<PAGE>
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
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[X] Preliminary proxy statement
[ ] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
JUST TOYS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
JUST TOYS, INC.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[X] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2).
[ ] $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 transactions applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to
Exchange Act Rule 0-11:
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
[ ] 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>
JUST TOYS, INC.
50 WEST 23RD STREET
NEW YORK, NEW YORK 10010
------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
------------
To the Stockholders of
Just Toys, Inc.
Please take notice that the 1996 Annual Meeting of Stockholders of Just
Toys, Inc., a Delaware corporation (the "Company"), will be held on Monday,
August 19, 1996 at 10:00 A.M. at the Company's showroom at 200 Fifth Avenue, New
York, New York for the following purposes:
1. To elect a board of seven directors;
2. To approve an amendment to the Company's Certificate of Incorporation
that will authorize an additional 1,000,000 shares of preferred stock
to be issued in accordance with the Certificate of Incorporation;
3. To ratify the appointment of Ernst & Young LLP as the Company's
independent auditors for the 1996 fiscal year; and
4. To transact such other business as may properly come before the meeting
or any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on July 15, 1996 as
the record date for the purpose of determining stockholders entitled to notice
of, and to vote at, the meeting.
YOU ARE EARNESTLY REQUESTED, WHETHER OR NOT YOU PLAN TO BE PRESENT AT THE
MEETING, TO MARK, DATE, SIGN AND RETURN PROMPTLY THE ACCOMPANYING PROXY IN THE
ENCLOSED ENVELOPE TO WHICH NO POSTAGE NEED BE AFFIXED IF MAILED IN THE UNITED
STATES.
By Order of the Board of Directors
Geoffrey Gimbel
Secretary
New York, New York
July 19, 1996
<PAGE>
ANNUAL MEETING OF STOCKHOLDERS
OF
JUST TOYS, INC.
------------
PROXY STATEMENT
------------
The proxy accompanying this proxy statement is solicited by the Board of
Directors of Just Toys, Inc., a Delaware corporation (the "Company"), for use at
the 1996 Annual Meeting of Stockholders to be held on Monday, August 19, 1996
at 10:00 A.M. at the Company's showroom at 200 Fifth Avenue, New York, New York,
and at any adjournment or adjournments thereof.
All proxies in the accompanying form which are properly executed and duly
returned will be voted in accordance with the instructions specified therein.
If no instructions are given, the shares represented by the proxies will be
voted in accordance with the recommendations of the Board of Directors as
indicated in this proxy statement and in the discretion of the proxy holders on
any other matters that may properly come before the meeting. A proxy may be
revoked at any time prior to its exercise by written notice to the Company, by
submission of another proxy bearing a later date or by voting in person at the
meeting. Such revocation will not affect a vote on any matters taken prior
thereto. The mere presence at the meeting of the person appointing a proxy will
not revoke the appointment.
The approximate date of mailing of this proxy statement and the
accompanying proxy to stockholders is July 19, 1996. The Company's principal
executive offices are located at 50 West 23rd Street, New York, New York 10010.
VOTING SECURITIES--RECORD DATE
Only holders of the Company's Common Stock, $.01 par value per share (the
"Common Stock"), of record at the close of business on July 15, 1996 (the
"Record Date") will be entitled to notice of and to vote at the meeting or at
any adjournment or adjournments thereof. On that date, 4,150,000 shares of
Common Stock were issued and outstanding.
Each share of Common Stock entitles the holder thereof to one vote with
respect to each proposal properly brought before the meeting for consideration
by stockholders. The holders of a majority of the outstanding shares of Common
Stock entitled to vote must be present at the meeting in person or by proxy to
constitute a quorum.
<PAGE>
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information at June 30, 1996 with
respect to the beneficial ownership of shares of Common Stock owned by (i) each
person known by the Company to own beneficially more than 5% of the outstanding
shares of Common Stock, (ii) each director and nominee for election as director
of the Company, and (iii) all officers and directors of the Company as a group:
<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) CLASS
- ----------------------------------------- -------------------------- ------------
<S> <C> <C>
Roger Gimbel............................. 722,888(2) 17.4%
4 West 33rd Street
New York, New York 10001
RGA Accessories, Inc..................... 630,000 15.2%
4 West 33rd Street
New York, New York 10001
Merrill Lynch & Co....................... 389,000(3) 9.4%
World Financial Center
North Tower
250 Vesey Street
New York, New York 10281
FMR Corp................................. 318,900(4) 7.7%
82 Devonshire Street
Boston, Massachusetts 02109
Morton J. Levy........................... 213,395(5) 5.1%
50 West 23rd Street
New York, New York 10010
Howard Kaufman........................... 94,888(6) 2.3%
Bishops Estate
Lenox, Massachusetts 01290
Barry Shapiro............................ 37,666(7) Less than 1%
50 West 23rd Street
New York, New York 10040
Donald D. Shack.......................... 34,000(8) Less than 1%
530 5th Avenue
New York, New York 10036
Michael Vastola 8,000(8) Less than 1%
50 West 23rd Street
New York, New York
Charmaine Jefferson...................... 1,000(8) Less than 1%
3511 Hillcrest Drive
Los Angeles, CA 90016
</TABLE>
-2-
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Irwin Naitove............................ 1,000(8) Less than 1%
RR1
Box 630
Mount Holly, Vermont 05758
Robert Pagano............................ 0 0
142-32 59th Avenue
Flushing, New York 11355
Scott Buske.............................. 0 0
305 Valley Street
Atlantic Highlands, NJ 07710
All directors and executive officers as
a group (ten persons) 1,112,837(9) 26.0%
- ---------------
</TABLE>
(1) Except as otherwise indicated in the following footnotes, the persons listed
in the table own of record the shares of Common Stock opposite their name
and have sole voting and investment power with respect to such shares of
Common Stock.
(2) Includes 630,000 shares of Common Stock owned by RGA Accessories, Inc., of
which Roger Gimbel is the controlling stockholder, President and Chief
Executive Officer, and 4,000 shares issuable upon exercise of currently
exercisable stock options granted under the Company's 1992 Incentive and
Non-Qualified Stock Option Plan (the"Plan").
