SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
[ ] Preliminary Proxy Statement
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, For Use of the Commission Only
(as permitted by Rule 14a-6(e) (2))
JAN BELL MARKETING, INC.
(Name of Registrant as Specified in Its Charter)
JAN BELL MARKETING, INC.
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on the table below per Exchange Act Rules 14a-6(i)(1) 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:
[ ] 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>
JAN BELL MARKETING, INC.
14051 NORTHWEST 14TH STREET
SUNRISE, FLORIDA 33323
----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
JULY 9, 1999
----------------
TO THE SHAREHOLDERS:
The Annual Meeting of Shareholders of Jan Bell Marketing, Inc., a Delaware
corporation, will be held on Friday, July 9, 1999 at 9:00 a.m., local time at
the Sheraton Suites Plantation, 311 University Drive, Plantation, Florida, for
the following purposes:
(1) To elect four 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 29, 2000;
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 21, 1999 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
June 4, 1999
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>
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 Friday, July 9, 1999 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, 1999.
Although the Annual Report is being mailed with the proxy materials, the Annual
Report is not a 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)
846-2718.
RECORD DATE AND SHARE OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Shareholders of record at the close of business May 21, 1999 are entitled
to notice of and to vote at the meeting. At the record date, 28,372,467 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 9, 1999 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, 1999, 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) ........... 2,230,500 7.3%
Haim Bashan(3) .............. 298,949 1%
Gregg Bedol(4) .............. 50,000 .18%
Thomas Epstein(5) ........... 85,000 .30%
Samuel A. Getz(6) ........... 988,967 3.47%
Margaret Gilliam(7) ......... 70,000 .25%
William Grayson(8) .......... 255,000 .89%
Peter Offermann(9) .......... 50,000 .18%
Robert Robison(10) .......... 50,000 .18%
</TABLE>
<PAGE>
<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(11) .............. 2,587,600 8.93%
60 State Street
Boston, MA 02109
Eliahu Ben Shmuel(12) .............................. 1,609,800 5.67%
16300 NE 19th Avenue, Suite 206
Miami Beach, FL 33162
Marbella Resources, Ltd(13) ........................ 1,635,588 5.77%
Tropical Isle Building
Wickhams Cay, Road Town
Tortola, British Virgin Islands
Cumberland Associates(14) .......................... 1,532,100 5.40%
1114 Avenue of the Americas
New York, NY 10036
Tweedy, Browne Company L.P. & Group(15) ............ 1,832,007 6.46%
52 Vanderbilt Avenue
New York, NY 10017
Dimensional Fund Advisors(16) ...................... 1,522,800 5.38%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
All executive officers and directors
and directors as a group (11 persons)(17) ......... 4,748,516 14.08%
</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 2,230,500 shares, which options are held by
various family and estate planning vehicles. 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 (13) below.
(3) Includes options to purchase 227,666 shares.
(4) Includes options to purchase 50,000 shares.
(5) Includes options to purchase 85,000 shares.
(6) Includes options to purchase 170,000 shares.
(7) Includes options to purchase 30,000 shares.
(8) Includes options to purchase 255,000 shares.
(9) Includes options to purchase 50,000 shares.
(10) Includes options to purchase 50,000 shares.
(11) Pioneering Management reported this ownership to the Company as of January
11, 1999.
(12) 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.
(13) Marbella Resources Limited reported to the Company that as of May 27, 1999
it owned 1,635,588 shares.
(14) Cumberland reported this ownership to the Company as of February 12, 1999.
(15) Tweedy, Browne reported this ownership as of August 16, 1998.
(16) Dimensional reported this ownership to the Company as of February 16, 1999.
(17) Includes 3,717,366 shares issuable upon the exercise of stock options for
all executive officers and directors.
2
<PAGE>
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 next Annual Meeting in 2000
must be received by the Company no later than February 4, 2000 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 1999 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 17, 1999. Shareholder proposals or
notices must be sent certified mail, return receipt requested to Richard
Bowers, Secretary, Jan Bell Marketing, Inc., 14051 N.W. 14th Street, Sunrise,
Florida 33323.
3
<PAGE>
ELECTION OF DIRECTORS
NOMINEES
The Board of Directors currently consists of nine members and is
classified into three classes with each class holding office for a three-year
period. The terms of Messrs. Bashan, Bedol, Getz and Robison expire in 1999;
the terms of Messrs. Arguetty and Offermann expire in 2000; and the terms of
Messrs. Epstein and Grayson and Ms. Gilliam expire in 2001. 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 2002: Messrs. Bedol, Getz and Robison. Mr. Bashan is to be elected to a term
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 certified 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.
