<PAGE>
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:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Garan, Incorporated
-----------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
Registrant
------------------------------------------------------------------------
(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(j)(2).
/ / $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 transaction applies:
- -----------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11: (1)
- -----------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
- -----------------------------------------------------------------------------
(1) Set forth the amount on which the filing fee is calculated and state how it
was determined.
/ / 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 No.:
- ------------------------------------------------------------------------------
3) Filing Party:
- ------------------------------------------------------------------------------
4) Date Filed:
- ------------------------------------------------------------------------------
<PAGE>
[LOGO]
, INCORPORATED
350 FIFTH AVENUE
NEW YORK, N.Y. 10118
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MARCH 8, 1996
------------------------
PLEASE TAKE NOTICE that the Annual Meeting of Shareholders of GARAN,
INCORPORATED, a Virginia corporation, will be held on March 8, 1996, at 2
o'clock p.m., at the Hyatt Regency Crystal City, 2799 Jefferson Davis Highway,
Arlington, Virginia, for the following purposes:
1. To elect three directors to the Board of Directors for a term of three
years each;
2. To ratify the selection of Robbins, Greene, Horowitz, Lester & Co., LLP
as the Company's independent certified public accountants for the fiscal
year ending September 30, 1996; and
3. To transact such other business as may properly come before the meeting
and any adjournment thereof.
The Board of Directors has fixed the close of business on January 18, 1996,
as the record date for the determination of shareholders entitled to notice of
and to vote at the Annual Meeting. Accordingly, only shareholders of record as
of that date will be entitled to notice of and to vote at the Annual Meeting or
any adjournment thereof.
By Order of the Board of Directors,
MARVIN S. ROBINSON
SECRETARY
New York, New York
January 26, 1996
PLEASE SIGN, DATE, AND RETURN THE ACCOMPANYING PROXY WHETHER OR NOT YOU PLAN
TO ATTEND THE MEETING SO THAT YOUR SHARES WILL BE REPRESENTED AT THE MEETING.
I-240
<PAGE>
[LOGO]
, INCORPORATED
350 FIFTH AVENUE
NEW YORK, N.Y. 10118
------------------------
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of Garan, Incorporated ("Company") of Proxies to be voted at
the Annual Meeting of Shareholders of the Company to be held on March 8, 1996.
The Company's Annual Report for the year ended September 30, 1995, a Notice of
Annual Meeting, and a Proxy accompany this Proxy Statement. The Proxy may be
revoked by the person giving it at any time prior to its use by giving written
notice of such revocation to Marvin S. Robinson, Secretary, Garan, Incorporated,
350 Fifth Avenue, New York, New York 10118.
Only holders of Common Stock of record at the close of business on January
18, 1996, are entitled to vote at the meeting. On that date there were 5,069,892
outstanding shares of Common Stock, each share having one vote. Action may be
taken at the meeting by vote of the holders of a majority of the shares
represented at the meeting in person or by proxy.
The Company's executive offices are located at 350 Fifth Avenue, New York,
New York 10118.
The Company's Annual Report, this Proxy Statement, and the Notice of Annual
Meeting and Proxy accompanying this Proxy Statement will be mailed to
shareholders on January 29, 1996.
ELECTION OF DIRECTORS
The Company's Board of Directors consists of nine directors divided into
three classes of three directors each. Three directors are to be elected at the
meeting for a term of three years each. It is intended that votes will be cast
pursuant to the Proxies hereby solicited for the nominees named on the next
page, each of whom is presently a director of the Company, unless authority to
vote for the election of one or more directors shall have been withheld by a
shareholder. If at the time of the election any of the nominees should be
unavailable for election, a circumstance which is not anticipated by the Board
of Directors, it is intended that the Proxies will be voted for such substitute
nominee or nominees as may be selected by the Nominating Committee of the Board
of Directors.
