<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>
/X/ Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/ / 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):
/X/ $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:
/ / 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
PRELIMINARY PROXY STATEMENT
JAN BELL MARKETING, INC.
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,
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
PRELIMINARY PROXY STATEMENT
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 12,
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,
25,838,424 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, 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>
Isaac Arguetty(2) 492,500 1.9%
Chaim Edelstein(3) 144,610 .6%
Thomas Epstein (4) 55,000 .2%
Sidney Feltenstein(5) 50,000 .2%
Haim Bashan (6) 246,200 1.0%
</TABLE>
-1-
<PAGE> 4
<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)
1000 Island Blvd #2006
Miami, FL 33160 1,455,750 5.7%
Marbella Resources, Ltd(8)
Tropical Isle Building
Wickhams Cay, Road Town
Tortola, British Virgin Islands 1,635,588 6.3%
Cumberland Associates (9)
1114 Avenue of the Americas
New York, NY 10036 1,550,000 6.1%
Tweedy, Browne Company
L.P. & Group (10)
52 Vanderbilt Avenue
New York, NY 10017 1,901,415 7.4%
Dimensional Fund
Advisors Inc. (11)
1299 Ocean Avenue 11th fl
Santa Monica, CA 90401 1,348,500 5.2%
All executive officers and directors
as a group (7 persons) (12) 1,309,534 5.1%
- ---------------
</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 410,000 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 (9) below.
(3) Includes options to purchase 134,000 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 1,076,435 shares issuable upon the exercise of stock options
for all executive officers and directors.
-2-
<PAGE> 5
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.
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 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
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<PAGE> 6
fill the vacancy. It is not expected that any nominee will be unable or will
decline to serve as a director.
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>
NAME AGE PRINCIPAL OCCUPATION DIRECTOR SINCE
---- --- -------------------- --------------
<S> <C> <C> <C>
Isaac Arguetty 50 Chairman of the Board and Chief Executive Officer of 1994
Jan Bell and Director of Delheim and Worchester PLC
Haim Bashan 48 Director and President of Regal Diamonds and Exclusive 1995
Diamonds
Chaim Edelstein 53 Director and Chairman of the Board of Hills Stores 1994
Company
Thomas Epstein 39 Director, Private Investor and Financial Consultant 1995
Sidney Feltenstein 55 Director and Chairman, CEO and President of A & W 1994
International
Peter Offermann 51 Director and Executive Vice President and Chief 1996
Financial Officer of TLC Beatrice Holdings
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>
-4-
<PAGE> 7
The following sets forth certain biographical information with respect
to each of the foregoing persons.
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 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 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.
-6-
<PAGE> 9
BOARD MEETINGS AND COMMITTEES
The Board of Directors held a total of six meetings and one Consents
to Action in Lieu of Meetings 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, and 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 Consents to Action in Lieu
of Meetings 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.
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
Name and Principal Position -------------------------------------- ----------------------
Other Restricted All
Annual Stock Other
Fiscal Salary Bonus Compensation Awards(1) Options Compensation(2)
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 1993 $292,186 0 N/A $697,125 75,000 $13,790
Counsel and Secretary
Tom Kerins 1994 $135,500 0 N/A 0 50,000 $95,917(8)
Senior Vice President of
Merchandising
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
</TABLE>
-7-
<PAGE> 10
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
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 the Company is negotiating his contractual severance.
(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.
(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.
Mr. Pennacchio joined the Company in May 1994 and was employed as the
Chief Executive Officer and President. Mr. Pennacchio and the Company agreed
to his termination of employment and resignation as a director in May 1996, and
the Company is negotiating his contractual severance.
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. Kerins is employed as the Senior Vice President of Special Events
and Promotions until September 26, 1997 at a base salary of $135,000, with a
discretionary bonus not to exceed $54,000. The agreement allows the Company to
terminate the employment of Mr. Kerins for cause without termination benefits
or without cause upon payment of $67,500 and acceleration of outstanding
options.
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
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<PAGE> 11
fiscal year ended February 3, 1996, fees and disbursements paid by the Company
to Delheim & Worcester totalled $201,966. The Company believes that the terms
of the arrangement with Delheim & Worcester are no less favorable than those
that could be obtained from an unaffiliated third party for comparable
services.
In addition, the law firm of Morgan, Lewis & Bockius LLP of which Mr.
Robison is a partner, performs certain legal services for the Company.
For information regarding compensation paid to Messrs. Arguetty,
Edelstein and Epstein, see COMPENSATION OF DIRECTORS.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table provides information regarding stock options
granted to the named officers in the fiscal year ended February 3, 1996. In
addition, in accordance with SEC rules there are shown the hypothetical gains
or "option spreads" that would exist for the respective options.
<TABLE>
<CAPTION>
Individual Grants
--------------------------
Percent of
Number of Total
Securities Options/SARs Potential Value at
Underlying Granted to Exercise Realizable Assumed
Options/SARs Employees or Base Annual Rates of Stock Price
Granted(1) in Fiscal Price(2) Expiration Appreciation For Option Term(3)
Name # Year ($/Sh) Date 5% ($) 10% ($)
----------- ----------- -------- --------- ---------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Joseph Pennacchio
May 4, 1995 150,000 9.2% 2.6250 5/4/05 248,062.50 626,062.50
August 11, 1995 126,000 7.7% 2.4375 8/11/05 193,488.75 488,328.75
Tom Kerins
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
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 have ten year terms.
(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.
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 $2.94 per share of common stock.
-9-
<PAGE> 12
<TABLE>
<CAPTION>
Number of Securities Value of
Underlying Unexercised
Unexercised in-the-Money
Options/SARs options/SARs
Shares at Fiscal at Fiscal
Acquired Value Year-End(#) Year-End($)
on Exercise Realized(1) Exercisable/ Exercisable/
Name (#) ($) Unexercisable Unexercsiable
<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.
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.
[INSERT GRAPH HERE]
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
<TABLE>
<CAPTION>
Cumulative Total Return
--------------------------------------------------------
JBM 12/90 12/91 12/92 12/93 1/95 1/96
<S> <C> <C> <C> <C> <C> <C> <C>
Jan Bell Marketing, Inc. 100 200 289 134 43 38
AMEX MARKET VALUE LAMX 100 128 130 155 141 180
S & P RETL STRS (SPECIALTY) IRSS 100 152 203 203 193 180
</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 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.
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<PAGE> 13
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.
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
-11-
<PAGE> 14
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 2
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 unanimously recommends a vote
FOR approval of each. The following discussion is qualified in its entirety by
reference to Exhibit A hereto, incorporated herein by reference, which contains
the text of the Company's currently effective Certificate of Incorporation.
Attached as Exhibit B hereto 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 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.
-12-
<PAGE> 15
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.
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 B 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.
-13-
<PAGE> 16
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.
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
-14-
<PAGE> 17
APPENDIX A
PROXY
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 (except as marked [ ] WITHHOLD AUTHORITY
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
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
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
--------------------------------------
Signature
-15-
<PAGE> 18
APPENDIX B
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
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.
-16-
<PAGE> 19
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 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:
-17-
