<PAGE>
SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
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 [_]
[_]CONFIDENTIAL, FOR USE OF THE
Check the appropriate box: COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[_]Preliminary Proxy Statement
[X]Definitive Proxy Statement
[_]Definitive Additional Materials
[_]Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
JACLYN, INC.
-----------------------------------------------------
(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)(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 ActRule 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>
JACLYN, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To The Stockholders Of
JACLYN, INC.
PLEASE TAKE NOTICE that the Annual Meeting of Stockholders of JACLYN, INC.
(the "Company") will be held at the offices of the Company, 635 59th Street,
West New York, New Jersey 07093, on Wednesday, December 3, 1997, at 9:30
o'clock a.m., prevailing local time, for the following purposes:
1. To elect seven directors to serve until the next annual meeting of
stockholders and until their respective successors are duly elected and
qualified;
2. To ratify the appointment of Deloitte & Touche LLP, independent
auditors, to serve as the auditors of the Company for the fiscal year
ending June 30, 1998; and
3. To transact such other business as may be properly brought before the
Annual Meeting and any adjournments thereof.
Only stockholders of record at the close of business on October 23, 1997 are
entitled to notice of and to vote at the Annual Meeting and at any adjournment
thereof.
Your attention is called to the Proxy Statement on the following pages. We
hope that you will attend the Annual Meeting. If you do not plan to attend,
please complete, sign, date and mail the enclosed proxy in the envelope
provided, which requires no postage if mailed in the United States.
By Order of the Board of Directors
Jaclyn Hartstein
Secretary
October 31, 1997
THE BOARD OF DIRECTORS REQUESTS ALL STOCKHOLDERS TO COMPLETE, DATE, SIGN AND
MAIL PROMPTLY THE ENCLOSED PROXY IN THE POSTAGE PREPAID ENVELOPE PROVIDED.
<PAGE>
JACLYN, INC.
635 59TH STREET
WEST NEW YORK, NEW JERSEY 07093
----------------
PROXY STATEMENT
----------------
This Proxy Statement is being furnished to stockholders on or about October
31, 1997 in connection with the solicitation by the Board of Directors of
Jaclyn, Inc. (the "Company") of proxies in the enclosed form for use at the
Annual Meeting of Stockholders to be held on December 3, 1997 and at any
adjournments thereof (the "Annual Meeting"). Any proxy given pursuant to such
solicitation and received in time for the Annual Meeting will be voted with
respect to all shares represented by it in accordance with the instructions,
if any, given in such proxy. Any proxy may be revoked by the person giving the
proxy by written notice received by the Secretary of the Company at any time
prior to its use or by voting in person at the Annual Meeting.
Only stockholders of record at the close of business on October 23, 1997
will be entitled to notice of and to vote at the Annual Meeting. On October
23, 1997, there were outstanding 2,691,405 shares of the Company's Common
Stock, $1 par value per share ("Common Stock"). Each share of Common Stock
entitles the record holder thereof to one vote. The holders of a majority of
the outstanding shares of Common Stock, represented in person or by proxy,
will constitute a quorum for the transaction of business.
The affirmative vote of a plurality of votes cast at the Annual Meeting is
required to elect directors. The affirmative vote of a majority of shares of
Common Stock present, in person or by proxy, and entitled to vote at the
Annual Meeting will be required to ratify the appointment of Deloitte & Touche
LLP as the Company's independent auditors for the fiscal year ending June 30,
1998.
SECURITY OWNERSHIP BY CERTAIN BENEFICIAL OWNERS
The following table sets forth information at October 23, 1997 with respect
to each person (including any "group" as that term is used in Section 13(d)(3)
of the Securities Exchange Act of 1934, as amended) who is known to the
Company to be the beneficial owner of more than 5% of the Company's Common
Stock, its only class of voting securities:
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
NAME AND ADDRESS BENEFICIAL PERCENT OF
OF BENEFICIAL OWNER OWNERSHIP* CLASS
------------------- -------------------- ----------
<S> <C> <C>
Allan Ginsburg............................. 217,347 (1)(2)(3)(4) 8.0%
635 59th Street
West New York, New Jersey 07093
Robert Chestnov............................ 193,742 (1)(2)(3)(5) 7.1%
635 59th Street
West New York, New Jersey 07093
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
NAME AND ADDRESS BENEFICIAL PERCENT OF
OF BENEFICIAL OWNER OWNERSHIP* CLASS
------------------- -------------------- ----------
<S> <C> <C>
Howard Ginsburg........................... 186,908 (1)(2)(3)(6) 6.8%
635 59th Street
West New York, New Jersey 07093
Bonnie Sue Levy........................... 221,002 (1)(7) 8.2%
635 59th Street
West New York, New Jersey 07093
Jaclyn, Inc. Employee Stock............... 172,703 6.4%
Ownership Plan
c/o Jaclyn, Inc.
