JAN BELL MARKETING INC, DEF 14A, 1996-07-17

JAN BELL MARKETING INC
DEF 14A, 1996-07-17
JEWELRY, PRECIOUS METAL

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<PAGE> 1

SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the Registrant /X/

Filed by a Party other than the Registrant / /

Check the appropriate box:

<TABLE>
<S> <C>
/ / 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 Rule 14a-11(c) or Rule 14a-12
</TABLE>

JAN BELL MARKETING, 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):

/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.

/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).

/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies:

(2) Aggregate number of securities to which transaction applies:

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (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:

/X/ 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> 2

JAN BELL MARKETING, INC.

[JAN BELL LOGO]

13801 NORTHWEST 14TH STREET

SUNRISE, FLORIDA 33323
---------------------

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
AUGUST 20, 1996
---------------------

TO THE SHAREHOLDERS:

The Annual Meeting of Shareholders of Jan Bell Marketing, Inc., a Delaware
corporation, will be held on Tuesday, August 20, 1996 at 9:00 a.m., local time
at the Bonaventure Resort, 250 Racquet Club Road, Fort Lauderdale, Florida.

(1) To elect three directors to serve for terms as specified herein or
until their successors are elected;

(2) To propose to Shareholders certain amendments to the Company's
Certificate of Incorporation;

(3) To ratify the appointment of Deloitte & Touche LLP as independent
accountants of the Company for the fiscal year ending February 1, 1997; and

(4) To transact such other business as may properly come before the
meeting or any adjournment thereof.

The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.

Only shareholders of record at the close of business on July 10, 1996 are
entitled to notice of and to vote at the meeting.

All shareholders are cordially invited to attend the meeting in person.

Sincerely,

/s/ Isaac Arguetty
------------------
Isaac Arguetty
Chairman of the Board

Sunrise, Florida
July 12, 1996
- --------------------------------------------------------------------------------

WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND
SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE TO ASSURE
REPRESENTATION OF YOUR SHARES. NO POSTAGE NEED BE AFFIXED IF MAILED IN THE
UNITED STATES.
- --------------------------------------------------------------------------------
<PAGE> 3

JAN BELL MARKETING, INC.

---------------------

PROXY STATEMENT
---------------------

INFORMATION CONCERNING SOLICITATION AND VOTING

GENERAL

The enclosed Proxy is solicited by the Board of Directors of Jan Bell
Marketing, Inc. (the "Company") for use at the Annual Meeting of Shareholders to
be held Tuesday, August 20, 1996 at 9:00 a.m. local time, or at any adjournment
thereof, for the purposes set forth herein and in the accompanying Notice of
Annual Meeting of Shareholders. The Annual Meeting will be held at the
Bonaventure Resort, 250 Racquet Club Road, Fort Lauderdale, Florida.

These proxy solicitation materials were mailed on or about July 17, 1996.
Although the Annual Report is being mailed with the proxy materials, the Annual
Report should not be deemed to be part of this Proxy Statement.

The Company's corporate offices are located at 13801 Northwest 14th Street,
Sunrise, Florida 33323, and its phone number at such address is (954) 846-2705.

RECORD DATE AND SHARE OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Shareholders of record at the close of business July 10, 1996 are entitled
to notice of and to vote at the meeting. At the record date, 25,859,756 shares
of the Company's voting common stock were issued and outstanding.

A list of stockholders entitled to vote at the meeting will be available at
the Company's corporate offices on August 20, 1996 and for ten days prior to the
meeting between the hours of 9:00 a.m. and 5:00 p.m.

As of July 1, 1996, the following table sets forth the beneficial ownership
of voting common stock of the Company by each director and director nominee who
owns shares, by all directors and executive officers as a group and by all
persons known by the Company to be the beneficial owners of more than 5% of the
voting common stock:

<TABLE>
<CAPTION>
SHARES OF COMMON STOCK
BENEFICIALLY OWNED
--------------------------
PERCENT OF
NUMBER OF SHARES
NAME AND ADDRESS(1) SHARES OUTSTANDING(1)
------------------------------------------------------------- --------- --------------
<S> <C> <C>
Eliahu Ben Shmuel(7)......................................... 1,455,750 5.7%
1000 Island Blvd #2006
Miami, FL 33160
Marbella Resources, Ltd(8)................................... 1,635,588 6.3%
Tropical Isle Building
Wickhams Cay, Road Town
Tortola, British Virgin Islands
Cumberland Associates(9)..................................... 1,550,000 6.1%
1114 Avenue of the Americas
New York, NY 10036
Tweedy, Browne Company L.P. & Group(10)...................... 1,901,415 7.4%
52 Vanderbilt Avenue
New York, NY 10017
Dimensional Fund Advisors Inc.(11)........................... 1,348,500 5.2%
1299 Ocean Avenue 11th fl
Santa Monica, CA 90401
All executive officers and directors as a group (11
persons)(12)............................................... 1,228,351 4.8%
</TABLE>

- ---------------

(1) Unless otherwise noted, each person has sole voting and investment power
over the shares listed opposite his or her name.
(2) Includes options to purchase 380,000 shares. Does not include shares of
common stock registered in the name of Marbella Resources Limited, wholly
owned by the Amid Trust, of which Mr. Arguetty's family has beneficial
interests, but with respect to which Mr. Arguetty is not a beneficiary and
has no voting or dispositive power. See footnote (8) below.
(3) Includes options to purchase 110,000 shares.
(4) Includes options to purchase 55,000 shares.
(5) Includes options to purchase 40,000 shares.
(6) Includes options to purchase 147,334 shares.
(7) Includes 146,800 shares held in the Ben Shmuel 1992 Charitable Unitrust.
(8) Marbella Resources Limited reports that as of May 1, 1996 it owned
1,635,588 shares.
(9) Cumberland reported this ownership as of March 31, 1996.
(10) Tweedy, Browne reported this ownership as of March 31, 1996.
(11) Dimensional reported this ownership as of March 31, 1996.
(12) Includes 1,022,435 shares issuable upon the exercise of stock options for
all executive officers and directors.