(3) The following information was set forth in Schedule 13G filed by Merrill
Lynch & Co., Inc. ("ML & Co.") with the Securities and Exchange Commission
on or about February 5, 1996. Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("MLPF & S"), is a wholly-owned direct subsidiary of ML & Co.
and a broker-dealer pursuant to the Securities Exchange Act of 1934. MLPF &
S may be deemed the beneficial owner of less than 5% of the common stock of
the Company as a result of its proprietary trading activity.
Merrill Lynch Group ("ML Group"), a wholly-owned subsidiary of ML & Co. may
be deemed the beneficial owner of 9.4% of the common stock of the Company by
virtue of its control of its wholly-owned subsidiary, Princeton Services,
Inc. ("PSI"). PSI, a wholly-owned direct subsidiary of ML Group, may be
deemed to be the beneficial owner of 9.4% of the common stock of the
Company by virtue of its being the general partner of Fund Asset Management,
L.P. ("FAM"). FAM, a Delaware limited partnership is an investment adviser
registered under Section 203 of the Investment Advisers Act of 1940. FAM may
be deemed to be the beneficial owner of 9.4% of the common stock of the
Company as a result of its acting as investment adviser to investments
companies registered under Section 8 of the Investment Company Act of 1940.
One registered investment company advised by FAM, Merrill Lynch Special
Value Fund, Inc. (the "Fund"), is the beneficial owner of 9.4% of the
common stock of the Company. ML & Co., MLPF & S, ML Group, PSI, FAM, and the
Fund disclaim beneficial ownership of the securities of the Company.
(4) Based upon information set forth in Schedule 13G filed by FMR Corp. with the
Securities and Exchange Commission on or about February 14, 1996, Fidelity
Management and Research Company ("Fidelity"), a wholly-owned subsidiary of
FMR Corp., is the beneficial owner of 318,900 shares or 7.7% of the Common
Stock of the Company as a result of acting as investment adviser to several
investment companies. Mr. Edward C. Johnson 3d, FMR Corp., through its
control of Fidelity, and the aforementioned investment companies each has
sole power to dispose of these 318,900 shares. The ownership of one
investment company, Fidelity Retirement Growth Fund, amounted to 318,900
shares or 7.7% of the Common Stock outstanding at March 15, 1995.
(5) Includes 1,500 shares owned by Mr. Levy as custodian for his grandson under
the Uniform Gifts to Minors Act and 65,000 shares issuable upon exercise of
currently exercisable stock options granted under the Plan.
(6) Includes 6,000 shares issuable upon exercise of currently exercisable stock
options granted under the Plan.
(7) Includes 11,000 shares issuable upon exercise of currently exercisable stock
options granted under the Plan.
-3-
<PAGE>
(8) Consists entirely of shares issuable upon exercise of currently exercisable
stock options granted under the Plan.
(9) Includes 130,000 shares issuable upon exercise of currently exercisable
stock options granted under the Plan.
PROPOSAL 1: ELECTION OF DIRECTORS
At the 1996 Annual Meeting of Stockholders, seven directors, constituting the
entire Board of Directors, are to be nominated for election, to serve until the
1997 Annual Meeting of Stockholders and until their respective successors are
duly elected and qualify. Unless a proxy shall specify that it is not to be
voted for the directors, it is intended that the shares of Common Stock
represented by each duly executed and returned proxy will be voted IN FAVOR of
the election as directors of the persons named below.
Each of the persons named below as a nominee for director is currently a
director of the Company and their stock ownership is set forth above under
"Security Ownership of Certain Beneficial Owners and Management".
If any nominee is not a candidate for election at the meeting, an event which
the Board of Directors does not anticipate, the proxies will be voted for a
substitute nominee and for the others named below.
The Company's By-Laws provide that directors be elected by a plurality of the
votes cast at the meeting by the holders of the outstanding shares of Common
Stock entitled to notice of, and to vote in, the election.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF THE
NOMINEES.
<TABLE>
<CAPTION>
NOMINEES FOR ELECTION AS DIRECTORS
NAME AGE PRINCIPAL OCCUPATION DIRECTOR SINCE (1)
- -------------------------- -------- -------------------------------------------------- ------------------
<S> <C> <C> <C>
Roger Gimbel 65 Director and Vice Chairman of the Board of 1992
Directors of the Company; Chief Executive
Officer and President of RGA Accessories, Inc.
Charmaine Jefferson 42 Director of the Company; Vice President/Business 1995
Affairs for de Passe Entertainment.
Howard Kaufman 70 Director of the Company; private investor 1992
Morton J. Levy 74 Chairman of the Board of Directors and Chief 1992
Executive Officer
Irwin Naitove 78 Director of the Company; private investor 1995
Donald D. Shack 67 Director of the Company; member of the law firm 1992
Shack & Siegel, P.C.
Barry Shapiro 54 Director, President and Chief Operating Officer 1995
of the Company
</TABLE>
-4-
<PAGE>
ROGER GIMBEL was appointed Vice Chairman of the Board of Directors, Chief
Financial Officer and Vice President of the Company in August 1992. Due to
health reasons, Mr. Gimbel resigned as Chief Financial Officer and Vice
President of the Company in April 1995. Mr. Gimbel was one of the founders of
the Company, and, since the commencement of operations, he and RGA Accessories,
Inc. ("RGA") one of the partners of the joint venture that was the predecessor
to the Company (the "Joint Venture"), have provided administrative services to
the Company. See "Certain Relationships and Related Transactions." Mr. Gimbel
is the Chief Executive Officer and President of RGA, which in addition to
providing services to the Company, is an importer and distributor of personal
accessories, small leather goods, and related items.
CHARMAINE JEFFERSON was appointed a director of the Company in July 1995.
Ms. Jefferson is currently employed as Vice President/Business Affairs for de
Passe Entertainment. From June 1995 to April 1996, Ms. Jefferson was self-
employed as a consultant providing management advice to not-for-profit
corporations. From August 1992 to June 1995, Ms. Jefferson was employed as the
executive director of the Dance Theater of Harlem, Inc. From 1988 through
August 1992, Ms. Jefferson was Deputy and Acting Commissioner for the New York
City Department of Cultural Affairs.
