-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Ci0qOv/BZ4jE8cOQOZ6fKgkIHwY0sOjAYAZYXdqC6qdrZa4H+r0OFJnw477ULVdG gjRwUF0cvX+z6CWn1oaRtw== 0000039917-98-000010.txt : 19981023 0000039917-98-000010.hdr.sgml : 19981023 ACCESSION NUMBER: 0000039917-98-000010 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19981022 EFFECTIVENESS DATE: 19981022 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: GARAN INC CENTRAL INDEX KEY: 0000039917 STANDARD INDUSTRIAL CLASSIFICATION: APPAREL & OTHER FINISHED PRODS OF FABRICS & SIMILAR MATERIAL [2300] IRS NUMBER: 135665557 STATE OF INCORPORATION: VA FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: S-8 SEC ACT: SEC FILE NUMBER: 333-66009 FILM NUMBER: 98729217 BUSINESS ADDRESS: STREET 1: 350 FIFTH AVE CITY: NEW YORK STATE: NY ZIP: 10118 BUSINESS PHONE: 2125632000 MAIL ADDRESS: STREET 1: 350 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10118 S-8 1 FORM S-8 REGISTRATION STATEMENT As filed with the Securities and Exchange Commission on October 22, 1998 Registration No. ______________________ =========================================================================== SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 GARAN, INCORPORATED (Exact name of registrant as specified in its charter) Virginia No. 13-5665557 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 350 Fifth Avenue New York, New York 10118 (212) 563-2000 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) ---------------- Garan, Incorporated 1998 Stock Option Plan (Full title of plan) ---------------- Marvin S. Robinson, Esq. Tannenbaum Dubin & Robinson, LLP 1140 Avenue of the Americas New York, New York 10036 (212) 302-2900 (Name, address, including zip code, and telephone number, including area code, of agent for service) CALCULATION OF REGISTRATION FEE =============================================================================== Proposed Proposed Maximum Maximum Maximum Title of Securities Amount Offering Aggregate Amount of to be Registered to be Price Per Offering Registration Registered Share Price Fee - ------------------------------------------------------------------------------- Common Stock (No Par Value) 200,000 $24.6875* $4,937,500 $1,497 =============================================================================== *The price of $ 24.6875 per share, which is the average of the high and low prices of the Company's Common Stock as reported on the American Stock Exchange on October 19, 1998, is set forth solely for purposes of calculating the filing fee. PAGE PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT Item 3. Incorporation of Documents by Reference The following documents filed with the Securities and Exchange Commission ("Commission") are incorporated by reference in this Registration Statement: (a) The Company's Annual Report on Form 10-K for the fiscal year ended September 30, 1997. (b) The Company's Quarterly Reports on Form 10-Q for the fiscal quarters ended December 31, 1997, March 31, 1998, and June 30, 1998. (c) All documents subsequently filed by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the securities Exchange Act of 1934, as amended ("Exchange Act") prior to the filing of a post-effective amendment which indicates that all securities offered herein have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference in this Registration Statement and to be a part hereof from the date of filing of such documents. The Company will provide, without charge, to each person to whom this Registration Statement is delivered, on written or oral request, a copy of any or all of the foregoing documents. Requests should be directed to Mr. Alexander J. Sistarenik, Treasurer, Garan, Incorporated, 350 Fifth Avenue, New York, New York 10118, (212) 563-2000. Item 4. Description of Securities Not applicable. Item 5. Interest of Named Experts and Counsel Counsel to the Company, Tannenbaum Dubin & Robinson, LLP, 1140 Avenue of the Americas, New York, New York 10036, has rendered an opinion to the effect that the Common Stock offered hereby, when issued in accordance with the Garan, Incorporated 1998 Stock Option Plan, will be legally and validly issued, fully paid, and non-assessable. As of October 19, 1998, Marvin S. Robinson, a director and the Vice President-General Counsel and Secretary of the Company and a member of Tannenbaum Dubin & Robinson, LLP, owned 5,956 shares of the Company's Common Stock having a market value, as of such date, of $147,039. Item 6. Indemnification of Directors and Officers The Virginia Stock Corporation Act gives Virginia corporations the power to indemnify their present and former officers and directors under certain circumstances, and the Restated Articles of Incorporation of the Company state that: "Each person made a party to any action, suit, or proceeding by reason of the fact that he, his testator or intestate, is or was a director, officer or employee of the Corporation, or of any corporation which he served as such at the request of the Corporation, shall be indemnified by the Corporation against the reasonable expenses, including attorneys' fees, actually and necessarily incurred by him in connection with the defense of such action, suit or proceeding, or in connection with any appeal therein, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such officer, director or employee is liable for negligence or misconduct in the performance of his duties. Such right of indemnification shall not be deemed exclusive of any rights to which such director, officer, or employee may be entitled under any By-law, agreement, vote of stockholders or