<PAGE> 1
JAN BELL MARKETING, INC.
(LOGO)
14051 NORTHWEST 14TH STREET
SUNRISE, FLORIDA 33323
---------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
JULY 2, 1998
---------------------
TO THE SHAREHOLDERS:
The Annual Meeting of Shareholders of Jan Bell Marketing, Inc., a Delaware
corporation, will be held on Thursday, July 2, 1998 at 9:00 a.m., local time at
the Sheraton Suites Plantation, 311 University Drive, Plantation, Florida, for
the following purposes:
(1) To elect three 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 30, 1999; and
(3) To transact such other business as may properly come before the
meeting or any adjournment thereof.
These business items are described in the accompanying Proxy Statement.
Only shareholders of record at the close of business on May 22, 1998 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 Signature)
Isaac Arguetty
Chairman of the Board
Sunrise, Florida
May 28, 1998
- --------------------------------------------------------------------------------
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> 2
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 Thursday, July 2, 1998 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 May 29, 1998.
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) 846-2719.
RECORD DATE AND SHARE OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Shareholders of record at the close of business May 22, 1998 are entitled
to notice of and to vote at the meeting. At the record date, 26,686,304 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, 1998 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, 1998, 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
- ------------------- --------- -----------
<S> <C> <C>
Isaac Arguetty(2)........................................... 1,662,500 5.88%
Haim Bashan(3).............................................. 286,349 1%
Gregg Bedol(4).............................................. 40,000 .15%
Thomas Epstein(5)........................................... 75,000 .28%
Margaret Gilliam............................................ 0 0
William Grayson(6).......................................... 135,000 .51%
Peter Offermann(7).......................................... 40,000 .15%
Robert Robison(8)........................................... 40,000 .15%
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
SHARES OF COMMON STOCK
BENEFICIALLY OWNED
-----------------------
PERCENT OF
NUMBER OF SHARES
NAME AND ADDRESS(1) SHARES OUTSTANDING
------------------- --------- -----------
<S> <C> <C>
Pioneering Management Corporation(9)........................ 2,587,600 9.70%
60 State Street
Boston, MA 02109
Eliahu Ben Shmuel(10)....................................... 1,609,800 6.03%
16300 NE 19th Avenue, Suite 206
Miami Beach, FL 33162
Marbella Resources, Ltd(11)................................. 1,635,588 6.13%
Box 424
LeFebvre Court
LeFebvre Street
St. Peter Port
Guernsey, GYI 3WT
Cumberland Associates(12)................................... 1,585,100 5.94%
1114 Avenue of the Americas
New York, NY 10036
Tweedy, Browne Company L.P. & Group(13)..................... 2,099,848 7.87%
52 Vanderbilt Avenue
New York, NY 10017
Dimensional Fund Advisors Inc.(14).......................... 1,456,000 5.46%
1299 Ocean Avenue
Santa Monica, CA 90401
All executive officers and directors as a group
(11 persons)(15).......................................... 2,885,072 9.82%
</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 1,580,000 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 (11) below.
(3) Includes options to purchase 214,666 shares.
(4) Includes options to purchase 40,000 shares.
(5) Includes options to purchase 75,000 shares.
(6) Includes options to purchase 135,000 shares.
(7) Includes options to purchase 40,000 shares.
(8) Includes options to purchase 40,000 shares.
(9) Pioneering Management reported this ownership to the Company as of December
31, 1997.
(10) 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.
(11) Marbella Resources Limited reported to the Company that as of May 1, 1998
it owned 1,635,588 shares.
(12) Cumberland reported this ownership to the Company as of April 8, 1998.
(13) Tweedy, Browne reported this ownership as of July 30, 1997.
2
<PAGE> 4
(14) Dimensional reported this ownership as of December 1997.
(15) Includes 2,699,766 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 1999 Annual Meeting must be
received by the Company no later than January 30, 1999 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 1998 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, 1998. 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 seven members and is
classified into three classes with each class holding office for a three year
period. The terms of Messrs. Epstein and Feltenstein expire in 1998; the
3
<PAGE> 5
terms of Messrs. Bashan, Bedol and Robison expire in 1999; and the terms of
Messrs. Arguetty and Offermann expire in 2000. Under the Bylaws, the number of
directors may be increased to thirteen. The Certificate of Incorporation
restricts the removal of directors under certain circumstances.