REVOCABILITY OF PROXIES

Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before it is used by delivering to the Company a written
notice of revocation or a duly executed proxy bearing a later date or by
attending the meeting and voting in person.

2
<PAGE> 5

VOTING AND SOLICITATION

If a proxy in the form distributed by the Company is properly executed and
returned to the Company, the shares represented by that proxy will be voted at
the Annual Meeting. Where a stockholder specifies a choice, the proxy will be
voted as specified. If no choice is specified, the shares represented by the
proxy will be voted for the election of all nominees, for approval of the
amendments to the Certificate and for the appointment of the independent
accountants.

Each share has one vote on each matter properly submitted for a vote at the
meeting. A majority of the outstanding shares will constitute a quorum at the
meeting. Abstentions and broker non-votes are counted for purposes of
determining the presence of a quorum. The nominees receiving the most support
for the number of positions to be filled are elected directors. Abstentions are
counted in tabulations of the votes cast on proposals presented to stockholders,
whereas broker non-votes are not counted for purposes of determining whether a
proposal has been approved.

The cost of this solicitation will be borne by the Company. In addition,
the Company may reimburse brokerage firms and other persons representing
beneficial owners of shares for their expenses in forwarding solicitation
materials to such beneficial owners. Proxies may also be solicited by certain of
the Company's directors, officers and regular employees, without additional
compensation, personally or by telephone or telegram.

DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS

Proposals of security holders of the Company which are intended to be
presented by such shareholders at the Company's 1997 Annual Meeting must be
received by the Company no later than January 15, 1997 in order that they may be
considered for inclusion in the proxy statement and form of proxy relating to
that meeting. Additionally, if a stockholder wishes to present to the Company an
item for consideration as an agenda item for a meeting, he or she must give
timely notice to the Secretary and give a brief description of the business
desired to be discussed. To be timely for the 1996 Annual Meeting, such notice
must be delivered to or mailed to and received by the Company no later than 5:00
p.m. local time on July 23, 1996. Shareholder proposals or notices should be
sent certified mail, return receipt requested to Richard Bowers, Secretary, Jan
Bell Marketing, Inc., 13801 N.W. 14th Street, Sunrise, Florida 33323.

ELECTION OF DIRECTORS

NOMINEES

The Board of Directors currently consists of eight members and is
classified into three classes with each class holding office for a three year
period. The terms of Messrs. Burden, Groussman and Bashan expire in 1996; the
terms of Messrs. Arguetty, Edelstein and Offermann expire in 1997; and the terms
of Messrs. Epstein and Feltenstein expire in 1998. Under the Bylaws, the number
of directors may be increased to thirteen. The Certificate of Incorporation
restricts the removal of directors under certain circumstances.

One present director, Mr. Bashan, is to be elected at the meeting for a
term expiring in 1999. Two new directors, Gregg Bedol and Robert G. Robison, are
to be elected for terms expiring in 1999. Unless otherwise instructed, the proxy
holders will vote the proxies received by them for such persons as the Company's
nominees. If any nominee of the Company is unable or declines to serve as a
director at the time of the Annual Meeting, the proxies will be voted for any
nominee who shall be designated by the present Board of Directors to fill the
vacancy. It is not expected that any nominee will be unable or will decline to
serve as a director.

3
<PAGE> 6

Any shareholder entitled to vote for the election of directors at a meeting
may nominate persons for election as directors only if written notice of such
shareholder's intent to make such nomination is given, either by personal
delivery or by United States mail, postage prepaid to Corporate Secretary, Jan
Bell Marketing, Inc., 13801 Northwest 14th Street, Sunrise, Florida 33323, not
later than: (i) with respect to the election to be held at an annual meeting of
shareholders, 30 days in advance of such meeting, and, (ii) with respect to any
election to be held at a special meeting of shareholders for the election of
directors, the close of business on the tenth day following the date on which
notice of such meeting is first given to shareholders. Each such notice must set
forth: (a) the name and address of the shareholder who intends to make the
nomination and of the person or persons to be nominated, (b) a representation
that such shareholder is a holder of record of stock of the corporation entitled
to vote at such meeting and intends to appear in person or by proxy at the
meeting to nominate the person or persons specified in the notice, (c) a
description of all arrangements or understandings between such shareholder and
each nominee and any other person or persons (naming such person or persons)
pursuant to which the nomination or nominations are to be made by such
shareholder, (d) such other information regarding each nominee proposed by such
shareholder as would have been required to be included in a proxy statement
filed pursuant to the proxy rules of the Securities and Exchange Commission if
such nominee had been nominated or intended to be nominated by the Board of
Directors, and (e) the consent of each nominee to serve as a director if
elected. The chairman of a shareholder meeting may refuse to acknowledge the
nomination of any person not made in compliance with the foregoing procedure.

INFORMATION REGARDING DIRECTORS AND EXECUTIVE OFFICERS

The names of the directors, director nominees and executive officers and
certain information about them are set forth below.

<TABLE>
<CAPTION>
DIRECTOR
NAME AGE PRINCIPAL OCCUPATION SINCE
- --------------------------------- --- ---------------------------------------------- --------
<S> <C> <C> <C>
Isaac Arguetty 50 Chairman of the Board and Chief Executive
Officer of Jan Bell and Director of Delheim
and Worchester PLC 1994
Haim Bashan 48 Director and President of Regal Diamonds and
Exclusive Diamonds 1995
Chaim Edelstein 53 Director and Chairman of the Board of Hills
Stores Company 1994
Thomas Epstein 39 Director, Private Investor and Financial
Consultant 1995
Sidney Feltenstein 55 Director and Chairman, CEO and President of A
& W International 1994
Peter Offermann 51 Director and Executive Vice President and
Chief Financial Officer of TLC Beatrice
International Holdings, Inc. 1996
Gregg Bedol 40 Vice President, Neil Thall Associates --
Robert G. Robison 42 Partner, Morgan, Lewis & Bockius LLP --
Richard Bowers 44 Senior Executive Vice President, General
Counsel and Secretary
</TABLE>

The following sets forth certain biographical information with respect to
the three director nominees (Messrs. Bashan, Bedol and Robison) and each of the
other persons.

