EXHIBIT 10.59
JPS Industries, Inc.
000 Xxxxx Xxxxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
July 31, 2001
Xx. Xxxxxxx X. Xxxxxxxxx
000 Xxxxxx Xxxx, #0000
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Dear Xx. Xxxxxxxxx:
We are writing with respect to that certain letter agreement between
you and JPS Industries f/k/a JPS Textile Group, Inc. (the "Company"), dated as
of February 28, 1999 (the "Agreement"), pertaining to your employment by the
Company. In accordance with our recent discussions, this letter/agreement amends
the terms of your Agreement as follows (bolded text indicates modifications to
existing Agreement):
1. Definitions. Unless otherwise specifically defined herein, each term
used herein that is defined in the Agreement shall have the meaning
assigned to such term in the Agreement. Each reference to "hereof",
"hereunder", "herein" and "hereby", and each other similar reference,
and each reference to "this Agreement" and each other similar reference
contained in the Agreement, shall from and after the date hereof refer
to the Agreement as amended hereby.
2. Amendments to Section 1 (Employment). Section 1 of the Agreement is
hereby deleted in its entirety and replaced with the following in lieu
therefor:
1. Employment. The Company agrees to employ
you, and you agree to be employed by the Company, commencing
on March 1, 1999 (the "Effective Date") and ending on October
31, 2003 (unless sooner terminated as hereinafter provided)
(the "INITIAL Employment Period"), on the terms and subject to
the conditions set forth in this Agreement (the "Agreement");
PROVIDED, HOWEVER, THAT THE INITIAL EMPLOYMENT PERIOD, AND THE
TERMS AND CONDITIONS OF THIS AGREEMENT, SHALL RENEW AND EXTEND
FOR A ONE (1) YEAR PERIOD BEGINNING ON NOVEMBER 1, 2003 AND
ENDING ON OCTOBER 31, 2004 (ANY SUCH EXTENSION PERIOD AND THE
INITIAL EMPLOYMENT PERIOD ARE COLLECTIVELY REFERRED TO HEREIN
AS THE "EMPLOYMENT PERIOD"), WITHOUT ANY FURTHER ACTION BY YOU
OR THE COMPANY TO EFFECTUATE SUCH RENEWAL AND EXTENSION,
UNLESS (I) YOU OR THE COMPANY PROVIDE WRITTEN NOTICE TO THE
OTHER PARTY ON OR BEFORE MAY 5, 2003 INDICATING THAT NO SUCH
RENEWAL OR EXTENSION SHALL OCCUR ON NOVEMBER 1, 2003, IN WHICH
EVENT THE EMPLOYMENT PERIOD SHALL EXPIRE ON OCTOBER 31, 2003,
OR (II) SOONER TERMINATED AS HEREINAFTER
PROVIDED. THE NON-RENEWAL REFERENCED IN THE IMMEDIATELY PRECEDING
SENTENCE SHALL NOT OPERATE TO DEPRIVE YOU OF ANY OF THE COMPENSATION
PROVIDED FOR IN SECTION 8(D) HEREOF WITH RESPECT TO ANY TERMINATION OF
YOUR EMPLOYMENT FOLLOWING NOTICE OF NON-RENEWAL, BUT PRIOR TO
EXPIRATION OF THE EMPLOYMENT PERIOD.
3. Amendments to Section 3(a)(i) (Base Salary). Section 3(a)(i) of the
Agreement is hereby deleted in its entirety and replaced with the
following in lieu therefor:
(a) (i) Base Salary. During the Employment
Period, the Company shall pay you, and you shall accept from
the Company for your services, a salary at (A) an initial rate
of $550,000 per annum FOR THE PERIOD COMMENCING ON MARCH 1,
1999 THROUGH AND INCLUDING OCTOBER 31, 2001, AND (B) A RATE OF
$600,000 PER ANNUM FOR THE PERIOD COMMENCING ON NOVEMBER 1,
2001 AND THEREAFTER, subject to increase in the Board's sole
discretion (the "Base Salary"), payable in accordance with the
Company's policy with respect to the compensation of
executives. Your Base Salary will not be decreased during the
Employment Period.
