<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:
[ ] 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.
LOGO
14051 NORTHWEST 14TH STREET
SUNRISE, FLORIDA 33323
---------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
JULY 2, 1997
---------------------
TO THE SHAREHOLDERS:
The Annual Meeting of Shareholders of Jan Bell Marketing, Inc., a Delaware
corporation, will be held on Wednesday, July 2, 1997 at 9:00 a.m., local time at
the Sheraton Suites Plantation, 311 University Drive, Plantation, Florida, for
the following purposes:
(1) To elect two directors to serve for terms as specified herein or
until their successors are elected;
(2) To ratify the appointment of Deloitte & Touche LLP as independent
accountants of the Company for the fiscal year ending January 31, 1998; and
(3) 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 May 23, 1997 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
May 30, 1997
- - --------------------------------------------------------------------------------
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 Wednesday, July 2, 1997 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 Sheraton
Suites Plantation, 311 University Drive, Plantation, Florida.
These proxy solicitation materials were mailed on or about June 4, 1997.
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 14051 Northwest 14th Street,
Sunrise, Florida 33323, and its phone number at such address is (954) 846-2776.
RECORD DATE AND SHARE OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Shareholders of record at the close of business May 23, 1997 are entitled
to notice of and to vote at the meeting. At the record date, 25,894,610 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 July 2, 1997 and for ten days prior to the
meeting between the hours of 9:00 a.m. and 5:00 p.m.
As of May 1, 1997, 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)........................................... 802,500 3.1%
Chaim Edelstein(3).......................................... 131,000 .5%
Thomas Epstein(4)........................................... 65,000 .3%
Sidney Feltenstein(5)....................................... 50,000 .2%
Haim Bashan(6).............................................. 249,517 1.0%
Gregg Bedol(7).............................................. 30,000 .1%
Peter Offermann(8).......................................... 30,000 .1%
Robert Robison(9)........................................... 30,000 .1%
</TABLE>
2
<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>
Pioneering Management Corporation(10)....................... 2,587,600 10.0%
60 State Street
Boston, MA 02109
Eliahu Ben Shmuel(11)....................................... 1,609,800 6.2%
16300 NE 19th Avenue, Suite 206
Miami Beach, FL 33162
Marbella Resources, Ltd(12)................................. 1,635,588 6.3%
Tropical Isle Building
Wickhams Cay, Road Town
Tortola, British Virgin Islands
Cumberland Associates(13)................................... 1,497,500 5.8%
1114 Avenue of the Americas
New York, NY 10036
Tweedy, Browne Company L.P. & Group(14)..................... 1,615,888 6.2%
52 Vanderbilt Avenue
New York, NY 10017
Dimensional Fund Advisors Inc.(15).......................... 1,340,000 5.2%
1299 Ocean Avenue
Santa Monica, CA 90401
All executive officers and directors as a group (12
persons)(16).............................................. 1,732,574 6.7%
</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 720,000 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 (12) below.
(3) Includes options to purchase 120,000 shares.
(4) Includes options to purchase 65,000 shares.
(5) Includes options to purchase 50,000 shares.
(6) Includes options to purchase 177,334 shares.
(7) Includes options to purchase 30,000 shares.
(8) Includes options to purchase 30,000 shares.
(9) Includes options to purchase 30,000 shares.
(10) Pioneering Management reported this ownership to the Company as of May 13,
1997.
(11) Includes all shares held by Eliahu Ben Shmuel, E.P. Family Partners, Hay
Foundation and Tropical Time, Inc. as set forth in a Stock Option Agreement
dated October 27, 1996.
(12) Marbella Resources Limited reported to the Company that as of May 1, 1997
it owned 1,635,588 shares.
(13) Cumberland reported this ownership to the Company as of May 19, 1997.
(14) Tweedy, Browne reported this ownership as of February 21, 1997.
3
<PAGE> 5
(15) Dimensional reported this ownership as of December 31, 1996.
(16) Includes 1,485,768 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.
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 1998 Annual Meeting must be
received by the Company no later than January 30, 1998 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 1997 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 June 13, 1997. Shareholder proposals or notices should be
sent certified mail, return receipt requested to Richard Bowers, Secretary, Jan
Bell Marketing, Inc., 14051 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. Arguetty, Edelstein and Offermann expire in
4
<PAGE> 6
1997; the terms of Messrs. Epstein and Feltenstein expire in 1998; and the terms
of Messrs. Bashan, Bedol and Robison expire in 1999. Under the Bylaws, the
number of directors may be increased to thirteen. The Certificate of
Incorporation restricts the removal of directors under certain circumstances.
Two present directors, Messrs. Arguetty and Offermann, are to be elected at
the meeting for terms expiring in 2000. 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.
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., 14051 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.