4
<PAGE> 7

ISAAC ARGUETTY

Mr. Arguetty was a co-founder, the Executive Vice President and a Director
of the Company and its predecessors from 1983 until December 1990, Chairman of
the Board of Directors from July 1987 to January 1990, and Co-Chairman of the
Board of Directors from January 1990 until December 1990. From 1991 through the
present, Mr. Arguetty has been a Director with Delheim and Worchester PLC, a
U.K. based international finance company. In May 1994, he rejoined the Company
as Co-Chairman of the Board and is the current chairman. In May 1996, Mr.
Arguetty became CEO of the Company.

HAIM BASHAN

Since 1990 Mr. Bashan has been the President of Regal Diamonds and
Exclusive Diamonds, subsidiaries of the Company. Mr. Bashan became a director of
the Company in November 1995.

CHAIM EDELSTEIN

Mr. Edelstein commenced employment with Abraham & Strauss in 1978, where he
was the Chairman and Chief Executive Officer from 1985 through 1994. Prior to
1978, Mr. Edelstein was with Hecht & Co. (a division of May Department Stores).
In addition to being a retail consultant, Mr. Edelstein currently serves as the
Chairman of the Board of Hills Stores Company and a director Carson Pirie Scott,
Inc.

THOMAS EPSTEIN

Mr. Epstein has been a private investor and financial consultant since 1990
and was a consultant to the Company from February 1995 until March 1996. Mr.
Epstein was affiliated with Zaleski, Sherwood & CO., Inc. from April 1986 to
September 1990. From 1980 to 1986, Mr. Epstein was employed by Bankers Trust
Company in various capacities, including Vice President. Mr. Epstein is a
director of Sun Television and Appliances, Inc.

SIDNEY FELTENSTEIN

Mr. Feltenstein has been a Director of the Company since 1994. He is
currently the Chairman, CEO and President of A&W International, Inc. Prior to
such time, Mr. Feltenstein was the Executive Vice President and Chief Marketing
Officer of Burger King Corporation from 1991 to 1993. Prior to that time, he was
employed by Dunkin Donuts, Inc., where he was Senior Vice President and Chief
Marketing Officer from 1979 to 1991.

PETER OFFERMANN

Peter Offermann has been Executive Vice President and Chief Financial
Officer of TLC Beatrice International Holdings, Inc. since December 1994. Since
May 1994, Mr. Offermann has been the President of Offermann Financial, Inc., a
financial consulting firm. From 1968 through May 1994, he served in a number of
positions with Bankers Trust Company and its affiliates, including as Managing
Director of BT Investment Partners, Inc. from October 1992 through May 1994,
Managing Director of BT Securities Corporation from October 1991 through October
1992, and Managing Director of Bankers Trust Company from 1986 through 1991.

5
<PAGE> 8

GREGG BEDOL

Since 1995, Gregg Bedol has been a Vice President at Neil Thall Associates,
an information systems consultant specializing in the retail industry. From 1993
to 1995 he was Vice President of Information Services at National Vision
Associates. From 1991 to 1993, he operated Bedol Retail Consulting, Inc., where
he advised retail and consumer products companies until 1993.

ROBERT G. ROBISON

Robert G. Robison has been a partner at the law firm of Morgan, Lewis &
Bockius LLP since 1991.

RICHARD BOWERS

Mr. Bowers has been the Senior Executive Vice President and General Counsel
of Jan Bell since May 1991 and Secretary since September 1992. Prior to such
time, he was engaged in the private practice of law with the firm of Gaston &
Snow.

COMPENSATION OF DIRECTORS

Directors who are not employees of the Company receive compensation of
$20,000 per year plus reimbursement of reasonable expenses for attending
meetings and automatically receive options to purchase at an exercise price
equal to the market price on the grant date 20,000 voting common shares on the
date of their initial election and 10,000 each year thereafter on January 1.
Such options are exercisable in full six months after the grant date and until
two years after a person ceases to be a director. Directors who are employees of
the Company do not receive additional compensation for services as a director.
Mr. Arguetty and Mr. Edelstein have agreed to waive their entitlement to the
cash compensation and options payable to directors who are not employees.

Mr. Epstein served as a financial and investment banking consultant to the
Company from February 1995 until March 1996. During the fiscal year ended
February 3, 1996, Mr. Epstein received a total of $90,000 for his consulting
services.

Effective as of the time that Mr. Arguetty was appointed the Co-Chairman of
the Board in May 1994, the Company entered into an agreement with Mr. Arguetty
to pay him $150,000 annually and to reimburse him for his reasonable expenses in
performing his duties. On August 11, 1995, Mr. Arguetty was granted options to
purchase 90,000 shares at a price of $2.4375 per share, which was the fair
market value of such shares on such date. The options generally become vested
and exercisable in equal installments as of the first three fiscal year ends
after the date of grant; provided that no vesting shall occur unless certain
goals as to Company performance for the relevant fiscal years are achieved.

