<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
<TABLE>
<S> <C>
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 Section 240.14a-11(c) or
Section 240.14a-12
</TABLE>
<TABLE>
<C> <S>
GARAN INCORPORATED
- ------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- ------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
</TABLE>
Payment of Filing Fee (Check the appropriate box):
<TABLE>
<S> <C> <C>
/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:
----------------------------------------------------------
</TABLE>
<PAGE>
[LOGO]
[LOGO]
, INCORPORATED
350 FIFTH AVENUE
NEW YORK, N.Y. 10118
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MARCH 3, 2000
------------------------
PLEASE TAKE NOTICE that the Annual Meeting of Shareholders of GARAN,
INCORPORATED, a Virginia corporation, will be held on March 3, 2000, 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, 2000; 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 20, 2000,
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, 2000
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]
[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 3, 2000.
The Company's Annual Report for the fiscal year ended September 30, 1999, 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 20, 2000, are entitled to vote at the meeting. On that date there were
5,320,337 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, 2000.
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 2003 55 1993
President, Capital Factors,
Inc.
Jerald Kamiel.............. President (Chief Operating 2003 56 1979 1979
Officer) of the Company
William J. Wilson.......... Vice President--Finance and 2003 59 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-- 2001 61 1986
Manufacturing) of the
Company
Richard A. Lichtenstein.... President, Marathon 2002 46 1989
Communications Incorporated
Seymour Lichtenstein....... Chairman of the Board (Chief 2002 73 1948 1948
Executive Officer) of the
Company
Frank Martucci............. President, Millcross Fund 2001 52 1993
Management, Inc.
Perry Mullen............... Retired 2001 77 1961
Marvin S. Robinson......... Vice President--General 2002 66 1983 1980
Counsel and Secretary of the
Company; Attorney
</TABLE>
Rodney Faver, Seymour Lichtenstein, and Marvin S. Robinson have occupied
positions with the Company for more than the past five fiscal years.
Mr. Robinson also has been a practicing attorney for more than the past five
fiscal years as a member of Tannenbaum Dubin & Robinson, LLP, the law firm 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.
Mr. Robinson is also the Secretary of Industri-Matematik International Corp., a
NASDAQ listed computer software company which is not engaged in business with
the Company. Richard A. Lichtenstein, the son of Seymour Lichtenstein, has been
the President and sole shareholder of Marathon Communications Incorporated, a
political consulting firm, for
2
<PAGE>
more than the past five fiscal years. Frank Martucci has been the President of
Millcross Fund Management, Inc., a private investment company, for more than the
past five fiscal years. Perry Mullen occupied a position with the company until
his retirement in 1989, and 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 53 years old and has occupied
a position with the Company for more than the past five fiscal years.
It is anticipated that all executive officers will be re-elected after the
2000 Annual Meeting of Shareholders.
During the fiscal year ended September 30, 1999, the Board of Directors met
four times.
On November 9, 1998, and again on November 12, 1999, the Board re-appointed
an Audit Committee and a Compensation Committee each consisting of Messrs.
Donohue, Martucci, and 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 selects and/or designates individuals to participate
in the Company's stock option plans and restricted stock 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 1999 fiscal year.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. 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
1999.
NOMINATING COMMITTEE
On November 12, 1999, the Board appointed a Nominating Committee consisting
of Messrs. S. Lichtenstein and 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 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
3
<PAGE>
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 20, 2000,
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................................................ 62,412(2) 1.2
Jerald Kamiel............................................... 160,175(3) 3.0
Richard A. Lichtenstein..................................... 34,022(4) *
Seymour Lichtenstein........................................ 722,650(5) 13.6
Frank Martucci..............................................