5
<PAGE> 7
INFORMATION REGARDING DIRECTORS AND EXECUTIVE OFFICERS
The names of the continuing 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 51 Chairman of the Board and Chief Executive
Officer of Jan Bell and Director of Delheim
and Worchester Ltd 1994
Haim Bashan 49 Director and President of Regal Diamonds and
Exclusive Diamonds 1995
Thomas Epstein 40 Director, Private Investor and Financial
Consultant 1995
Sidney Feltenstein 56 Director and Chairman, CEO and President of A
& W International 1994
Peter Offermann 52 Director and Executive Vice President and
Chief Financial Officer of TLC Beatrice
International Holdings, Inc. 1996
Gregg Bedol 41 Director and President of Bedol Retail
Ventures 1996
Robert G. Robison 43 Partner, Morgan, Lewis & Bockius LLP 1996
Richard Bowers 45 Senior Executive Vice President, General
Counsel and Secretary
David Boudreau 38 CFO, Senior Vice President of Finance and
Treasurer
Marc Weinstein 43 Chief Operating Officer, Sam's Retail Division
Martyn E. Holland 41 Senior Vice President, Management Information
Systems
</TABLE>
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 Ltd, 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.
THOMAS EPSTEIN
Mr. Epstein has been a private investor and financial consultant since
1990. Mr. Epstein was affiliated with Zaleski, Sherwood & CO., Inc. from April
1986 to September 1990. From 1980 to 1986, Mr. Epstein was
6
<PAGE> 8
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. Mr. Offermann
serves as a director of National Auto Finance, Inc.
GREGG BEDOL
Since August, 1996, Mr. Bedol has been President of Bedol Retail Ventures,
which creates, operates, and supports retailers through technology and services.
Prior to forming Bedol Retail Ventures, Mr. Bedol was 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.
ROBERT ROBISON
Robert G. Robison has been a partner of 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.
DAVID BOUDREAU
Mr. Boudreau has been the Chief Financial Officer since February 1997 and
the Senior Vice President of Finance and Treasurer since 1993. Prior to such
time, he held various positions with Jan Bell since 1986.
MARC WEINSTEIN
Mr. Weinstein joined the Company in July 1996 as the Senior Vice President
of Human Resources and became the Chief Operating Officer, Sam's Retail Division
in April 1997. Prior to joining Jan Bell, Mr. Weinstein was the Vice President
of Human Resources at Burger King Corporation.
7
<PAGE> 9
MARTYN HOLLAND
Mr. Holland joined the Company in April 1997 as the Senior Vice President
of Information Systems. From 1995 to April 1997, Mr. Holland was the Vice
President of M.I.S. at Sunglass Hut International. Prior to such time, Mr.
Holland was the C.I.O. and Vice President of I.T. at Tupperware Worldwide.
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.
BOARD MEETINGS AND COMMITTEES
The Board of Directors held a total of eight meetings and two Consents to
Action in Lieu of Meetings during the fiscal year ended February 1, 1997. 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 a Nomination Committee.
The Audit Committee presently consists of Messrs. Epstein, Edelstein and
Bedol and met one time in Fiscal 1996. 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.
Offermann and Feltenstein and met formally one time during the fiscal year ended
February 1, 1997 and had numerous informal meetings. 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.
The Nomination Committee did not hold any meetings during the fiscal year
ended February 1, 1997.
8
<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 most highly compensated executive officers
and one additional departed executive of the Company during the fiscal year
ending February 1, 1997:
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>
Isaac Arguetty 1996 225,000 0 N/A(3) 0 0 0
Chairman of the Board
and Chief Executive
Officer
Richard Bowers 1996 250,019 0 N/A 0 0 15,408
Senior Executive 1995 240,000 0 N/A 0 0 15,408
Vice President, 1994 269,175 0 N/A 0 0 540,408(4)
General Counsel and
Secretary
David Boudreau 1996 135,486 31,500 N/A 0 0 10,608
CFO, Senior Vice 1995 123,500 0 N/A 0 50,000 9,810
President of 1994 123,500 0 N/A 0 0 9,810
Finance and Treasurer
Joseph Pennacchio 1996 157,785 0 N/A 0 0 2,013,167(6)
Former CEO(5) 1995 540,000 0 N/A 0 276,000 6,006
1994 359,307 0 N/A 0 360,000 65,000(7)
</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 ($2.1875 per
share) is as follows: Richard Bowers -- 5,130 shares, $11,222.
(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 $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.
(5) Mr. Pennacchio resigned as CEO, President and a director on May 6, 1996.
(6) Represents contractual severance payments.
(7) Represents $15,000 for whole life insurance policy and fixed payment
regarding commencement of employment and relocation.
9
<PAGE> 11
Mr. Arguetty has been employed as the Chief Executive Officer since May
1996. The Company is in the process of finalizing an employment agreement with
Mr. Arguetty, pursuant to which he will receive a base annual salary of $360,000
and will have the opportunity to receive an annual cash bonus based upon the
achievement of objective performance criteria, such as net income, operating
cash flow and return on working capital. It is contemplated that Mr. Arguetty
will also receive the grant of incentive based stock options to purchase
1,650,000 common shares at an exercise price equal to the closing price on the
grant date. The options will vest upon the earlier to occur of the achievement
of certain performance criteria or five years provided Mr. Arguetty has been
continuously employed. The agreement will allow the Company to terminate Mr.