The following persons are to be elected at the meeting for terms expiring
in 2001: Thomas Epstein, Margaret Gilliam and William Grayson. 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.
In February 1998, the Company announced a letter of intent to purchase the
stock of Mayor's Jewelers, Inc., a premier luxury jeweler in the Southeast. A
definitive stock purchase agreement has been signed by shareholders representing
52.57% of the outstanding Mayor's stock. Subject to the completion of the
pending acquisition of Mayor's, the Company intends to elect at the time the
transaction closes two additional persons as designated by Mayor's and approved
by the Company as directors of Jan Bell for terms to expire at the Annual
Meeting in 1999. The Board would consist of ten members after the Annual
Meeting; however, there can be no assurance that the Mayor's transaction will
close.
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.
[INTENTIONALLY BLANK]
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<PAGE> 6
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 52 Chairman of the Board and Chief Executive
Officer of Jan Bell and Director of Delheim
and Worchester Ltd 1994
Haim Bashan 50 Director and President of Regal Diamonds and
Exclusive Diamonds 1995
Thomas Epstein 41 Director, Private Investor and Financial
Consultant 1995
Margaret Gilliam 59 Director Nominee and President of Gilliam &
Co.
William Grayson 50 Director Nominee, CMO and Senior Vice
President
Peter Offermann 53 Director and Executive Vice President and
Chief Financial Officer of TLC Beatrice
International Holdings, Inc. 1996
Gregg Bedol 42 Director and CEO and President of RetailOps
LLC 1996
Robert G. Robison 44 Partner, Morgan, Lewis & Bockius LLP 1996
Richard Bowers 46 Senior Executive Vice President, General
Counsel and Secretary
David Boudreau 39 CFO, Senior Vice President and Treasurer
Marc Weinstein 44 COO/Sam's Retail Division, Senior Vice
President
</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
International, Ltd. and Exclusive Diamonds International, Ltd., 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 employed by Bankers
Trust Company in various capacities, including Vice President. Mr. Epstein is a
director of Sun Television and Appliances, Inc.
5
<PAGE> 7
MARGARET GILLIAM
Since April 1997, Ms. Gilliam has been the President of Gilliam & Co., a
business advisory firm. From 1975 to March 1997, Ms. Gilliam was associated with
Credit Suisse First Boston in various capacities, including Senior Security
Analyst-Retail Trade and Soft Goods Industries and Director-Equity Research.
Prior to such time, Ms. Gilliam held similar positions with various
institutional brokerage firms, including Goldman, Sachs & Co.
WILLIAM GRAYSON
Mr. Grayson joined Jan Bell in June 1997. From June 1995 through June 1997
he was a Senior Vice President of Macy's, and from June 1993 through June 1995
he was a Senior Vice President of Montgomery Wards. Prior to that time, he was
President of William Schneider, Inc. and a Vice President of the May Company.
PETER OFFERMANN
Mr. 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 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
Mr. Bedol is currently the CEO and President of RetailOps LLC, a retail
outsourcing service. Additionally, 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
Mr. 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.
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 and since 1986, he held various positions with Jan Bell.
6
<PAGE> 8
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.
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 five meetings during the fiscal year
ended January 31, 1998. 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 and Bedol and met
twice in Fiscal 1997. 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 twice during Fiscal 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 Fiscal 1997.