HOWARD KAUFMAN was appointed a director of the Company in October 1992. Mr.
Kaufman has been engaged in the toy business for approximately 34 years, having
been a founder and principal officer of KayBee Stores, a division of the
Consolidated Stores Corp. For more than the past five years, Mr. Kaufman has
been a private investor. Mr. Kaufman is also a director of Berkshire Life
Insurance Company and All For A Dollar, Inc.
MORTON J. LEVY was appointed as Chairman and Chief Executive Officer of the
Company on March 30, 1995. Mr. Levy is a director and officer of each of the
Company's subsidiaries. He was appointed a director of the Company in October
1992 and became a consultant to the Company in 1994. Mr. Levy was engaged in
the toy business for approximately 36 years, having been a founder and principal
officer of Gabriel Industries, Inc., a diversified toy manufacturer. For more
than five years prior to his engagement as a consultant to the Company, Mr. Levy
was a private investor.
IRWIN NAITOVE was appointed a director of the Company in May 1995. Mr.
Naitove has been in corporate finance for the past 45 years. For more than the
past five years, Mr. Naitove has been a private investor.
DONALD D. SHACK was appointed a director of the Company in August 1992. Mr.
Shack is an attorney and, since April 1993, has been a member of the law firm of
Shack & Siegel, P.C., general counsel to the Company. From January 1990 through
March 1993, Mr. Shack was a member of the law firm of Whitman & Ransom which
served as general counsel to the Company during that period. Mr. Shack is also
a director of the following publicly-held companies: Andover Togs, Inc., Ark
Restaurants Corp. and International Citrus Corporation.
BARRY SHAPIRO was appointed as President and Chief Operating Officer of the
Company on March 30, 1995. Mr. Shapiro is Chairman of the Company's Hong Kong
subsidiaries and a director and officer of each of the Company's other
subsidiaries. He was appointed a director of the Company in April 1995. Mr.
Shapiro has been employed in the toy business for over 25 years. In November
1994, Mr. Shapiro was appointed Executive Vice President of the Company. From
December 1993 until November 1994, he served as Managing Director of the
Company's Hong Kong subsidiaries, Joyful World Enterprises, Ltd. and Just Toys
Products, Ltd. From October 1991 to November 1993, he was the President of
Packaging Specialists, a manufacturer and distributor of protective packaging.
From January 1984 to June 1991, Mr. Shapiro was Executive Vice President of
Imagineering, Inc.
-5-
<PAGE>
INFORMATION CONCERNING THE BOARD OF DIRECTORS
During the Company's past fiscal year, the Board of Directors held seven
meetings and took action four times by unanimous written consent. During the
Company's past fiscal year, each member of the Board attended at least 75% of
the meetings of the Board and Board Committees on which he or she served. The
Executive Committee of the Board of Directors comprised of Morton J. Levy, Barry
Shapiro and Donald D. Shack held one meeting during the past fiscal year.
The Compensation Committee makes determinations pertaining to the
compensation of the Company's executive officers. Due to the changes in the
composition of the Board of Directors during fiscal 1995, the Board of Directors
as a whole, excluding Mr. Levy, met as a Compensation Committee on two occasions
to establish Mr. Levy's compensation arrangements. The Board of Directors has a
Stock Option Committee currently consisting of Howard Kaufman and Irwin Naitove,
which makes determinations pertaining to the grant of options under the
Company's 1992 Incentive and Non-Qualified Stock Option Plan. During the
Company's past fiscal year, the Stock Option Committee took action by unanimous
written consent four times and held two meetings.
The Board of Directors' Audit Committee, comprised of Messrs. Kaufman and
Shack and Ms. Jefferson, reviews the performance of the Company's independent
auditors, their fees and services and the scope of their audit. The selection
of the independent auditors, however, is made by the Board as a whole. The
Audit Committee held one meeting during the past fiscal year. The Board of
Directors does not maintain a standing nominating committee, the customary
functions of such committee being performed by the entire Board of Directors.
All directors hold office until the next annual meeting of stockholders and
the election and qualification of their successors. Executive officers serve at
the pleasure of the Board of Directors.
Directors who are not officers of the Company receive a $10,000 annual
retainer, plus reimbursement of reasonable out-of-pocket expenses. Pursuant to
the Company's 1992 Incentive and Non-Qualified Stock Option Plan, each director
who is not an officer of the Company and who does not provide legal or
consulting services to the Company is entitled to receive, on the commencement
of service as a director and on each anniversary thereof on which such director
remains a director of the Company, options to purchase 5,000 shares of Common
Stock at an exercise price equal to the fair market value of such shares on the
date of grant. Directors who are also officers of the Company do not receive
any compensation for services rendered in their capacity as directors.
EXECUTIVE OFFICERS OF THE COMPANY
The following table sets forth the names and ages as of June 30, 1996 of
executive officers of the Company and all offices held by each person.
<TABLE>
<CAPTION>
NAME AGE TITLE OFFICER SINCE
- ----------------- --- ---------------------------------- -------------
<S> <C> <C> <C>
Morton J. Levy 74 Chairman of the Board of 1995
Directors
and Chief Executive Officer
Barry Shapiro 54 Director, President and Chief 1995
Operating Officer of the
Company
</TABLE>
-6-
<PAGE>
<TABLE>
<S> <C> <C> <C>
Michael Vastola 51 Vice President -- Finance and 1995
Chief Financial Officer
Robert Pagano 42 Vice President Marketing and 1996
Product Planning
Scott Buske 47 Vice President of Manufacturing 1996
Operations
</TABLE>
See "Election of Directors" above for a description of Messrs Levy's and
Shapiro's occupations and prior engagements.
MICHAEL VASTOLA was appointed the Vice President--Finance of the Company on
March 30, 1995. In April 1995, Mr. Vastola was named Chief Financial Officer of
the Company. Mr. Vastola is a director and officer of each of the Company's
United States subsidiaries. Mr. Vastola joined the Company on March 1, 1995,
following a 23-year career at The Lionel Corporation, serving as its Chairman
and Chief Executive Officer from 1983 to 1991.