In May, 1995, the Company engaged Mr. Edelstein to perform certain
consulting services for the Company, primarily relating to retail expansion. Mr.
Edelstein is to be paid $2,500 per day for his services, subject to an annual
cap of $150,000. During the fiscal year ended February 3, 1996, Mr. Edelstein
received a total of $128,750 for his consulting services. On May 4, 1995, Mr.
Edelstein was granted options under the Company's Stock Option Plan to purchase
270,000 common shares at a price of $2.63 per share, which was the fair market
value of such shares on such date. On August 11, 1995, Mr. Edelstein was granted
options to purchase 72,000 shares at a price of $2.4375 per share, which was the
fair market value of such shares on such date. The options become vested and
exercisable in equal installments as of the first three fiscal year ends after

6
<PAGE> 9

the date of grant, provided that the consulting arrangement remains in effect,
and provided, further, that no vesting shall occur unless certain goals as to
Company performance for the relevant fiscal years are achieved.

BOARD MEETINGS AND COMMITTEES

The Board of Directors held a total of six meetings and one Consent to
Action in Lieu of Meeting during the fiscal year ended February 3, 1996. No
Director attended fewer than 75% of the aggregate of all meetings of the Board
of Directors or any committees.

The Board presently has an Audit Committee, Compensation and Option
Committees and does not have a nomination committee.

The Audit Committee presently consists of Messrs. Burden, Edelstein and
Groussman and met four times in Fiscal 1995. The Audit Committee meets
independently with the internal auditing staff, representatives of the Company's
independent accountants and with representatives of senior management. The
Committee reviews the general scope of the Company's annual audit and other
matters relating to internal control systems. In addition, the Audit Committee
is responsible for reviewing and monitoring the performance of non-audit
services by the Company's auditors as well as reviewing the engagement or
discharge of the Company's independent accountants.

The Compensation and Option Committees presently consist of Messrs. Burden
and Feltenstein and held one meeting and one Consent to Action in Lieu of
Meeting during the fiscal year ended February 3, 1996. The Compensation and
Option Committees may review and report to the Board the salaries and benefit
programs designed for executive officers with a view to insure that the Company
is attracting and retaining highly qualified managers through competitive salary
and benefit programs and encouraging extraordinary effort through incentive
rewards.

7
<PAGE> 10

COMPENSATION OF EXECUTIVE OFFICERS

EXECUTIVE COMPENSATION

The following table sets forth certain information regarding compensation
paid by the Company to each of the five most highly compensated executive
officers and one additional departed executive of the Company during the fiscal
year ending February 3, 1996:

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
-------------------
ANNUAL COMPENSATION AWARDS
--------------------------------- -------------------
OTHER RESTRICTED
ANNUAL STOCK ALL OTHER
FISCAL SALARY BONUS COMPENSATION AWARDS(1) OPTIONS COMPENSATION(2)
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) ($) (#) ($)
- ------------------------------ ------ -------- ------- ------------ --------- ------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Joseph Pennacchio 1995 $540,000 0 N/A(3) 0 276,000 $ 6,006
Former CEO(5) 1994 359,307 0 N/A 0 360,000 65,000(4)
Peter Hayes 1995 153,837 0 N/A 0 0 995,000
Former President(6) 1994 375,000 0 N/A 0 330,000(5) 145,500(4)
Richard Bowers 1995 240,000 0 N/A 0 0 15,408
Senior Executive Vice 1994 269,175 0 N/A 0 0 540,408(7)
President, General Counsel 1993 292,186 0 N/A $697,125 75,000 13,790
and Secretary
Tom Kerins 1995 135,000 0 N/A 0 50,000 95,917(8)
Former Senior Vice President
of Merchandising(9)
David Boudreau 1995 123,500 0 N/A 0 50,000 9,810
Senior Vice President of 1994 123,500 0 N/A 0 0 9,810
Finance and Treasurer 1993 123,500 35,000 N/A 0 0 9,810
Jeffrey Weiss 1995 120,000 0 N/A 0 35,000 14,500
Senior Vice President of 1994 120,000 0 N/A 0 0 14,500
Distribution 1993 120,000 25,000 N/A 0 0 14,500
</TABLE>

- ---------------

(1) Dividends (if any) will be paid on restricted stock. The aggregate number of
shares of restricted stock and their value at fiscal year-end ($2.94 per
share) is as follows: Richard Bowers -- 5,130 shares, $15,082.
(2) Except as otherwise explained, the amounts set forth in this column for each
individual represent payments of annual premiums by the Company for whole
life insurance policies provided to executive officers.
(3) Entries marked "n/a" represent information which is not reportable.
(4) Represents for each person annual premiums of $15,000 for whole life
insurance policies and fixed bonuses and payments regarding commencement of
employment and relocation.
(5) Mr. Pennacchio resigned as CEO, President and a director on May 6, 1996, and
he received a contractual severance of $1,999,619 plus continuation of
certain benefits and vesting of options for a two year period.
(6) Mr. Hayes resigned as President and director on April 30, 1995. All options
were cancelled and he received cash of $995,000 as a contractual severance
payment.

8
<PAGE> 11

(7) Represents $15,408 for annual premium for whole life insurance policy and
$525,000 as consideration for entering into new employment agreement and
waiving substantial and material rights available under previous agreement.
(8) Represents $35,000 as a fixed bonus regarding commencement of employment and
$60,917 as relocation reimbursement.
(9) Mr. Kerins' employment with the Company ended on July 3, 1996.

Mr. Bowers is employed as the Senior Executive Vice President and General
Counsel until August 1, 1999. Mr. Bowers receives a base annual salary of
$250,000 (subject to annual adjustment to reflect increases in the consumer
price index) with a discretionary annual bonus of up to $100,000.00. The
agreement allows Jan Bell to terminate his employment for cause without
termination benefits or without cause upon payment of the base salary and annual
bonus for the remaining term of the agreement with acceleration of outstanding
options and vesting of bonus stock. Mr. Bowers may terminate the agreement on
the same terms as a termination by Jan Bell without cause following a change in
control, the takeover, merger or acquisition of Jan Bell or a sale of
substantially all of Jan Bell's assets, or the failure to appoint him as Senior
Executive Vice President and General Counsel.