7
<PAGE> 9
COMPENSATION OF EXECUTIVE OFFICERS
EXECUTIVE COMPENSATION
The following table sets forth certain information regarding compensation
paid by the Company to each of the most five highly compensated executive
officers of the Company during the fiscal year ended January 31, 1998:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
---------------------------------- AWARDS
OTHER ------------ ALL OTHER
FISCAL SALARY BONUS ANNUAL OPTIONS COMPENSATION(1)
NAME AND PRINCIPAL POSITION YEAR ($) ($) COMPENSATION (#) ($)
- --------------------------- ------ -------- -------- ------------ ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Isaac Arguetty 1997 $360,000 $506,268 N/A(2) 1,650,000 $ 31,185
Chairman of the Board 1996 225,000 62,500 N/A 0 20,865
and Chief Executive
Officer
Richard Bowers 1997 $250,000 0 N/A 90,000 $ 15,408
Senior Executive Vice 1996 250,019 0 N/A 0 15,408
President, General 1995 240,000 0 N/A 0 15,408
Counsel and Secretary
David Boudreau 1997 $180,000 $100,746 N/A 300,000 $ 10,608
CFO, Senior Vice 1996 135,486 31,500 N/A 0 10,608
President of 1995 123,500 0 N/A 50,000 9,810
Finance and Treasurer
Marc Weinstein 1997 $180,000 $100,746 N/A 300,000 0
COO, Senior Vice
President of Operations
William Grayson 1997 $123,077 $111,940 N/A 405,000 $ 10,000(3)
CMO, Senior Vice
President of
Merchandising
</TABLE>
- ---------------
(1) 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.
(2) Entries marked "N/A" represent information which is not reportable.
(3) Represents a moving allowance upon commencement of employment.
Mr. Arguetty has been employed as the Chief Executive Officer since May
1996. Mr. Arguetty receives a base annual salary of $360,000 and has 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 which are set each year by the Compensation Committee.
The agreement allows 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.
8
<PAGE> 10
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. 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 a one year period. 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 and Senior Vice
President of Finance and Treasurer. Mr. Boudreau receives a base annual salary
of $180,000 and has 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 which are set each year by the CEO. The
agreement allows the Company to terminate Mr. Boudreau for cause without
termination benefits or without cause upon the payment of base salary for a one
year period and the vesting of certain options. If Mr. Boudreau is terminated
within a two year period after a change in control, he will receive the payment
of base salary for up to two years plus certain benefits.
Mr. Weinstein is employed as the Chief Operating Officer and Senior Vice
President of Operations. Mr. Weinstein receives a base annual salary of $180,000
and has 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 which are set each year by the CEO. The
agreement allows the Company to terminate Mr. Weinstein for cause without
termination benefits or without cause upon the payment of base salary for a one
year period and the vesting of certain options. If Mr. Weinstein is terminated
within a two year period after a change in control, he will receive the payment
of base salary for up to two years plus certain benefits.
Mr. Grayson is employed as the Chief Merchandising Officer and Senior Vice
President of Merchandising. Mr. Grayson receives a base annual salary of
$200,000 and has 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 which are set each year by the CEO. The
agreement allows the Company to terminate Mr. Grayson for cause without
termination benefits or without cause upon the payment of base salary for a one
year period and the vesting of certain options. If Mr. Grayson is terminated
within a two year period after a change in control, he will receive the payment
of base salary for up to two years plus certain benefits.
CERTAIN TRANSACTIONS
The law firm of Morgan, Lewis & Bockius LLP of which Mr. Robison is a
partner performs certain legal services for the Company.
Mr. Epstein serves as a financial consultant to the Company pursuant to a
consulting agreement effective as of February 1998. The agreement is terminable
at will by either party and provides for monthly payments for each transaction
of $5,000 plus a payment of $100,000 for the successful completion of
transactions valued at less than $50 million and a payment of $200,000 for the
successful completion of transactions greater than $50 million.
9
<PAGE> 11
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 1997, 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 January 31, 1998. 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 $2.6875 per share of common stock.
<TABLE>
<CAPTION>
VALUE OF
UNEXERCISED
NUMBER OF SECURITIES IN-THE-MONEY
UNDERLYING UNEXERCISED OPTIONS/SARS
OPTIONS/SARS AT FISCAL AT FISCAL
SHARES YEAR-END(#) YEAR-END($)
ACQUIRED VALUE ---------------------- ----------------
ON EXERCISE REALIZED(1) EXERCISABLE/ EXERCISABLE/
NAME (#) ($) UNEXERCISABLE UNEXERCISABLE
- ---- ----------- ----------- ---------------------- ----------------
<S> <C> <C> <C> <C>
Isaac Arguetty..................... 0 0 1,580,000/1,100,000 $194,150/343,750
Richard Bowers..................... 0 0 220,000/60,000 16,875/11,250
David Boudreau..................... 0 0 240,100/225,100 8,575/0
Marc Weinstein..................... 0 0 115,000/230,000 28,237/18,825
William Grayson.................... 0 0 135,000/270,000 19,687/13,125
</TABLE>
- ---------------
(1) Fair market value of shares at exercise minus the exercise price.