otherwise." In addition the Company has entered into indemnification agreements with each of its officers and directors in which it has agreed to indemnify each such individual for actions taken on behalf of the Company in which the officer or director believed that his conduct was at least not opposed to the best interests of the Company and the officer or director was not adjudged liable to the Company. The Company maintains, on behalf of its present and former directors and officers, insurance protection against certain liabilities arising out of the discharge of their duties and also insurance covering the Company against indemnification payments to its directors and officers for certain liabilities. Item 7. Exemption From Registration Claimed Not Applicable. Item 8. Exhibits Exhibit No. Description of Exhibit -------------- ------------------------------------------------ Exhibit 4.1 Restated Articles of Incorporation of the Company dated May 15, 1986 (filed as an Exhibit to the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 1988, and incorporated herein by reference). Exhibit 4.2. Articles of Amendment of the Restated Articles of Incorporation of the Company dated May 10, 1988 (filed as an Exhibit to the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 1988, and incorporated herein by reference). Exhibit 4.3. Articles of Amendment of the Restated Articles of Incorporation dated November 9, 1992 (filed as an Exhibit to the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 1992, and incorporated herein by reference). Exhibit 4.4 By-Laws, as amended through April 21, 1993, of the Company (filed as an Exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1993, and incorporated herein by reference). Exhibit 4.5 Garan, Incorporated 1998 Stock Option Plan. Exhibit 5.1 Opinion of Tannenbaum Dubin & Robinson, LLP. Exhibit 23.1 Consent of Tannenbaum Dubin & Robinson, LLP (contained in Exhibit 5.1). Exhibit 23.2 Consent of Citrin, Cooperman & Company, LLP. Exhibit 24.1 Power of Attorney (included as part of the signature page to this Registration Statement). The Company will provide, without charge, to each person to whom this Registration Statement is delivered, on written or oral request, a copy of any and all of the foregoing documents. Requests should be directed to Mr. Alexander J. Sistarenik, Treasurer, Garan, Incorporated, 350 Fifth Avenue, New York, New York 10118, (212) 563-2000. Item 9. Undertakings (a) The Company hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended ("Securities Act"). (ii) To reflect in the prospectus any facts or events arising after the effective date of this Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in the Registration Statement; provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the Company pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in this Registration Statement. (2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The Company hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Company's annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) that contains a form of prospectus shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers, and controlling persons of the Company pursuant to the foregoing provisions, or otherwise, the Company has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Company of expenses incurred or paid by a director, officer, or controlling person of the Company in the successful defense of any action, suit, or proceeding) is asserted by such director, officer, or controlling person in connection with the securities being registered, the Company, unless in the opinion of its counsel the matter has been settled by controlling precedent, will submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. PAGE SIGNATURES Pursuant to the requirements of the Securities Act, the Company, Garan, Incorporated, certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, on this 22nd day of October, 1998. GARAN, INCORPORATED /S/ SEYMOUR LICHTENSTEIN ------------------------------------------- Seymour Lichtenstein, Chairman of the Board Principal Executive Officer PAGE EXHIBIT 24.1 POWER OF ATTORNEY We, the undersigned officers and directors of Garan, Incorporated, hereby severally constitute and appoint Seymour Lichtenstein and William J. Wilson, and each of them singly, our true and lawful attorneys, with full power to them and each of them singly, to sign for us in our names in the capacities indicated below, any amendments to this Registration Statement on Form S-8 (including post-effective amendments), and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, and generally to do all things in our names and on our behalf in our capacities as officers and directors to enable Garan, Incorporated to comply with the provisions of the Securities Act of 1933, as amended, hereby ratifying and confirming our signatures as they may be signed by our said attorneys, or any of them, to said Registration Statement and all amendments thereto. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. Signature Title Date - ---------- ----- ---- /S/ SEYMOUR LICHTENSTEIN Chairman of the Board October 22, 1998 - --------------------------- (Principal Executive Officer) Seymour Lichtenstein /S/ WILLIAM J. WILSON Vice President - Finance and October 22, 1998 - --------------------------- Administration (Principal William J. Wilson Financial and Accounting Officer) /S/ STEPHEN J. DONOHUE Director October 22, 1998 - ----------------------- Stephen J. Donohue /S/ RODNEY FAVER Director October 22, 1998 - ----------------------- Rodney Faver /S/ JERALD KAMIEL Director October 22, 1998 - ----------------------- Jerald Kamiel /S/ FRANK MARTUCCI Director October 22, 1998 - ----------------------- Frank Martucci /S/ MARVIN S. ROBINSON Director October 22, 1998 - ----------------------- Marvin S. Robinson PAGE Exhibit Index - ------------- Sequentially Exhibit Numbered Number Description Page -------- ----------- ---- 4.1. Restated Articles of Incorporation of the Company dated May 15,1986 (filed as an Exhibit to the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 1988, and incorporated herein by reference). 