<PAGE>
SCHEDULE 14A PRELIMINARY COPY
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the registrant __X__
Filed by a party other than the registrant ____
Check the appropriate box:
__X__ Preliminary Proxy Statement ____ Confidential for
Use of the Commission
Only (as permitted by
Rule 14a-6(e)(2))
_____ Definitive Proxy Statement
_____ Definitive Additional Materials
_____ Soliciting Material Pursuant to Rule
14a-11(c) or Rule 14a-12
FAB INDUSTRIES, INC.
--------------------
(Name of Registrant as Specified in Its Charter)
FAB INDUSTRIES, INC.
--------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
__X__ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-
6(i)(2) or Item 22(a)(2) of Schedule 14A.
_____ $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
_____ Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transactions applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
_____ Fee paid previously with preliminary materials.
_____ Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
FAB INDUSTRIES, INC.
200 Madison Avenue
New York, New York 10016
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
May 4, 1995
TO: THE STOCKHOLDERS OF FAB INDUSTRIES, INC.
Please take notice that the Annual Meeting of Stockholders of Fab
Industries, Inc. (the "Company") will be held at the principal office of the
Company, 200 Madison Avenue, New York, New York 10016, on Thursday, May 4,
1995 at 10:15 a.m. for the following purposes:
1. To elect two (2) directors to Class I of the Company's Board of
Directors.
2. To ratify the employment agreement dated March 1, 1993 between
the Company and Mr. Samson Bitensky.
3. To transact such other business as may properly come before the
meeting or any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on March 16, 1995
as the record date for the purpose of determining the stockholders entitled
to notice of, and to vote at, the meeting. A list of the stockholders
entitled to vote at the meeting will be open to the examination of any
stockholder of the Company for any purpose germane to the meeting during
ordinary business hours, at the offices of the Company, 200 Madison Avenue,
New York, New York, for the 10-day period prior to the meeting.
You are requested, whether or not you plan to be present at the meeting,
to mark, date, sign and return promptly the accompanying proxy in the
enclosed envelope to which no postage need be affixed if mailed in the United
States. You may revoke your proxy for any reason at any time prior to the
voting thereof, and if you attend the meeting in person you may withdraw the
proxy and vote your own shares.
By Order of the Board of Directors
SHERMAN S. LAWRENCE,
Secretary
Dated: April 3, 1995
<PAGE> 3
ANNUAL MEETING OF STOCKHOLDERS
OF
FAB INDUSTRIES, INC.
200 Madison Avenue
New York, New York 10016
PROXY STATEMENT
The proxy accompanying this Proxy Statement is solicited by the Board
of Directors of Fab Industries, Inc. (the "Company") for use at the Annual
Meeting of Stockholders to be held at the principal office of the Company,
200 Madison Avenue, New York, New York 10016, on Thursday, May 4, 1995 at
10:15 a.m., and at any adjournment or adjournments thereof. All proxies in
the accompanying form which are properly executed and duly returned will be
voted in accordance with the instructions specified therein. If no
instructions are given, such proxies will be voted in favor of each of the
nominees for director. The proxy may be revoked at any time prior to its
exercise by written notice to the Company, by submission of another proxy
bearing a later date, or by voting in person at the meeting. The approximate
date of mailing of this Proxy Statement and the accompanying proxy to
stockholders is April 3, 1995.
VOTING SECURITIES---RECORD DATE
Only holders of the Company's Common Stock, $.20 par value (the "Common
Stock"), of record at the close of business on March 16, 1995 (the "Record
Date") will be entitled to notice of and to vote at the meeting or any
adjournment or adjournments thereof. On that date, 6,014,419 shares of
Common Stock were issued and outstanding. Each outstanding share entitles
the holder thereof to one vote.
<PAGE> 4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of the Record Date
(except as noted below) as to the shares of Common Stock beneficially owned
by each person known by the Company to be the beneficial owner of more than
five percent of the outstanding Common Stock.
Name and Address of Number of Shares Percent
Beneficial Owner Beneficially Owned (1) of Class
---------------------- ---------------------- --------
Samson Bitensky(2) 1,573,755(3) 26.2%
200 Madison Avenue
New York, New York 10016
Quest Advisory Corp.,
Quest Management Company and
Charles M. Royce (4) 654,232(4) 10.9%
1414 Avenue of the Americas
New York, New York 10019
------------------------
(1) Except as otherwise indicated below, each of the persons listed in the
table owns the shares of Common Stock opposite his or its name and has
sole voting and dispositive power with respect to such shares of Common
Stock.