1
<PAGE>
Pursuant to the Company's By-laws, the Board of Directors has nominated the
following persons selected by the Nominating Committee to be elected at the
Annual Meeting as directors of the Company:
<TABLE>
<CAPTION>
SERVED AS SERVED AS
TERM TO DIRECTOR OFFICER
NAME PRINCIPAL OCCUPATION EXPIRE IN AGE SINCE SINCE
- ------------------------------ -------------------------------- ---------- --- ----------- -----------
<S> <C> <C> <C> <C> <C>
Richard A. Lichtenstein....... President, Marathon 1999 42 1989
Communications Incorporated
Seymour Lichtenstein.......... Chairman of the Board (Chief 1999 69 1948 1948
Executive Officer) of the
Company
Marvin S. Robinson............ Vice President--General 1999 62 1983 1980
Counsel and Secretary of the
Company; Attorney
</TABLE>
Seymour Lichtenstein and Marvin S. Robinson have occupied positions with the
Company for more than the past five years. Mr. Robinson also has been a
practicing attorney for more than the past five years as a member of the law
firm, Tannenbaum Dubin & Robinson, LLP, which has been counsel to the Company
for more than the last five fiscal years. The Company intends to continue such
firm as counsel for the current fiscal year. Richard A. Lichtenstein, the son of
Seymour Lichtenstein, has been the President and sole shareholder of Marathon
Communications Incorporated, a political consulting firm, for more than the past
five years.
2
<PAGE>
Each of the directors named below will continue in office after the Annual
Meeting until his term expires in the year indicated:
<TABLE>
<CAPTION>
SERVED AS SERVED AS
TERM DIRECTOR OFFICER
NAME PRINCIPAL OCCUPATION EXPIRES IN AGE SINCE SINCE
- ------------------------------ ------------------------------------- ---------- --- ----------- -----------
<S> <C> <C> <C> <C> <C>
Stephen J. Donohue............ Regional Manager/Executive Vice 1997 51 1993
President, Capital Factors, Inc.
Rodney Faver.................. Employee (Vice President-- 1998 57 1986
Manufacturing) of the
Company
Jerald Kamiel................. President (Chief Operating Officer) 1997 52 1979 1979
of the Company
Frank Martucci................ President, Millcross Fund Management, 1998 48 1993
Inc.
Perry Mullen.................. Retired 1998 73 1961
William J. Wilson............. Vice President--Finance and 1997 55 1982 1982
Administration of the Company
</TABLE>
Rodney Faver, Jerald Kamiel, and William J. Wilson have occupied positions
with the Company for more than the past five years. Stephen J. Donohue has been
the Regional Manager/Executive Vice President of Capital Factors, Inc. for more
than the past five years. Frank Martucci has been the President of Millcross
Fund Management, Inc., a private investment company, since 1993, and he was a
private investor from 1990-1993. Perry Mullen retired as an active employee
(Vice President--Manufacturing) of the Company on December 31, 1989, and he was
a Consultant to the Company from 1990 through 1995. He was an officer of the
Company from 1961 to 1989.
The executive officers of the Company include Messrs. Kamiel, S.
Lichtenstein, Robinson, and Wilson and Alexander J. Sistarenik, who has been the
Company's Treasurer since 1990. Mr. Sistarenik is 49 years old and has occupied
a position with the Company for more than the past five years.
It is anticipated that all executive officers will be re-elected after the
1996 Annual Meeting of Shareholders.
During the year ended September 30, 1995, the Board of Directors met four
times.
On November 7, 1994, the Board re-appointed an Audit Committee and a
Compensation Committee each consisting of Stephen J. Donohue, Frank Martucci,
and Marvin S. Robinson. Among other matters, the Audit Committee reviews the
internally-prepared quarterly and annual financial statements, meets with the
Company's independent certified public accountants, and recommends a firm of
independent certified public accountants to the Company. Among other matters,
the Compensation
3
<PAGE>
Committee deals with compensation of the principal officers of the Company and
also selects individuals to participate in the Company's stock option plan. See
"Compensation Committee Report on Executive Compensation" below. The Audit
Committee and the Compensation Committee each met informally at various times
through and after the end of the 1995 fiscal year.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Marvin S. Robinson, the Vice President--General Counsel and Secretary of the
Company and a member of Tannenbaum Dubin & Robinson, LLP, the law firm which is
counsel to the Company, was a member of the Compensation Committee during fiscal
1995.