4.2. Articles of Amendment of the Restated Articles of Incorporation of the Company dated May 10, 1988 (filed as an Exhibit to the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 1988, and incorporated herein by reference). 4.3. Articles of Amendment of the Restated Articles of Incorporation dated November 9, 1992 (filed as an Exhibit to the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 1992, and incorporated herein by reference) 4.4. By-Laws as amended through April 21, 1993, of the Company (filed as an Exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1993, and incorporated herein by reference). 4.5 Garan Incorporated 1998 Stock Option Plan. 9 5.1 Opinion of Tannenbaum Dubin & Robinson, LLP. 20 23.1 Consent of Tannenbaum Dubin & Robinson, LLP (contained in Exhibit 5.1). 23.2 Consent of Citrin Cooperman & Company, LLP. 23 24.1 Power of Attorney (included as part of the signature page to this Registration Statement). EX-4.5 2 GARAN, INCORPORATED 1998 STOCK OPTION PLAN EXHIBIT 4.5 GARAN, INCORPORATED 1998 STOCK OPTION PLAN SECTION I Purpose The purpose of the Garan, Incorporated 1998 Stock Option Plan is to provide favorable opportunities for (a) certain selected employees of Garan, Incorporated and its subsidiaries and (b) certain selected non-employee members of the Board of Directors of Garan, Incorporated to purchase shares of Common Stock of Garan, Incorporated to provide an increased incentive for these individuals to contribute to the future success and prosperity of Garan, Incorporated, to enhance the value of the Common Stock for the benefit of its shareholders, and to increase the ability of the Company to attract and retain individuals of exceptional skill. SECTION II Definitions and Construction 2.1. The following capitalized terms used in this Stock Option Plan shall have the respective meanings set forth in this Section. Board shall mean the Board of Directors of Garan. Cause shall mean, with respect to an Optionee, (a) the breach by the Optionee of any agreement between the Company and the Optionee, (b) willful and gross misconduct on the part of the Optionee that is materially and demonstrably detrimental to the Company, or (c) the commission by the Optionee of one or more acts which constitute an indictable crime under Federal, state, or local law, each as may be determined in good faith by written resolution adopted by a majority of the members of the Board at a meeting duly called and held for that purpose after reasonable notice to the Optionee and opportunity for the Optionee and his or her counsel to be heard. Change of Control shall mean: (a) Continuing Directors no longer constitute at least a majority of the Board; (b) any person or group of persons (as defined in Rule 13d-5 under the Exchange Act), together with its affiliates, become the beneficial owner, directly or indirectly, of at least 40% of Garan's then outstanding Common Stock; (c) the approval by Garan's shareholders of the merger or consolidation of Garan with any other corporation, the sale of substantially all of the assets of Garan or the liquidation or dissolution of Garan unless, in the case of a merger or consolidation, the Continuing Directors in office immediately prior to such merger or consolidation will constitute at least a majority of directors of the surviving corporation of such merger or consolidation and any parent (as such terms is defined in Rule 12b-2 under the Exchange Act) of such corporation, and such surviving corporation (and such parent, if any) shall have at least five directors; or (d) at least a majority of the Continuing Directors in office immediately prior to any other action proposed to be taken by Garan's shareholders or by the Board determines that such proposed action, if taken, would constitute a change of control of Garan and such proposed action is thereafter taken. Change of Control Exercise Period shall mean the period during which a Limited Right may be exercised in accordance with Section 8.2. Change of Control Price shall mean the higher of (i) the highest price per share of Common Stock paid or offered in any transaction related to a Change of Control of Garan or (ii) the highest Fair Market Value per share of Common Stock at any time during the 60-day period preceding a Change of Control. Code shall mean the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder. Committee shall mean the Compensation Committee appointed by the Board to administer the Plan which shall be composed of at least two persons. Common Stock shall mean the Common Stock, no par value, of Garan. Company shall mean Garan, Incorporated and its Subsidiaries. Continuing Director shall mean any individual who is a member of the Board on November 1, 1997, or is designated (before such person's initial election as a director) as a Continuing Director by a majority of the then Continuing Directors. Disability shall mean disability within the meaning of Section 22(e)(3) of the Code, as determined by the Committee. Exchange Act shall mean the Securities Exchange Act of 1934, as