635 59th Street
West New York, New Jersey 07093
Dimensional Fund Advisors................. 174,397 (8) 6.5%
1299 Ocean Avenue
Santa Monica, California 90401
</TABLE>
- --------
* Except as otherwise indicated below, each person listed above has sole
voting and investment power with respect to the shares indicated as
beneficially owned by such person.
(1) Such stockholder is a party, along with certain of his or her family
members, trusts and custodianships for the benefit of such stockholder and
his or her family members, and the Company, to a stockholders agreement,
described below under the caption "Stockholders Agreement," which provides,
among other things, that a committee of four of the signatory stockholders
may direct the vote of the shares as to which such stockholder may have or
share voting power. At October 23, 1997, 1,027,039 shares of Common Stock
(38.2%) were subject to such stockholders agreement.
(2) Includes 22,654 shares of Common Stock owned by the Jaclyn, Inc.
Employees' Pension Trust, of which Messrs. Abe Ginsburg, Allan Ginsburg,
Robert Chestnov and Howard Ginsburg are co-trustees, with respect to which
each shares voting and investment power and with respect to which each
disclaims beneficial ownership. See the table below under the caption
"SECURITY OWNERSHIP OF MANAGEMENT" for certain information with respect to
the beneficial ownership by Abe Ginsburg of Common Stock of the Company.
(3) Except as described in footnotes (4), (5) and (6) to this table with
respect to Messrs. Allan Ginsburg, Robert Chestnov and Howard Ginsburg,
respectively, excludes 154,461 shares of Common Stock owned by the Jaclyn,
Inc. Employee Stock Ownership Plan ("ESOP"), with respect to which Messrs.
Abe Ginsburg, Allan Ginsburg, Robert Chestnov and Howard Ginsburg, as co-
trustees, share investment power. If the 154,461 shares of Common Stock
owned by the ESOP were included in the beneficial ownership of such
individuals, Abe Ginsburg would be deemed to own 9.2% of the Company's
Common Stock; Allan Ginsburg, 13.6%; Robert Chestnov, 12.7%; and Howard
Ginsburg, 12.5%. Each disclaims beneficial ownership of such shares.
(4) Includes 39,692 shares of Common Stock which Allan Ginsburg has the right
to acquire pursuant to presently exercisable stock options. Also includes
21,984 shares of Common Stock held of record by Mr. Ginsburg as custodian
for his children, 10,769 shares owned by Mr. Ginsburg's wife and 10,609
shares owned by a charitable foundation of which Mr. Ginsburg serves as an
officer and trustee, with respect to which Mr. Ginsburg shares voting and
investment power. Mr. Ginsburg disclaims beneficial ownership of all of
such shares. In addition, includes 9,485 shares allocated to Mr.
Ginsburg's account under the ESOP.
2
<PAGE>
(5) Includes 41,161 shares of Common Stock which Robert Chestnov has the right
to acquire pursuant to presently exercisable stock options. Also includes
30,800 shares held of record by Mr. Chestnov as trustee of two trusts with
respect to which he shares voting power and has sole investment power,
27,423 shares held of record by Mr. Chestnov as co-trustee of a trust with
respect to which he shares voting and investment power and 3,500 shares
owned by a charitable foundation of which Mr. Chestnov serves as an
officer and director, with respect to which Mr. Chestnov shares voting and
investment power. Mr. Chestnov disclaims beneficial ownership of the
shares he holds as trustee, co-trustee and as officer and director of the
charitable foundation. In addition, includes 372 shares of Common Stock
owned by Mr. Chestnov's wife and 6,906 shares held of record by her as
custodian for their children, with respect to which shares Mr. Chestnov
disclaims beneficial ownership, and 9,485 shares allocated to Mr.
Chestnov's account under the ESOP.
(6) Includes 39,692 shares of Common Stock which Howard Ginsburg has the right
to acquire pursuant to presently exercisable stock options. Also includes
55,114 shares of Common Stock held of record by Mr. Howard Ginsburg as
custodian for his children and 1,800 shares owned by his wife, with
respect to all of which shares Mr. Ginsburg disclaims beneficial
ownership. In addition, includes 9,485 shares allocated to Mr. Ginsburg's
account under the ESOP.
(7) Includes 12,500 shares of Common Stock which Mrs. Levy has the right to
acquire pursuant to presently exercisable stock options and 4,698 shares
allocated to Mrs. Levy's account under the ESOP.
(8) Pursuant to a Schedule 13G, as amended, filed by Dimensional Fund Advisors
Inc. ("DFA") with the Securities and Exchange Commission, DFA has
indicated that all shares listed in the immediately preceding table
opposite its name are owned by advisory clients of DFA, no one of which,
to DFA's knowledge, owns more than 5% of the Company's Common Stock. DFA
has indicated that it has sole dispositive power with respect to all such
shares of Common Stock, that it has sole voting power with respect to
123,070 of such shares and that certain of its officers, who also serve as
officers of DFA Investment Dimensions Group Inc. (the "Fund") and The DFA
Investment Trust Company (the "Trust"), each an open-end management
investment company registered under the Investment Company Act of 1940, in
their capacities as officers of the Fund and the Trust, vote 23,427
additional shares of Common Stock which are owned by the Fund and 27,900
shares of Common Stock which are owned by the Trust.