ROBERT PAGANO returned to the Company in December 1995 and was appointed
Vice President Marketing and Product Planning of the Company in February 1996.
From May 1994 through December 1995, Mr. Pagano was the Vice President for
Research and Development at Toy Biz, Inc. Prior to that time, starting in
November 1991, Mr. Pagano was Vice President--Marketing of the Joint Venture and
then of the Company.
SCOTT BUSKE was appointed the Vice President of Manufacturing Operations in
February 1996. Mr. Buske, for more than the past five years, was Chairman of
the Board, President and Chief Executive Officer of Table Toys, Inc. In
February 1996, immediately following Mr. Buske's employment by the Company,
Table Toys, Inc. filed a petition under Chapter 11 of the federal bankruptcy
laws.
-7-
<PAGE>
EXECUTIVE COMPENSATION
----------------------
The Summary Compensation Table below sets forth certain information
concerning compensation paid or accrued in 1995 to the past and present Chief
Executive Officer of the Company and the two executive officers whose total
salary and bonus in 1995 exceeded $100,000.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG-TERM
ANNUAL COMPENSATION ALL OTHER
COMPENSATION ------------- COMPENSATION
NAME AND PRINCIPAL -------------- OPTIONS --------------
POSITION YEAR SALARY ($) AWARDED (#) ($)
- ------------------------ ---- -------------- ------------- ---------------
<S> <C> <C> <C> <C>
Morton Levy 1995 166,833 85,000
Chairman of the Board 1994 -- --
and Chief Executive 1993 -- --
Officer
Allan Rigberg (1) 1995 96,570 --
Chairman of the Board 1994 350,000 20,000
and Chief Executive 1993 325,000 --
Officer
Barry Shapiro 1995 185,000 39,000 45,801(2)
President and Chief 1994 -- --
Operating Officer 1993 -- --
Michael Vastola 1995 121,446 40,000
Vice President - Finance 1994 -- --
and Chief Financial 1993 -- --
Officer
</TABLE>
(1) As of March 30, 1995, no longer employed by the Company.
(2) Includes a $35,470 housing allowance paid to Mr. Shapiro while he served as
Managing Director of the Company's Hong Kong subsidiaries.
-8-
<PAGE>
The following table sets forth certain information with respect to options
to purchase the Company's Common Stock granted in fiscal year 1995 under the
Company's 1992 Incentive and Non-Qualified Stock Option Plan for the executive
officers named in the Summary Compensation Table above.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM
- -----------------------------------------------------------------------------------------------------------
PERCENT OF TOTAL
OPTIONS GRANTED EXERCISE
OPTIONS TO EMPLOYEES IN PRICE EXPIRATION
NAME GRANTED (#) 1995 ($/SHARE) DATE 5% ($) 10% ($)
---- ----------- --------------- ---------- ----------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Morton Levy 50,000 21.4% 2.00 5/18/05 1,806 62,108
35,000 15.0% 1.625 7/12/05 35,768 90,644
Allan Rigberg -- -- -- -- -- --
Barry Shapiro 10,000 4.3% 3.625 1/26/05 8,545 35,078
29,000 12.4% 1.625 7/12/05 29,637 75,105
Michael Vastola 15,000 6.4% 3.625 3/1/05 -- 28,301
25,000 10.7% 1.625 7/12/05 25,549 64,740
</TABLE>
The following table details the value on December 31, 1995 of options to
purchase Common Stock held by the executive officers named in the Summary
Compensation Table above.
FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED OPTIONS AT VALUE OF UNEXERCISED IN-THE-MONEY
DECEMBER 31, 1995 OPTIONS AT DECEMBER 31, 1995(1)
----------------------------------------------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE($) UNEXERCISABLE($)
---- ----------- ------------- -------------- ----------------
<S> <C> <C> <C> <C>
Morton Levy 58,000 52,000
Allan Rigberg -- -- -- --
Barry Shapiro 5,200 65,000 -- --
Michael Vastola -- 40,000 -- --
</TABLE>
(1) Based on the closing price of the Company's Common Stock on the NASDAQ
National Market System on December 31, 1995.
COMPENSATION ARRANGEMENTS
In February 1996, the Compensation Committee of the Board of Directors
established a company wide bonus pool to enable employees of the Company to
participate in any profits the Company earns in 1996. The pool will consist of
20% of the first $1,000,000 of pre-tax earnings, 15% on the next $1,000,000 of
pre-tax earnings and 10% of all pre-tax earnings over $2,000,000. Mr. Levy and
Mr. Shapiro will receive 30% and 25% respectively, of the pool. The remaining
45% of the pool will be distributed to the employees of the Company, subject to
the discretion of Messrs. Levy and Shapiro.
In February 1996, the Board approved an agreement with Mr. Shapiro which
provides that if the Company is acquired during 1996 and Mr. Shapiro is
terminated as a consequence thereof, Mr. Shapiro will be paid an amount equal to
his 1996 base salary.
-9-
<PAGE>
PERFORMANCE MEASUREMENT COMPARISON
The following graph sets forth as of December 31, 1995, the cumulative total
stockholder return on the Company's Common Stock compared with the cumulative
total return of the NASDAQ National Market Index and a peer group common stock
index comprised of those public companies whose business activities fall within
the same Standard Industrial Classification Code as the Company. The total
return assumes a $100 investment on October 1, 1992 (the date of the initial
public offering of the Company's Common Stock) and reinvestment of dividends in
the Company's Common Stock and in each index.