Mr. Boudreau is employed as the Senior Vice President of Finance and
Treasurer until May 9, 1997 at a base annual salary of $140,000 with a
discretionary bonus not to exceed $56,000. The agreement allows the Company to
terminate the employment of Mr. Boudreau for cause without termination benefits
or without cause upon payment of the greater of 12 months base salary or the
base salary for the remaining employment term and acceleration of outstanding
options.

Mr. Weiss is employed as the Senior Vice President of Distribution until
August 17, 1998 at a base annual salary of $135,000 with a discretionary bonus
not to exceed $54,000. The agreement allows the Company to terminate the
employment of Mr. Weiss for cause without termination benefits or without cause
upon payment of $135,000 and acceleration of outstanding options.

CERTAIN TRANSACTIONS

The Company has from time to time engaged the services of Dr. Anthony
Armstrong, an employee of Delheim & Worcester, a U.K. based international
finance company, to perform certain financial consulting services. Dr.
Armstrong's services have consisted primarily of preparing merchandising and
inventory reports and sales sensitivity analyses. Mr. Arguetty serves as a
director to and is principal shareholder of Delheim & Worcester. During the
fiscal year ended February 3, 1996, fees and disbursements paid by the Company
to Delheim & Worcester totalled $201,966. The Company believes that the terms of
the arrangement with Delheim & Worcester are no less favorable than those that
could be obtained from an unaffiliated third party for comparable services.

In addition, the law firm of Morgan, Lewis & Bockius LLP of which Mr.
Robison is a partner, performs certain legal services for the Company.

For information regarding compensation paid to Messrs. Arguetty, Edelstein
and Epstein, see COMPENSATION OF DIRECTORS.

9
<PAGE> 12

OPTION/SAR GRANTS IN LAST FISCAL YEAR

The following table provides information regarding stock options granted to
the named officers in the fiscal year ended February 3, 1996. In addition, in
accordance with SEC rules there are shown the hypothetical gains or "option
spreads" that would exist for the respective options.

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- -----------------------------------------------------------------------------
PERCENT OF
NUMBER OF TOTAL POTENTIAL REALIZABLE VALUE AT
SECURITIES OPTIONS/SARS ASSUMED ANNUAL RATES OF STOCK
UNDERLYING GRANTED TO EXERCISE PRICE APPRECIATION FOR OPTION
OPTIONS/SARS EMPLOYEES OR BASE TERM(3)
GRANTED(1) IN FISCAL PRICE(2) EXPIRATION ---------------------------------
NAME # YEAR ($/SH) DATE 5% ($) 10% ($)
- ------------------------ ------------ ------------ -------- ---------- ---------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Joseph Pennacchio
May 4, 1995........... 150,000 9.2% 2.6250 5/6/98 248,062.50 626,062.50
August 11, 1995....... 126,000 7.7% 2.4375 5/6/98 193,488.75 488,328.75
Tom Kerins
May 4, 1995........... 20,000 1.2% 2.6250 7/3/96 33,075.00 83,475.00
August 11, 1995....... 30,000 1.8% 2.4375 7/3/96 46,068.75 116,268.75
David Boudreau
May 4, 1995........... 20,000 1.2% 2.6250 5/4/05 33,075.00 83,475.00
August 11, 1995....... 30,000 1.8% 2.4375 8/11/05 46,068.75 116,268.75
Jeff Weiss
May 4, 1995........... 10,000 .6% 2.6250 5/4/05 16,537.50 41,737.50
August 11, 1995....... 25,000 1.5% 2.4375 8/11/05 38,390.62 96,890.62
</TABLE>

- ---------------

(1) No SAR's were granted in 1995. Individual option grants become exercisable
in installments over a three year period subject to the attainment of
certain Company financial performance standards. Options can become
immediately exercisable upon the occurrence of certain corporate events,
including a change in control of the Company or delivery of written notice
of a stockholder's meeting to consider a merger, sale of assets or similar
reorganization. All options granted in 1995 had ten year terms when
granted.

(2) All grants were made at or above 100% of fair market value as of the date of
grant.
(3) The dollar amounts under these columns are the result of calculations using
the February 3, 1996 closing market price of $2.94 per share at the 5% and
10% rates set by the SEC and therefore are not intended to forecast
possible future appreciation, if any, of the Company's stock price. No gain
to optionees is possible without an increase in stock price, which will
benefit all shareholders commensurately.

10
<PAGE> 13

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FY-END OPTION/SAR VALUES

The following table shows stock option exercises by named officers in
Fiscal 1995, including the aggregate value of gains on the date of exercise. In
addition, the table includes the number of shares covered by both exercisable
and non-exercisable stock options as of February 3, 1996. Also reported are the
values for "in-the-money" options which represent the positive spread between
the exercise price of any such existing stock options and the fiscal year-end
price of $2.94 per share of common stock.

<TABLE>
<CAPTION>
VALUE OF
NUMBER OF SECURITIES UNEXERCISED
UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS/SARS
OPTIONS/SARS AT AT FISCAL
SHARES FISCAL YEAR-END(#) YEAR-END($)
ACQUIRED -------------------- -------------
ON EXERCISE VALUE EXERCISABLE/ EXERCISABLE/
NAME (#) REALIZED(1) UNEXERCISABLE UNEXERCISABLE
- ------------------------------------------- ----------- ----------- -------------------- -------------
<S> <C> <C> <C> <C>
Joseph Pennacchio.......................... 0 0 72,000/564,000 0/111,315
Richard W. Bowers.......................... 0 0 190,000/0 0/0
Tom Kerins................................. 0 0 15,000/ 80,000 0/ 79,075
David Boudreau............................. 0 0 83,434/ 56,666 0/ 79,075
Jeff Weiss................................. 0 0 58,625/ 41,666 0/ 15,762
</TABLE>

- ---------------

(1) Fair market value of shares at exercise minus the exercise price.