3
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information at October 23, 1997 as to the
ownership of shares of the Company's Common Stock, its only outstanding class
of equity securities, with respect to (a) each director and nominee for
director, (b) each executive officer named in the Summary Compensation Table
under the caption "EXECUTIVE COMPENSATION" below and (c) all directors and
executive officers of the Company as a group (9 persons):
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT
BENEFICIAL OF
NAME OF BENEFICIAL OWNER OWNERSHIP (1) CLASS
- ------------------------ ------------- -------
<S> <C> <C>
Abe Ginsburg............................................ 93,213(2) 3.5%
Allan Ginsburg.......................................... 217,347(3) 8.0%
Robert Chestnov......................................... 193,742(4) 7.1%
Howard Ginsburg......................................... 186,908(5) 6.8%
Martin Brody............................................ 2,387(6) *
Richard Chestnov........................................ 48,273(7) 1.8%
Albert Safer............................................ 2,000(8) *
Anthony Christon........................................ 33,475(9) 1.2%
Bonnie Sue Levy......................................... 221,002(10) 8.2%
All directors and executive officers as a group (9
persons)............................................... 899,462(11) 31.4%
</TABLE>
- --------
* Less than one (1%) percent.
(1) Except as otherwise indicated below, each person named above and each
person in the group referred to above has sole voting and investment power
with respect to shares indicated as beneficially owned by such person or
group.
(2) Reference is made to footnotes (1), (2) and (3) to the table above under
the caption "SECURITY OWNERSHIP BY CERTAIN BENEFICIAL OWNERS". Includes
56,749 shares of Common Stock and 2,581 shares of Common Stock,
respectively, owned by two charitable foundations in which Abe Ginsburg
serves as an officer and director, with respect to which Mr. Ginsburg
shares voting and investment power. Mr. Ginsburg disclaims beneficial
ownership of such shares. Also includes 10,920 shares of Common Stock owned
by Mr. Ginsburg's wife, with respect to which he disclaims beneficial
ownership.
(3) See footnotes (1), (2), (3) and (4) to the table above under the caption
"SECURITY OWNERSHIP BY CERTAIN BENEFICIAL OWNERS" for certain information
concerning the beneficial ownership by Allan Ginsburg of Common Stock of
the Company.
(4) See footnotes (1), (2), (3) and (5) to the table above under the caption
"SECURITY OWNERSHIP BY CERTAIN BENEFICIAL OWNERS" for certain information
concerning the beneficial ownership by Robert Chestnov of Common Stock of
the Company.
(5) See footnotes (1), (2), (3) and (6) to the table above under the caption
"SECURITY OWNERSHIP BY CERTAIN BENEFICIAL OWNERS" for certain information
concerning the beneficial ownership by Howard Ginsburg of Common Stock of
the Company.
(6) Includes 2,000 shares of Common Stock which Mr. Brody has the right to
acquire pursuant to presently exercisable stock options.
(7) Richard Chestnov holds 27,423 of the shares set opposite his name as co-
trustee of a trust, 3,500 of the shares set opposite his name as an officer
and director of a charitable foundation, with respect to which, in each
case, he shares voting and investment power, and 200 shares as custodian
for his child. Mr. Chestnov disclaims beneficial ownership of such shares.
Also includes 2,000 shares of Common Stock which Mr. Chestnov has the right
to acquire pursuant to presently exercisable stock options.
4
<PAGE>
(8) Includes 2,000 shares of Common Stock which Mr. Safer has the right to
acquire pursuant to presently exercisable stock options.
(9) Includes 32,500 shares of Common Stock which Mr. Christon has the right
to acquire pursuant to presently exercisable stock options, 600 shares held
by him in an individual retirement account and 375 shares allocated to his
account under the ESOP.
(10) See footnotes (1) and (7) to the table above under the caption "SECURITY
OWNERSHIP BY CERTAIN BENEFICIAL OWNERS" for certain information concerning
the beneficial ownership by Bonnie Sue Levy of Common Stock of the Company.
(11) Reference is made to footnotes (2) through (10) above. Includes an
aggregate of 171,545 shares of Common Stock which executive officers of the
Company have the right to acquire pursuant to presently exercisable stock
options and an aggregate of 33,528 shares of Common Stock allocated to the
respective accounts of executive officers of the Company under the ESOP.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE.
Anthony Christon inadvertently failed to timely report one transaction
involving the purchase of 600 shares of Common Stock on his Annual Statement
of Changes in Beneficial Ownership of Securities on Form 5 for the fiscal year
ended June 30, 1997.