COMPARISON OF CUMULATIVE TOTAL RETURN OF THE
COMPANY'S COMMON STOCK, PEER GROUP COMMON
STOCK INDEX AND NASDAQ NATIONAL MARKET INDEX
[SEE ATTACHED CHART]
- ------------------------------FISCAL YEAR ENDING-------------------------------
COMPANY 1992 1992 1993 1994 1995
JUST TOYS INC 100.00 112.24 51.02 15.31 11.73
INDUSTRY INDEX 100.00 96.73 112.26 104.25 138.27
BROAD MARKET 100.00 108.57 130.23 136.73 177.35
-10-
<PAGE>
REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors currently consists of
Messrs. Gimbel and Naitove and Ms. Jefferson. However, in fiscal 1995 the
Compensation Committee consisted of all members of the Board of Directors,
except Messrs. Levy and Shapiro. The Compensation Committee determines the
compensation of Mr. Levy as Cheif Executive Officer of the Company and sets
policies for and reviews with Mr. Levy the compensation of the other executive
officers identified in the Summary Compensation Table above and the Company's
other principal executives. The Company's executive compensation packages are
comprised primarily of base salaries, performance based bonus awards and stock
options. It is the philosophy of the Compensation Committee that a substantial
portion of a senior executive officer's compensation be directly related to the
performance of the Company. Individual compensation is reviewed on the basis of
various considerations, including Company performance, individual performance,
position tenure, and internal comparability.
In March 1995, the Company employed Mr. Levy as Chairman of the Board and
Chief Executive Officer for a base annual salary of $225,000. Mr. Levy's salary
was the result of negotiations between Mr. Levy and the other members of the
Board of Directors at the time of his retention. The Board sought to compensate
Mr. Levy fairly to reflect his extensive experience in the toy industry and the
substantial difficulties facing the Company at the time of his retention. Prior
to becoming an officer of the Company, Mr. Levy had received options to purchase
25,000 shares of the common stock of the Company in connection with his service
as a director and consultant to the Company. In keeping with the Company's
philosophy that a substantial portion of an executive's compensation be
performance based, since his appointment as Chief Executive Officer, Mr. Levy
has received options to purchase an additional 85,000 shares of common stock
having exercise prices equal to or higher than the fair market value of the
Company's stock on the date of grant of such options.
The compensation of the other executive officers identified in the Summary
Compensation Table and the Company's other principal executives consists for
1995 of a combination of base salary and stock options. For 1996 the
Compensation Committee has established a Company-wide bonus pool to enable
management employees of the Company to participate in profits the Company earns
in 1996. The pool will consist of 20% of the first $1,000,000 of pre-tax
earnings, 15% on the next $1,000,000 of pre-tax earning and 10% of all pre-tax
earnings over $2,000,000. Mr. Levy and Mr. Shapiro will receive 30% and 25%
respectively, of the pool. The remaining 45% of the pool will be distributed to
certain employees of the Company, subject to the discretion of Messrs. Levy and
Shapiro.
The Company's stock option program is designed to further align the interest
of the executives with those of the stockholders at large. Options are granted
with exercise prices equal to or above market on the grant date and vest,
generally, in 20% increments over a period of five years. This approach is
designed to incentivise creation of stockholder values over the long term since
the full benefit of the option cannot be realized unless price appreciation
occurs over a number of years and the executive is rewarded only to the extent
that stockholders at large have benefited. The Company does not issue options
to executives on any fixed basis preferring to maintain a flexible program.
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<PAGE>
Section 162(m) of the Internal Revenue Code generally disallows a tax
deduction to public companies for compensation over $1 million paid to the
corporation's Chief Executive Officer and the four other most highly compensated
executive officers unless such compensation is paid pursuant to performance
standards prescribed under Section 162(m). Section 162(m) provides that
qualifying performance-based compensation will not be subject to the deduction
limit if certain requirements are met. The Company currently intends to
structure grants under future stock option plans in a manner that complies with
this requirement. The Company does not anticipate that the compensation package
for the Chief Executive Officer or any of the four most highly compensated
executive officers, will exceed $1,000,000 as contemplated by Section 162(m)
within the next year. The Company has not found it necessary to address the
issue of Section 162(m) in respect of compensation paid in excess of $1,000,000.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Donald D. Shack is a member of the firm of Shack & Siegel, P.C., general
counsel to the Company. Roger Gimbel is the Chief Executive Officer and
President of RGA, which provides certain administrative services to the Company.
See "Certain Relationships and Related Transactions." In addition, until April
1995, Mr. Gimbel was the Chief Financial Officer of the Company and an officer
of the Company's subsidiaries.
Howard Kaufman Charmaine Jefferson Roger Gimbel Donald D. Shack Irwin Naitove
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<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
ARRANGEMENTS WITH RGA
Since the commencement of operations in March 1989, RGA has provided certain
administrative services to the Company and its predecessors. These services
include maintenance of financial books and records and preparation of financial
statements, budgets, forecasts and cash flow projections; services relating to
the Company's banking relationships; payment from the Company's accounts of
accounts payable and payroll; collection of accounts receivable and credit
analysis; order processing and resolution of routine claims, deductions and
allowances with customers; import processing; cash management; and other
miscellaneous services and advice.
Effective October 1, 1992, the Company and RGA entered into a new agreement
pursuant to which RGA provides such services to the Company. The agreement is
automatically renewed from year to year unless terminated by the Company upon at
least six months notice prior to the commencement of any renewal term or by RGA
at least 12 months prior to the commencement of any renewal term. The agreement
provides that the Company will pay RGA, as a fee for the services described
above, an amount equal to the sum of (i) 4.0% of the first $30,000,000 of the
Company's domestic non-letter of credit gross sales, 3.75% of such gross sales
in excess of $30,000,000 but less than $40,000,001, 3.5% of such gross sales in
excess of $40,000,000 but less than $50,000,001, 3.25% of such gross sales in
excess of $50,000,000 but less than $60,000,001 and 3.0% of such gross sales in
excess of $60,000,000, (ii) 1.5% of the Company's domestic letter of credit
gross sales, and (iii) 1.0% of the Company's foreign gross sales. The Company
incurred expenses of $668,000 and $877,000 for the foregoing services in 1995
and 1994, respectively. RGA also provided the Company with certain warehouse
services for which it incurred expenses of $107,000 in 1995 and $320,000 in
1994.