Perry Mullen................................................ 7,446 *
Marvin S. Robinson.......................................... 5,956 *
Alexander J. Sistarenik..................................... 15,680(6) *
William J. Wilson........................................... 72,425(7) 1.4
All officers and directors as a group (ten persons)......... 1,080,766 20.1
</TABLE>
- ------------
* Less than 1%
(1) Beneficial ownership is based upon 5,320,337 shares of Common Stock
outstanding at January 20, 2000. In computing the number of shares
beneficially owned and the percentage beneficially owned by a person and by
all executive officers and directors as a group, shares of Common Stock
which may be acquired presently or within 60 days after January 20, 2000, by
exercise of options are included.
(2) Includes 22,690 shares awarded pursuant to the Restricted Stock Plan (see
footnote 1, page 6).
(3) Includes 20,000 shares subject to options exercisable currently and 44,775
shares awarded pursuant to the Restricted Stock Plan (see footnote 1,
page 6).
(4) Includes 2,596 shares owned by Richard A. Lichtenstein's wife and
1,160 shares held by Mr. Lichtenstein as custodian for his children.
(5) Includes 65,670 shares awarded pursuant to the Restricted Stock Plan (see
footnote 1, page 6), 19,200 shares owned by The Lichtenstein Foundation,
Inc., a charitable foundation of which Seymour Lichtenstein is president and
a director, 100 shares owned by Mr. Lichtenstein's wife as custodian for
their son, 4,012 shares owned by Mr. Lichtenstein's wife, and 12,500 shares
subject to options exercisable currently by Mr. Lichtenstein's wife.
(6) Includes 10,380 shares subject to options exercisable currently.
(7) Includes 17,000 shares subject to options exercisable currently and 26,865
shares awarded pursuant to the Restricted Stock Plan (see footnote 1,
page 6).
4
<PAGE>
Except for Seymour Lichtenstein, whose mailing address is 350 Fifth Avenue,
New York, New York 10118, as of January 20, 2000, 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>
DePrince, Race & Zollo Inc. 472,100(2) 8.9
201 South Orange Avenue
Orlando, Florida 32801
David A. Dorsky, Karen A. Dorsky, 378,747(3) 7.1
and Noah P. Dorsky
379 West Broadway
New York, New York 10012
Lord, Abbett & Company 372,264(2) 7.0
767 Fifth Avenue
New York, New York 10153
Royce & Associates, Inc. 357,200(2) 6.7
1414 Avenue of the Americas
New York, New York 10019
Franklin Resources, Inc. 355,000(2) 6.7
777 Mariners Island Boulevard
San Mateo, California 94404
Dimensional Fund Advisors, Inc. 315,142(2) 5.9
1299 Ocean Avenue
Santa Monica, California 90401
Private Capital Management, Inc. 278,200(2) 5.2
3003 Tamiami Trail North
Naples, Florida 34103
</TABLE>
- ------------
(1) The information in the table excludes Cede & Company, holder of record on
January 20, 2000, in its capacity as nominee for the Depository Trust
Company, of 3,710,884 shares, which constitute 69.7% of the outstanding
Common Stock.
(2) As described in filings with the Securities and Exchange Commission and
supplemented by other information available to the Company, these registered
owners are registered investment advisors which hold such shares for the
benefit of registered investment companies and other institutional accounts.
(3) David A. Dorsky, Noah P. Dorsky, and Karen A. Dorsky own beneficially
52,318, 71,790, and 20,788 shares, respectively, as to which each has sole
dispositive power. As Trustees of certain trusts David A. Dorsky and
Noah P. Dorsky share dispositive power over an additional 90,000 shares, and
with Karen A. Dorsky as Trustees of certain other trusts and as directors of
the Dorsky Foundation they share dispositive power over an additional
143,851 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>
LONG-TERM COMPENSATION
AWARDS
--------------------------
RESTRICTED SECURITIES
NAME AND ANNUAL COMPENSATION STOCK AWARDS UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR BASE SALARY ($) BONUS ($) ($)(1) OPTIONS (#) COMPENSATION ($)(2)
------------------ ---- --------------- --------- ------------ ----------- -------------------
<S> <C> <C> <C> <C> <C> <C>
Seymour Lichtenstein(3).............. 1999 550,000 820,000 1,756,672 45,000
Chairman 1998 530,000 670,000 45,000
1997 530,000 445,000 45,000
Jerald Kamiel........................ 1999 375,000 755,000 1,197,731 40,000 8,930
President 1998 345,000 605,000 8,930
1997 345,000 455,000 16,930
William J. Wilson.................... 1999 225,000 415,000 718,639 20,000 19,854
Vice President-- 1998 205,000 350,000 10,717
Finance and Administration 1997 205,000 270,000 10,615
Marvin S. Robinson(4)................ 1999 200,000
Vice President-- 1998 200,000
General Counsel and Secretary 1997 200,000
Alexander J. Sistarenik.............. 1999 170,000 110,000 12,500
Treasurer 1998 160,000 100,000
1997 160,000 80,000
</TABLE>
- ------------
(1) During fiscal 1999, with the consent of the participants (Messrs. S.
