<PAGE>
SCHEDULE 14A
Information Required in Proxy Statement
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 (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 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:
<PAGE>
-----------------------------------------------------------------------
(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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<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.,
a Delaware corporation (the "Company"), will be held at the offices of the
Company, 635 59th Street, West New York, New Jersey 07093, on Tuesday,
November 30, 1999, 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, 2000; 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 20, 1999 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 29, 1999
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
29, 1999 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 November 30, 1999 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 or, in the absence of any instruction, for the
election of all of the nominees named herein to serve as directors and for
ratification of the appointment of Deloitte & Touche LLP as the Company's
independent auditors. 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 20, 1999
will be entitled to notice of and to vote at the Annual Meeting. On October
20, 1999, there were outstanding 2,711,391 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 presence, in person or by
proxy, of a majority of the shares of Common Stock entitled to vote at the
Annual Meeting 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,
2000.
SECURITY OWNERSHIP BY CERTAIN BENEFICIAL OWNERS
The following table sets forth information at October 20, 1999 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 Percent
Name and Address Beneficial of
of Beneficial Owner Ownership Class
------------------- -------------------- -------
<S> <C> <C>
Allan Ginsburg............................. 217,879(1)(2)(3)(4) 7.9%
635 59th Street
West New York, New Jersey 07093
Robert Chestnov............................ 225,374 (1)(2)(3)(5) 8.1%
635 59th Street
West New York, New Jersey 07093
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Amount and
Nature of Percent
Name and Address Beneficial of
of Beneficial Owner Ownership Class
------------------- -------------------- -------
<S> <C> <C>
Howard Ginsburg............................ 196,065 (1)(2)(3)(6) 7.1%
635 59th Street
West New York, New Jersey 07093
Bonnie Sue Levy............................ 224,834 (1)(7) 8.2%
635 59th Street
West New York, New Jersey 07093
Dimensional Fund Advisors.................. 174,594 (8) 6.4%
1299 Ocean Avenue
Santa Monica, California 90401
Michael J. Crew, Investment Advisor........ 144,700 (9) 5.3%
681 Falmouth Road, Box C-2
Mashpee, Massachusetts 02649
</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 20, 1999, 1,024,310
shares of Common Stock (37.8%) 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 Allan Ginsburg, Robert Chestnov and Howard Ginsburg,
respectively, and in footnote (1) to the table below under the caption
"SECURITY OWNERSHIP OF MANAGEMENT" with respect to Abe Ginsburg, excludes
123,209 shares of Common Stock owned by the Jaclyn, Inc. Employee Stock
Ownership Plan ("ESOP"), with respect to which Abe Ginsburg, Allan
Ginsburg, Robert Chestnov and Howard Ginsburg, as co-trustees, share
investment power. If the 123,209 shares of Common Stock owned by the ESOP
were included in the beneficial ownership of such individuals, Abe
Ginsburg would be deemed to own 7.9% of the Company's Common Stock; Allan
Ginsburg, 12.1%; Robert Chestnov, 12.2%; and Howard Ginsburg, 11.3%. Each
disclaims beneficial ownership of such shares.
(4) Includes 50,000 shares of Common Stock which Allan Ginsburg has the right
to acquire pursuant to presently exercisable stock options. Also includes
29,884 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 1,984
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 8,334 shares allocated to Mr.
Ginsburg's account under the ESOP.
2
<PAGE>
(5) Includes 66,161 shares of Common Stock which Robert Chestnov has the right
to acquire pursuant to presently exercisable stock options. Also includes
20,600 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 10,817 shares allocated to Mr.
Chestnov's account under the ESOP.
(6) Includes 50,000 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 8,334 shares allocated to Mr. Ginsburg's
account under the ESOP.
(7) Includes 15,000 shares of Common Stock which Mrs. Levy has the right to
acquire pursuant to presently exercisable stock options and 6,030 shares
allocated to Mrs. Levy's account under the ESOP.
(8) Pursuant to a Schedule 13G filed by Dimensional Fund Advisors Inc.