NOMINATING COMMITTEE
On November 6, 1995, the Board appointed a Nominating Committee consisting
of Jerald Kamiel and William J. Wilson to select the management nominees for
directors. The Nominating Committee met one time. Nominations for directors also
may be made by the Company's shareholders in compliance with certain procedures
set forth in the Company's By-laws. These procedures include written notice to
the Secretary of the Company not less than 45 days prior to the date of the
Annual Meeting, provided, that if less than 45 days' notice or prior public
disclosure of the date of the Annual Meeting is given or made, notice by the
shareholder must be delivered not later than the close of business on the 10th
day following the earlier of (i) the day on which notice of the date of the
Annual Meeting was mailed or (ii) the day on which such public disclosure was
made. Such shareholder's notice shall set forth (a) as to each person whom the
shareholder proposes to nominate for election as a director (1) the name, age,
business address, and residence address of such person, (2) the principal
occupation or employment of such person, (3) the class and number of shares of
the Company's Common Stock which are beneficially owned by such person on the
date of such shareholder notice, and (4) any other information relating to such
person that is required to be disclosed in solicitations of proxies with respect
to nominees for election as directors pursuant to Regulation 14A under the
Securities Exchange Act of 1934, as amended, and (b) as to the shareholder
giving the notice (1) the name and address, as they appear on the Company's
books, of such shareholder and any other shareholders known by such shareholder
to be supporting such nominees and (2) the class and number of shares of the
Company's Common Stock which are beneficially owned by such shareholder on the
date of such shareholder notice and by any other shareholders known by such
shareholder to be supporting such nominees on the date of such shareholder
notice.
4
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of January 18, 1996,
concerning the Common Stock of the Company beneficially owned by each nominee
for director, each director continuing in office, and all officers and directors
as a group:
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF BENEFICIAL
NAME OF BENEFICIAL OWNER OWNERSHIP (1) PERCENT
------------------- --------
<S> <C> <C>
Stephen J. Donohue................................ -- --
Rodney Faver...................................... 24,722 (2)
Jerald Kamiel..................................... 75,400 1.5
Richard A. Lichtenstein........................... 30,266(3) (2)
Seymour Lichtenstein.............................. 623,068(4) 12.3
Frank Martucci.................................... -- --
Perry Mullen...................................... 6,446 (2)
Marvin S. Robinson................................ 3,456 (2)
William J. Wilson................................. 25,560 (2)
All officers and directors as a group (ten
persons)......................................... 791,198 15.6
</TABLE>
- ------------------------
(1) Unless otherwise indicated, all shares are owned of record and beneficially.
(2) Less than 1%.
(3) Does not include 2,296 shares owned by Richard A. Lichtenstein's wife and
860 shares held by Mr. Lichtenstein in custody for his daughter.
(4) Does not include 19,200 shares owned by The Lichtenstein Foundation, Inc., a
charitable foundation of which Seymour Lichtenstein is president and a
director, and 4,012 shares owned by Mr. Lichtenstein's wife.
5
<PAGE>
Except for Seymour Lichtenstein, whose mailing address is 350 Fifth Avenue,
New York, New York 10118, as of January 18, 1996, the Company knows of no other
beneficial owner of more than 5% of its outstanding shares, except as follows
(1):
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF BENEFICIAL
NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP PERCENT
- ----------------------------------------- ------------------- ----------
<S> <C> <C>
Charles M. Royce 643,840(2) 12.7
c/o Quest Advisory Corp.
1414 Avenue of the Americas
New York, New York 10019
Noah P. Dorsky (3) 460,512(4) 9.1
379 West Broadway
New York, New York 10012
David A. Dorsky 408,752(4) 8.1
379 West Broadway
New York, New York 10012
Lazard Freres & Co. 302,000(5) 6.0
One Rockefeller Plaza
New York, New York 10020
Putnam Investment Management 301,200(6) 5.9
1 Post Office Square
Boston, Massachusetts 02109
Karen A. Dorsky 287,670(4) 5.7
379 West Broadway
New York, New York 10012
</TABLE>
- ------------------------
(1) The information in the table excludes Cede & Company, holder of record on
January 18, 1996, in its capacity as nominee for the Depository Trust
Company, of 3,522,257 shares, which constitute 69.5% of the outstanding
Common Stock of the Company.