Arguetty for cause without termination benefits or without cause upon the
payment of base salary and bonus for a one year period and the vesting of
certain options. If Mr. Arguetty is terminated within a two year period after a
change in control, he will receive the continuation of base salary for up to
three years plus a lump sum cash payment based upon the base salary or most
recent annual bonus.
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 Chief Financial Officer, Senior Vice
President of Finance and Treasurer at a base annual salary of $180,000 with a
discretionary bonus not to exceed $72,000. The agreement allows the Company to
terminate the employment of Mr. Boudreau for cause without termination benefits
or without cause upon payment of 12 months base salary.
CERTAIN TRANSACTIONS
The Company has from time to time engaged the services of Dr. Anthony
Armstrong, an employee of Delheim & Worchester, 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 & Worchester. During the
fiscal year ended February 1, 1997, fees paid by the Company to Delheim &
Worchester totalled $95,860. The Company believes that the terms of the
arrangement with Delheim & Worchester are no less favorable than those that
could be obtained from an unaffiliated third party for comparable services.
The Company purchased a car for Company use from Miriam Arguetty (the wife
of Isaac Arguetty) for $80,000 in September 1996.
In addition, the law firm of Morgan, Lewis & Bockius LLP of which Mr.
Robison is a partner performs certain legal services for the Company.
10
<PAGE> 12
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 1996, 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 1, 1997. 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 $2.1875 per share of common stock.
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF SECURITIES UNEXERCISED
UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS/SARS
OPTIONS/SARS AT AT FISCAL
SHARES FISCAL YEAR-END(#) YEAR-END($)
ACQUIRED VALUE -------------------- -------------
ON EXERCISE REALIZED(1) EXERCISABLE/ EXERCISABLE/
NAME (#) ($) UNEXERCISABLE UNEXERCISABLE
---- ----------- ----------- -------------------- -------------
<S> <C> <C> <C> <C>
Isaac Arguetty............................. 0 0 720,000/410,000 0/0
Joseph Pennacchio.......................... 0 0 636,000/0 0/0
Richard W. Bowers.......................... 0 0 190,000/0 0/0
David Boudreau............................. 0 0 123,434/16,666 0/0
</TABLE>
- - ---------------
(1) Fair market value of shares at exercise minus the exercise price.
11
<PAGE> 13
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,
1991 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 (SPECIALTY) INDEX
<TABLE>
<CAPTION>
JAN BELL
MEASUREMENT PERIOD MARKETING, AMEX MARKET S&P RETAIL
(FISCAL YEAR COVERED) INC. VALUE (SPECIALTY)
<S> <C> <C> <C>
12/91 100.00 100.00 100.00
12/92 145.00 101.00 134.00
12/93 67.00 121.00 133.00
1/95 21.00 110.00 127.00
1/96 19.00 140.00 118.00
1/97 16.00 152.00 130.00
</TABLE>
- - ---------------
* $100 invested on 12/31/91 in Stock or Index -- including reinvestment of
dividends.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Under rules established by the Securities 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
other most highly compensated executive officers during Fiscal 1996. The
disclosure requirements for these individuals (the "named executive officers")
includes the use of tables and a
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<PAGE> 14
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. Offermann and Mr.
Feltenstein for Fiscal 1996 prepared the following report. The Compensation
Committee is composed entirely of director 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 Mr. Arguetty as CEO, the
Committee acts 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 objective
criteria, 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 as percentages of base salary. The Company is
in the process of developing a cash bonus arrangement for executives which will
be based upon the achievement of specific criteria and goals, such as net
income, operating cash flow, and return on working capital. Accordingly, total
annual cash compensation will vary each year based on Company performance and
profitability as well as a subjective and objective evaluation of each
executive's contribution to that performance. Base salaries for the named
executive officers are set forth in employment agreements.
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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 generally 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 did not grant options
in Fiscal 1996 to the named executives as set forth on page 8 of this proxy.
SUBMITTED BY THE COMPENSATION COMMITTEE OF THE COMPANY'S BOARD OF
DIRECTORS: PETER OFFERMANN AND SIDNEY FELTENSTEIN.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Company believes that during Fiscal 1996 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 390 shares in April 1996.
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 January 31, 1998 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.,
14051 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: May 30, 1997
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APPENDIX A
PROXY
JAN BELL MARKETING, INC.
14051 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
May 23, 1997, at the Annual Meeting of Shareholders to be held on or about July
2, 1997 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.)
- - --------------------------------------------------------------------------------
Isaac Arguetty
Peter Offermann
(Continued on next page)
2. PROPOSAL TO APPROVE AND RATIFY THE APPOINTMENT OF DELOITTE & TOUCHE
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. 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 PROPOSAL 2.
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: , 1997
---------------------------
(Be sure to date this Proxy)
-------------------------------
Signature
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Signature