("DFA") with the Securities and Exchange Commission, DFA has indicated
that it is an investment advisor registered under the Investment Advisors
Act of 1940, furnishes investment advice to four investment companies
registered under the Investment Company Act of 1940, and serves as
investment manager to certain other investment vehicles, including
commingled group trusts (these investment companies and investment
vehicles are the "Portfolios"). In its role as investment advisor and
investment manager, DFA has indicated that it possesses both voting and
investment power over the shares listed in the immediately preceding
table opposite its name that are owned by the Portfolios. DFA further has
indicated that such shares are owned by the Portfolios and DFA disclaims
beneficial ownership of such shares.
(9) Michael J. Crew, Investment Advisor has advised the Company that he shares
voting and investment power with respect to all of the shares listed in
the immediately preceding table opposite his name.
3
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information at October 20, 1999 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
Name of Beneficial Owner Beneficial Ownership (1) of Class
- ------------------------ ----------------------- --------
<S> <C> <C>
Abe Ginsburg................................ 91,839 (2) 3.4%
Allan Ginsburg.............................. 217,879 (3) 7.9%
Robert Chestnov............................. 225,374 (4) 8.1%
Howard Ginsburg............................. 196,065 (5) 7.1%
Martin Brody................................ 6,387 (6) *
Richard Chestnov............................ 52,273 (7) 1.9%
Albert Safer................................ 6,000 (8) *
Anthony Christon............................ 44,806 (9) 1.6%
Bonnie Sue Levy............................. 224,834 (10) 8.2%
All directors and executive officers as a
group (9 persons).......................... 966,572 (11) 32.7%
</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
65,769 shares of Common Stock owned by a charitable foundation in which
Abe Ginsburg serves as an officer and director and with respect to which
Mr. Ginsburg shares voting and investment power, and 2,581 shares of
Common Stock owned by a charitable foundation in which Mr. Ginsburg
serves as an officer and director and with respect to which Mr. Ginsburg
has sole voting and investment power. Mr. Ginsburg disclaims beneficial
ownership of all such shares. In addition, includes 812 shares of Common
Stock allocated to Mr. Ginsburg's account under the ESOP.
(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 6,000 shares of Common Stock which Mr. Brody has the right to
acquire pursuant to presently exercisable stock options.
4
<PAGE>
(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 held
by Mr. Chestnov as custodian for his child. Mr. Chestnov disclaims
beneficial ownership of such shares. Also includes 6,000 shares of Common
Stock which Mr. Chestnov has the right to acquire pursuant to presently
exercisable stock options.
(8) Includes 6,000 shares of Common Stock which Mr. Safer has the right to
acquire pursuant to presently exercisable stock options.
(9) Includes 42,500 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 1,706 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 241,661 shares of Common Stock which directors and executive
officers of the Company have the right to acquire pursuant to presently
exercisable stock options and an aggregate of 36,033 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.
During the fiscal year ended June 30, 1999, Allan Ginsburg filed a late Form
4 reporting an aggregate of two transactions.
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 (the
"Stockholders Agreement"). The Stockholders Agreement, among other things,
entitles 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 20, 1999, the
Stockholders Committee was entitled, pursuant to the Stockholders Agreement,
to direct the vote as to 1,024,310 shares of Common Stock (37.8%).
5
<PAGE>
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.
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..................... 82 1968 Chairman of the Executive
Committee of the Company
Allan Ginsburg................... 57 1968 Chairman of the Board of the
Company
Robert Chestnov.................. 51 1981 President and Chief Executive
Officer of the Company
Howard Ginsburg.................. 57 1981 Vice Chairman of the Board of
the Company; President of the
Company's Shane Handbag
Division
Martin Brody..................... 78 1980 Private Investor
Richard Chestnov................. 54 1988 Private Investor
Albert Safer..................... 51 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 Solomon
Smith Barney mutual funds and preferred income funds.