(2) Under rules and regulations of the Securities and Exchange Commission
(the "Commission"), Mr. Bitensky may be deemed a "control person" of the
Company.
(3) Includes 64,000 shares of Common Stock owned by the Halina and Samson
Bitensky Foundation, Inc., and 89,996 shares of Common Stock owned by
Mr. Bitensky's spouse. Mr. Bitensky disclaims beneficial ownership of
the shares owned by his spouse.
(4) Quest Advisory Corp., a New York corporation ("Quest"), Quest Management
Company, a Connecticut general partnership ("QMO") and Charles M. Royce
comprise a group under Rule 13d-1(b) of the Securities Exchange Act of
1934, as amended. Quest beneficially owns and has sole voting power and
sole dispositive power with respect to 623,532 shares of Common Stock and
QMO beneficially owns and has sole voting power and sole dispositive
power with respect to 30,700 shares of Common Stock shown in the table
above. Charles M. Royce is an individual who may be deemed a "control
person" of Quest and QMO. Mr. Royce disclaims beneficial ownership of
the shares held by Quest and QMO. This information is derived from
Quest's Schedule 13G, as amended, dated February 10, 1995, filed with the
Commission.
<PAGE> 5
The following table sets forth certain information as of the Record Date
as to the Common Stock beneficially owned by the Company's directors (of
which Messrs. Shack and Kunreuther constitute the nominees for directors),
the Chief Executive Officer of the Company, the other three executive
officers identified in the Summary Compensation Table set forth herein and
the directors and executive officers of the Company as a group.
Shares of Common Percent
Stock Beneficially of
Name of Owned on the Outstanding
Beneficial Owner Record Date(1) Common Stock
---------------- ------------------- ------------
Samson Bitensky 1,573,755(2) 26.2%
Sherman S. Lawrence 7,750 *
Donald D. Shack 308 *
Oscar R. Kunreuther 400 *
Louis Feil 4,000 *
Lawrence H. Bober 332 *
Stanley August 57,369(3) *
Howard Soren 30,782 *
Steven Myers 95,471(3)(4) 1.6%
All directors and officers
as a group (9 persons) 1,770,167(2)(4)(5) 29.2%
------------------------------
* Less than 1%
(1) Except as otherwise indicated below, each of the persons listed in the
table owns the shares of Common Stock opposite his name and has sole
voting and dispositive power with respect to the shares of Common Stock
indicated as being beneficially owned by him.
(2) See footnote 3 to the first table set forth above under the heading
"Security Ownership of Certain Beneficial Owners and Management" with
respect to beneficial ownership of these shares.
(3) Includes 20,000 shares of Common Stock deemed to be beneficially owned
by reason of the right to acquire such shares within 60 days of the Record
Date.
<PAGE> 6
(4) Includes 46,666 shares of Common Stock owned by Beth B. Myers; 3,332
shares owned by Jessica C. Myers in a custodial account under control of
Beth B. Myers; and 2,000 shares owned by Allison R. Myers in a custodial
account under the control of Beth B. Myers. Beth B. Myers is the daughter
of Mr. Bitensky, President and Chief Executive of the Company, and the
spouse of Steven Myers, an officer of the company. Jessica C. Myers
and Allison R. Myers are the minor daughters of Mr. and Mrs. Myers.
Mr. Myers disclaims beneficial ownership of the shares owned by his
spouse and minor daughters.
(5) Includes 40,000 shares of Common Stock deemed to be beneficially owned
by directors and executive officers of the Company by reason of their
right to acquire such shares within 60 days of the Record Date.
<PAGE> 7
PROPOSAL 1 - ELECTION OF DIRECTORS
At the 1995 Annual Meeting of Stockholders, two directors are to be
elected to Class I of the Company's Board of Directors for a term of three
years. Unless a proxy shall specify that it is not to be voted for a
director, it is intended that the shares represented by each duly executed
and returned proxy will be voted in favor of the election as directors of Mr.
Donald D. Shack and Mr. Oscar R. Kunreuther to Class I. Messrs. Shack and
Kunreuther are at present directors of the Company. Messrs. Shack and
Kunreuther were most recently elected at the 1992 Annual Meeting of
Stockholders.