STOCKHOLDERS AGREEMENT.
Messrs. Abe Ginsburg, Allan Ginsburg, Robert Chestnov and Howard Ginsburg,
certain other family members, trusts and custodianships for the benefit of
such individuals and family members, and the Company are parties to an amended
and restated stockholders agreement dated as of July 30, 1996 ("Stockholders
Agreement"). The Stockholders Agreement, among other things, entitles Messrs.
Abe Ginsburg, Allan Ginsburg, Robert Chestnov and Howard Ginsburg, in their
capacity as a stockholders' committee (in such capacity, collectively, the
"Stockholders Committee"), acting by the vote of at least two-thirds, or by
the unanimous written consent, of the members of the Stockholders Committee,
for a period of ten years from the date of the Stockholders Agreement, to
direct the voting of the shares of Common Stock with respect to which the
signatory stockholders have or share, or may hereafter have or share, voting
power with respect to all matters submitted to stockholders of the Company at
any annual or special meeting of stockholders of the Company or pursuant to a
written consent in lieu thereof. At October 23, 1997, the Stockholders
Committee was entitled, pursuant to the Stockholders Agreement, to direct the
vote as to 1,027,039 shares of Common Stock (38.2%).
ITEM 1: ELECTION OF DIRECTORS
NOMINEES FOR ELECTION.
A Board of Directors consisting of seven directors is to be elected by
stockholders at the Annual Meeting to hold office until the next annual
meeting of stockholders and until their respective successors are duly elected
and qualified. Unless otherwise specified in the proxies, the shares
represented by all proxies received will be voted for the election of the
nominees named in the following table, all of whom are now directors of the
Company. All nominees have consented to being named in this Proxy Statement
and to serve if elected. While the Board of Directors has no reason to believe
that any of those named will not be available as a candidate for election as a
director of the Company, should such a situation arise, proxies may be voted
for the election of the remaining named nominees and for such substitute
nominee or nominees as the holders of the proxies may determine.
5
<PAGE>
Certain information with respect to each director is set forth below:
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE SINCE PRINCIPAL OCCUPATION
---- --- -------- --------------------
<S> <C> <C> <C>
Abe Ginsburg................ 80 1968 Chairman of the Executive Committee of
the Company
Allan Ginsburg.............. 55 1968 Chairman of the Board of the Company
Robert Chestnov............. 49 1981 President and Chief Executive Officer
of the Company
Howard Ginsburg............. 55 1981 Vice Chairman of the Board of the
Company; President of the Company's
Shane Handbag Division
Martin Brody................ 76 1980 Private Investor
Richard Chestnov............ 52 1988 Private Investor
Albert Safer................ 49 1997 President of Safer Textile Processing
and Kuttner Prints, textile mills
</TABLE>
INFORMATION CONCERNING THE BOARD OF DIRECTORS.
The business experience during the last five years of the directors of the
Company is as follows:
Abe Ginsburg has been Chairman of the Executive Committee of the Company
since November 29, 1988.
Allan Ginsburg has been Chairman of the Board of the Company since November
29, 1988.
Robert Chestnov has been the President and Chief Executive Officer of the
Company since November 29, 1988.
Howard Ginsburg has been Vice Chairman of the Board of the Company since
November 29, 1988 and has been President of the Company's Shane Handbag
Division for more than the past five years.
Martin Brody has been a private investor since his retirement on January 1,
1994. From April 1990 through December 1993, Mr. Brody was Vice Chairman of
the Board of Restaurant Associates Corporation, the owner and operator of
specialty restaurants, and was Chairman of its Board for more than five years
prior thereto. Mr. Brody also serves as a director of a number of Smith Barney
mutual funds and preferred income funds.
Richard Chestnov has been a private investor since 1992. Prior thereto, he
was a partner of Chego International, an apparel importer.
Albert Safer has been President of Safer Textile Processing and Kuttner
Prints, textile mills, for more than the past five years. Mr. Safer has also
served as President of Safer Development and Management, which is engaged in
real estate development and management, for more than the past five years.
MEETINGS AND COMMITTEES.
During the Company's fiscal year ended June 30, 1997 the Board of Directors
held four meetings. Each director except Martin Brody attended at least 75% of
the meetings of the Board of Directors, and of committees of the Board of
Directors on which he served, during such fiscal year. Each director who is
not an employee of the Company (a "non-employee director") receives an annual
fee of $12,000 for serving as a director. In addition, each non-employee
director in office immediately after each annual meeting of stockholders at
which directors are elected, and each non-employee director on the date such
person is first elected a director, automatically is granted an option to
purchase 2,000 shares of Common Stock under the Company's 1996 Non-Employee
Director Stock Option Plan. During the fiscal year ended June 30, 1997,
Messrs. Brody and Richard Chestnov were each granted options to purchase 2,000
shares of Common Stock at a per share exercise price of $5.125.