(2) As described in a Schedule 13G dated January 9, 1995, and a Form 3 dated
January 9, 1995, both filed with the Securities and Exchange Commission, and
supplemented by other information available to the Company, (a) Charles M.
Royce is (i) the managing general partner of Quest Management Company, a
Connecticut general partnership which owns 18,700 shares of Company stock,
and (ii) the principal shareholder of Quest Advisory Corp., a New York
corporation which owns 625,140 shares of Company stock, and (b) Mr. Royce
has disclaimed beneficial ownership of the shares held by those entities.
(3) Noah P. Dorsky failed to file a Form 4 with respect to the month of May,
1995, to report sales of Company stock during that month, and failed to file
a required Form 5 with respect to the 1995 fiscal year in a timely fashion.
A Form 5 reporting his transactions in Company stock during fiscal 1995 was
filed by Mr. Dorsky on December 21, 1995.
6
<PAGE>
(4) David A. Dorsky and Noah P. Dorsky own beneficially 36,530 and 88,290
shares, respectively, as to which each has sole dispositive power. As
Trustees of certain trusts they share dispositive power over an additional
84,552 shares, and with Karen A. Dorsky as Trustees of certain other trusts
and as Executors of the Estate of Samuel Dorsky, they share dispositive
power over an additional 287,670 shares. Accordingly, their combined
ownership and dispositive power represents 9.8% of the outstanding Company
stock.
(5) As described in a Schedule 13G dated February 12, 1993, filed with the
Securities and Exchange Commission and supplemented by additional
information available to the Company, Lazard Freres & Co. is an investment
adviser, and the securities relating to such filing may be owned by advisory
clients of Lazard Freres & Co.
(6) The Company has no information regarding the nature of the ownership of
these shares.
Seymour Lichtenstein may be deemed to be a "control person" of the Company
as that term is defined by the Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
NAME AND ANNUAL COMPENSATION ALL OTHER
PRINCIPAL POSITION YEAR BASE SALARY BONUS COMPENSATION (1)
- ------------------------------------ --------- ----------- ---------- ----------------
<S> <C> <C> <C> <C>
Seymour Lichtenstein................ 1995 $ 500,000 $ 260,000 $ 45,000
Chairman 1994 500,000 390,000 45,000
1993 500,000 490,000 36,000
Jerald Kamiel....................... 1995 325,000 240,000 16,930
President 1994 325,000 240,000 16,930
1993 325,000 300,000 16,930
William J. Wilson................... 1995 190,000 176,000 10,384
Vice President-- 1994 190,000 176,000 10,230
Finance and Administration 1993 190,000 220,000 10,230
Alexander J. Sistarenik............. 1995 150,000 48,000
Treasurer 1994 150,000 48,000
1993 145,000 60,000
</TABLE>
- ------------------------
(1) All Other Compensation consists of the cost of life insurance paid or to be
paid by the Company pursuant to Employment Agreements with the named
executive officer which is payable to such executive officer's designated
beneficiary.
The foregoing table does not include an aggregate of $366,366, $303,074 and
$301,865 in salary and fees paid in fiscal 1995, 1994, and 1993, respectively,
to Marvin S. Robinson (Vice President--General Counsel and Secretary of the
Company) and the law firm, Tannenbaum Dubin & Robinson, LLP, of which Mr.
Robinson is a member. In addition, the table excludes compensation payable to
the executive officers pursuant to the Company's Retirement Plans including the
SERP and SBRP described below.
7
<PAGE>
OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES
There were no grants of options under any of the Company's stock option or
stock appreciation plans to any executive officer during the last fiscal year.