11
<PAGE> 14

PERFORMANCE GRAPH

The graph below compares the five year cumulative total return for Jan Bell
stock with the cumulative total return of the Amex Market Value Stock Index and
the S&P Retail Specialty Index. The graph assumes $100 invested on December 31,
1990 in Jan Bell stock and $100 invested at that time in each of the indexes.
The comparison assumes that dividends are reinvested.

COMPARISON OF 61 MONTHS CUMULATIVE TOTAL RETURN*
AMONG JAN BELL MARKETING, INC., THE AMEX MARKET VALUE INDEX
AND THE S & P RETAIL STORES-SPECIALTY INDEX

[GRAPH]

<TABLE>
<CAPTION>
JAN BELL
MEASUREMENT PERIOD MARKETING, AMEX MARKET S&P RETL STRS
(FISCAL YEAR COVERED) INC. VALUE (SPECIALTY)
<S> <C> <C> <C>
12/90 100.00 100.00 100.00
12/91 200.00 128.00 152.00
12/92 289.00 130.00 203.00
12/93 134.00 155.00 203.00
1/95 43.00 141.00 193.00
1/96 38.00 180.00 180.00
</TABLE>

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

Under rules established by the Securities and Exchange Commission, the
Company is required to provide certain data and information regarding the
compensation and benefits provided to the Company's Chief Executive Officer
("CEO") and the four other most highly compensated executive officers during
Fiscal 1995. The disclosure requirements for these individuals (the "named
executive officers") includes the use of tables and a report explaining the
rationale and considerations regarding the executive compensation decisions
affecting those individuals. In fulfillment of these requirements, the
Compensation Committee consisting of

12
<PAGE> 15

Mr. Burden and Mr. Feltenstein for Fiscal 1995 prepared the following report.
The Compensation Committee is composed entirely of directors who have never been
employees of the Company.

Compensation Philosophy

This report reflects the Company's compensation philosophy as endorsed by
the Board of Directors and the Committee and resulting actions taken by the
Company. With regard to compensation actions affecting the CEO Mr. Pennacchio,
the Committee acted as the approving body.

Executive compensation has been designed to:

- Support a pay for performance policy that provides compensation amounts
based both on overall corporate results and individual performance;

- Motivate executives to achieve business initiatives and reward them for
their achievement;

- Provide total compensation opportunities which allow the Company to
compete for and retain talented results oriented executives who will
contribute to the Company's short-term and long-term success; and

- Align the interests of executives with the long-term interests of
stockholders through award opportunities based on stock performance.

At present, executive compensation is comprised of base salary, annual
bonus cash incentive opportunities based on subjective analysis, and long-term
incentive opportunities in the form of grants of stock options.

As an executive's level of responsibility increases, a greater portion of
his or her potential total compensation opportunity is generally based on
performance incentives and less on base salary, causing greater variability in
the individual's absolute compensation level from year-to-year. Incentive
compensation (all pay other than base salary) comprises a significant
compensation opportunity and is tied to the Company's short term earnings and
long term stock performance.

In reviewing or administering the individual elements of executive
compensation, the Company and the Committee strive to balance short and
long-term incentive objectives and utilize prudent judgment in reviewing
performance matters and incentive payments. While the Company has not yet
established a policy with respect to qualifying compensation paid to executive
officers for deductibility under new Internal Revenue Code provisions relating
to over $1 million compensation packages, the Company is continuing to review
the regulations and will generally seek to structure compensation to provide for
maximum deductibility, recognizing that there may be circumstances in which the
Company's interests are best served otherwise.

Annual Compensation Program

Annual total cash compensation for senior management consists of base
salary and discretionary bonuses of up to 40% of base salary. Accordingly, total
annual cash compensation varies each year based on achievement of Company
performance and profitability and a subjective evaluation of each executive's
contribution to that performance. Base salaries for the named executive officers
are set forth in employment agreements and were not changed in Fiscal 1995.

No discretionary bonuses were paid in Fiscal 1995.

13
<PAGE> 16

Long-Term Incentives -- Stock Option Plan

The Company's Stock Option Plan is designed to align a significant portion
of the named executive compensation with shareholder interests. In determining
the number of options to be awarded, the amount and terms of options previously
granted are generally not considered. The stock options are a right to purchase
shares of common stock generally over a ten-year period at the fair market value
per share as of the date the option is granted and vesting in increments over a
three year period, so the options provide value to the recipient only when the
stock price increases above the option grant price and the option has become
exercisable. The vesting and exercisability of options granted to the named
executives are subject to the Company achieving certain profitability levels in
each year.

The Committee has typically granted stock options on an annual basis to
executive officers pursuant to shareholder approved plans as well as options at
the time an executive commences employment. The Committee granted options in
Fiscal 1995 to the named executives as set forth on page 8 of this proxy
statement. The particular allocation for each person including the CEO was
determined in relation to management level and a subjective assessment of
individual performance.

SUBMITTED BY THE COMPENSATION COMMITTEE OF THE COMPANY'S BOARD OF
DIRECTORS: JOHN BURDEN AND SIDNEY FELTENSTEIN.

COMPLIANCE WITH SECTION 16(A) OF SECURITIES EXCHANGE ACT OF 1934

The Company believes that during Fiscal 1995 its officers and directors
complied with all filing requirements under Section 16(a) of the Securities
Exchange Act of 1934, except Mr. Edelstein did not timely file one report
reflecting the purchase by his minor son of 110 shares on November 21, 1995.

AMENDMENT OF CERTIFICATE

The Board of Directors of the Company has approved two amendments to the
Certificate of Incorporation (the "Certificate") and has directed that such
amendments be submitted to a vote of the shareholders at the Annual Meeting.
Each of the proposals is described below.

The Board believes that the amendments are in the best interest of the
Company and its shareholders and recommends a vote FOR approval of each. The
following discussion is qualified in its entirety by reference to Exhibit A
attached hereto, which is the text of the proposed amendments to the
Certificate.