6
<PAGE>
The Company does not have a nominating committee, the functions of which are
performed by the Board of Directors, or a compensation committee, the
functions of which are performed by the Company's Executive Committee and
Stock Option Committee to the extent set forth below under the caption
"Executive Committee and Stock Option Committee Report on Executive
Compensation." The Executive Committee, whose members are Abe Ginsburg
(Chairman), Allan Ginsburg, Robert Chestnov and Howard Ginsburg, meets
informally throughout the Company's fiscal year. The Stock Option Committee,
whose present members are Abe Ginsburg, Richard Chestnov and Albert Safer,
acted once by unanimous written consent during the fiscal year ended June 30,
1997. The Company's Audit Comittee, which met once during the fiscal year
ended June 30, 1997, presently consists of Messrs. Martin Brody, Richard
Chestnov and Albert Safer. The Audit Committee recommends the appointment of
independent auditors to audit the Company's consolidated financial statements
and to perform professional services related to the audit, reviews with the
independent auditors the scope and results of their audit, reviews and
recommends the performance by the independent auditors of professional
services in addition to those which are audit-related and considers the
possible effect the performance of such services would have on the
independence of the auditors, reviews with the independent auditors the
Company's system of internal controls, and reviews with management and the
independent auditors the annual certified financial statements.
EXECUTIVE OFFICERS.
The executive officers of the Company are set forth in the table below. All
executive officers are elected at the annual meeting or at interim meetings of
the Board of Directors. No arrangement or understanding exists between any
executive officer and any other person pursuant to which he or she was elected
as an executive officer.
<TABLE>
<CAPTION>
NAME AGE POSITION AND PERIOD SERVED
---- --- --------------------------
<S> <C> <C>
Abe Ginsburg.......... 80 Chairman of the Executive Committee since November
29, 1988
Allan Ginsburg........ 55 Chairman of the Board since November 29, 1988
Robert Chestnov....... 49 President and Chief Executive Officer since November
29, 1988
Howard Ginsburg....... 55 Vice Chairman of the Board since November 29, 1988
and President of the Company's Shane Handbag
Division for more than the past five years
Bonnie Sue Levy....... 52 Vice President for more than the past five years;
President of the Company's Aetna Kiddie Bag
Division since April 1995 (Co- President from May
1994 to April 1995 and President for more than five
years prior to May 1994)
Anthony Christon...... 52 Chief Financial Officer since August 22, 1995
(employed by the Company since May 1, 1995; for
more than five years prior to 1995, Vice President
and Controller of Calvin Klein Sport, Inc., an
apparel manufacturer)
</TABLE>
FAMILY RELATIONSHIPS.
Abe Ginsburg, Chairman of the Executive Committee and a director of the
Company, is the father of Howard Ginsburg, Vice Chairman of the Board and a
director of the Company. Allan Ginsburg, Chairman of the Board and a director
of the Company, is the brother of Bonnie Sue Levy, Vice President of the
Company, is a nephew of Abe Ginsburg and is a first cousin of Howard Ginsburg.
Robert Chestnov, President, Chief Executive Officer and a director of the
Company, and Richard Chestnov, a director of the Company, are brothers.
7
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE.
The following table sets forth certain summary information concerning the
compensation of the Company's chief executive officer and each of its four
other most highly compensated executive officers:
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
----------------------
ANNUAL
COMPENSATION AWARDS
------------------ ---------------------- ALL OTHER ---
NAME AND SALARY BONUS SECURITIES UNDERLYING COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) OPTIONS(#) ($)(1)
- ------------------ ---- -------- ------- ---------------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Robert Chestnov,........ 1997 $306,950 $80,000 25,000 $14,918
President and Chief 1996 285,900 75,000 15,052
Executive Officer 1995 285,900 13,337
Allan Ginsburg, ........ 1997 $306,950 $80,000 25,000 $14,767
Chairman of the Board 1996 285,900 75,000 8,627
1995 285,900 19,946
Howard Ginsburg,........ 1997 $306,950 $80,000 25,000 $22,846
Vice Chairman of the 1996 285,900 75,000 18,011
Board 1995 285,900 22,356
Anthony Christon,....... 1997 $200,680 $30,000 7,500 $ 7,741
Chief Financial Officer 1996 178,405 50,000 3,514
1995 25,080(2) 25,000
Bonnie Sue Levy,........ 1997 $182,205 $10,000 7,500 $16,671
Vice President 1996 179,405 7,500 11,594
1995 192,010 13,190
</TABLE>
- --------
(1) Amounts in this column for the fiscal year ended June 30, 1997 include (i)
premiums paid during fiscal 1997 by the Company for term life insurance for
the benefit of certain of the named executive officers (Robert Chestnov--
$3,445, Allan Ginsburg--$3,445, Howard Ginsburg--$3,445, Anthony Christon--
$1,406 and Bonnie Sue Levy--$1,765), (ii) reimbursement during fiscal 1997
of medical and/or dental expenses under a supplemental medical and dental
expense reimbursement program for executive officers and certain other
employees of the Company (Robert Chestnov--$9,804, Allan Ginsburg--$9,653,
Howard Ginsburg--$17,732, Anthony Christon --$4,671 and Bonnie Sue Levy--
$13,237) and (iii) the value, as at June 30, 1997, of shares of Common Stock
allocated to accounts of the named executive officers under the ESOP during
fiscal 1997 (Robert Chestnov--$1,669, Allan Ginsburg--$1,669, Howard
Ginsburg--$1,669, Anthony Christon--$1,664 and Bonnie Sue Levy--$1,669).