No stock options were exercised by any executive officer in the last fiscal
year, and no unexercised options were held by any executive officer at the end
of the last fiscal year.
EXECUTIVE EMPLOYMENT AGREEMENTS
Jerald Kamiel, Seymour Lichtenstein, and William J. Wilson, all executive
officer-directors of the Company, each entered into Employment Agreements with
the Company in 1986 and Rodney Faver, an employee-director of the Company,
entered into an Employment Agreement with the Company in 1988, which agreements
were amended and restated as of December 4, 1992. The term of the Employment
Agreement with Mr. Wilson expires on September 30, 1997. The term of Mr.
Kamiel's Employment Agreement is extended each April 1 and October 1 for six
months unless either party notifies the other of its or his intention to
terminate the Employment Agreement at the end of the then existing term. As a
result of this provision, the term of Mr. Kamiel's Employment Agreement
presently expires on September 30, 1998. The term of Mr. Lichtenstein's
Employment Agreement expires on September 30, 1997. Mr. Lichtenstein's
Employment Agreement also provides for a five-year consulting term after the
expiration of his full time employment for a consulting fee equal to 66 2/3% of
his last annual compensation as a full time employee. The Employment Agreement
with Mr. Faver was further amended as of October 1, 1995, and the term now
expires on September 30, 1998. The Employment Agreements provide that each
individual shall be compensated at a rate at least equal to his base salary for
fiscal 1993, and provide for a death benefit equal to 150% of his base salary at
the date of his death payable in 12 equal monthly installments. The Employment
Agreements also require the Company to provide each of those individuals with
specified life insurance benefits. In addition to delineating the duties and
responsibilities of the individual, each Employment Agreement provides that if
the Company terminates the individual's employment or, as to Mr. Lichtenstein,
his consulting arrangement, other than for "cause" as defined in his Employment
Agreement or, as to Messrs. Faver and Wilson, his employment term ends and is
not renewed, the individual (a) shall be entitled to receive an amount equal to
three times the individual's base salary at the time of termination payable in
three equal installments over two years and (b) shall continue to receive
certain fringe benefits for a period specified in his Employment Agreement. The
Employment Agreements also provide that each individual has the right to
terminate his employment within six months of a "change in control" of the
Company as such term is defined in his Employment Agreement. If the individual
leaves the employ of the Company following a "change in control", he shall be
entitled to receive a lump sum payment equal to 2.99 times his average annual
taxable income from the Company over the previous five years and also to
continue to receive certain fringe benefits. Pursuant to the Employment
Agreements, if an individual's employment is terminated by the Company, the
Company has the option to invoke certain covenants of non-competition.
COMPENSATION PURSUANT TO RETIREMENT PLANS
Effective September 28, 1981, the Company adopted three defined benefit
pension plans for its employees which provide upon retirement (a) in the case of
certain employees, benefits related to an employee's compensation and years of
service to the Company, and (b) in the case of hourly employees, benefits
related to years of service to the Company. Seymour Lichtenstein, Marvin S.
Robinson, and William J. Wilson are the Trustees of each pension plan. The
maximum pension benefit payable to an employee on the Company's management
payroll including the executive officers based on 30 years of
8
<PAGE>
covered service will equal 45% of the average of his or her 60 highest
consecutive months' compensation during the 120 months before the earlier of his
or her retiring or attaining age 65 less an amount equal to 60% of his or her
primary Social Security benefit.
Contributions under the Company's pension plan are computed on an actuarial
basis. Although the executive officers are participants in a Company pension
plan, the amount of contribution or accrual in respect of a specified person
cannot readily be separately calculated by the actuaries for the plans.
The maximum annual benefits payable pursuant to the Company's pension plans
for employees retiring on and after October 1, 1987, are limited by the Tax
Reform Act of 1986 to $90,000 subject to increase as provided in that Act and
limitations for retirements prior to the Social Security retirement age. (For
1995, the maximum amount was $120,000.) Additional limits imposed by the Revenue
Reconciliation Act of 1993 ("RRA 93") affect the benefits payable pursuant to
the Company's pension plans after September 30, 1994. The Company adopted,
effective April 1, 1989, a Supplemental Executive Retirement Plan ("SERP") for
certain executive employees which restores pension benefits limited by the
legislation referred to in the two previous sentences and any future
legislation. The present participants are Messrs. Faver, Kamiel, Wilson, and S.