4. Amendments to Section 3(a)(ii) (Bonus). Section 3(a)(ii) of the
Agreement is hereby deleted in its entirety and replaced with the
following in lieu therefor:
(ii) Bonus. In addition to your Base
Salary, unless you voluntarily terminate your employment for
other than Good Reason (as hereinafter defined), or are
terminated by the Company for Cause in accordance with the
requirements of paragraph 7(c) hereof (as hereinafter
defined), you will be eligible to participate in the Company's
1999 Management Incentive Bonus Plan (the "1999 Bonus Plan")
and receive a bonus (the "Incentive Bonus") based upon the
attainment of the performance goals specified therein in an
amount calculated by the Board (or its designee) which shall
be not less than 50% of your Base Salary and shall not exceed
200% of your Base Salary. The Board shall establish a
performance-based annual bonus program for senior executives
of the Company including you for fiscal years after 1999 (a
"Future Bonus Plan") and award you an annual bonus opportunity
thereunder which is not less favorable than the opportunity
provided pursuant to the 1999 Bonus Plan (i.e., at least 50%
of your Base Salary and not more than 200% of your Base
Salary) without restricting the discretion of the Board to set
reasonable targets and criteria for such incentive
compensation. Any bonus plan payment that is to be made for
the fiscal year IN WHICH THE EMPLOYMENT AGREEMENT EXPIRES
PURSUANT TO SECTION 1, shall be made to you on or before
January 31 OF THE YEAR IMMEDIATELY FOLLOWING THE YEAR IN WHICH
THE EMPLOYMENT AGREEMENT SO EXPIRES.
5. Amendments to Section 7(d) (Termination by You). The first paragraph of
Section 7(d) of the Agreement is hereby deleted in its entirety and
replaced with the following in lieu therefor:
(d) Termination by You. You may terminate your
employment hereunder for Good Reason. For purposes of this
Agreement, "Good Reason" shall mean (A) any material
diminution of your duties or status from that provided for in,
or any material limitation of your powers in any respect not
contemplated by, paragraph 2 hereof; provided, however that
you first deliver written notice thereof to the Board and the
Company shall have failed to cure such diminution or
limitation within thirty (30) days after receipt of such
written notice or (B) any material failure by the Company to
comply with paragraphs 3 through 5 hereof; provided, however
that you first deliver written notice thereof to the Board and
the Company shall have failed to cure such failure within ten
(10) days after receipt of such written notice or (C) your
election to terminate your employment WITHIN NINETY (90) DAYS
following a Change in Control (as hereinafter defined);
provided, however that you first deliver written notice
thereof to the Board or (D) your failure to be elected to the
Board during the Employment Period.
6. Amendments to Section 8(d) (Other Than for Cause or For Good Reason).
Section 8(d) of the Agreement is hereby deleted in its entirety and
replaced with the following in lieu therefor:
(d) Other Than for Cause or For Good Reason. If
the Company shall terminate your employment other than
pursuant to paragraphs 7(b) or 7(c) hereof or if you shall
terminate your employment for Good Reason pursuant to
paragraph 7(d) hereof, then:
(i) The Company shall continue to pay
you your Base Salary without interest through the later of (A)
October 31, 2003 and (B) TWO YEARS from the Date of
Termination, in accordance with normal payroll practices;
provided, however, that in the event of your death prior to
the expiration of payment hereunder, your estate or your
beneficiary shall have the right to elect to receive the
remaining amount hereunder in a lump sum payment; and
provided, further, that IF YOUR EMPLOYMENT IS TERMINATED BY
(A) THE COMPANY FOR ANY REASON OTHER THAN PURSUANT TO
PARAGRAPHS 7(B) OR 7(C) HEREOF or (B) YOU FOR GOOD REASON,
THEN you shall have the option to require the Company to pay
you the full amount required by this paragraph 8(d)(i) in one
lump sum on the business day immediately following the Date of
Termination [FOR AVOIDANCE OF DOUBT, THE AGGREGATE AMOUNT
PAYABLE UNDER THIS SUBSECTION IS $1.2 MILLION ($600,000 ANNUAL
SALARY X 2)];
(ii) The Company shall continue to pay
you, at the same time payable to other participants in the
1999 Bonus Plan or any Future
Bonus Plan, an amount equal to the sum of (A) any bonus earned
as of the Date of Termination under the 1999 Bonus Plan or any
Future Bonus Plan for a fiscal year ending prior to the Date
of Termination but not paid as of such date, (B) a pro rata
portion (based on the number of days worked) of the target
bonus payable under the 1999 Bonus Plan (which target shall be
50% of your Base Salary) or any Future Bonus Plan in effect
for the fiscal year in which your Date of Termination occurs
(determined without regard to whether the performance goals
established under the applicable program are met) and (C) an
amount equal to your target bonus (which target shall be 50%
of your Base Salary) under the 1999 Bonus Plan or any Future