6
<PAGE>
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, 1999 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 (the "Director Plan"). During the fiscal year ended
June 30, 1999, Messrs. Martin Brody, Richard Chestnov and Albert Safer each
were granted options to purchase 2,000 shares of Common Stock at a per share
exercise price of $3.75.
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 during fiscal 1999 by unanimous written consent. The Company's
Audit Committee, which held one meeting during the fiscal year ended June 30,
1999, 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.
7
<PAGE>
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.......... 82 Chairman of the Executive Committee since November
29, 1988
Allan Ginsburg........ 57 Chairman of the Board since November 29, 1988
Robert Chestnov....... 51 President and Chief Executive Officer since November
29, 1988
Howard Ginsburg....... 57 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....... 54 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...... 54 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.
8
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table.
The following table sets forth certain summary information for each of the
Company's fiscal years ended June 30, 1999, 1998 and 1997 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
----------------- ------------------------
Restricted Securities All Other
Name and Salary Bonus Stock Underlying Compensation
Principal Position Year ($) ($) Award(s)($) Options (#) ($)(1)
- ------------------ ---- -------- -------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Robert Chestnov ........ 1999 $303,615 $ 12,500 25,000 $18,235
President and Chief
Executive Officer 1998 317,650 122,500 $83,750(2) 18,863
1997 306,950 80,000 25,000 14,918
Allan Ginsburg ......... 1999 $303,615 $ 12,500 25,000 $24,348
Chairman of the Board 1998 317,650 62,500 26,267
1997 306,950 80,000 25,000 14,767
Howard Ginsburg ........ 1999 $303,615 $ 12,500 25,000 $29,347
Vice Chairman of the
Board 1998 317,650 62,500 10,009
1997 306,950 80,000 25,000 22,846
Anthony Christon ....... 1999 $213,690 $ 5,000 10,000 $ 5,704
Chief Financial Officer 1998 209,780 25,000 10,847
1997 200,680 30,000 7,500 7,741
Bonnie Sue Levy ........ 1999 $196,590 $ 0 7,500 $16,241
Vice President 1998 183,405 10,000 10,465
1997 182,205 10,000 7,500 16,671
</TABLE>
- --------
(1) Amounts in this column for the fiscal year ended June 30, 1999 include (i)
premiums paid during fiscal 1999 by the Company for term life insurance
for the benefit of certain of the named executive officers (Robert
Chestnov--$2,362, Allan Ginsburg--$2,362, Howard Ginsburg--$2,362, Anthony
Christon--$1,174 and Bonnie Sue Levy--$1,546), (ii) reimbursement during
fiscal 1999 of medical and/or dental expenses under a supplemental medical
and dental expense reimbursement program (the "Medical Expense Program")
for executive officers and certain other employees of the Company (Robert
Chestnov--$13,215, Allan Ginsburg--$19,328, Howard Ginsburg--$24,327,
Anthony Christon--$1,875 and Bonnie Sue Levy--$12,040) and (iii) the
value, as at June 30, 1999, of shares of Common Stock allocated to
accounts of the named executive officers under the ESOP during fiscal 1999
(Robert Chestnov--$2,658, Allan Ginsburg--$2,658, Howard Ginsburg--$2,658,
Anthony Christon--$2,655 and Bonnie Sue Levy--$2,655).
(2) Amount in this column for Mr. Chestnov includes the dollar value on the
date of grant of an award to Mr. Chestnov during fiscal 1998 of 20,000
shares of Common Stock which are restricted pursuant to an agreement
between the Company and Mr. Chestnov. All shares are presently vested and
future dividends, if any, would be payable with regard to such shares.
9
<PAGE>
Stock Options.
Option Grants in the Last Fiscal Year. The following table sets forth
certain information concerning the grant of stock options to the executive
officers named in the Summary Compensation Table during the Company's fiscal
year ended June 30, 1999.