Lichtenstein. The Company has elected to purchase annuity contracts to fund its
presently determinable obligations to participants in the SERP and to reimburse
the participants for the current tax recognition resulting from such purchases.
As a result, the restored pension benefit has been calculated on an after-tax
basis. As a result of RRA 93, the Company has adopted, effective January 1,
1995, a Supplemental Benefit Retirement Plan ("SBRP") for all Company employees,
excluding SERP participants, whose benefits are impacted by such legislation.
The SBRP benefits are funded without current tax recognition to the
participants, who include Messrs. Robinson and Sistarenik.
9
<PAGE>
The following table is illustrative of the amount of annual retirement
benefits based upon compensation payable pursuant to the Company's pension plan
on retirement of an employee at age 65:
<TABLE>
<CAPTION>
HIGHEST FIVE-YEAR ANNUAL BENEFIT FOR YEARS OF CREDITED SERVICE
AVERAGE ANNUAL COMPENSATION PRIOR TO REDUCTION FOR SOCIAL SECURITY BENEFIT
------------------------------------------------
<S> <C> <C> <C> <C>
15 20 25 30
---------- ---------- ----------- -----------
$100,000........................... $ 22,500 $ 30,000 $ 37,500 $ 45,000
200,000........................... 45,000 60,000 75,000 90,000
300,000........................... 67,500 90,000 112,500 135,000*
400,000........................... 90,000 120,000 150,000* 180,000*
500,000........................... 112,500* 150,000* 187,500* 225,000*
600,000........................... 135,000* 180,000* 225,000* 270,000*
</TABLE>
* Pursuant to the Tax Reform Act of 1986, the maximum annual benefit
payable pursuant to the Company's pension plan for salaried employees
retiring on and after October 1, 1987, is $90,000 subject to increase
as provided in that Act. (For 1995, the maximum amount was $120,000.)
In addition, that Act provides (a) that the maximum annual benefit
may be increased by benefits accrued prior to October 1, 1987, and
(b) limitations for retirements prior to the Social Security
retirement age. The Company's SERP provides a benefit for certain
executive employees equal to the annual retirement benefit described
in the first paragraph of this section which is in all cases offset
by 60% of a participant's primary Social Security benefit and by the
maximum benefit payable under the applicable pension plan. The
Company's SBRP provides a benefit for other employees restoring
benefits impacted by RRA 93.
The current years of credited service of the individuals set forth in
the table on page 7 are: Jerald Kamiel, 27; Seymour Lichtenstein, 30;
Alexander J. Sistarenik, 23; and William J. Wilson, 23. In addition,
Marvin S. Robinson has 14 years of credited service. The maximum
credited service which may be accrued is 30 years.
STOCK OPTION AND STOCK APPRECIATION PLANS
At the 1989 Annual Meeting of Shareholders, the Company's shareholders
approved the Garan, Incorporated 1989 Stock Option Plan ("1989 Plan") for key
employees of the Company and its subsidiaries. Members of the Board of Directors
who are also employees of the Company or any of its subsidiaries are eligible
for option grants. The 1989 Plan is administered by the Compensation Committee
of the Board of Directors which determines, in its discretion, which key
employees will be granted options, the number of shares subject to an option,
the date after which an option may be exercised, whether or not an option is an
"incentive stock option" within the meaning of Section 422A of the Internal
Revenue Code of 1986, as amended, and other terms and conditions of the options.
The total number of shares of Company Common Stock authorized for grant under
the 1989 Plan is 200,000 (after adjustment for the two-for-one stock split in
December, 1992). No options were granted during the fiscal year ended September
30, 1995.