The Class I directors elected will hold office until the 1998
Annual Meeting of Stockholders and until their respective successors are duly
elected and qualify. If any of such nominees is not a candidate for election
at the meeting, an event which the Board of Directors does not anticipate,
the proxies will be voted for a substitute nominee. The Board of Directors
recommends a vote FOR the election of each of the nominees.
Principal Occupation Director
Name Age and Company Office(1) Since
- ------------------ --- -------------------------- -------
Nominees for Election to Class I of the Board of Directors:
Donald D. Shack 66 Attorney, member of the 1986
firm of Shack & Siegel,
P.C.(2)
Oscar R. Kunreuther 74 Certified Public Accountant; 1991
Associated with the
Radix Organization, Inc. (3)
Continuing Members of the Board of Directors:
Class II---Term expires at the 1996 Annual Meeting of Stockholders:
Louis Feil 81 Real estate investment(4) 1966-1983
1984
Lawrence H. Bober 70 Retired, Vice Chairman 1979
of the Board, First New
York Bank for Business and
First New York Business
BankCorp.(5)
Class III---Term expires at the 1997 Annual Meeting of Stockholders:
Samson Bitensky 75 Chairman of the Board of 1966
Directors, President and Chief
Executive Officer of the Company(4)
Sherman S. Lawrence 76 Attorney; Secretary of 1966
the Company(4)(6)
<PAGE> 8
(1) Unless otherwise indicated, directors' principal occupations have
been their respective principal occupation for at least five years.
(2) Since April 3, 1993, Mr. Donald D. Shack has been a member of the
law firm of Shack & Siegel, P.C. From January 1, 1990 until April
2, 1993, Mr. Shack was a member of the law firm of Whitman &
Ransom. For more than five years prior to that time, Mr. Shack was
a member of Golenbock and Barell which merged with Whitman & Ransom
as of January 1, 1990. The Company had retained Golenbock and
Barell since 1966, Whitman & Ransom since 1990, and Shack & Siegel,
P.C., since its inception on April 3, 1993, to render legal
services. Mr. Shack is a director of the following publicly-held
companies: Andover Togs, Inc., Ark Restaurants Corp., International
Citrus Corporation and Just Toys, Inc.
(3) Mr. Oscar R. Kunreuther was a partner in BDO Seidman, Certified
Public Accountants and predecessor firms in excess of five years,
until his retirement on June 30, 1987. Since then he has been
associated with Radix Organization, Inc., a private merchant
banking firm.
(4) Member of the Executive Committee.
(5) Mr. Lawrence H. Bober is a retired Vice Chairman of the Board of
First New York Business Bank Corp. ("FNYBBC") and of First New York
Bank for Business (formerly, The First Women's Bank), a commercial
bank and wholly-owned subsidiary of FNYBBC (the "Bank"), where he
served from January 1988 until January 1991. On November 13, 1992,
the Federal Deposit Insurance Corporation was appointed as receiver
for the Bank. Prior to 1988 and for in excess of five years, Mr.
Bober was a Senior Vice President of Manufacturers Hanover Trust
Company, a commercial bank.
(6) The Company has retained since 1966, and proposes to retain in the
current fiscal year, Mr. Sherman S. Lawrence to render legal
services. The Company made payments aggregating $50,000 to Mr.
Lawrence in respect of legal services rendered to the Company and
its subsidiaries during the fiscal year ended December 3, 1994.
<PAGE> 9
Information Concerning the Board of Directors
The Audit Committee (composed of Mr. Kunreuther as Chairman and
Messrs. Bober, Lawrence and Shack) held two meetings during the Company's
past fiscal year. The committee is charged with receiving and reviewing the
recommendations of the independent auditors, reviewing the audited
consolidated financial statements, meeting periodically with the independent
auditors and Company personnel with respect to the adequacy of internal
accounting controls and reviewing the Company's accounting policies.
The Company has a finance committee composed of Samson Bitensky,
Lawrence H. Bober and Louis Feil, whose purpose is to discuss proper
investments for corporate funds. There were no formal meetings of this
committee held during the Company's past fiscal year.
The Company has a stock option committee composed of Messrs. Bitensky,
Feil and Lawrence, whose purpose is to make recommendations concerning the
grant of options pursuant to the Company's stock option plan. There were no
formal meetings of this committee held during the Company's past fiscal year.