Lichtenstein, Kamiel, Wilson, and Rodney Faver, an employee and director of
the Company), the Company terminated its Supplemental Executive Retirement
Plan ("SERP")(see page 8) effective January 1, 1999, and on May 7, 1999,
adopted a Restricted Stock Plan. In lieu of the SERP benefits given up, at
the recommendation of the Compensation Committee the Company awarded
65,670 shares, 44,775 shares, 26,865 shares, and 22,690 shares to
Messrs. S. Lichtenstein, Kamiel, Wilson, and Faver, respectively, pursuant
to the Restricted Stock Plan. The market value on the date of the award is
shown in the foregoing table. The restricted shares vest at the rate of 20%
per year as long as the recipient is employed by the Company, provided that
in the event a participant's employment with the Company is terminated by
the Company for cause prior to May 7, 2004, all of such shares shall be
forfeited. The vesting will be accelerated on the death or disability of the
participant or in the event of a change of control of the Company. The
participants are entitled to vote and receive dividends on the restricted
shares, and as of September 30, 1999, the value of the restricted shares
held by Messrs. S. Lichtenstein, Kamiel, Wilson, and Faver was $2,142,483,
$1,460,748, $876,470, and $740,261 respectively.
(2) 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 table excludes compensation payable to the executive
officers pursuant to the Company's Retirement Plans including the SERP and
SBRP described below.
6
<PAGE>
(3) During fiscal 1999, 1998 and 1997, Mr. Lichtenstein's wife received
$320,000, $290,000 and $270,000, respectively, in compensation from the
Company. Mrs. Lichtenstein has been employed by the Company for the past 29
years and is currently its Vice President--Design. During fiscal 1997,
Mrs. Lichtenstein also received 12,500 stock options from the Company, all
of which are exercisable currently.
(4) The salary paid to Mr. Robinson represents part of the fees payable to the
law firm, Tannenbaum Dubin & Robinson, LLP, of which Mr. Robinson is a
member. The aggregate fees paid to such firm, including Mr. Robinson's
salary, were $320,985, $310,457, and $288,999 with respect to fiscal 1999,
1998, and 1997, respectively.
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS AT
OF FISCAL YEAR END (#) FISCAL YEAR END ($)(1)
--------------------------- ---------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Jerald Kamiel............................... 20,000 0 312,500 0
Alexander J. Sistarenik..................... 10,880 0 170,000 0
William J. Wilson........................... 20,000 0 312,500 0
</TABLE>
(1) Market value of the underlying securities at fiscal year-end, minus the
exercise price.
No stock options were granted to any executive officer during fiscal 1999.