(2) Includes amounts from May 1, 1995, when Mr. Christon's employment with the
Company commenced.
8
<PAGE>
STOCK OPTIONS.
OPTION GRANTS IN THE LAST FISCAL YEAR. The following table sets forth
certain information concerning the grant of stock options to the executive
officers named in the Summary Compensation Table during the Company's fiscal
year ended June 30, 1997.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------
POTENTIAL REALIZABLE
VALUE AT ASSUMED
NUMBER OF PERCENT OF ANNUAL RATES OF STOCK
SECURITIES TOTAL OPTIONS PRICE APPRECIATION
UNDERLYING GRANTED TO FOR OPTION TERM
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION ----------------------
NAME GRANTED(#) FISCAL YEAR PRICE($/SH) DATE 5%($) 10%($)
- ---- ---------- ------------- ----------- ---------- ---------- ----------- ---
<S> <C> <C> <C> <C> <C> <C> <C>
Robert Chestnov......... 25,000 17.5% $4.0625 6/30/06 $ 63,872 $ 161,864
Allan Ginsburg.......... 25,000 17.5% $4.46875 6/30/01 $ 17,904 $ 51,849
Howard Ginsburg......... 25,000 17.5% $4.46875 6/30/01 $ 17,904 $ 51,849
Anthony Christon........ 7,500 5.2% $4.0625 6/30/06 $ 19,162 $ 48,671
Bonnie Sue Levy......... 7,500 5.2% $4.46875 6/30/01 $ 5,371 $ 15,555
</TABLE>
FISCAL YEAR END OPTION VALUES. The following table sets forth certain
information concerning the number and value at June 30, 1997 of shares of
Common Stock subject to unexercised options held by the executive officers
named in the Summary Compensation Table. No stock options were exercised by
such executive officers during the Company's fiscal year ended June 30, 1997.
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF SECURITIES UNEXERCISED
UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS OPTIONS AT FISCAL
AT FISCAL YEAR END(#) YEAR END($)
--------------------- -----------------
EXERCISABLE/ EXERCISABLE/
NAME UNEXERCISABLE UNEXERCISABLE(1)
---- --------------------- -----------------
<S> <C> <C>
Robert Chestnov................... 41,161/-- $ 9,375/--
Allan Ginsburg.................... 39,692/-- --/--
Howard Ginsburg................... 39,692/-- --/--
Anthony Christon.................. 32,500/-- $10,625/--
Bonnie Sue Levy................... 12,500/-- --/--
</TABLE>
- --------
(1) Based on the closing price on the American Stock Exchange on June 30, 1997
of the shares of Common Stock subject to the stock options.
PENSION PLAN.
The Company maintains a defined benefit pension plan entitled the "Jaclyn,
Inc. Employees Pension Trust" (the "Pension Plan") which covers all non-union
employees of the Company and certain of its subsidiaries who have attained age
21 and have completed at least six months of service to the Company. The
following table sets forth the estimated annual benefit payable under the
Pension Plan to an employee who retires at age 65 in 1997 at the remuneration
and years-of-service classifications set forth in the table. The benefits do
not take into account voluntary employee contributions, are not subject to any
deduction for Social Security benefits and represent annual benefits payable
for life with one hundred twenty (120) monthly payments guaranteed, commencing
at
9
<PAGE>
age 65. The table gives effect to the limitations imposed by the Internal
Revenue Code of 1986, as amended (the "Code"), on the accrual of benefits on
compensation above certain levels (presently a maximum of $160,000).
<TABLE>
<CAPTION>
ASSUMED YEARS OF SERVICE
---------------------------------------
ASSUMED ANNUAL
AVERAGE COMPENSATION 15 20 25 30 35
-------------------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
$100,000.............................. $14,250 $19,000 $23,750 $28,500 $33,250
$125,000.............................. 18,000 24,000 30,000 36,000 42,000
$150,000 ............................. 21,750 29,000 36,250 43,500 50,750
$160,000 and greater.................. 23,250 31,000 38,750 46,500 54,250
</TABLE>
Compensation under the Pension Plan includes all cash compensation subject
to withholding (as reflected on each participant's Form W-2 as reported for
the preceding year) plus salary deferral contributions made by the employee to
the Jaclyn, Inc. Premium Payment Plan, excluding commissions, and, as to the
individuals named in the table under the caption "EXECUTIVE COMPENSATION--
Summary Compensation Table," would be the amounts set forth opposite their
respective names under the captions "Salary" and "Bonus" (subject, however, to
the Code limitations referred to above). As of June 30, 1997, the following
individuals had the number of years of credited service under the Pension Plan
indicated after their names: Allan Ginsburg, 36; Robert Chestnov, 27; Howard
Ginsburg, 36; Anthony Christon 2; and Bonnie Sue Levy, 22.