10
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors reports to the Board of
Directors with respect to compensation of executive officers as follows:
The principal policy of the Compensation Committee in making compensation
recommendations is to relate the financial interests of the executive officers
of Garan, Incorporated ("Company"), including the Company's principal officers,
Jerald Kamiel, Seymour Lichtenstein (the Company's Chief Executive Officer), and
William J. Wilson, to the operating results of the Company and shareholder value
which are considered to reflect performance by the executive officers. In
evaluating operating results we have taken into account various market
conditions impacting on the Company, and in assessing shareholder value we have
taken into account dividends, book value, and market value.
The Compensation Committee has continued the Company's policy of maintaining
annual base compensation somewhat below competitive levels to permit reliance on
bonuses to reflect executive officer performance, although the Compensation
Committee uses total compensation on a year-to-year basis for comparison with
the Company's operating results and shareholder value in the same years. Based
upon the foregoing, the maintenance of Mr. Kamiel's and Mr. Wilson's
compensation in 1995 at 1994 levels reflects on a year-to-year basis the level
of performance underlying the operating results achieved despite the continued
negative impact of market conditions, the continued quarterly and extra cash
dividends, the stability of the market price of the Company's stock, and the
continued increase in book value during 1995. Mr. Lichtenstein's compensation,
at his request, was reduced in 1995.
The Compensation Committee recommends for the Company's principal officers
bonuses and total compensation for fiscal 1995 and a continuation of their base
compensation for fiscal 1996 as follows:
<TABLE>
<CAPTION>
1995 1995 TOTAL 1996 BASE
BONUS COMPENSATION COMPENSATION
---------- ------------- -------------
<S> <C> <C> <C>
Jerald Kamiel.............................. $ 240,000 $ 565,000 $ 325,000
Seymour Lichtenstein....................... 260,000 760,000 500,000
William J. Wilson.......................... 176,000 366,000 190,000
</TABLE>
November 6, 1995
/s/ STEPHEN J. DONOHUE
--------------------------------------
Stephen J. Donohue
/s/ FRANK MARTUCCI
--------------------------------------
Frank Martucci
/s/ MARVIN S. ROBINSON
--------------------------------------
Marvin S. Robinson
11
<PAGE>
COMPENSATION OF DIRECTORS
Stephen J. Donohue, Richard A. Lichtenstein, Frank Martucci, and Perry
Mullen each receives annual compensation of $12,500 plus reimbursement of
related travel expenses for his services as a director. Marvin S. Robinson is
paid for his services as a director at his usual billing rates for legal
services. The directors who are full time employees of the Company (Rodney
Faver, Jerald Kamiel, Seymour Lichtenstein, and William J. Wilson) do not
receive separate compensation for their services as directors. Mr. Mullen was a
consultant to the Company through December 31, 1995, and he did not receive
separate compensation for his services as a director while he was a consultant.
SHAREHOLDER RETURN
Set forth below is a line graph comparing the cumulative total return on the
Company's Common Stock against the cumulative total return of the Dow Jones
Equity Market Index and the Dow Jones Apparel Index for the period commencing
October 1, 1990 and ending September 30, 1995.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN AMONG
GARAN, INCORPORATED COMMON STOCK, THE DOW JONES APPAREL INDEX, AND
THE DOW JONES EQUITY MARKET INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
GARAN, INCORPORATED COMMON STOCK DOW JONES APPAREL INDEX DOW JONES EQUITY MARKET INDEX
<S> <C> <C> <C>
9/30/90 100 100 100
9/30/91 160.9023 95.3321 87.6373
9/30/92 374.2372 150.2386 117.3836
9/30/93 360.1023 110.9341 107.9343
9/30/94 187.2093 209.4527 139.8781
9/30/95 212.6465 237.756 155.7601
</TABLE>
RATIFICATION OF AUDITORS
The Board of Directors, acting upon the recommendation of its Audit
Committee, has again selected, subject to the ratification of shareholders,
Robbins, Greene, Horowitz, Lester & Co., LLP to be the Company's independent
certified public accountants for the fiscal year ending September 30, 1996.