The Company established a compensation committee (the "Compensation
Committee") on October 4, 1993 which is composed of Messrs. Bober and Feil.
The Compensation Committee is charged with making recommendations regarding
the compensation of senior management personnel and setting performance
goals. The Compensation Committee held one teleconference meeting during the
past fiscal year.
The Company does not have a nominating committee.
During the Company's past fiscal year, the Board of Directors held
four meetings. No member of the Board of Directors attended fewer than 75%
of the aggregate of (i) the number of meetings of the Board of Directors, and
(ii) the number of meetings of committees of the Board of Directors (during
the periods he served on such committees), except that Mr. Lawrence H. Bober
attended only one of the two Audit Committee meetings held during fiscal
1994.
During 1994, the Company paid a fee of $10,000 per annum to Messrs.
Feil, Kunreuther and Bober and $7,500 to each other director who was not a
full-time employee. No additional fee is paid for service on committees of
the Board of Directors.
<PAGE> 10
EXECUTIVE COMPENSATION
The Summary Compensation Table shown below sets forth certain
information concerning the annual and long-term compensation for services in
all capacities to the Company for the 1994, 1993 and 1992 fiscal years, of
those persons who were (i) the Chief Executive Officer during fiscal 1994 and
(ii) the other three most highly compensated executive officers of the
Company at the fiscal year ended December 3, 1994.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation All Other
Name and Principal Position Year Salary ($)(1) Bonus ($)(2) Compensation ($)(3)
------------------------------ ----- ------- -------- -------------------
<S> <C> <C> <C> <C>
Samson Bitensky 1994 350,000 815,120 20,341
President and Chief 1993 350,000 939,200 23,981
Executive Officer 1992 350,000 948,700 21,627
Stanley August(4) 1994 215,000 140,000 19,358
Vice President 1993 214,583 140,000 21,959
1992 209,167 140,000 19,806
Howard Soren(4) 1994 150,000 110,000 15,328
Vice President-Finance 1993 149,583 110,000 15,266
and Treasurer 1992 144,166 110,000 13,596
Steven Myers(4) 1994 150,000 110,000 15,318
Vice President 1993 149,583 110,000 15,266
1992 144,166 110,000 13,342
</TABLE>
------------------------------------
<PAGE> 11
(1) Includes compensation deferred pursuant to the Company's
qualified 401K Money Option Savings Plan.
(2) The amounts set forth for Mr. Bitensky represent incentive
compensation paid to Mr. Bitensky pursuant to his current and pr
employment agreements as more fully discussed below under "Repor
Compensation Committee on Executive Compensation".
(3) Represents the amount of the Company's contribution under its
Non-Qualified Executive Retirement Plan and the amount contributed
by the Company to its Employee Stock Ownership Plan for shares
allocated during each year to the account of the applicable officer.
(4) On December 3, 1994, Messrs. August, Soren and Myers held
12,000, 6,000 and 6,000 shares (remaining from the original grant
30,000, 15,000 and 15,000 shares during the 1991 fiscal year),
respectively, of restricted Common Stock having a market value,
the closing price of the Common Stock on December 2, 1994, of $379,500
$189,750 and $189,750, respectively. The foregoing shares of
restricted Common Stock will become transferable to the extent of
50% of such shares on each of the next two anniversaries of the date of
grant hereafter. Any dividends declared in respect of shares of
restricted Common Stock which are transferrable by the applicable
officer were paid to such applicable officer. Any dividends
declared in respect of shares of restricted Common Stock which have
not become transferable by the applicable officer are held in
escrow by the Company and will be paid to the applicable officer at
such time as the shares in respect of which such dividend was
declared become transferable by such officer.
<PAGE> 12
The table below sets forth certain information at December 3,
1994 with respect to unexercised options to purchase shares of Common
Stock under the Company's Stock Option Plan to the Chief Executive
Officer of the Company and the other three most highly compensated
executive officers of the Company.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
Shares Value Number of Securities
Acquired on Realized Underlying Unexercised Value of Unexercised in-the-money
Name Exercise (#) ($) Options at Fiscal Year-end(#) Options at Fiscal Year-End ($)(1)
----- ------------ -------- ---------------------------- ----------------------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Samson Bitensky - - - - - -
Stanley August - - 20,000 - 323,700 -
Howard Soren - - 20,000 - 323,700 -
Steven Myers - - 20,000 - 323,700 -
</TABLE>
(1) Based on the closing sale price on the American Stock Exchange of
the Company's Common Stock on December 2, 1994.
