<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
GARAN, INCORPORATED
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
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 (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>
[LOGO]
, INCORPORATED
350 FIFTH AVENUE
NEW YORK, N.Y. 10118
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON FEBRUARY 28, 1997
------------------------
PLEASE TAKE NOTICE that the Annual Meeting of Shareholders of GARAN,
INCORPORATED, a Virginia corporation, will be held on February 28, 1997, 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 Citrin Cooperman & Company, LLP as the
Company's independent certified public accountants for the fiscal year
ending September 30, 1997; 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 21, 1997,
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 27, 1997
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 February 28,
1997. The Company's Annual Report for the year ended September 30, 1996, 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
21, 1997, 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 if the holders of a majority of the shares entitled to vote
are 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 28, 1997.
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. The election of each nominee requires
the affirmative vote of the holders of a plurality of the votes cast in person
or by proxy. 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. Votes that are withheld will
not be included in determining the number of votes cast. 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>
Stephen J. Donohue............ Regional Manager/Executive Vice 2000 52 1993
President, Capital Factors,
Inc.
Jerald Kamiel................. President (Chief Operating 2000 53 1979 1979
Officer) of the Company
William J. Wilson............. Vice President--Finance and 2000 56 1982 1982
Administration of the Company
</TABLE>
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.
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>
Rodney Faver.................. Employee (Vice President-- 1998 58 1986
Manufacturing) of the
Company
Richard A. Lichtenstein....... President, Marathon 1999 43 1989
Communications Incorporated
Seymour Lichtenstein.......... Chairman of the Board (Chief 1999 70 1948 1948
Executive Officer) of the Company
Frank Martucci................ President, Millcross Fund Management, 1998 49 1993
Inc.
Perry Mullen.................. Retired 1998 74 1961
Marvin S. Robinson............ Vice President--General 1999 63 1983 1980
Counsel and Secretary of the
Company; Attorney
</TABLE>
2
<PAGE>
Rodney Faver, 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. 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 50 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
1997 Annual Meeting of Shareholders.
During the year ended September 30, 1996, the Board of Directors met four
times.
On November 6, 1995, and again on November 8, 1996, 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 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 1996 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
1996.
NOMINATING COMMITTEE
On November 8, 1996, the Board appointed a Nominating Committee consisting
of Seymour Lichtenstein and Marvin S. Robinson to select the management nominees
for director. 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
3
<PAGE>
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 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 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.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of January 21, 1997,
concerning the Common Stock of the Company beneficially owned by each nominee
for director, each director continuing in office, each executive officer, 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.................................... 5,000(5) (2)
Perry Mullen...................................... 6,446 (2)
Marvin S. Robinson................................ 5,956 (2)
Alexander J. Sistarenik........................... 3,180 (2)
William J. Wilson................................. 25,560 (2)
All officers and directors as a group (ten
persons)......................................... 799,598 15.8
</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) Includes 5,000 shares owned by Millcross High Yield Fund, LP, which is 50%
beneficially owned by Mr. Martucci.
4
<PAGE>
Except for Seymour Lichtenstein, whose mailing address is 350 Fifth Avenue,
New York, New York 10118, as of January 21, 1997, the Company knows of no
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 624,240(2) 12.3
Quest Advisory Corp.
1414 Avenue of the Americas
New York, New York 10019
David A. Dorsky, Karen A. Dorsky, 487,042(3) 9.6
and Noah P. Dorsky
379 West Broadway
New York, New York 10012
Franklin Resources, Inc. 405,600(4) 8.0
777 Mariners Island Boulevard
San Mateo, California 94404
Dimensional Fund Advisors, Inc. 308,800(4) 6.1
1299 Ocean Avenue
Santa Monica, California 90401
</TABLE>
- ------------
(1) The information in the table excludes Cede & Company, holder of record on
January 21, 1997, in its capacity as nominee for the Depository Trust
Company, of 3,581,697 shares, which constitute 70.6% of the outstanding
Common Stock of the Company.