Under the agreement with RGA, the Company has the right to purchase, at cost,
from RGA any computer software used by RGA in the performance of its services
for the Company, to the extent RGA owns or has the right to transfer such
software. The agreement also provides that during its term and for a period of
one year thereafter, RGA will not provide similar services to any of the
Company's competitors in the toy business.
Commencing in 1996, the Company terminated its prior arrangements with RGA and
began assuming internally the functions and services previously provided by RGA
to the Company. RGA will continue to provide computer related services through
1996 and for such services the Company will pay to RGA an aggregate of $300,000,
in 1996, less certain credits.
HONG KONG SERVICES ARRANGEMENTS
Services similar to that provided by RGA in the United States are provided to
the Company's Hong Kong subsidiaries by a company in Hong Kong of which Roger
Gimbel, the Vice Chairman of the Board of Directors of the Company, is a
shareholder. The Company incurred expenses of $293,000 in 1995 and $217,000 in
1994 for such services. The Company has negotiated a fixed fee of $116,000 for
1996.
PUBLIC WAREHOUSE FACILITY
The Company utilizes, among other facilities, a public warehouse in New Jersey
which stores the Company's inventory and packages and ships such inventory in
accordance with the Company's instructions for a fee based upon a percentage of
the dollar value of orders shipped from such facility. The operator of such
warehouse facility leases the premises from Jersey Warehouse Partners, a general
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<PAGE>
partnership of which Roger Gimbel is a General Partner and in which Mr. Gimbel
holds a 42.45% interest. Rental expense for such warehouse facility was
approximately $5,300 in 1995. The Company believes that the arrangements with
Jersey Warehouse Partners are fair and reasonable and are on terms at least as
favorable as would be available from unaffiliated parties.
PROPOSAL 2 - AMENDMENT OF CERTIFICATE OF INCORPORATION TO AUTHORIZE AN
ADDITIONAL 1,000,000 SHARES OF PREFERRED STOCK
The Company's Certificate of Incorporation (the "Certificate") currently
authorizes the issuance of up to 1,000,000 shares of preferred stock, $1.00 par
value. In connection with (i) the Company's settlement of the litigation
brought by the Company's former Chief Executive Officer and its former President
against the Company, and (ii) the Company's acquisition of substantially all of
the assets of Table Toys, Inc., the Company has issued nearly 700,000 shares of
its preferred stock in two series, Series A and Series B. As the dividends that
are payable on each of the Series A and Series B preferred stock may be paid
through the issuance of additional shares of preferred stock, the Company may
soon have no shares of preferred stock available for issuance.
The Board believes that the Company needs to have available for issuance
additional shares of preferred stock to give the Company the financing
flexibility that the availability of the preferred stock affords. Accordingly,
the Board has proposed that the Company authorize an additional 1,000,000 shares
of the Company's preferred stock, $1.00 par value. At this time, the Company
has no firm agreement to issue any additional preferred stock but believes that
it is in the best interest of the Company to have additional preferred stock
available to it, without having to incur possible delays and expenses associated
with seeking stockholder approval, in case appropriate opportunities arise for
the issuance of shares of preferred stock in the future. Accordingly, the Board
has approved, and recommends to stockholders that they also approve, an
amendment to the Certificate to authorize an additional 1,000,000 shares of
preferred stock.
In accordance with the Certificate, the additional 1,000,000 shares of
authorized preferred stock will rank senior to the Company's authorized Common
Stock and will be issuable in series having such designations, dividend rates,
liquidation prices, redemption prices, conversion prices, voting rights,
maturity dates and other terms as may be established from time to time by the
Board in the resolutions establishing such series. If the resolutions
establishing the series so provide, holders of any series of preferred stock may
have the right to receive a liquidating distribution before any distribution is
made to holders of Common Stock upon liquidation, and holders of preferred
stock may be entitled to receive all dividends to which they are entitled before
any dividends may be paid to holders of Common Stock. Holders of each series of
preferred stock will have such voting rights (which may include special rights
regarding election of directors) as may be provided in the resolutions
establishing such series. As provided in the Certificate, the preferred stock
will not be set aside for any specified purpose, but will be subject to
issuance at the discretion of the Board from time to time for any proper
corporate purposes and without any further stockholder approval.
Preferred stock can be used to make more difficult a change in control of the
Company. Under certain circumstances the Board could create impediments to, or
frustrate persons seeking to effect, a takeover or transfer of control of the
Company by causing such shares to be issued to a holder or holders who might
side with the Board in opposing a takeover bid that the Board determines is not
in the best interest of the Company and its stockholders. Such action may have
an adverse impact on stockholders who may want to accept such takeover bid. In
this connection, the Board could, publicly or privately issue shares of
preferred stock with full voting rights to a holder that would thereby have
sufficient voting power to insure that certain types of proposals -- including
any proposal to remove directors, to
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<PAGE>
accomplish certain business combinations opposed by the Board, or to alter,
amend or repeal provisions in the Certificate or By-laws of the Company relating
to any such action -- would not receive the requisite stockholder vote.
Furthermore, the existence of such shares might have the effect of discouraging
any attempt by a person or entity to acquire control of the Company since the
issuance of such shares could dilute the ownership of such person or entity.
The Company is not currently contemplating the issuance of any preferred stock
which may make more difficult a change in control of the Company, nor is the
Company aware of any proposals relating to a possible change in control of the
Company.
The complete text of proposed Article FOURTH of the Certificate as adopted by
the Board is set forth in Exhibit A attached to this Proxy Statement.
REQUIRED VOTE
The affirmative vote of holders of a majority of the shares of Common Stock
outstanding and entitled to vote on this matter is required to authorize the
Amendment to the Certificate in order to authorize an additional 1,000,000
shares of preferred stock pursuant to the following resolution:
"RESOLVED, that the amendment to the Company's Certificate of Incorporation be
approved in the form annexed as Exhibit A to the Company's Proxy Statement
dated July 19, 1996."
______________________
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE AMENDMENT TO
THE COMPANY'S CERTIFICATE OF INCORPORATION TO PROVIDE FOR THE AUTHORIZATION OF
AN ADDITIONAL 1,000,000 SHARES OF PREFERRED STOCK.