4
<PAGE>
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 ............ 53 Chairman of the Board and Chief Executive Officer 1994
of Jan Bell
Haim Bashan ............... 51 Director and President of Regal Diamonds and Exclusive 1995
Diamonds
Gregg Bedol ............... 43 Director and CEO and President of RetailOps LLC 1996
Thomas Epstein ............ 42 Director, Private Investor and Financial Consultant 1995
Samuel A. Getz ............ 42 Director and CEO and President of Mayor's Division 1998
Margaret Gilliam .......... 62 Director and President of Gilliam & Co. 1998
William Grayson ........... 51 Director and CEO and President of Sam's Division 1998
Peter Offermann ........... 54 Director and Executive Vice President and Chief Financial 1996
Officer of TLC Beatrice International Holdings, Inc.
Robert B. Robison ......... 45 Partner, Morgan, Lewis & Bockius LLP 1996
David Boudreau ............ 40 CFO, Senior Vice President of Finance and Treasurer
Marc Weinstein ............ 45 COO, 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. 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.
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.
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>
SAMUEL A. GETZ
Mr. Getz has been the CEO and President of Mayor's Jewelers, Inc. since
1990. Mr Getz became a director of Jan Bell Marketing in July 1998 when Jan
Bell acquired Mayor's.
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. Ms. Gilliam is a
director of Horizon Group Properties and Oshman's Sporting Goods.
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
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.
ROBERT ROBISON
Robert G. Robison has been a partner of the law firm of Morgan, Lewis &
Bockius LLP since 1991.
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.
MARC WEINSTEIN
Mr. Weinstein joined the Company in July 1996 as the Senior Vice President
of Human Resources and became the Chief Operating Officer in April 1997. Prior
to joining Jan Bell, Mr. Weinstein was the Vice President of Human Resources at
Burger King Corporation.
6
<PAGE>
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 six (6) meetings during the fiscal
year ended January 30, 1999. 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 1998. The Audit Committee meets with 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 Mr. Offermann
and Ms. Gilliam and met once during Fiscal 1998. 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 1998.
7
<PAGE>
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 30, 1999:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
--------------------------------------------- ------------- ALL OTHER
FISCAL SALARY BONUS OTHER ANNUAL OPTIONS COMPENSATION(1)
NAME AND PRINCIPAL POSITION YEAR ($) ($) COMPENSATION (#) ($)
- -------------------------------- ------ ----------- ----------- -------------- ------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Isaac Arguetty 1998 $360,000 $509,165 N/A(2) 0 $ 15,785
Chairman of the Board 1997 360,000 506,268 N/A 1,650,000 31,185
and Chief Executive Officer 1996 225,000 62,500 N/A 0 20,865
David Boudreau 1998 $189,231 $106,324 N/A 52,002 $ 10,608
CFO, Senior Vice President of 1997 180,000 100,746 N/A 300,000 10,608
Finance and Treasurer 1996 135,486 31,500 N/A 0 10,608
Samuel A. Getz(3) 1998 $155,769 $ 62,169 N/A 510,000 $ 7,500
CEO and President of
Mayor's Division
Marc Weinstein 1998 $184,615 $103,730 N/A 52,002 $ 15,000
COO, Senior Vice President 1997 180,000 100,746 N/A 300,000 0
of Operations
William Grayson 1998 $211,539 $118,858 N/A 57,801 $ 15,000
CEO and President 1997 123,077 111,940 N/A 405,000 10,000(4)
of Sam's Division
</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 or financial investments provided to
executive officers.
(2) Entries marked "N/A" represent information which is not reportable.
(3) Represents payments for services since joining Company on July 28, 1998.
(4) 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.
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 $220,000 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
8
<PAGE>
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. Getz is employed as the CEO and President of the Mayor's Division. Mr.
Getz receives a base annual salary of $300,000 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. The agreement allows the Company to terminate Mr. Getz for
cause without termination benefits or without cause upon the payment of base
salary for a two year period and the vesting of certain options. If Mr. Getz 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
$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. 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 CEO and President of the Sam's Division.
Mr. Grayson receives a base annual salary of $250,000 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
Mayor's leased a building from a trust in which Samuel A. Getz is a
beneficiary. Rent expense was $190,000 during the six months ended January 30,
1999.
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. For his
services in connection with the acquisition of Mayor's Jeweler's Inc., Mr.
Epstein was paid $200,000 in 1998. Additionally, Mr. Epstein received $5,000 in
1998 for consultation regarding another possible acquisition.
9
<PAGE>
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 1998, 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 30, 1999. 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 $6.625 per share of common stock.
