JPS Industries, Inc. Adopts Stockholder Rights Plan GREENVILLE, S.C., May 2 /PRNewswire-FirstCall/ -- JPS Industries, Inc. (Pink Sheets: JPST) announced today that its Board of Directors has adopted a share purchase rights plan. This action was taken after careful study and was not taken in response to any pending takeover bid for the Company. The primary purpose of the plan is to preserve the Company's existing and projected net operating losses, or "NOLs," for tax purposes. Under the Internal Revenue Code and rules promulgated by the Internal Revenue Service, the Company can carry forward these NOLs in certain circumstances to offset current and future earnings, and thus reduce its federal income tax liability (subject to certain requirements and restrictions). The Company believes that it will be able to carry forward a substantial portion of its NOLs and that these NOLs, therefore, constitute a substantial asset of the Company. The Company's future use of these NOLs could be substantially limited or lost altogether, however, in the event of an "ownership change," as defined under Section 382 of the Internal Revenue Code. In general, the Code says that a company experiences an ownership change if holders of at least 5% of the outstanding common shares, or "5% holders," increase their aggregate ownership interest in the company over a three-year testing period by more than 50%, measured in terms of the market value of the company's capital stock. The plan is designed to reduce the likelihood of an ownership change under the Code, by discouraging any person or group from acquiring enough shares to constitute 5% or more of the outstanding shares of common stock of the Company. The plan also discourages preexisting 5% holders of common stock from acquiring additional shares representing more than an additional 1%. In addition, our Board may exempt any person or group that owns more than 5% but less than 15% of our common stock if the Board determines that the person or group's ownership will not endanger the availability of our NOLs. After giving careful consideration to the Company's NOLs and past transactions in the Company's common stock, the Board of Directors concluded that, because the plan would serve to protect the NOLs, which, in turn, would protect stockholder value, the plan would be in the best interests of the Company and its stockholders. Under the plan, the rights will initially trade together with the Company's common shares and will not be exercisable. In the absence of further action by the Board of Directors, the rights issued under the plan generally will become exercisable and allow the holder to acquire the Company's common shares at a discounted price if a person or group acquires 5% or more of the Company's outstanding common shares, or if a preexisting 5% holder increases its holdings by more than 1% (subject to downward adjustment by the Board if deemed necessary to protect the NOLs). Rights held by non- exempt persons who exceed the 5% threshold will be void. Under certain circumstances, the rights will entitle the holder to buy shares in an acquiring entity at a discounted price. The plan also includes an exchange option. In general, after the rights become exercisable, the Board of Directors may, at its option, effect an exchange of part or all of the rights (other than rights that have become void) for common shares. Under this option, the Company would issue one share of common share for each right, subject to adjustment in certain circumstances. The Company's Board of Directors may, at its option, redeem all rights for $0.01 per right, generally at any time prior to the rights becoming exercisable. The rights will expire on May 10, 2015, unless earlier redeemed, exchanged, or amended by the Directors. The issuance of the rights is not a taxable event, will not affect the Company's reported financial condition or results of operations (including earnings per share), should not interfere with the Company's operating, financing, or investing activities, and will not change the way in which the Company's common shares are currently traded. JPS Industries, Inc. is a major U.S. manufacturer of extruded urethanes, polypropylenes and mechanically formed glass substrates for specialty industrial applications. JPS specialty industrial products are used in a wide range of applications, including: printed electronic circuit boards; advanced composite materials; aerospace components; filtration and insulation products; surf boards; construction substrates; high performance glass laminates for security and transportation applications; plasma display screens; athletic shoes; commercial and institutional roofing; reservoir covers; and medical, automotive and industrial components. Headquartered in Greenville, South Carolina, the Company operates manufacturing locations in Slater, South Carolina; Westfield, North Carolina; and Easthampton, Massachusetts. CONTACT: Charles R. Tutterow Executive Vice President and Chief Financial Officer 864/239-3915 DATASOURCE: JPS Industries, Inc. CONTACT: Charles R. Tutterow, Executive Vice President and Chief Financial Officer of JPS Industries, Inc., +1-864-239-3915

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