<TABLE>
<CAPTION>
Potential
Realizable
Value at
Individual Grants Assumed Annual
------------------------- Rates of Stock
Number of Percent of Price
Securities Total Options Appreciation
Underlying Granted to Exercise For Option Term
Options Employees in Price Expiration ---------------
Name Granted (#) Fiscal Year (S/Sh) Date 5%($) 10%($)
- ---- ----------- ------------- -------- ---------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Robert Chestnov.. 25,000 17.9% $2.25 4/19/09 $35,375 $89,648
Allan Ginsburg... 25,000 17.9% $2.475 4/19/04 $ 9,915 $28,716
Howard Ginsburg.. 25,000 17.9% $2.475 4/19/04 $ 9,915 $28,716
Anthony
Christon........ 10,000 7.1% $2.25 4/19/09 $14,150 $35,859
Bonnie Sue Levy.. 7,500 5.4% $2.475 4/19/04 $ 2,975 $ 8,615
</TABLE>
Fiscal Year End Option Values. The following table sets forth certain
information concerning the number and value at June 30, 1999 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, 1999.
<TABLE>
<CAPTION>
Number of Securities Value of 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............... 66,161/-- $18,750.00/--
Allan Ginsburg................ 50,000/-- $13,125.00/--
Howard Ginsburg............... 50,000/-- $13,125.00/--
Anthony Christon.............. 42,500/-- $ 7,500.00/--
Bonnie Sue Levy............... 15,000/-- $ 3,937.50/--
</TABLE>
- --------
(1) Based on the closing price on the American Stock Exchange on June 30, 1999
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 1999 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 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).
10
<PAGE>
<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, 1999, the following
individuals had the number of years of credited service under the Pension Plan
indicated after their names: Allan Ginsburg, 38; Robert Chestnov, 29; Howard
Ginsburg, 38; Anthony Christon 4; and Bonnie Sue Levy, 24.
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 substantially 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 Executive Committee reduced the aggregate salary and bonus compensation
of Robert Chestnov, the Company's President and Chief Executive Officer, by
$124,035 in fiscal 1999 compared to the prior fiscal year. In determining to
reduce Mr. Chestnov's salary compensation, the Executive Committee noted the
decrease in profitability of the Company during fiscal 1998 and both revenues
and earnings prospects for fiscal 1999. Moreover, although the Executive
Committee recognized Mr. Chestnov's central role in the consummation during
fiscal 1999 of the acquisition by the Company of a manufacturer and
distributor of women's apparel to mail order catalogue companies and the
potential benefits to the Company of that acquisition, the Executive Committee
nevertheless substantially eliminated Mr. Chestnov's bonus compensation after
consideration of the
11
<PAGE>
unfavorable results for the fiscal year ended June 30, 1999, including the
closing of three unprofitable divisions which contributed significantly to
those results. In order to further link Mr. Chestnov's compensation to
stockholders' interests and to the value of shares of the Company's Common
Stock, in fiscal 1999 the Stock Option Committee granted Mr. Chestnov an
option to purchase 25,000 shares of Common Stock.
<TABLE>
<CAPTION>
The Executive
Committee The Stock Option Committee
------------- --------------------------
<S> <C>
Abe Ginsburg, Chairman Abe Ginsburg
Allan Ginsburg Richard Chestnov
Robert Chestnov Albert Safer
Howard Ginsburg
</TABLE>
Compensation Committee Interlocks and Insider Participation
The Company's Executive Committee consists of Abe Ginsburg, Allan Ginsburg,
Robert Chestnov and Howard Ginsburg and its Stock Option Committee consists of
Abe Ginsburg, Richard Chestnov and Albert Safer. During the fiscal year ended
June 30, 1999, the Company purchased fabric in the ordinary course of business
from Rainbow Mills Dyeing and Finishing, Inc. and from Kuttner Prints,
corporations in which Albert Safer, a director of the Company, holds an
indirect, majority equity interest, at an aggregate purchase price of
$213,525.33 and $22,612.22, respectively. During such fiscal year, the Company
also purchased fabric in the ordinary course of business from F&M Fabrics,
Inc., a corporation in which Mr. Safer's wife holds a 50% indirect equity
interest, at an aggregate purchase price of $203.40. The Company believes that
the foregoing transactions were on terms no less favorable than it could have
received from unrelated third parties. In addition, during fiscal 1999, Abe
Ginsburg, Chairman of the Executive Committee and a director and co-founder of
the Company, was paid $80,000 for services rendered to the Company and was
reimbursed $8,907 for medical and/or dental expenses under the Medical Expense
Program. Jaclyn Hartstein, Secretary of the Company, who is a daughter of Abe
Ginsburg and a sister of Howard Ginsburg, was paid $154,440 for services
rendered to the Company in fiscal 1999 and was reimbursed $21,224 for medical
and/or dental expenses under the Medical Expense Program. Ms. Hartstein also
was granted an option to purchase 7,500 shares of Common Stock at an exercise
price of $2.25 per share, the market price per share of Common Stock on the
date of grant.