AMENDMENT PROPOSAL #1

Current Provision

Article Eighth of the Certificate, requires that various corporate actions
between the Company or any subsidiary of the Company and a Related Person
(defined below) be approved by the affirmative vote of not less than 66 2/3% of
the Company's total voting power excluding shares held by the Related Person and
his Affiliates or Associates, unless, such transaction is approved by not less
than two-thirds of the Continuing Directors either before or after such Related
Person became a Related Person, or, among other things, certain minimum price,
form of consideration and procedural requirements are satisfied.

This provision and certain related sections of the Certificate are intended
to encourage any person desiring to acquire a controlling interest in the
Company to do so through a transaction negotiated with the

14
<PAGE> 17

Company's Board of Directors rather than through a hostile takeover attempt. The
currently-existing provisions are intended to assure that any acquisition of
control of the Company will be subject to review by the Board to take into
account, among other things, the interests of all of the Company's shareholders.
These provisions can be disadvantageous to the extent that they could limit or
preclude meaningful shareholder participation in certain transactions and render
more difficult or discourage certain takeovers in which shareholders might
receive for some or all of their shares a price that is higher than the
prevailing market price at the time the takeover attempt is commenced. These
provisions also further render more difficult or discourage proxy contests, the
assumption of control by a person of a large block of the Company's voting stock
or other transactions which are opposed by the Company's incumbent Board of
Directors.

Proposed Amendment

Article Eighth, Section (d)(xvi) of the Certificate defines "Related
Person" generally as any person who beneficially owns 10% or more of the capital
stock of the Company or an assignee of any shares of capital stock which were at
any time within the two-year period immediately prior to the date in question
beneficially owned by any Related Person, unless such assignment or succession
occurred pursuant to a public offering under the Securities Act of 1933, as
amended. This Section also contains certain exclusions from the definition of a
Related Person. The proposed Amendment relates to the clause "provided, however,
that the term "Related Person" shall not include (v) the sole incorporator of
the Company or any of his Affiliates or Associates as designated in his sole
discretion by him." The Board of Directors proposes that the term "sole
incorporator" contained in this clause be replaced by the term "Chairman of the
Board."

The Board of Directors believes that this exemption should not apply to the
sole incorporator because the sole incorporator is no longer a member of the
Board of Directors, does not currently have any affiliation with the Company
and, therefore, is not subject to any fiduciary obligations to the Company or
its Shareholders. If the foregoing proposal is approved by the shareholders,
certain corporate transactions between the Company and the Chairman of the
Board, or the Chairman's Affiliates and Associates, will be exempted from the
restrictions and requirements applicable to other Related Persons. The Board
believes that the potential problems that could arise by excluding the sole
incorporator from the definition as a Related Person, are not present when
excluding the Chairman because the Chairman, unlike the sole incorporator, owes
a fiduciary duty to the Company and its shareholders. This also provides a means
for the Chairman to protect the Company should a hostile party attempt to
acquire a controlling interest in the Company.

AMENDMENT PROPOSAL #2

Current Provision

Currently the Certificate provides for the Company to have a classified
board with each of three classes of directors serving three year terms. The
Certificate further provides that a director may be removed from office only
with cause and only with the affirmative vote of at least 50% of the
shareholders entitled to vote in an election of directors. This provision
mirrors Section 141(k) of the Delaware General Corporation Law which would apply
to the Company in the absence of a provision in the Certificate. These
provisions are intended to have an anti-takeover effect by preventing a hostile
party who has succeeded in obtaining a controlling interest in the Company from
being able to take immediate control of the Board of Directors.

15
<PAGE> 18

Proposed Amendment

The proposed amendment would modify Article Seventh, Section (e) by
permitting the shareholders to also remove a director from the Board without
cause. The shareholders would be authorized to remove any director by the
affirmative vote of 50% of a quorum of shareholders, provided that the
Continuing Directors shall have adopted a resolution approving the removal of
such director. The Board believes that this amendment is in the best interests
of the Company and its shareholders because it gives shareholders the
flexibility to remove a director in situations where the director no longer has
the support of the shareholders, but has not taken any action that would
constitute "cause." This is not true under the current section which provides
for removal only "with cause." The proposed amendment would not undermine the
anti-takeover effect of the classified board because a resolution approving the
removal of a director without cause must be adopted by a two-thirds vote of the
Continuing Directors before the shareholders may vote to remove that director.

The complete text of the proposed amendments of Articles Seventh and Eighth
of the Certificate are set forth in Appendix A to this Proxy Statement, along
with the text of the related resolutions to be adopted by the shareholders. The
text of the amendments are subject to change as may be required by the Delaware
Secretary of State. THESE AMENDMENTS HAVE NOT BEEN PROPOSED IN RESPONSE TO ANY
PROPOSAL OR PLAN OF ANY THIRD PARTY TO SEEK CONTROL OF THE COMPANY.

The foregoing amendments to the Certificate of Incorporation require the
affirmative vote of the holders of at least a majority of the outstanding voting
shares entitled to vote.

RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS

The Board of Directors has appointed Deloitte & Touche LLP, independent
accountants, to audit the consolidated financial statements of the Company for
the fiscal year ending February 1, 1997 and recommends that shareholders vote
for ratification of such appointment.

In the event of a negative vote on such ratification of appointment, the
Board of Directors will reconsider its selection. Even if the selection is
ratified, the Board in its discretion may direct the appointment of a new
independent accounting firm at any time during the year, if the Board believes
that such a change would be in the best interests of the Company and its
shareholders.

Deloitte & Touche LLP has audited the Company's financial statements
annually since 1983. Its representatives are expected to be present at the
meeting with the opportunity to make a statement if they desire to do so and are
expected to be available to respond to appropriate questions.