EXECUTIVE COMMITTEE AND STOCK OPTION COMMITTEE REPORT ON EXECUTIVE
COMPENSATION
The Company does not have a compensation committee. The Executive Committee
of the Board of Directors determines compensation of the Company's executive
officers. The Stock Option Committee is responsible for the grant of options
to purchase shares of Common Stock under the Company's 1990 Stock Option Plan
and for the administration of all stock option plans of the Company.
The primary objectives of the Company's executive compensation structure are
to maintain executive compensation at competitive levels to retain qualified
personnel and to reward individuals for their respective contributions to the
Company's success. Bonuses, in particular, are granted in order to reward and
acknowledge employees for, among other things, individual initiative and
achievement. The grant of stock options is intended to provide executives with
a stake in the long-term success of the Company and to coordinate executives'
and stockholders' long-term interests by creating a direct link between a
portion of executive compensation and increases in the market price of Common
Stock.
The Executive Committee and the Stock Option Committee each consider a
number of factors in determining compensation of executives, such as
historical financial results, anticipated revenues and earnings for the next
fiscal year, individual contributions to, and length of service with, the
Company, compensation levels at other companies (both within and outside the
Company's industry), and equity and fairness within the top levels of
management. Historically, the Executive Committee has fostered the objective
of equity and fairness by setting equal salaries and bonuses for the Company's
Chairman of the Board, President and Vice-Chairman of the Board. Decisions by
the Executive Committee and the Stock Option Committee are, however, primarily
subjective. No specific corporate performance-related targets are formally
used and no pre-determined weight is generally assigned to any of the factors
mentioned above.
The salary of Robert Chestnov, the Company's Chief Executive Officer, for
the fiscal year ended June 30, 1997 was $306,950. Mr. Chestnov also received a
bonus of $80,000. In determining to increase Mr. Chestnov's salary for fiscal
1997, the Executive Committee noted the substantially improved operating
results for fiscal 1996, including net earnings of $685,000 ($.25 per share),
compared with the prior year, the successful completion during fiscal 1996 of
the Company's restructuring program, and that the Executive Committee had not
increased
10
<PAGE>
Mr. Chestnov's salary during fiscal 1995 or fiscal 1996. In granting Mr.
Chestnov a bonus for fiscal 1997, the Executive Committee primarily considered
the increases in net sales and in net earnings of the Company in fiscal 1997
compared to fiscal 1996. Based upon the Company's improved operating
performance in fiscal 1996, and to provide Mr. Chestnov with incentive
compensation linked to stockholders' interests, during the fiscal year ended
June 30, 1997, the Stock Option Committee granted Mr. Chestnov an option to
purchase 25,000 shares of Common Stock at an exercise price per share of
$4.0625, the fair market value per share on the date of grant.
THE EXECUTIVE COMMITTEE
THE STOCK OPTION COMMITTEE
Abe Ginsburg, Chairman Abe Ginsburg
Allan Ginsburg Richard Chestnov
Robert Chestnov Albert Safer
Howard Ginsburg
CERTAIN TRANSACTIONS.
During the fiscal year ended June 30, 1997, the Company purchased fabric in
the ordinary course of business from Rainbow Mills Dyeing and Finishing, Inc.,
a corporation in which Albert Safer, a director of the Company, holds an
indirect, majority equity interest, at an aggregate purchase price of
$594,748.82. In addition, during such fiscal year the Company purchased fabric
in the ordinary course of business from F&M Fabrics, Inc., in which Mr.
Safer's wife holds an indirect 50% equity interest, at an aggregate purchase
price of $1,152,651.03.
11
<PAGE>
PERFORMANCE GRAPH.
The following graph compares the yearly percentage change in the cumulative
total return on the Company's Common Stock for the five fiscal years ended
June 30, 1997 with (i) Media General Financial Services' American Stock
Exchange Market Value Index and (ii) a peer group of three companies,
consisting of Sirco International Corp., Swank, Inc. and Fuqua Enterprises,
Inc. (formerly known as Vista Resources, Inc.), which either compete with the
Company in one of its product categories or are engaged in related industries.
The comparison assumes an investment of $100 on July 1, 1992 in the Company
and in each of the comparison groups and that all dividends were reinvested.