<PAGE> 13
1990 Executive Retirement Plan
A trusteed non-qualified Executive Retirement Plan was adopted
by the Company effective November 30, 1990. Its purpose is to
provide benefits to those key employees who are not participating
in the Company's Profit-Sharing Plan. The plan is administered by
a committee appointed by the Board of Directors who, prior to the
first day of the plan year, designate those key employees who will
be covered by the plan.
1987 Stock Option Plan
. . . . . The 1987 Stock Option Plan (the "Plan"), adopted on
June 1, 1987 and amended March 15, 1988, February 28, 1989 and May
7, 1992, was approved by the stockholders of the Company on May 5,
1988. Under the Plan, options to purchase shares of Common Stock
are designated at the time of grant as either "incentive stock
options" ("ISOs"), which are intended to qualify under Section 422A
of the Internal Revenue Code of 1986, or options which do not so
qualify ("NQOs"). Under the plan, ISOs may be granted to
employees, including employees who are also officers or directors
of the Company. NQOs may be granted to employees, officers or
directors of the Company, whether or not such directors are
employees of the Company. An aggregate of 650,000 shares of Common
Stock were reserved for issuance pursuant to options granted or to
be granted under the Plan and 167,000 shares remain available for
issuance as of the Record Date.
Employee Stock Ownership Plan
. . . . . Effective as of November 25, 1991, the Company
established the Fab Industries, Inc., Employee Stock Ownership Plan
(the "ESOP"). All full-time employees are eligible to participate
upon the completion of one year of service. On December 18, 1991,
the ESOP purchased 340,000 shares of Common Stock from Samson
Bitensky, the Chairman of the Board and President of the Company,
for $34.875 per share, which represented approximately 5.5% of the
Company's then outstanding Common Stock. The Company loaned the
sum of $11,857,500 to the ESOP to enable it to purchase such
shares. The loan is payable by the ESOP in 15 equal annual
installments plus interest at prime adjusted periodically.
. . . . . Participants are not required or permitted to make
contributions to the ESOP. The only contributions to the ESOP are
made by the Company which is obligated to make contributions
sufficient to pay the principal amount of the loan and interest
accrued thereon. Dividends on the shares of Common Stock acquired
by the ESOP are utilized to repay the loan from the Company. The
shares of Common Stock acquired by the ESOP are allocated among the
participants on the basis of their relative compensation (as
defined in the ESOP). Voting rights attach to the allocated shares
and to a participant's percentage of unallocated or unvoted shares,
according to a formula detailed in the plan.
<PAGE> 14
COMPARISON OF FIVE-YEAR CUMULATIVE
TOTAL RETURN
The graph set forth below compares the yearly percentage change
and the cumulative total shareholder return on the Company's Common
Stock against the cumulative total return on the American Stock
Exchange Market Value index and a peer group comprised of those
public companies whose business activities fall within the same
standard industrial classification code as the Company for the
period commencing December 2, 1989 and ending December 3, 1994.
This graph assumes a $100.00 investment in the Company's Common
Stock and in each index on December 2, 1989 and that all dividends
paid by companies in each index were reinvested.
[The Performance Graph is being filed in tabular form pursuant to
Item 304(d) of Regulation S-T.]
<TABLE>
<CAPTION>
1989 1990 1991 1992 1993 1994
<C> <C> <C> <C> <C> <C>
Fab Industries, Inc. $100 $89.17 $190.17 $181.92 $208.80 $194.86
Broad Market Index -
American Stock Exchange $100 $85.44 $100.27 $107.90 $124.51 $118.51
Peer Group -
SIC Code 225 $100 $76.81 $141.35 $219.90 $176.49 $160.62
</TABLE>
<PAGE> 15
REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
It has been the policy of the Company to tie a
significant portion of executive compensation to corporate
performance. For the three principal executives other than Mr.
Bitensky, the key elements are base salary, annual bonus and long-
term incentive opportunities in the form of restricted stock and
stock options. For all of the four principal executives, including
Mr. Bitensky, the largest portions of total compensation are based
on performance (as opposed to base salaries and benefits).