OTHER MATTERS

The Company knows of no other matters to be submitted to the meeting. If
any other matters properly come before the meeting, then the persons named in
the enclosed form of proxy will each have discretionary authority to vote all
proxies with respect thereto in accordance with their judgment.

16
<PAGE> 19

AVAILABLE INFORMATION

The Company files annual reports on Form 10-K with the Securities and
Exchange Commission. A copy of such annual report for the fiscal year ended
February 3, 1996 (except for certain exhibits thereto) may be obtained, free of
charge, upon written request by any shareholder to Jan Bell Marketing, Inc.,
13801 Northwest 14th Street, Sunrise, Florida 33323, Attention: Corporate
Secretary. Copies of all exhibits to the annual report are available upon
similar request, subject to payment of a $0.15 per page charge to reimburse the
Company for its expenses in supplying any exhibit.

THE BOARD OF DIRECTORS

Dated: July 12, 1996

17
<PAGE> 20

APPENDIX A

CERTIFICATE OF AMENDMENT

CERTIFICATE OF INCORPORATION

JAN BELL MARKETING, INC.

PURSUANT TO SECTION 242 OF THE DELAWARE
GENERAL CORPORATION LAW

JAN BELL MARKETING, INC., a Delaware corporation, hereby certifies as
follows:

FIRST: The Certificate of Incorporation of the Corporation was filed
in the Office of the Secretary of State of Delaware on June 11, 1987 and a
certified copy was recorded in the Office of the Recorder of Kent County,
Delaware. The Certificate of Incorporation was previously amended on June
19, 1989 and July 29, 1991.

SECOND: Article Eighth of the Certificate of Incorporation is hereby
amended to modify the definition of "Related Person" by striking Section
(d)(xvi) of Article Eighth in its entirety and by substituting in lieu
thereof the following:

(xvi) The term "Related Person" shall mean any Person who alone or
together with any Affiliates or Associates is:

(A) the Beneficial Owner, directly or indirectly, of an
aggregate percentage of the outstanding Voting Stock equal to or
exceeding ten percent (10%), or

(B) an assignee of or otherwise has succeeded to the Beneficial
Ownership of any shares of Voting Stock which were at any time within
the two-year period immediately prior to the date in question
Beneficially Owned by any Related Person, if such assignment or
succession shall have occurred in the course of a transaction or
series of transactions not involving a public offering within the
meaning of the Securities Act of 1933, as amended;

provided, however, that the term "Related Person" shall not include (v)
the Chairman of the Board of the Corporation or any of his Affiliates or
Associates as designated in his sole discretion by him, (w) the
Corporation or any Subsidiary all of the Capital Stock of or other
ownership interest in which is directly or indirectly owned by the
Corporation, (x) any Person whose acquisition of such aggregate
percentage of Voting Stock was approved by not less than a two-thirds
vote of the Continuing Directors prior to such acquisition or (y) any
pension, profit sharing, employee stock ownership or other employee
benefit plan of the Corporation or any Subsidiary or any trustee or
fiduciary when acting in such capacity with respect to any such plan.

THIRD: Article Seventh of the Certificate of Incorporation is hereby
amended by striking Section (e) thereof in its entirety and by substituting
the following:

(e) Subject to the rights of the holders of Preferred Stock to
elect directors under specified circumstances, any director may be
removed from office either: (1) without cause by the affirmative

A-1
<PAGE> 21

vote of at least 50% of the combined voting power of the then
outstanding shares of stock entitled to vote generally in the election
of directors, voting together as a single class, that are present in
person or by proxy at a meeting where such action may be taken,
provided, however, that prior to any such meeting, that the Continuing
Directors as defined in Article Eighth, by a two-thirds vote of such
Continuing Directors, shall have adopted a resolution approving the
removal of such director, or (2) with cause by the affirmative vote of
the holders of at least 50% of the combined voting power of the then
outstanding shares of stock entitled to vote generally in the election
of directors, voting together as a single class.

FOURTH: This Amendment to the Certificate of Incorporation was duly
adopted in accordance with Section 242 of the Delaware General Corporation
Law.

IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Amendment of its Certificate of Incorporation to be executed by its President
this day of , 1996.

JAN BELL MARKETING, INC.

By:
--------------------------------------
Name:
Title:

A-2
<PAGE> 22

PROXY APPENDIX B

JAN BELL MARKETING, INC.
13801 N.W. 14TH STREET
SUNRISE, FLORIDA 33323

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints Vincent Tubito and Isaac Arguetty as
Proxies, each with the power to appoint his substitute, and hereby authorizes
each of them to represent and to vote, as designated below, all the shares of
Common Stock of Jan Bell Marketing, Inc. held of record by the undersigned on
July 10, 1996, at the Annual Meeting of Shareholders to be held on or about
August 20, 1996 or any adjournment thereof.

1. ELECTION OF DIRECTORS

<TABLE>
<S> <C>
/ / FOR the nominees listed below / / WITHHOLD AUTHORITY
(except as marked to the contrary below) to vote for the nominees listed below
</TABLE>

(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR AN INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH THE NOMINEE'S NAME BELOW.)

- --------------------------------------------------------------------------------

Haim Bashan, Gregg Bedol and Robert G. Robison

2. PROPOSALS TO AMEND THE CERTIFICATE

/ / FOR / / AGAINST / / ABSTAIN

3. PROPOSAL TO APPROVE AND RATIFY THE APPOINTMENT OF DELOITTE & TOUCHE

/ / FOR / / AGAINST / / ABSTAIN

(Continued on next page)

4. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment thereof.

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR THE NOMINEES AND FOR PROPOSALS 2 AND 3.

Please sign exactly as name appears below. When shares are held by more than
one owner, all should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by president or authorized officer. If a
partnership, please sign in partnership name by authorized person.

DATED: , 1996
-------------------
(Be sure to date this Proxy)

-------------------------------
Signature