COMPARISON OF CUMULATIVE TOTAL RETURN
<TABLE>
<CAPTION>
- -------------------------------------------FISCAL YEAR ENDING------------------------------------------
COMPANY 1992 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C> <C>
JACLYN INC 100 149.70 171.63 77.24 60.38 63.93
PEER GROUP 100 134.06 131.66 127.24 167.26 139.44
BROAD MARKET 100 109.33 105.54 126.99 145.40 154.64
</TABLE>
ITEM 2: SELECTION OF AUDITORS
The Board of Directors has appointed Deloitte & Touche LLP, independent
auditors, to audit the books and accounts of the Company for the fiscal year
ending June 30, 1998. This firm is the successor to the firm of auditors which
has audited the books of the Company or its predecessor since 1965. A
representative of Deloitte & Touche LLP is expected to be present at the
Annual Meeting to respond to appropriate questions and will be given an
opportunity to make a statement if such representative desires to do so.
The appointment of Deloitte & Touche LLP is subject to ratification by a
majority of the shares of Common Stock present, in person or by proxy, and
entitled to vote at the Annual Meeting. If the appointment of Deloitte &
Touche LLP is not ratified by such stockholder vote, the Board of Directors
will reconsider its action and select independent auditors without further
stockholder action.
12
<PAGE>
The Board of Directors recommends a vote FOR ratification of the appointment
of Deloitte & Touche LLP as auditors of the Company. Unless otherwise
specified in the proxies, the shares represented by all proxies received will
be voted FOR the appointment of Deloitte & Touche LLP.
OTHER INFORMATION
PROPOSALS FOR 1998 ANNUAL MEETING.
Consistent with Securities and Exchange Commission regulations, stockholder
proposals intended to be included in the proxy statement and form of proxy for
the 1998 Annual Meeting of Stockholders must be received at the principal
executive offices of the Company, 635 59th Street, West New York, New Jersey
07093, no later than July 4, 1998. Any such proposals, as well as any
questions relating thereto, should be directed to the Secretary of the
Company.
GENERAL.
The solicitation of proxies in the accompanying form will be made, at the
Company's expense, primarily by mail and through brokerage and banking
institutions. In addition, proxies may be solicited in person or by telephone,
telecopier or telegraph, by officers, directors and regular employees of the
Company. The Company will reimburse brokerage firms, nominees, fiduciaries and
other custodians their reasonable expenses for forwarding the proxy material
to beneficial owners and obtaining their instructions.
Proxies submitted which contain abstentions or broker non-votes will be
deemed present at the Annual Meeting in determining the presence of a quorum.
Shares of Common Stock that are voted to abstain with respect to any matter
are considered shares entitled to vote, and cast, with respect to that matter.
Shares of Common Stock subject to broker non-votes with respect to any matter
will not be considered as shares entitled to vote with respect to that matter.
The Board of Directors is aware of no other matters that are to be presented
to stockholders for formal action at the Annual Meeting. If, however, any
other matters properly come before the meeting or any adjournment thereof, it
is the intention of the persons named in the enclosed form of proxy to vote
such proxies in accordance with their judgment on such matters.
By Order of the Board of Directors.
Jaclyn Hartstein
Secretary
October 31, 1997
13
<PAGE>
JACLYN, INC. PROXY
- --------------------------------------------------------------------------------
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder hereby appoints DAVID HARTSTEIN and LLOYD
FRANK, and any one of them, the proxies of the undersigned, with power of
substitution, hereby revoking any proxy heretofore given, to vote all shares
which the undersigned is entitled to vote at the 1997 Annual Meeting of
Stockholders of JACLYN, INC. (the "Company") to be held at the Company's
executive offices, 635 59th Street, West New York, New Jersey 07093, on December
3, 1997 at 9:30 a.m., and at any adjournments thereof, with all powers the
undersigned would possess if personally present, and the undersigned authorizes
and instructs said proxies to vote as follows:
ITEM 1 -- Election of the following nominees as directors:
Abe Ginsburg, Allan Ginsburg, Robert Chestnov, Howard Ginsburg, Martin
Brody, Richard Chestnov and Albert Safer.
(TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH THE NOMINEE'S NAME.)
FOR [_] WITHHOLD [_]
(Continued and to be signed on the other side)
<PAGE>
ITEM 2 -- Ratification of Deloitte & Touche LLP as independent auditors.
FOR [_] AGAINST [_] ABSTAIN [_]
ITEM 3 -- In their discretion, upon any other matters as may properly come
before the meeting.
Date
-----------------------------------
Signature
------------------------------
Signature
------------------------------
Please mark, date and sign as your name
appears above and return in the enclosed
envelope. If acting as executor,
administrator, trustee, guardian, etc.,
you should so indicate when signing. If
the signer is a corporation, please sign
the full corporate name by a duly
authorized officer. If shares are held
jointly, each stockholder named should
sign.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE
STOCKHOLDER. IF NO DIRECTION IS GIVEN, SUCH SHARES WILL BE VOTED "FOR" ITEMS 1
AND 2.