______________________
PROPOSAL 3: RATIFICATION OF THE SELECTION OF INDEPENDENT AUDITORS
The following disclosures are required by the rules and regulations of the
Securities Exchange Commission in connection with the Company's decisions to
change its independent auditors.
The Company determined to change its independent auditors and accordingly
dismissed Richard A. Eisner & Company, LLP ("Eisner") as its independent
auditors effective as of November 8, 1995. The decision to change independent
auditors was unanimously approved by the Company's Board of Directors including
all members of the Audit Committee of the Board of Directors.
During the Company's two most recently completed fiscal years and the
subsequent interim period up to the date of the change of accountants (November
8, 1995), there were no disagreements between the Company and Eisner on any
matter of accounting principles or practices, financial statement disclosure, or
auditing scope or procedures, which disagreements, if not resolved to the
satisfaction of Eisner, would have caused it to make reference to the matter of
disagreement in its report. During the two most recently completed fiscal years
and the subsequent interim period up to the date of the change of accountants
(November 8, 1995), the Company was not advised by Eisner of any of the
reportable events listed in Item 304(a)(1)(v)(A) through (D) of Regulation S-K
(the "Regulation").
The audit report of Eisner on the consolidated financial statements of the
Company as of and for the fiscal year ended December 31, 1993 did not contain
any adverse opinion or disclaimer of opinion, nor was it qualified or modified
as to uncertainty, audit scope, or accounting principles. The audit report
-15-
<PAGE>
of Eisner on the consolidated financial statements of the Company as of and for
the fiscal year ended December 31, 1994 contained a statement regarding the
uncertainty of the Company to continue as a going concern. In addition, the
report noted that the Company adopted the method of accounting for certain
investments in debt and equity securities prescribed by Statement of Financial
Accounting Standards No. 115.
Effective November 13, 1995, the Company retained Ernst & Young LLP ("E&Y") as
its independent auditors. E&Y had previously served as independent auditors for
the Company's Hong Kong subsidiaries for the fiscal year ended December 31,
1994. During the Company's two most recently completed fiscal years and the
interim period prior to the engagement of E&Y, the Company (or someone on its
behalf) did not consult E&Y regarding either (i) the application of accounting
principles to a specified transaction either completed or proposed or the type
of audit opinion that might be rendered on the Company's financial statements;
or (ii) any matter that was either the subject of a disagreement (as such term
is used in Item 304(a)(1)(iv) of the Regulation and the related instruction to
Item 304 of the Regulation) or any of the reportable events listed in Item
304(a)(1)(v)(A) through (D) of the Regulation.
It is proposed that the stockholders ratify the appointment by the Board of
Directors of E&Y as the independent auditors of the Company for the fiscal year
ending December 31, 1996. The Company expects a representative of E&Y to be
present at the annual meeting who will respond to appropriate questions
submitted by stockholders and will make such statements as he or she may desire.
Approval by the stockholders of the appointment of independent auditors is not
required, but the Board of Directors deems it desirable to submit this matter to
the stockholders. If a majority of the votes cast at the meeting should not
approve the selection of E&Y, the selection of independent auditors will be
reconsidered by the Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE
APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS OF THE COMPANY.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT
------------------------------------------------------------
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the
Company's officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities to file reports of ownership
and changes in ownership on Forms 3, 4 and 5 with the Commission and the
NASDAQ/National Market System. Officers, directors and greater than ten percent
stockholders are required by the Commission's regulation to furnish the Company
with copies of all Forms 3, 4 and 5 they file.
Based solely on the Company's review of the copies of such forms it has
received, the Company believes that all of its officers, directors and greater
than ten percent beneficial owners complied with all filing requirements
applicable to them with respect to transactions during fiscal 1995, except for
three Form 4s reflecting three sales of the Company's stock by JTI Toys, Inc.,
Allan Rigberg, the former Chief Executive Officer and Chairman of the Board, and
Rose Evangelista, the former President, Chief Operating Officer and Director of
the Company, which Form 4s were filed late.
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<PAGE>
VOTING PROCEDURES
Pursuant to Securities and Exchange Commission rules, a designated blank space
is provided on the proxy card to withhold authority to vote for one or more
nominees for director and boxes are provided on the proxy card for stockholders
to mark if they wish to abstain on Proposals 2 or 3. Votes withheld in
connection with the election of one or more of the nominees for director will
not be counted in determining the votes cast and will have no effect on the
vote. Abestentions in connection with Proposal 2 will be counted as present and
therefore will affect a negative vote. Abstentions are not counted in
determining the votes cast with respect to the ratification of the selection of
independent auditors and will have no effect on the vote.
Under the rules of the National Association of Securities Dealers, brokers who
hold shares in street name for customers have the authority to vote on certain
items when they have not received instructions from beneficial owners. Brokers
that do not receive instructions are entitled to vote upon the election of
directors and the selection of independent auditors. Under the General
Corporation Law of the State of Delaware, a broker non-vote will have no effect
on the outcome of the election of directors or upon Proposal 3 and will have the
same effect as a vote against Proposal 2.
OTHER MATTERS
MANNER AND EXPENSES OF SOLICITATION
The solicitation of proxies in the accompanying form is made by the Board of
Directors and the cost thereof will be borne by the Company. In addition to the
solicitation of proxies by use of the mails, some of the officers, directors and
other employees of the Company may also solicit proxies personally or by mail,
telephone or telegraph, but they will not receive additional compensation for
such services. Brokerage firms, custodians banks, trustees, nominees or other
fiduciaries holding shares of Common Stock in their names will be requested by
the Company to forward proxy materials to their principals and will be
reimbursed for their reasonable out-of-pocket expenses in such connection.
It is important that proxies be returned promptly. Therefore, whether or not
you plan to attend the meeting in person, you are urged to mark, date, execute,
and return your proxy in the enclosed envelope, to which no postage need be
affixed if mailed in the United States.
DISCRETIONARY AUTHORITY TO VOTE PROXY
As of the date of this proxy statement, the Board of Directors is not aware of
any other matters to be presented for action, but if any other matters properly
come before the meeting, it is intended that the persons voting the accompanying
proxy will vote the shares represented thereby in accordance with their best
judgment.