Bonus Plan in effect for the fiscal year in which your Date of
Termination occurs (determined without regard to whether the
performance goals established under the applicable program are
met), multiplied by TWO, provided, however, that IF YOUR
EMPLOYMENT IS TERMINATED BY (A) THE COMPANY FOR ANY REASON
OTHER THAN PURSUANT TO PARAGRAPHS 7(B) OR 7(C) HEREOF OR (B)
YOU FOR GOOD REASON, then you shall have the option to require
the Company to pay you the full amount required by this
paragraph 8(d)(ii) in one lump sum on the business day
immediately following the Date of Termination [FOR AVOIDANCE
OF DOUBT, THE AGGREGATE AMOUNT PAYABLE UNDER THIS SUBSECTION
IS $600,000 ($300,000 TARGET BONUS X 2)];
(iii) You shall immediately become fully
vested in any stock options previously granted to you
hereunder or otherwise, with such options remaining
exercisable for one year from the date of your termination of
employment; and
(iv) The Company shall maintain in full
force and effect, for your continued benefit through (A) the
later of October 31, 2003 and (B) TWO YEARS from the Date of
Termination, all employee benefit plans and programs providing
medical, dental and/or life insurance benefits in which you
(and, in the case of medical and dental insurance, your
spouse) were entitled to participate immediately prior to the
Date of Termination; provided, however that your continued
participation is possible under the general terms and
provisions of such plans and programs. In the event that your
participation in any such plan or program is barred, the
Company shall provide you (and your spouse) with comparable
benefits under a mirror benefit plan. Notwithstanding the
above, if you are employed by a new employer and you (and your
spouse) are eligible to and have elected to receive comparable
coverage from such employer (including the waiver of any
pre-existing condition limitation) at a comparable cost to
you, you shall no longer be eligible to receive coverage under
this paragraph.
7. Amendments to Section 9(a) (Restrictive Covenants and Confidentiality;
Injunctive Relief). Section 9(a) of the Agreement is hereby deleted in
its entirety and replaced with the following in lieu therefor:
(a) You agree, as a condition to the performance
by the Company of its obligations hereunder, particularly its
obligations under paragraphs 3 through 5 hereof, that from the
Effective Date through THE LATER OF (X) DATE ON WHICH THE
EMPLOYMENT PERIOD EXPIRES PURSUANT TO SECTION 1 HEREOF OR (Y)
OCTOBER 31, 2003 (THE "NON-COMPETE EXPIRATION DATE"), and
during the additional period, if any, extending until the due
date of the final payment owed to you by the Company following
any termination of your employment by the Company other than
pursuant to paragraphs 7(b) or 7(c) hereof or by you for Good
Reason pursuant to paragraph 7(d) hereof (but without regard
to any election by you to take any such payment in a lump
sum), and, with respect to clauses (i) and (ii) below but not
clause (iii) below, during the further period of ONE (1) YEAR
following THE NON-COMPETE EXPIRATION DATE or the end of any
such additional period, you shall not, without the prior
written approval of the Board, directly or indirectly through
any other person, firm or corporation:
8. Amendments to Section 12 (Notice). Section 12 of the Agreement is
hereby deleted in its entirety and replaced with the following in lieu
therefor:
12. Notice. For purposes of this Agreement,
notices and all other communications provided for shall be in
writing and shall be deemed to have been duly given when
delivered or mailed by United States registered or certified
mail, return receipt requested, postage prepaid, addressed as
follows:
If to you:
Xxxxxxx X. Xxxxxxxxx
000 Xxxxxx Xxxx, #0000
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
with a copy to:
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If to the Company:
JPS Industries, Inc.
000 Xxxxx Xxxxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Board of Directors
with a copy to:
Xxxxx, Day, Xxxxxx & Xxxxx
0000 XxxXxxxx Xxxxx
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxxx Xxxxxx
or to such other address as any party may have furnished to
the other in writing in accordance herewith, except that
notices of change of address shall be effective only upon
receipt.
9. Effect of Amendment. Except as amended hereby, the terms of the
Agreement shall remain in full force and effect without change.
Assuming this letter correctly sets forth our agreement regarding
amendments to the Agreement, please sign duplicate acknowledgment copies of same
and return one to me.
Very truly yours,
JPS INDUSTRIES, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
----------------------------------------
Title: Executive Vice President and Chief
Financial Officer
This letter correctly sets forth the amendments to terms and conditions of the
Agreement pertaining to my employment by the Company.
/s/ Xxxxxxx X. Xxxxxxxxx
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Xxxxxxx X. Xxxxxxxxx