Mr. Bitensky is one of the founders of the Company. He
owns approximately 1,570,000 shares of Common Stock constituting
approximately 26% of the total amount. Accordingly, his interest
is very much aligned with the interest of all stockholders and the
Company has not considered it sensible to relate Mr. Bitensky's
compensation to the Company's performance through long-term stock
incentives such as restricted stock or stock options. Instead, Mr.
Bitensky's compensation is tied to Company performance through the
use of incentive compensation. The members of the Compensation
Committee believe that Mr. Bitensky continues to be significantly
responsible for the Company's success.
Mr. Bitensky entered into an employment agreement with
the Company effective April 1, 1993, pursuant to which he is to
perform the duties of its President and Chief Executive Officer.
The agreement expires March 31, 1998, subject to automatic
successive one year renewals unless either party terminates on
notice given not less than six months prior to the then expiration
date. The agreement provides for an annual base salary of
$350,000, or such greater amount as the Board of Directors may from
time to time determine, and incentive compensation if the Company's
annual pre-tax income exceeds $10,000,000 equal to 3% of the
Company's annual pre-tax income up to $11,000,000 and 4% of such
pre-tax income in excess of $11,000,000. In the event of
disability as defined in the employment agreement, compensation at
the above rate is payable for the first year, and at one half such
rate for the second year of such disability. Upon termination of
full-time employment, Mr. Bitensky will be retained to provide
advisory and consulting services for a period of five years for a
fee of $250,000 per annum. In the event of the death of Mr.
Bitensky while employed or providing consulting services, an amount
equal to the average annual compensation paid to Mr. Bitensky over
the three most recent years is payable to his beneficiaries over a
period of five years.
<PAGE> 16
In the event of Mr. Bitensky's death while employed or
within two years after termination of employment, the agreement
provides an option to Mr. Bitensky's estate, exercisable during the
period of six months after the appointment of Mr. Bitensky's
personal representative, to sell to the Company such number of
shares of Common Stock as may be purchased with an amount equal to
(i) the lesser of (A) $7,000,000 or (B) 10% of the Company's net
worth at the end of the fiscal year immediately prior to Mr.
Bitensky's death, plus (ii) such amount as may be purchased with
the proceeds of life insurance which the Company may purchase from
time to time on Mr. Bitensky's life. Currently the Company
maintains several life insurance policies on Mr. Bitensky's life
providing for the payment of an aggregate of $3,000,000 for such
purpose. The purchase price of shares purchased pursuant to the
option is the market price per share increased by an amount equal
to one-half of the amount by which the book value per share exceeds
the market price per share.
As indicated above, the key elements of the compensation
payable to the three principal executives other than the President
are base salary, annual bonus and long-term incentives in the form
of restricted stock and stock options. By far, the largest
portions of total compensation are performance based.
Adjustment of base salaries involves considerations of
competitive data, assessment of performance, position tenure and
internal comparability. The base salaries of the three executives
are considered to be average by industry standards and are adjusted
modestly, the primary focus being on total compensation. All three
executives are eligible to receive annual cash bonuses based on a
review of the Company's performance during the year for which such
a bonus is payable. 1994 was a very profitable year, although not
as profitable as 1993. It was not deemed appropriate, however,
that bonuses to the three executives be decreased and, accordingly,
the cash bonuses for 1994 were equal to those paid in 1993.
The Company's stock option and restricted stock programs
are designed to align the interests of the executives with those of
the stockholders at large. Options are granted with exercise
prices equal to market on the grant date and vest, generally, over
a period of five years. This approach is designed to provide
incentives for the creation of stockholder values over the long
term since the full benefit of the option cannot be realized unless
price appreciation occurs over a number of years and the executive
is rewarded only to the extent that stockholders at large have
benefited. The Company's restricted stock program contemplates the
grant of shares of Common Stock which the recipient may not sell or
otherwise dispose of until an applicable restriction period lapses
and which are forfeited if the recipient terminates employment
prior to the lapsing of the restriction period.
The Company does not issue options or grant restricted
stock on any fixed basis preferring to maintain a flexible program.
No options were issued or grants made to executives in 1994.