EXECUTIVE EMPLOYMENT AGREEMENTS
Jerald Kamiel, Seymour Lichtenstein, and William J. Wilson, all executive
officer-directors of the Company, and Rodney Faver, an employee-director of the
Company, are parties to Employment Agreements with the Company, which agreements
were last amended and restated as of October 1, 1996. Mr. Faver's Employment
Agreement was amended further as of October 1, 1998. The term of the Employment
Agreements with Messrs. Faver, Lichtenstein, and Wilson expire on September 30,
2000. The term of Mr. Kamiel's Employment Agreement expires on September 30,
2002, 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 total 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 total 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 and, as to
Mr. Lichtenstein, his consulting arrangement, other than for "cause" as defined
in his Employment Agreement, as to Messrs. Faver and Wilson, if his employment
term ends and is not renewed, and, as to Mr. Kamiel, if his employment term is
not extended, (a) the individual shall be entitled to receive a multiple of the
individual's annual total 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"
7
<PAGE>
of the Company, as such term is defined in his Employment Agreement, and, as to
Mr. Kamiel, if 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 total 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 (subject to limitations
set forth in the Internal Revenue Code of 1986, as amended) 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 the maximum
retirement age less an amount equal to 60% of his or her primary Social Security
benefit.
Contributions under the Company's pension plans 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.
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
1999, the maximum amount was $130,000.) 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 restored pension benefits limited by the
legislation referred to in the two previous sentences and any future
legislation. The Company terminated the SERP effective January 1, 1999, and
replaced it with the Garan, Incorporated 1999 Restricted Stock Plan (see
footnote 1, page 6). The participants in the SERP were Messrs. Faver, Kamiel, S.
Lichtenstein, and Wilson, all of whom were granted restricted stock awards under
the new plan. The Company elected to purchase annuity contracts to fund
substantially all of its 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 was 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 the former 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.
8
<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 1999, the maximum amount was $130,000.)
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 provided 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, 30; Marvin S. Robinson, 18;
Alexander J. Sistarenik, 27; and William J. Wilson, 27. The maximum
credited service which may be accrued is 30 years.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's executive officers, directors, and persons who beneficially own
more than 10% of a registered class of the Company's equity securities to file
with the Securities and Exchange Commission initial reports of ownership and
reports of changes in ownership of Common Stock and other equity securities of
the Company. Such executive officers, directors, and greater than 10% beneficial
owners are required by Securities and Exchange Commission regulations to furnish
the Company with copies of all Section 16(a) forms filed by such reporting
persons. Based solely on the Company's review of such forms furnished to the
Company and representations from certain reporting persons, other than Perry
Mullen, who did not file until November, 1999, a Form 5 reporting transactions
in Company Stock in the month of September, 1999, the Company believes that
there was compliance with all filing requirements applicable to the Company's
executive officers, directors, and greater than 10% beneficial owners.
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, that might incorporate future filings,
including this Proxy Statement, in whole or in part, the following report and
the Performance Graph should not be incorporated by reference into any such
filings, nor shall they be deemed to be soliciting material or deemed filed with
the Securities and Exchange Commission under the Securities Act of 1933, as
amended, or under the Securities Act of 1934, as amended.
9
<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 has been and 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 the performance
by the executive officers. In evaluating operating results, the Committee takes
into account conditions impacting on the Company's operations and growth, and in
assessing shareholder value, the Committee primarily takes into account
dividends and book value as well as market value.
The Compensation Committee has continued the Company's policy of maintaining
annual base compensation at what the Committee believes are somewhat below
competitive levels to permit reliance on bonuses to reflect officer performance,
although the Compensation Committee uses total cash compensation (base
compensation plus bonus) 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 cash
compensation of Messrs. Kamiel, Lichtenstein, and Wilson in 1999, over their
1998 levels to reflect on a year-to-year basis the level of performance
underlying the improvement in operating results achieved, the continued
quarterly and extra cash dividends and increase in book value during 1999, and
the market price of the Company's Common Stock.