amended. Exercise Price shall mean the price of a share of Common Stock payable by the Optionee on exercise of an Option. Fair Market Value on a specified day shall mean, if the Common Stock is publicly traded, the reported closing price on that day, or if there was no sale of Common Stock reported on that day, then the reported closing price on the next preceding day on which there was such a sale, but if the Common Stock is not publicly traded, the Committee shall make a good faith determination of Fair Market Value. Garan shall mean Garan, Incorporated ISO shall mean an incentive stock option within the meaning of Section 422 of the Code. Limited Right shall mean the right pursuant to an award granted under Section 8.1 to surrender to Garan all or a portion of an Option in accordance with Section 8.2. Non-ISO shall mean a stock option which is not an ISO. Option shall mean a stock option granted under the Plan. Optionee shall mean an individual who has been granted one or more Options. Parent Corporation shall mean a parent corporation, as defined in Section 424(e) of the Code. Plan shall mean this Garan, Incorporated 1998 Stock Option Plan. Retirement shall mean retirement on or after age sixty-five or, with the advance consent of the Committee, at an earlier age. Stock Appreciation Right shall mean a right to receive cash or Common Stock upon the exercise of an Option in accordance with Section 6.7. Subsidiary shall mean a subsidiary corporation, as defined in Section 424(f) of the Code. Termination Date shall mean the last day on which an Option may be exercised, which date is fixed by the Committee but which shall not be later than the day preceding the tenth anniversary of the date on which the Option is granted. 2.2. When used in this Plan, unless the context clearly indicates to the contrary, (a) the masculine gender shall include the feminine and neuter genders, (b) the feminine gender shall include the masculine and neuter genders, (c) the neuter gender shall include the masculine and feminine genders, (d) the singular shall include the plural, and (e) if a defined term is intended, it shall be capitalized. SECTION III Administration 3.1. Except as otherwise provided in the Plan, and subject to Section 3.2, the Committee shall administer the Plan and shall have full power to grant Options, construe and interpret the Plan, establish and amend rules and regulations for its administration, and perform all other acts relating to the Plan including the delegation of administrative responsibilities which it believes reasonable and proper. 3.2. Subject to the provisions of the Plan and the right of the Board to give specific direction, the Committee shall establish the policies and criteria pursuant to which it shall grant Options and administer the Plan and, in its discretion, shall determine which employees of the Company and/or members of the Board shall be granted Options, the number of shares covered by any such Options, and the terms and conditions of the Options. 3.3. The Committee may at any time, with the consent of the Optionee, in its sole discretion cancel any Option and issue to the Optionee a new Option for an equivalent or lesser number of shares of Common Stock and at a lower Exercise Price. 3.4. Any decision made, or action taken, by the Committee or the Board arising out of or in connection with the interpretation and administration of the Plan shall be final and conclusive. SECTION IV Shares Subject to the Plan 4.1. The total number of shares of Common Stock available for grants of Options under the Plan shall be 200,000, subject to adjustment in accordance with Section IX. These shares may be either authorized and unissued or reacquired shares of Common Stock. If an Option or portion thereof shall expire or terminate for any reason without having been exercised in full, the unpurchased shares covered by such Option shall be available for future grants of Options. An Option or portion thereof exercised through the exercise of a Stock Appreciation Right pursuant to Section 6.7 or related to a Limited Right exercised pursuant to Section VIII shall be treated, for the purposes of this Section IV, as though the Option or portion thereof had been exercised through the purchase of Common Stock with the result that the shares of Common Stock subject to the Option or portion thereof that was so exercised shall not be available for future grants of Options. SECTION V Eligibility 5.1. Options may be granted to key employees of the Company or to persons who have been engaged to become key employees of the Company. Key employees will comprise, those who contribute to the management, direction, and/or overall success of the Company. 5.2. Options also may be granted to members of the Board who are not employees of the Company. Such Optionees will comprise, in general, those who, while not employees of the Company, have an ongoing relationship with the Company and make significant contributions to the overall success of the Company. SECTION VI Terms of Options 6.1.a. All Options shall be evidenced by written agreements executed by the Company and the Optionee. Such Options shall be subject to the applicable provisions of the Plan and shall contain such provisions as are required by the Plan and any other provisions the Committee may prescribe. All agreements evidencing Options shall specify the total number of shares subject to each grant, the Exercise Price, and the Termination Date. Those Options that comply with the requirements for an ISO set forth in Section 422 of the Code and that the Committee wishes to designate as an ISO shall be ISOs, and all other Options (including any Option that would otherwise qualify as an ISO but which the Committee designates as a Non-ISO) shall be Non-ISOs. Only Non-ISOs shall be granted to any Optionee who is not an employee of the Company on the date the Option is granted. 