(2) As described in filings 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 10,900 shares of Company stock,
and (ii) the principal shareholder of Quest Advisory Corp., a New York
corporation which owns 613,340 shares of Company stock, and (b) Mr. Royce
has disclaimed beneficial ownership of the shares held by those entities.
(3) David A. Dorsky and Noah P. Dorsky own beneficially 31,530 and 83,290
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.
(4) The Company has no information regarding the nature of the ownership of
these shares.
5
<PAGE>
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................ 1996 $ 500,000 $ 310,000 $ 45,000
Chairman 1995 500,000 260,000 45,000
1994 500,000 390,000 45,000
Jerald Kamiel....................... 1996 325,000 340,000 16,930
President 1995 325,000 240,000 16,930
1994 325,000 240,000 16,930
William J. Wilson................... 1996 190,000 220,000 10,490
Vice President-- 1995 190,000 176,000 10,384
Finance and Administration 1994 190,000 176,000 10,230
Alexander J. Sistarenik............. 1996 150,000 60,000
Treasurer 1995 150,000 48,000
1994 145,000 48,000
</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 $306,834, $366,366 and
$303,074 in salary and fees paid in fiscal 1996, 1995, and 1994, 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.
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
6
<PAGE>
1988, which agreements were last amended and restated as of October 1, 1996. The
term of the Employment Agreements with Messrs. Lichtenstein and Wilson expire on
September 30, 2000. The term of Mr. Faver's Employment Agreement expires on
September 30, 1998. The term of Mr. Kamiel's Employment Agreement expires on
September 30, 1999 and will be 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. Mr.
Lichtenstein's Employment Agreement 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
Agreements provide that each individual shall be compensated at a rate at least
equal to his base salary for fiscal 1997, and provide for a death benefit equal
to 150% of his annual compensation at the date of his death. 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, as to Messrs. Faver and Wilson, his employment term ends and is not
renewed, or, as to Mr. Kamiel, his employment term is not extended, (a) the
individual shall be entitled to receive a multiple of the individual's annual
compensation at the time of termination, (b) the individual shall continue to
receive certain fringe benefits for a period specified in his Employment
Agreement, and (c) Mr. Kamiel can terminate his employment. 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, or, as to Mr. Kamiel, he is not
made chief executive officer of the Company within six months after a vacancy
occurs, and receive a lump sum payment equal to 2.99 times his average annual
compensation from the Company over the previous five years. 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 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 other than Seymour Lichtenstein (who,
under applicable law, received his pension benefit in September, 1996) 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.
7
<PAGE>
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
1996, 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 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 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.
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 1996, 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
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 6 are: Jerald Kamiel, 28; Alexander J. Sistarenik,
24; and William J. Wilson, 24. In addition, Marvin S. Robinson has 15
years of credited service. The maximum credited service which may be
accrued is 30 years.
8
<PAGE>
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, 1996. On November 8, 1996, options to purchase Common Stock for an exercise
price of $17 per share were granted to the following director and executive
officers: Rodney Faver--15,000, Jerald Kamiel--40,000, Alexander J.
Sistarenik--12,500, and William J. Wilson--20,000. The options are first
exercisable on November 7, 1997, and exercise is subject to satisfaction of
certain specified conditions.
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 Committee recommends an increase in the total
compensation of Messrs. Kamiel, Lichtenstein, and Wilson in 1996 over their 1995
levels to reflect on a year-to-year basis the level of performance underlying
the improvement in 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 1996. In addition, for the same reasons, the
Compensation Committee recommends an increase in the base compensation of the
three officers.
9
<PAGE>
The Compensation Committee recommends for the Company's principal officers
bonuses and total compensation for fiscal 1996 and base compensation for fiscal
1997 as follows:
<TABLE>
<CAPTION>
1996 1996 TOTAL 1997 BASE
BONUS COMPENSATION COMPENSATION
---------- ------------- -------------
<S> <C> <C> <C>
Jerald Kamiel.................................. $ 340,000 $ 665,000 $ 345,000
Seymour Lichtenstein........................... 310,000 810,000 530,000
William J. Wilson.............................. 220,000 410,000 205,000
</TABLE>
November 8, 1996
/s/ STEPHEN J. DONOHUE
--------------------------------------
Stephen J. Donohue
/s/ FRANK MARTUCCI
--------------------------------------
Frank Martucci
/s/ MARVIN S. ROBINSON
--------------------------------------
Marvin S. Robinson
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 on the next page 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 September 30, 1991 and ending September 30, 1996.