OPTIONS/SARS
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
OPTIONS/SARS UNDERLYING UNEXERCISED IN-THE-MONEY
SHARES AT FISCAL YEAR-END(#) AT FISCAL YEAR-END($)
ACQUIRED VALUE ------------------------ ----------------------
ON EXERCISE REALIZED(1) EXERCISABLE/ EXERCISABLE/
NAME (#) ($) UNEXERCISABLE UNEXERCISABLE
- ------------------------- ------------- ------------ ------------------------ ----------------------
<S> <C> <C> <C> <C>
Isaac Arguetty .......... 0 0 2,130,000/650,000 $7,173,375/2,500,000
David Boudreau .......... 0 0 340,100/192,152 930,625/ 473,004
Samuel A. Getz .......... 0 0 170,000/340,000 42,500/ 83,300
William Grayson ......... 0 0 255,000/207,801 935,625/ 696,077
Marc Weinstein .......... 0 0 230,000/167,002 861,875/ 541,479
</TABLE>
- ----------------
(1) Fair market value of shares at exercise minus the exercise price.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table provides information regarding stock options granted
to the named officers in the fiscal year ended January 30, 1999.
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF
SECURITIES TOTAL
UNDERLYING OPTIONS/SARS
OPTIONS/SARS GRANTED TO EXERCISE OR
GRANTED EMPLOYEES IN BASE PRICE(2) EXPIRATION GRANT DATE
NAME (#) FISCAL YEAR ($/SH) DATE PRESENT VALUE(3)
- ------------------------- -------------- -------------- --------------- ------------ -----------------
<S> <C> <C> <C> <C> <C>
Isaac Arguetty .......... 0 0 N/A N/A $ 0
David Boudreau .......... 52,002 4.71% 4.50 10/08/08 138,663
Samuel A. Getz .......... 510,000 46.24% 6.38 01/28/04 1,584,570
William Grayson ......... 57,801 5.24% 4.50 10/08/08 154,126
Marc Weinstein .......... 52,002 4.71% 4.50 10/08/08 138,663
</TABLE>
- ----------------
(1) No SAR's were granted in 1998. Individual option grants generally become
exercisable in installments over a three-year period commencing October 2002
subject to continued employment and to the attainment of certain Company
financial performance standards. One third of Mr. Getz's options were
immediately exercisable and the remaining amounts become exercisable
commencing July 1999 subject to continued employment and to the attainment
of certain Company financial performance standards or stock price targets.
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.
(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.
10
<PAGE>
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, 1993 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 MONTH CUMULATIVE TOTAL RETURN*
AMONG JAN BELL MARKETING, INC., THE AMEX MARKET VALUE INDEX
AND THE S & P RETAIL (SPECIALTY) INDEX
<TABLE>
<CAPTION>
CUMULATIVE TOTAL RETURN
---------------------------------------------------
12/93 1/95 1/96 1/97 1/98 1/99
------- ------ ------ ------ ------ -----
<S> <C> <C> <C> <C> <C> <C>
JAN BELL MARKETING, INC. ......... 100 32 28 23 29 71
AMEX MARKET VALUE ................ 100 91 116 126 145 157
S & P RETAIL (SPECIALTY) ......... 100 95 89 97 104 95
</TABLE>
11
<PAGE>
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 1998. 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. Offermann and Ms. Gilliam for Fiscal 1998 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:
/bullet/ Support a pay for performance policy that provides compensation
amounts based both on overall corporate results and individual
performance;
/bullet/ Motivate executives to achieve business initiatives and reward
them for their achievement;
/bullet/ 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
/bullet/ 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.
12
<PAGE>
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.
Consistent with the focus on performance based compensation, Mr.
Arguetty's target bonus opportunity in 1998 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 1998 bonus was $509,165.
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 1998 to
the named executives as set forth on page of this proxy.
SUBMITTED BY THE COMPENSATION COMMITTEE OF THE COMPANY'S BOARD OF
DIRECTORS: PETER OFFERMANN AND MARGARET GILLIAM.
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 29, 2000 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.
13
<PAGE>
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
January 30, 1999 (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: June 4, 1999
14
<PAGE>
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 21, 1999, at the Annual Meeting of Shareholders to be held on or about July
9, 1999 or any adjournment thereof.
1. ELECTION OF DIRECTORS
[ ] FOR the nominees listed below [ ] WITHHOLD AUTHORITY
(except as marked to the contrary below) to vote for the nominees listed below
(INSTRUCTION: To withhold authority to vote for an individual nominee, strike a
line through the nominee's name below.)
Haim Bashan Gregg Bedol Samuel A. Getz Robert Robison
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.
<PAGE>
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.
Dated: ___________________________, 1999
(Be sure to date this Proxy)
________________________________________
Signature
________________________________________
Signature
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.