6.1.b. The written agreement referred to in Section 6.1.a also shall provide that unless the shares of Common Stock acquired on the exercise of the Option are then currently registered under the Securities Act of 1933, as amended, if counsel to Garan advises that the same is required, prior to delivery of the shares acquired upon the exercise of the Option the Optionee shall agree to hold such shares for investment only and not with a view to resale or distribution thereof to the public, and such Optionee shall deliver to Garan a letter to that effect in a form specified by counsel to Garan together with any additional documents specified by counsel. In the event that issuance of shares of Common Stock on exercise of the Option is subject to laws, rules, and/or regulations of a jurisdiction other than the United States of America, the Optionee simultaneously shall comply with requirements of counsel to Garan to satisfy the same. 6.2. The Exercise Price for an ISO shall not be less than the Fair Market Value of a share of Common Stock on the date the Option is granted. 6.3.a. The Committee shall determine the dates after which Options may be exercised in whole or in part. If Options are exercisable in installments, installments or portions thereof that are exercisable and not exercised shall accumulate and remain exercisable. The Committee also may amend an Option to accelerate the dates after which Options may be exercised in whole or in part. However, no Option or portion thereof shall be exercisable after the Termination Date. 6.3.b. Notwithstanding any contrary provisions of Section 6.3.a, upon a Change of Control (i) each Option or portion thereof which, by its terms, is not yet exercisable shall vest and become exercisable in full and (ii) each Option which has a Termination Date falling within 90 days after a Change of Control shall have its Termination Date extended until the earlier of the 90th day after the Change of Control or the day before the tenth anniversary of the date such Option was granted. 6.4. Notwithstanding any contrary provisions of Sections 6.2 and 6.3.a, no ISO shall be granted to any employee who, at the time the Option is granted, owns (directly, or within the meaning of Section 424(d) of the Code) more than 10% of the total combined voting power of all classes of stock of Garan or of any Subsidiary or Parent Corporation thereof unless (a) the Exercise Price under such Option is at least 110% of the Fair Market Value of a share of Common Stock on the date the Option is granted and (b) the Termination Date of such Option is a date not later than the day preceding the fifth anniversary of the date on which the Option is granted. 6.5. An Option or portion thereof shall be exercised by delivery of a written notice of exercise to Garan and payment of the full price of the shares being purchased pursuant to the Option. An Optionee may exercise an Option with respect to less than the full number of shares for which the Option may then be exercised, but an Optionee must exercise the Option in full shares of Common Stock. The price of Common Stock purchased pursuant to an Option or portion thereof may be paid: 6.5.a. In United States dollars in cash or by check, bank draft, or money order payable to the order of Garan, by wire transfer to an account designated by Garan, or by such other payment method as the Committee, in its discretion, may authorize; 6.5.b. Through the delivery of shares of Common Stock with an aggregate Fair Market Value on the date of exercise equal to the Exercise Price, or 6.5.c. By any combination of the above methods of payment. The Committee may also permit a participant to pay the Exercise Price by authorizing a third party to sell shares of Common Stock acquired upon exercise of the Option and remit to the Company a sufficient portion of the sale proceeds to pay the entire Exercise Price and any tax withholding resulting from such exercise. The Committee shall determine acceptable methods for tendering Common Stock as payment upon exercise of an Option and may impose such limitations and prohibitions on the use of Common Stock to exercise an Option as it deems appropriate including, without limitation, any limitation or prohibition designed to avoid certain accounting consequences which may result from the use of Common Stock as payment upon exercise of an Option. 6.6. Garan, in its discretion, may require an Optionee to pay to Garan at the time of exercise the amount that Garan deems necessary to satisfy its obligation to withhold Federal, state, or local income or other taxes incurred by reason of the exercise. Upon the exercise of an Option requiring tax withholding, an Optionee may make a written election to have shares of Common Stock withheld by Garan from the shares otherwise to be received. The number of shares so withheld shall have an aggregate Fair Market Value on the date of exercise sufficient to satisfy the applicable withholding taxes. The approval of any such election by an Optionee shall be at the sole discretion of the Committee. Where the exercise of an Option does not give rise to an obligation to withhold income taxes on the date of exercise, Garan, in its discretion, may require an Optionee to place shares of Common Stock purchased under the Option in escrow for the benefit of Garan