Options were issued in equal amount to Messrs. August, Soren and
Myers in 1988 and 1990. Restricted stock grants, related in amount
to salary and bonus, were made to Messrs. August, Soren and Myers
in 1991. The restricted shares granted vested as to 40% in two
years with an additional 20% vesting in each of the next three
years.
<PAGE> 17
The foregoing Report of the Compensation Committee on
Executive Compensation shall not be deemed to be incorporated by
reference into any filing of the Company under the Securities Act
of 1933, as amended, or the Securities Exchange Act of 1934, as
amended, except to the extent that the Company specifically
incorporates such information by reference.
Lawrence H. Bober
Louis Feil
<PAGE> 18
PROPOSAL 2 - RATIFICATION OF
SAMSON BITENSKY'S EMPLOYMENT AGREEMENT
The 1993 Revenue Reconciliation Act (the "Revenue Act")
provides that publicly held corporations will not be able to deduct
compensation paid to certain executive officers to the extent that
such compensation exceeds $1,000,000, unless certain requirements
are satisfied. The Revenue Act rules do not apply to compensation
based on the attainment of performance goals if, among other
requirements, the material terms of such compensation, are
disclosed to and approved by stockholders.
The employment agreement is therefore being submitted to
stockholders for their approval of the terms of the employment
agreement as those terms are described above under "Report of the
Compensation Committee on Executive Compensation".
Required Vote
The affirmative vote of a majority of the shares of
Common Stock outstanding and entitled to vote on this matter is
required to ratify the employment agreement pursuant to the
following resolution:
"RESOLVED, that the employment agreement
dated March 1, 1993 between the Company and
Mr. Samson Bitensky, is hereby ratified,
affirmed and approved in all respects."
THE BOARD OF DIRECTORS RECOMMENDS YOU VOTE "FOR" RATIFICATION
AND APPROVAL OF MR. BITENSKY'S EMPLOYMENT AGREEMENT.
<PAGE> 19
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTS
The firm of BDO Seidman, Certified Public Accountants,
330 Madison Avenue, New York, New York, served as the Company's
independent public accountants for its fiscal year ended December
3, 1994. No independent public accountant has been formally
selected by the Company for the current fiscal year. In keeping
with the Company's policy, formal selection of the Company's
independent public accountants will be considered by the Company's
newly-elected Board of Directors at the Annual Meeting of Directors
to be held immediately following the Company's Annual Meeting of
Stockholders on Thursday, May 4, 1995. Representatives of BDO
Seidman are expected to be present at the Company's 1995 Annual
Meeting of Stockholders and available to respond to appropriate
questions from stockholders. Such representatives will also be
accorded an opportunity to make a statement at such time should
they desire to do so.
<PAGE> 20
VOTING PROCEDURES
Pursuant to Commission rules, a designated blank space is
provided on the proxy card to withhold authority to vote for one or
more nominees for director and a box is provided on the proxy card
for stockholders to mark if they wish to abstain on Proposal 2.
Votes withheld in connection with the election of one or more
directors will not be counted in determining the votes cast and
will have no effect on the vote. Abstentions in connection with
the ratification of the employment agreement between the Company
and Mr. Samson Bitensky will be counted and therefore will affect
a negative vote.
Under the rules of the National Association of Securities
Dealers, brokers who hold shares in street name for customers have
the authority to vote on certain items when they have not received
instructions from beneficial owners. Under the General Corporation
Law of the State of Delaware, a broker non-vote will have no effect
on the outcome of the election of directors and will have the same
effect as a vote against Proposal 2.
GENERAL
The solicitation of proxies in the accompanying form is
made by the Board of Directors and the cost thereof will be borne
by the Company. In addition to the solicitation of proxies by use
of the mails, some of the officers, directors and other employees
of the Company may also solicit proxies personally or by mail,
telephone or telegraph, but they will not receive additional
compensation for such services. Brokerage firms, custodians,
banks, trustees, nominees or other fiduciaries holding shares of
Common Stock in their names will be requested by the Company to
forward proxy materials to their principals and will be reimbursed
for their reasonable out-of-pocket expenses in such connection.
As of the date of this Proxy Statement, the Board of
Directors is not aware of any other matters to be presented for
action, but if any other matters properly come before the meeting,
it is intended that the persons voting the accompanying proxy will
vote the shares represented thereby in accordance with their best
judgment.
It is important that proxies be returned promptly.