The Compensation Committee recommends to the Board of Directors that the
Company's principal officers receive bonuses and total cash compensation for
fiscal 1999 and base compensation for fiscal 2000 as follows:
<TABLE>
<CAPTION>
1999 1999 TOTAL CASH 2000 BASE
BONUS COMPENSATION COMPENSATION
-------- --------------- ------------
<S> <C> <C> <C>
Jerald Kamiel........................... $755,000 $1,130,000 $375,000
Seymour Lichtenstein.................... 820,000 1,370,000 550,000
William J. Wilson....................... 415,000 640,000 225,000
</TABLE>
The Company, with the agreement of the executives affected, terminated its
SERP (Supplemental Executive Retirement Plan) effective January 1, 1999, and
adopted on May 7, 1999, a Restricted Stock Plan. The Compensation Committee
recommended to the Board of Directors that in lieu of the SERP benefit given up,
the Company grant awards of restricted stock to the affected executives as
follows: Jerald Kamiel, 44,775 shares, Seymour Lichtenstein, 65,670 shares, and
William J. Wilson, 26,865 shares.
November 12, 1999
/s/ STEPHEN J. DONOHUE
----------------------------------------
Stephen J. Donohue
/s/ FRANK MARTUCCI
----------------------------------------
Frank Martucci
/s/ MARVIN S. ROBINSON
----------------------------------------
Marvin S. Robinson
10
<PAGE>
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 S&P Textiles
(Apparel Manufacturers) Index and the AMEX Market Value Index for the period
commencing September 30, 1994, and ending September 30, 1999.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN AMONG
GARAN, INCORPORATED COMMON STOCK, THE S&P TEXTILES (APPAREL MANUFACTURERS)
INDEX, AND
THE AMEX MARKET VALUE INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Garan, Incorporated S&P Textiles AMEX Market
Common Stock (Apparel Manufactured) Index Value Index
9/30/94 100.00 100.00 100.00
9/30/95 114.00 97.00 137.00
9/30/96 118.00 131.00 161.00
9/30/97 174.00 172.00 222.00
9/30/98 217.00 117.00 221.00
9/30/99 268 94 358
</TABLE>
COMPENSATION OF DIRECTORS
Stephen J. Donohue, Richard A. Lichtenstein, 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. In lieu of compensation
to Frank Martucci, the Company makes donations to charities suggested by him.
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.
11
<PAGE>
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, 2000. Robbins, Greene,
Horowitz, Lester & Co., LLP, which had audited the Company's consolidated
financial statements for many years prior to January 1, 1997, merged with Citrin
Cooperman & Company, LLP on that date. Citrin Cooperman & Company, LLP has
audited the Company's consolidated financial statements since January 1, 1997,
and the Board of Directors considers them 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, 2000, 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 on March 3, 2000.
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 2001 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, 2000. 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, 2000
12
<PAGE>
GARAN, INCORPORATED
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
MARCH 3, 2000
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 March 3, 2000 at
2:00 p.m., Eastern Standard Time, and at any and all adjournments thereof, as
specified on the reverse.
___________________________________________________
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD
PROMPTLY IN THE ENCLOSED ENVELOPE.
___________________________________________________
_________________________________________________________________________
Please date and sign exactly as name(s) appear(s) 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?
_________________________________ _______________________________
_________________________________ _______________________________
_________________________________ _______________________________
<PAGE>
/X/ PLEASE MARK VOTES
AS IN THIS EXAMPLE
- -------------------------------------------
GARAN, INCORPORATED
- -------------------------------------------
Mark box at right if an address change or comment has been noted on the reverse
side of this card. / /
CONTROL NUMBER:
RECORD DATE SHARES:
Please be sure to sign and date this Proxy. Date
- --------------------------------------------------------------------------------
- ------------Shareholder sign here------------------Co-owner sign here-----------
DETACH CARD
1. Election of Directors With-
Nominees (for a term of three years each): hold
For All From For All
Nominees All Except
(01) Stephen J. Donohue / / / / / /
(02) Jerald Kamiel / / / / / /
(03) William J. Wilson / / / / / /
Instruction: To withhold authority to vote for any nominee, mark the "For
All Except" box and strike a line through the name(s) of the nominee(s).
Your shares will be voted for the remaining nominee(s).
For Against Abstain
2. Ratification of selection of auditors for the / / / / / /
fiscal year ending September 30, 2000
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, 2000.
DETACH CARD
