SOURCE: Jaclyn, Inc

October 06, 2009 16:38 ET

Jaclyn, Inc. Enters Into Employment Agreement With Chief Executive Officer

MAYWOOD, NJ--(Marketwire - October 6, 2009) - Jaclyn, Inc. (OTCQX: JCLY) today announced that it has entered into an employment agreement with Robert Chestnov under which he will continue to serve as the Company's President and Chief Executive Officer through at least October 2014, subject to extension or earlier termination. Mr. Chestnov has been the Company's President and Chief Executive Officer since November 1988.

Under the terms of the employment agreement, Mr. Chestnov is entitled to receive an annual base salary of $435,000 and a minimum annual bonus in an amount equal to 25% of his annual base salary, each of which may be increased in the discretion of the Board of Directors' executive committee. In addition, under the terms of a stock award contract between the Company and Mr. Chestnov, he received a stock award on the date of the signing of the employment agreement of 150,000 shares of the Company's common stock under the Company's 2007 Stock Incentive Plan. The Company will pay all amounts necessary to satisfy taxes that may be payable by Mr. Chestnov as a result of the issuance of the stock award.

The employment agreement also provides that on January 15, 2010, Mr. Chestnov will receive a restricted stock award of 100,000 additional shares of common stock under the 2007 Stock Incentive Plan, subject to stockholder approval of an increase in the number of shares that may be issued under that plan. The terms of this restricted stock award, which will be set forth in a restricted stock award contract between the Company and Mr. Chestnov, provide that 25,000 of the restricted award shares will vest on January 15, 2010, with the remaining 75,000 restricted award shares vesting pro rata in three annual installments beginning on January 15, 2011. However, if Mr. Chestnov's employment is terminated for any reason (except as described below), and in certain other circumstances, he must forfeit to the Company the restricted award shares that have not yet vested. The Company will pay all amounts necessary to satisfy taxes that may be payable by Mr. Chestnov as a result of the issuance of the restricted stock award.

Upon a termination of the employment agreement by Mr. Chestnov for good reason, as defined in the employment agreement, Mr. Chestnov will be entitled to receive a lump sum payment in an amount equal to two times his base salary at the annual rate in effect on the date of termination, any accrued and unpaid bonus compensation, and any other accrued and unpaid amounts to which Mr. Chestnov is entitled through the date of termination, and all non-vested restricted stock award shares will immediately vest. In addition, in the event of a change of control, as defined in the agreement, Mr. Chestnov will be entitled to terminate the employment agreement and receive a lump sum payment in an amount equal to two times his base salary at the annual rate in effect on the date of termination, and all non-vested restricted stock award shares will immediately vest.

In the event of a termination by the Board of Directors of the Company as a result of Mr. Chestnov's disability, he will be entitled to receive his base salary for the remainder of that calendar year (but not less than one-half of his base salary), his minimum bonus for that year and all other amounts to which he was entitled for portion of the year up to his termination. In the event of Mr. Chestnov's death, Mr. Chestnov's legal representatives will be entitled to receive the same amounts that Mr. Chestnov would have been entitled to receive for a termination as a result of Mr. Chestnov's disability.

The employment agreement also contains provisions prohibiting Mr. Chestnov, during the term of his employment and for a period of the earlier of (i) one year following his employment or (ii) the Company's bankruptcy, from (a) soliciting for hiring, or hiring, any employee, consultant or other person employed or affiliated with the Company, (b) interfering with the Company's relationships with its suppliers, customers, lessors or other persons or entities and (c) competing with the Company.

Forward Looking Statements

Note: This press release contains information concerning, among other things, our future plans and objectives that are or may be deemed to be forward-looking statements. However, forward-looking statements are subject to a number of known and unknown risks and uncertainties that may cause our actual results, trends, performance or achievements, or industry trends and results, to differ materially from the future results, trends, performance or achievements expressed or implied by such forward-looking statements. Those risks and uncertainties may include, but are not limited to, general economic and business conditions (including the ongoing financial downturn and disruptions in credit markets); competition; potential changes in customer spending; acceptance of our product offerings and designs; the variability of consumer spending resulting from changes in domestic economic activity; a highly promotional retail environment; any significant variations between actual amounts and the amounts estimated for those matters identified as our critical accounting estimates as well as other significant accounting estimates made in the preparation of our financial statements; and the impact of current and potential hostilities in the Middle East and in other geographic areas; as well as other geopolitical concerns. You are urged to consider all such factors. In light of the uncertainty inherent in such forward-looking statements, you should not consider their inclusion to be a representation that such forward-looking matters will be achieved. We assume no obligation for updating any such forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting such forward-looking statements.

Jaclyn, Inc. is a designer, manufacturer and marketer of apparel, women's sleepwear, infants' and children's apparel, handbags, premiums and related accessories. Our web site is at www.jaclyninc.com.

Contact Information

  • Company Contact:
    Anthony Christon
    Chief Financial Officer
    Jaclyn, Inc.
    (201) 909-6000