until such time as income tax withholding is required on amounts included in the gross income of the Optionee as a result of the exercise of an Option. At such time, Garan in its discretion may require an Optionee to pay to Garan the amount that Garan deems necessary to satisfy its obligation to withhold Federal, state, or local income or other taxes incurred by reason of the exercise of the Option, in which case the shares of Common Stock will be released from escrow to the Optionee. Alternatively, subject to acceptance by the Committee, in its sole discretion, an Optionee may make a written election to have shares of Common Stock held in escrow applied toward Garan's obligation to withhold Federal, state, or local income or other taxes incurred by reason of the exercise of the Option, based on the Fair Market Value of the shares on the date of the termination of the escrow arrangement. Upon application of such shares toward Garan's withholding obligation, any shares of Common Stock held in escrow and, in the judgment of the Committee, not necessary to satisfy such obligation shall be released from escrow to the Optionee. 6.7. At or after the grant of an Option, the Committee, in its discretion, may provide an Optionee with an alternate means of exercising an Option, or a designated portion thereof, by granting the Optionee a Stock Appreciation Right. A Stock Appreciation Right is a right to receive, upon exercise of an Option or any portion thereof, in the Committee's sole discretion, an amount of cash equal to, and/or shares of Common Stock having a Fair Market Value on the date of exercise equal to, the excess of the Fair Market Value of a share of Common Stock on the date of exercise over the Exercise Price, multiplied by the number of shares of Common Stock that the Optionee would have received had the Option or portion thereof been exercised through the purchase of shares of Common Stock at the Exercise Price, provided that (a) such Option or portion thereof has been designated as exercisable in this alternative manner, (b) such Option or portion thereof is otherwise exercisable, and (c) the Fair Market Value of a share of Common Stock on the date of exercise exceeds the Exercise Price. 6.8. Each Option, during the Optionee's lifetime, shall be exercisable only by the Optionee, and neither it nor any right hereunder shall be transferable otherwise than by Will or the laws of descent and distribution or be subject to attachment, execution, or other similar process. In the event of any attempt by the Optionee to alienate, assign, pledge, hypothecate, or otherwise dispose of an Option or of any right under the Plan, except as provided for in the Plan, or in the event of any levy or any attachment, execution, or similar process upon the rights or interest conferred by the Plan, Garan may terminate the Option by notice to the Optionee and the Option shall thereupon become null and void. 6.9.a. If an Optionee's employment with the Company is terminated for Cause, each Option held by such Optionee together with all rights under the Plan shall terminate on the date of termination of employment to the extent not previously exercised. 6.9.b. If a non-employee Optionee engages in conduct which constitutes Cause, each Option held by such Optionee together with all rights under the Plan shall terminate on the date the Board determines that the Optionee has engaged in conduct constituting Cause to the extent not previously exercised. 6.10. If an Optionee's employment with the Company terminates for any reason other than for Cause, or if a non-employee Optionee shall cease to serve as a member of the Board for any reason other than for Cause, each Option held by such Optionee shall remain exercisable, to the extent it was exercisable at the time of termination of employment or cessation of ongoing relationship, until the earliest of: 6.10.a. The Termination Date; 6.10.b. The death of the Optionee, or such later date not more than six months after the death of the Optionee as may be provided pursuant to Section 6.11; 6.10.c. Two months after the date of termination of the Optionee's employment or service as a member of the Board by reason of Retirement; 6.10.d. Six months after the date of termination of the Optionee's employment or service as a member of the Board by reason of Disability; 6.10.e. Two months after the date of the termination by the Company of the Optionee's employment or service as a member of the Board other than for Cause; or 6.10.f. One month after the date of the termination by the Optionee of the Optionee's employment or service as a member of the Board other than by reason of Retirement, Disability, or death. After such date all Options shall terminate, together with all rights under the Plan, to the extent not previously exercised. 6.11. In the event of the death of the Optionee while employed by the Company or serving as a member of the Board, an Option may be exercised at any time or from time to time prior to the earlier of the Termination Date and a date six months after the date of the Optionee's death by the person or persons to whom the Optionee's rights under each Option shall pass by Will or by the applicable laws of descent and distribution to the extent that the Optionee was entitled to exercise it on the date of the Optionee's death. In the event of the death of the Optionee while entitled to exercise an Option pursuant to Section 6.10, the Committee, in its discretion, may permit such Option to be exercised at any time or from time to time prior to the Termination Date during a period of up to six months from the death of the Optionee, as determined by the Committee, by the person or persons to whom the Optionee's rights under each Option shall pass by Will or by the applicable laws of descent and distribution to the extent that the Option was exercisable at the time of cessation of the Optionee's employment or service as a member of the Board. Any person or persons to whom an Optionee's rights under an Option have passed by Will or by the applicable laws of descent and distribution shall be subject to all terms and conditions of the Plan and the Option applicable to the Optionee. 