Therefore, whether or not you plan to attend the meeting in person,
you are urged to mark, date, execute and return your proxy in the
enclosed envelope, to which no postage need be affixed if mailed in
the United States. The proxy may be revoked at any time before it
is exercised. If you attend the meeting in person you may withdraw
the proxy and vote your own shares.
<PAGE> 21
Stockholder Proposals
Stockholder proposals in respect of matters to be acted
upon at the Company's 1996 Annual Meeting of Stockholders should be
received by the Company on or before December 2, 1995 in order that
they may be considered for inclusion in the Company's proxy
materials.
THE COMPANY WILL PROVIDE WITHOUT A CHARGE A COPY OF ITS ANNUAL
REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 3, 1994,
INCLUDING FINANCIAL STATEMENTS AND SCHEDULE THERETO, TO EACH OF THE
COMPANY'S STOCKHOLDERS OF RECORD ON MARCH 16, 1995, AND EACH
BENEFICIAL STOCKHOLDER ON THAT DATE, UPON RECEIPT OF A WRITTEN
REQUEST THEREFOR MAILED TO THE COMPANY'S OFFICES, 200 MADISON
AVENUE, NEW YORK, NEW YORK 10016, ATTENTION: SECRETARY. IN THE
EVENT THAT EXHIBITS TO SUCH FORM 10-K ARE REQUESTED, A FEE WILL BE
CHARGED FOR REPRODUCTION OF SUCH EXHIBITS. REQUESTS FROM
BENEFICIAL STOCKHOLDERS MUST SET FORTH A GOOD FAITH REPRESENTATION
AS TO SUCH OWNERSHIP ON MARCH 16, 1995.
By Order of the Board of Directors,
SHERMAN S. LAWRENCE,
Secretary
Dated: April 3, 1995
<PAGE> 22
Appendix A
FAB INDUSTRIES, INC.
ANNUAL MEETING OF STOCKHOLDERS
MAY 4, 1995
This Proxy Solicited on Behalf of the Board of Directors
THE UNDERSIGNED, revoking all previous proxies, hereby
appoints HOWARD SOREN and SHERMAN S. LAWRENCE, or either of them,
attorneys and proxies with power of substitution, for and in the
name, place and stead of the undersigned, and with all the powers
the undersigned would possess if personally present, to vote as
instructed below all of the shares of Common Stock of FAB
INDUSTRIES, INC. (the "Company"), which the undersigned is entitled
to vote at the Annual Meeting of Stockholders of the Company, to be
held on Thursday, May 4, 1995 at 10:15 A.M., at the principal
office of the Company, 200 Madison Avenue, New York, New York
10016, and at any adjournment or adjournments thereof. The shares
represented by this Proxy will be voted as indicated below upon the
following matters, as more fully described in the Proxy Statement.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN
ACCORDANCE WITH THE INSTRUCTIONS GIVEN. IF NO SUCH INSTRUCTIONS
ARE GIVEN, THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN
FAVOR OF THE NOMINEES FOR DIRECTORS AND FOR ITEM 2.
(See reverse side)
<PAGE> 23
[ ] ____________ _______
ACCOUNT NUMBER COMMON
1. Election of (2) Directors to Class I
(Instruction: To withhold
authority to vote
FOR ALL NOMINEES WITHHOLD for any individual nominee
LISTED (except as AUTHORITY strike a line through the
marked to the to vote for nominee's name in the text
contrary) all nominees below.) To Class I of the
listed Board of Directors
(to hold office until the
1998 Annual Meeting
of Stockholders): Donald D.
Shack, Oscar R. Kunreuther
[ ] [ ]
_____________________________________________________________________
2. Ratification of the employment agreement dated March 1,
1993 between the Company and Mr. Samson Bitensky.
For Against Abstain
[ ] [ ] [ ]
_____________________________________________________________________
3. In their discretion, upon such other business
as may properly come before the meeting.
_____________________________________________________________________
Dated: ___________________,1995
_____________________________
______________________________
Note: Please sign exactly as
your name or names appear
hereon. Joint owners should
each sign personally. When
signing as executor,
administrator, corporation
officer, attorney, agent,
trustee or guardian etc.,
please add your full title to
your signature.
Note: Please date, mark (in
blue or black ink), sign
and mail this Proxy in the
envelope provided for this
purpose. No postage is
required for mailing in the
United States.