[INTENTIONALLY BLANK]
10
<PAGE> 12
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table provides information regarding stock options granted to
the named officers in the fiscal year ended January 31, 1998.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
---------------------------
PERCENT OF
NUMBER OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO EXERCISE
OPTIONS/SARS EMPLOYEES OR BASE
GRANTED(1) IN FISCAL PRICE(2) EXPIRATION GRANT DATE
NAME (#) YEAR ($/SH) DATE PRESENT VALUE
- ---- ------------ ------------ -------- ---------- ----------------
<S> <C> <C> <C> <C> <C>
Isaac Arguetty...................... 1,650,000 49.48% $2.375 12/02/02 $2,029,500
Richard Bowers...................... 90,000 2.70% 2.50 07/31/02 116,757
David Boudreau...................... 300,000 9.00% 3.00 07/31/02 484,050
Marc Weinstein...................... 300,000 9.00% 3.00 07/31/02 484,050
William Grayson..................... 45,000 1.35% 2.25 06/23/07 56,786
William Grayson..................... 360,000 10.80% 3.00 07/31/02 580,860
</TABLE>
- ---------------
(1) No SAR's were granted in 1997. Individual option grants become exercisable
in installments over a three year period subject to continued employment
and 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 stockholder's meeting to consider a merger, sale of
assets or similar reorganization. All options granted in 1997 had five year
terms when granted.
(2) All grants were made at or above 100% of fair market value as of the date of
grant.
(3) The present value of these options was determined using the Black-Scholes
model of option valuation in a manner consistent with the requirements of
SFAS No. 123.
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,
1992 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>
12/92 $100.00 $100.00 $100.00
12/93 $ 46.00 $120.00 $100.00
1/95 $ 15.00 $109.00 $ 95.00
1/96 $ 13.00 $139.00 $ 88.00
1/97 $ 11.00 $150.00 $ 97.00
1/98 $ 13.00 $173.00 $103.00
</TABLE>
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* $100 invested on 12/31/92 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 1997. 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 1997 prepared the following report. The Compensation
Committee is composed entirely of directors who have never been employees of the
Company.
Compensation Philosophy
This report reflects the Company's compensation philosophy as endorsed by
the Board of Directors and the Committee and resulting actions taken by the
Company. With regard to compensation actions affecting 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 objective and discretionary bonuses as percentages of base salary.
The Company has a cash bonus arrangement for executives which is 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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Consistent with the focus on performance based compensation, Mr. Arguetty's
target bonus opportunity in 1997 was set at 100% of his base salary and
completely attributable to corporate performance. In light of such
considerations and performance exceeding the objective target criteria, Mr.
Arguetty's 1997 bonus was $506,268.
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 five to ten-year period exercisable 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 continued employment
and/or the Company achieving certain profitability levels in each year.
The Committee has typically granted stock options 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 1997 to
the named CEO and the other executives as set forth on page 11 of this proxy.
SUBMITTED BY THE COMPENSATION COMMITTEE OF THE COMPANY'S BOARD OF
DIRECTORS: PETER OFFERMANN AND SIDNEY FELTENSTEIN.
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 30, 1999 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.
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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
January 31, 1998 (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 28, 1998
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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 22, 1998, at the Annual Meeting of Shareholders to be held on or about
July 2, 1998 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.)
- --------------------------------------------------------------------------------
Tom Epstein
Margaret Gilliam
William Grayson
(Continued on next page)
2. PROPOSAL TO APPROVE AND RATIFY THE APPOINTMENT OF DELOITTE & TOUCHE LLP
[ ] 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: , 1998
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(Be sure to date this Proxy)
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Signature
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Signature