Robbins, Greene, Horowitz, Lester & Co., LLP has audited the Company's
consolidated financial statements for many years, and the Board of Directors
considers that firm well qualified. It is intended that votes pursuant to the
Proxies hereby solicited will be cast to ratify the selection of Robbins,
Greene,
12
<PAGE>
Horowitz, Lester & Co., LLP as the Company's independent certified public
accountants for the fiscal year ending September 30, 1996, unless a Proxy
directs otherwise. No member of the firm of Robbins, Greene, Horowitz, Lester &
Co., LLP will be present and, accordingly, available to answer questions at the
Company's Annual Meeting to be held on March 8, 1996.
OTHER MATTERS
The Board of Directors does not know of any business to be presented at the
Annual Meeting other than that which is specifically referred to in the Proxy
and this Proxy Statement. If any other matters properly come before the meeting,
it is the intention of the Proxy holders to vote in accordance with their best
judgment.
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the 1997 Annual Meeting
must be received by the Company at its executive offices, 350 Fifth Avenue, New
York, New York 10118, for inclusion in the Proxy Statement and form of Proxy
relating to that meeting by September 28, 1996. See "Nominating Committee" for a
discussion of provisions for shareholder nominations to the Board of Directors.
EXPENSE OF SOLICITATION OF PROXIES
The cost of this solicitation of Proxies will be borne by the Company. The
Proxies will be solicited principally through the use of the mails, but officers
and regular employees of the Company may solicit Proxies personally or by
telephone. The Company has engaged D.F. King & Co., Inc. which will provide,
among other services, assistance in the solicitation of proxies for a fee of
approximately $13,000. The Company reimburses banks, brokerage houses, and other
custodians, nominees, and fiduciaries for their reasonable expenses in
forwarding proxy material to their principals.
By Order of the Board of Directors,
MARVIN S. ROBINSON
SECRETARY
New York, New York
January 26, 1996
13
<PAGE>
']
[LOGO], INCORPORATED
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS--MARCH 8, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints SEYMOUR LICHTENSTEIN and MARVIN S. ROBINSON, or either of them, with
power of substitution, as attorneys and proxies to appear and vote all the
shares of stock standing in the name of the undersigned at the Annual Meeting of
Shareholders of GARAN, INCORPORATED to be held at the Hyatt Regency Crystal
City, 2799 Jefferson Davis Highway, Arlington, Virginia, on March 8, 1996, at
2:00 P.M., Eastern Standard Time, and at any and all adjournments thereof, and
the undersigned hereby instructs said attorneys to vote:
1. ELECTION OF DIRECTORS
Nominees: Richard A. Lichtenstein, Seymour Lichtenstein, and Marvin S.
Robinson for a term of three years each.
/ / VOTE FOR the election of all nominees for the terms indicated, except
vote withheld from the following nominee, if any.
---------------------------------------------------------------------------
/ / VOTE WITHHELD from all nominees.
2. RATIFICATION OF SELECTION OF AUDITORS for the fiscal year ending September
30, 1996:
/ / FOR / / AGAINST / / ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon any other
business which may properly come before the meeting.
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)
<PAGE>
THIS PROXY WILL BE VOTED AS DIRECTED WITH RESPECT TO THE PROPOSALS REFERRED
TO IN ITEMS 1 AND 2 ABOVE, BUT IN THE ABSENCE OF SUCH DIRECTION THIS PROXY WILL
BE VOTED FOR THE ELECTION OF ALL NOMINEES FOR DIRECTOR REFERRED TO IN ITEM 1 AND
FOR THE PROPOSAL REFERRED TO IN ITEM 2.
<TABLE>
<S> <C>
The undersigned hereby acknowledges receipt of the
Notice of Annual Meeting and Proxy Statement dated
January 26, 1996.
Dated....................................... ,
1996
.............................................. (L.S.)
SHAREHOLDER(S) SIGNATURE
.............................................. (L.S.)
SHAREHOLDER(S) SIGNATURE
PLEASE DATE AND SIGN EXACTLY AS NAME APPEARS HEREON.
WHEN SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR,
TRUSTEE, OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH.
</TABLE>