6.12. Any Optionee who disposes of shares of Common Stock acquired upon the exercise of an ISO either (a) within two years after the date of the grant of the ISO under which the Common Stock was acquired or (b) within one year after the transfer of such shares to the Optionee, shall notify Garan of such disposition and of the amount realized upon such disposition. SECTION VII Limitation on Grants of ISOs 7.1. To the extent the aggregate Fair Market Value of the Common Stock subject to an Option which is exercisable for the first time during any one calendar year by an employee exceeds $100,000, such excess portion of the Option may not be treated as an ISO. SECTION VIII Limited Rights 8.1.a. Limited Rights may be granted by the Committee in conjunction with all or any portion of any Option granted under the Plan and such rights may be granted either at or after the time of the grant of such Option. 8.1.b. Limited Rights or any applicable portion thereof granted with respect to a given Option shall terminate and no longer be exercisable upon the termination of the related Option. Upon the exercise of an Option, the related Limited Right shall cease to be exercisable to the extent of the shares of Common Stock with respect to which such Option is exercised. 8.1.c. A Limited Right related to an Option may be exercised by an Optionee, in accordance with Section 8.2, by surrendering the applicable portion of the related Option. Upon such exercise and surrender, the Optionee shall be entitled to receive an amount determined in the manner prescribed in Section 8.2. 8.2. Limited Rights shall be subject to such terms and conditions not inconsistent with the provisions of the Plan, as shall be determined from time to time by the Committee, including the following: 8.2.a. Limited Rights can only be exercised within the Change of Control Exercise Period, which is the 30-day period following a Change of Control, and will become fully exercisable, if not already fully exercisable, upon the Change of Control, provided that any Limited Right shall not exercisable by any Optionee who is subject to Section 16(b) of the Exchange Act during the first six months of the date of grant of a Limited Right. In the event a Change of Control shall occur within six months of the date of grant of a Limited Right to an Optionee who is subject to Section 16(b) of the Exchange Act, the Change of Control Exercise Period for such Optionee shall be deemed to commence on the first day following such six month period. 8.2.b. Upon the exercise of a Limited Right related to an Option, an Optionee shall be entitled to receive an amount in cash equal in value to the excess of the Change of Control Price over the Option Price specified in the related Option, such excess to be multiplied by the number of shares of Common Stock in respect of which the Limited Right shall have been exercised. 8.2.c. Limited Rights shall be transferable only at such time or times and to the extent that the underlying Option would be transferable under Section 6.8 of the Plan. SECTION IX Adjustments 9.1. If (a) Garan shall at any time be involved in a transaction to which Section 424(a) of the Code is applicable, (b) Garan shall declare a dividend payable in, or shall subdivide or combine, its Common Stock, or (c) any other event shall occur which in the judgment of the Committee necessitates action by way of adjusting the terms of the outstanding Options, the Committee may take any such action as in its judgment shall be necessary to preserve the Optionee's rights substantially proportionate to the rights existing prior to such event and to the extent that such action shall include an increase or decrease in the number of shares of Common Stock subject to outstanding Options, the number of shares available under Section IV shall be increased or decreased, as the case may be, proportionately. The judgment of the Committee with respect to any matter referred to in this Section IX shall be conclusive and binding upon each Optionee. SECTION X Amendment and Termination of Plan 10.1. The Board may at any time, or from time to time, suspend or terminate the Plan in whole or in part or amend it in such respects as the Board may deem appropriate, provided that no such amendment shall be made which would, without approval of the shareholders of Garan: 10.1.a. Materially modify the eligibility requirements for receiving Options; 10.1.b. Materially increase the total number of shares of Common Stock which may be issued pursuant to Options, except as provided in Section IX; or 10.1.c. Materially increase in any way the benefits accruing to Optionees. 