10
<PAGE>
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>
9/30/91 100 100 100
9/30/92 215.77188 114.36804 111.72649
9/30/93 223.77813 83.23828 127.35784
9/30/94 116.30938 99.702285 131.04058
9/29/95 132.12813 117.23161 170.65988
9/30/96 137.05938 187.09303 206.7708
</TABLE>
RATIFICATION OF AUDITORS
The Board of Directors, acting upon the recommendation of its Audit
Committee, has selected, subject to the ratification of shareholders, Citrin
Cooperman & Company, LLP to be the Company's independent certified public
accountants for the fiscal year ending September 30, 1997. Robbins, Greene,
Horowitz, Lester & Co., LLP which audited the Company's consolidated financial
statements for many years merged with Citrin Cooperman & Company, LLP on January
1, 1997 and the Board of Directors considers Citrin Cooperman & Company, LLP
well qualified. The selection of Citrin Cooperman & Company, LLP will be
ratified if a majority of the votes cast are voted in favor of ratification.
Abstentions will not be treated as votes cast. It is intended that votes
pursuant to the Proxies hereby solicited will be cast to ratify the selection of
Citrin Cooperman & Company, LLP as the Company's independent certified public
accountants for the fiscal year ending September 30, 1997, unless a Proxy
directs otherwise. No member of the firm of Citrin Cooperman & Company, LLP will
be present and, accordingly, available to answer questions at the Company's
Annual Meeting to be held on February 28, 1997.
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.
11
<PAGE>
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the 1998 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 30, 1997. 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 27, 1997
12
<PAGE>
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
- --------------------------------------------------------------------------------
GARAN, INCORPORATED
- --------------------------------------------------------------------------------
RECORD DATE SHARES:
Please be sure to sign and date this Proxy. Date
- --------------------------------------------------------------------------------
- --------Shareholder sign here-----------------------Co-owner sign here----------
1. Election of Directors. For Withhold For All
Nominees (for a term of three years each): All From All Except
Stephen J. Donohue [ ] [ ] [ ]
Jerald Kamiel [ ] [ ] [ ]
William J. Wilson [ ] [ ] [ ]
Instruction: To withhold authority to vote for any nominee, mark the "For
All Except" box and draw a line through the nominee's name in the list
provided above.
For Against Abstain
2. Ratification of selection of auditors for
the fiscal year ending September 30, 1997. [ ] [ ] [ ]
3. In their discretion, the Proxies are authorized to vote upon any other
business which may properly come before the meeting.
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.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting
and Proxy Statement dated January 27, 1997.
Mark box at right if an address change or comment has been [ ]
noted on the reverse side of this card.
GARAN, INCORPORATED
Dear Shareholder,
Your vote counts, and you are strongly encouraged to exercise your right to vote
your shares.
If you will not be attending the Annual Meeting of Shareholders on February
28, 1997, but would like to vote your shares, please mark the boxes on this
proxy card to indicate how you would like your shares to be voted. Then,
sign the card, detach it and return your proxy vote in the enclosed postage
paid envelope. Your proxy card must be received prior to February 28, 1997 in
order to be voted.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
Garan, Incorporated
<PAGE>
GARAN, INCORPORATED
Proxy for Annual Meeting of Shareholders
February 28, 1997
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 to 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 February 28, 1997
at 2:00 p.m., Eastern Standard Time, and at any and all adjournments thereof,
as specified on the reverse.
--------------------------------------------------------------------
PLEASE VOTE, DATE, AND SIGN ON REVERSE, AND RETURN PROMPTLY
USING THE ENCLOSED ENVELOPE
--------------------------------------------------------------------
Please date and sign exactly as name appears hereon.
When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such.
- --------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
___________________________________ ___________________________________
___________________________________ ___________________________________
___________________________________ ___________________________________