ANNUAL REPORT
The Annual Report of the Company for 1995, including financial statements,
accompanies this proxy statement.
SUBMISSION OF STOCKHOLDER PROPOSALS
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<PAGE>
Stockholder proposals in respect of matters to be acted at the Company's 1997
Annual Meeting of Stockholders should be received by the Company on or before
March 21, 1997 in order that they may be considered for inclusion in the
Company's proxy materials.
THE COMPANY WILL PROVIDE WITHOUT CHARGE A COPY OF THE COMPANY'S ANNUAL REPORT
ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995, INCLUDING FINANCIAL
STATEMENTS AND SCHEDULES THERETO, TO EACH OF THE COMPANY'S SHAREHOLDERS OF
RECORD ON JULY 15, 1996 AND EACH BENEFICIAL SHAREHOLDER ON THAT DATE, UPON
RECEIPT OF A WRITTEN REQUEST THEREFORE MAILED TO THE COMPANY'S OFFICES, 50 WEST
23RD STREET, NEW YORK, NEW YORK 10010, ATTENTION: SECRETARY. REQUESTS FROM
BENEFICIAL SHAREHOLDERS MUST SET FORTH A GOOD FAITH REPRESENTATION AS TO SUCH
OWNERSHIP ON THAT DATE.
By Order of the Board of Directors
Geoffrey Gimbel
Secretary
Dated: July 19, 1996
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<PAGE>
EXHIBIT A
AMENDMENT TO THE CERTIFICATE OF INCORPORATION TO AUTHORIZE AN ADDITIONAL
1,000,000 SHARES OF PREFERRED STOCK
If proposal 2 is approved, the Certificate shall be amended by deleting
Article Fourth and substituting in its place the following:
"FOURTH: The total number of shares of stock which the Corporation
shall have authority to issue is Seventeen Million (17,000,000), consisting
of Fifteen Million (15,000,000) shares of Common Stock, $0.01 par value per
share, and Two Million (1,000,000) shares of Preferred Stock, $1.00 par
value per share (the "Preferred Stock").
The Preferred Stock may be issued, from time to time, in one or more
series, with such powers, designations, preferences and relative,
participating, optional or other rights, qualifications, limitations or
restrictions thereof, as shall be stated and expressed in the resolution or
resolutions providing for the issue of such series adopted by the Board of
Directors from time to time, pursuant to the authority herein given, a copy
of which resolution or resolutions shall have been set forth in a
certificate made, executed, acknowledged, filed and recorded in the manner
required by the laws of the State of Delaware in order to make the same
effective. Each series shall consist of such number of shares as shall be
stated and expressed in such resolution or resolutions providing for the
issuance of the stock of such series. All shares of any one series of
Preferred Stock shall be alike in every particular.
No holder of any of the shares of the stock of the Corporation,
whether now or hereafter authorized and issued, shall be entitled as of
right to purchase or subscribe for (1) any unissued stock of any class, or
(2) any additional shares of any class to be issued by reason of any
increase of the authorized capital stock of the Corporation of any class,
or (3) bonds, certificates of indebtedness, debentures or other securities
convertible into stock of the Corporation, or carrying any right to
purchase stock of any class, but any such unissued stock or such additional
authorized issue of any stock or of other securities convertible into
stock, or carrying any right to purchase stock, may be issued and disposed
of pursuant to resolution of the Board of Directors to such persons, firms,
corporations or associations and upon such terms as may be deemed advisable
by the Board of Directors in the exercise of its discretion."
<PAGE>
JUST TOYS, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS
AUGUST 19, 1996
THE UNDERSIGNED, revoking all previous proxies, hereby appoints MORTON J.
LEVY, BARRY SHAPIRO and DONALD D. SHACK, or any of them as attorneys, agents and
proxies with power of substitution, and with all powers the undersigned would
possess if personally present, to vote all shares of Common Stock of JUST TOYS,
INC. (the "Company") which the undersigned is entitled to vote at the Annual
Meeting of Shareholders of the Company to be held on Monday, August 19, 1996 at
10:00 A.M. local time at the Company's showroom at 200 Fifth Avenue, New York,
New York, and at all adjournments thereof. The shares represented by this Proxy
will be voted as indicated below upon the following matters, all more fully
described in the Proxy Statement.
(1) Election of a board of seven directors
WITHHOLD AUTHORITY
Nominee VOTE FOR TO VOTE FOR
- ------- -------- ------------------
Roger Gimbel [ ] [ ]
Charmaine Jefferson [ ] [ ]
Howard Kaufman [ ] [ ]
Morton J. Levy [ ] [ ]
Irwin Naitove [ ] [ ]
Donald D. Shack [ ] [ ]
Barry Shapiro [ ] [ ]
(See reverse side)
<PAGE>
(2) Approval of an amendment to the Company's Certificate of Incorporation that
will authorize an additional 1,000,000 shares of preferred stock to be
issued in accordance with the Certificate of Incorporation.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
(3) Ratification of the appointment of Ernst & Young LLP as independent auditors
for the 1996 fiscal year.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
(4) In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE
INSTRUCTIONS GIVEN. IF NO SUCH INSTRUCTIONS ARE GIVEN, THE SHARES REPRESENTED
BY THIS PROXY WILL BE VOTED IN FAVOR OF ELECTION OF THE NOMINEES FOR DIRECTORS
DESIGNATED BY THE BOARD OF DIRECTORS AND FOR ITEMS 2 and 3.
Dated:___________________
______, 1996
__________________________
___________
NOTE: Please sign exactly as your
name or names appear hereon. Joint
owners should each sign personally.
When signing as executor,
administrator, corporation, officer,
attorney, agent, trustee or guardian,
etc., please add your full title to
your signature.
NOTE: PLEASE MARK, DATE, SIGN AND MAIL THIS PROXY IN THE ENVELOPE ENCLOSED FOR
THIS PURPOSE. NO POSTAGE IS REQUIRED FOR MAILING IN THE UNITED STATES.