10.2. No amendment, suspension, or termination of this Plan, without the Optionee's consent, shall alter or impair any of the rights or obligations under any Option theretofore granted to an Optionee under the Plan. SECTION XI Government and Other Regulations 11.1. The obligation of Garan to issue, or transfer and deliver, shares for Options exercised under the Plan or to deliver cash upon exercise of a Limited Right or with respect to a Stock Appreciation Right, shall be subject to all applicable laws, regulations, rules, orders, and approvals which shall then be in effect and required by governmental entities and any stock exchanges on which Common Stock may be traded. SECTION XII Miscellaneous Provisions 12.1. The right of the Company to terminate (whether by dismissal, discharge, retirement, or otherwise) the Optionee's employment or service as a member of the Board at any time at will or as otherwise provided by any agreement between the Company and the Optionee is specifically reserved. Neither the Optionee nor any person entitled to exercise the Optionee's rights in the event of the Optionee's death shall have any of the rights of a shareholder with respect to the shares subject to each Option except to the extent that, and until, such shares shall have been issued upon the exercise of each Option. 12.2. All expenses of administering the Plan shall be borne by Garan. 12.3. Payments received from Optionees upon the exercise of Options shall be used for the general corporate purposes of Garan except that any stock received or withheld in payment may be retired or retained in Garan's treasury and reissued. 12.4. In addition to such other rights of indemnification as they may have as members of the Board or the Committee, the members of the Board and the Committee shall be indemnified by Garan against all costs and expenses reasonably incurred by them in connection with any action, suit, or proceeding to which they or any of them may be party by reason of any action taken or failure to act under or in connection with the Plan or any Option granted under the Plan, and against all amounts paid by them in settlement thereof (provided such settlement is approved by independent legal counsel selected by Garan) or paid by them in satisfaction of a judgment in any such action, suit, or proceeding, except a judgment based upon a finding of bad faith, provided that upon the institution of any such action, suit, or proceeding, a Committee or Board member, in writing, shall give Garan notice thereof and an opportunity, at its own expense, to handle and defend the same before such Committee or Board member undertakes to handle and defend it on such member's own behalf. SECTION XIII Shareholder Approval and Effective Dates 13.1. The Plan shall become effective when it is adopted by the Board. However, if the Plan is not approved within one year after the Plan is adopted by the Board by the vote at a meeting of the shareholders of Garan at which a quorum is present by the holders of a majority of the shares voting at that meeting, the Plan and all Options shall terminate at the time of that meeting of shareholders, or, if no such meeting is held, after the passage of one year from the date the Plan was adopted by the Board. Options may not be granted under the Plan after the day before the 10th anniversary of adoption by the Board. EX-5.1 3 OPINION OF TANNENBAUM DUBIN & ROBINSON, LLP EXHIBIT 5.1 [TANNENBAUM DUBIN & ROBINSON, LLP] October 22, 1998 Garan, Incorporated 350 Fifth Avenue New York, New York 10118 Re: Registration Statement on Form S-8 Relating to the Garan, Incorporated 1998 Stock Option Plan ("Plan") --------------------------------------------------- Gentlemen: This opinion is submitted in connection with the Registration Statement on Form S-8 ("Registration Statement") filed by Garan, Incorporated ("Company") on the date hereof with the Securities and Exchange Commission under the Securities Act of 1933, as amended, relating to 200,000 shares of Common Stock, no par value, of the Company issuable pursuant to the Plan. We have examined such corporate documents and records of the Company, certificates of public officials, and such other documents and questions of law as we have deemed necessary or appropriate for the purpose of rendering this opinion. In examining the foregoing, we have assumed, without independent verification, the genuineness of all signatures and the authenticity of all documents submitted to us as originals and the conformity to original documents of documents submitted to us as certified or photostatic copies. While nothing has been brought to our attention which leads us to believe that the opinions expressed herein are factually incorrect, we have not, beyond the examination described above, made independent factual investigations for the purpose of rendering this opinion, although we have made such inquiry of officers of the Company as we have deemed necessary for the proper discharge of our responsibilities as counsel to the Company and for the purpose of rendering this opinion. Notwithstanding anything herein to the contrary, whether expressly stated or implied, the opinion hereinafter expressed is subject to the following further qualifications and limitations, whether or not a specific reference is made in this opinion to such qualifications and limitations: A. The effect of applicable bankruptcy, insolvency, reorganization, moratorium, or other similar laws, statutes, or rules of general application relating to, or affecting, the enforcement of creditors' rights generally, now or hereafter in effect. B. As we are admitted to practice only in the State of New York, this opinion is limited to the laws of the United States and State of New York, and we offer no opinion as to the possible application of laws of other jurisdiction, provided, however, that insofar as this opinion expresses an opinion as to matters of Virginia law, we have relied upon the opinion of Messrs. Hunton & Williams, