ Xxxxxxx X. Xxxxxxxxx
-------------------------------
Xxxxxxx X. Xxxxxxxxx
5