12
<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, 1999 with (i) Media General Financial Services' American Stock
Exchange Market Value Index and (ii) a peer group of three companies,
consisting of Samsonite Corporation, Swank, Inc. and Tandy Brands Accessories,
Inc., which during fiscal 1999 either competed with the Company in one of its
product categories or was engaged in related industries. Samsonite Corporation
replaces Sirco International Corp., which the Company understands is no longer
engaged in a competing product category or related industry. The comparison
assumes an investment of $100 on July 1, 1994 in the Company and in each of
the comparison groups and that all dividends were reinvested.
COMPARISON OF CUMULATIVE TOTAL RETURN
[LINE GRAPH]
JACLYN, INC. PEER GROUP INDEX AMEX MARKET INDEX
1994 100 100 100
1995 45.01 109.3 120.33
1996 35.18 85.29 137.78
1997 37.25 168 146.53
1998 42.94 66.11 169.41
1999 24.83 41.07 166.65
13
<PAGE>
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, 2000. 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.
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
Other Action at the Meeting.
The Board of Directors has not received notice of and is not aware of any
other matters that are to be presented for action at the Annual Meeting. If,
however, any other matters properly come before the Annual Meeting or any
adjournment thereof, it is the intention of the persons named in the enclosed
form of proxy to vote such proxies in their discretion on such matters,
including any matters relating to or dealing with the conduct of the Annual
Meeting.
Proposals For 2000 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 2000 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 1, 2000. Any such proposals, as well as any
questions relating thereto, should be directed to the Secretary of the
Company. As to any proposals intended to be presented by a stockholder without
inclusion in the Company's proxy statement and form of proxy for the 2000
Annual Meeting, the proxies named in the Company's form of proxy for that
meeting will be entitled to exercise discretionary authority on that proposal
unless the Company receives notice of the matter on or before September 14,
2000. However, even if such notice is timely received, such proxies may
nevertheless be entitled to exercise discretionary authority on that matter to
the extent permitted by Securities and Exchange Commission regulations.
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
or facsimile, 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.
14
<PAGE>
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.
By Order of the Board of Directors.
October 29, 1999
Jaclyn Hartstein
Secretary
15
<PAGE>
JACLYN, INC. Proxy
- --------------------------------------------------------------------------------
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder hereby appoints JACLYN 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 1999 Annual Meeting of
Stockholders of JACLYN, INC. (the "Company") to be held at the Company's
offices, 635 59th Street, West New York, New Jersey 07093, on November 30, 1999
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.
Note: Please date and sign exactly as your name appears
hereon. If acting as an executor, administrator, trustee,
guardian, etc., you should so indicate. If the signer is a
corporation, please sign the full corporate name by a duly
authorized officer. If shares are held jointly, each
stockholder should sign.
Signature: Date:
------------------------------ ---------------
Signature: Date:
------------------------------ ---------------
The shares represented by this proxy will be voted as directed by the
stockholder(s). If no direction is given, such shares will be voted FOR the
election of all listed nominees for director, FOR Item 2, and in the discretion
of the proxies on any other matters that may properly come before the meeting.
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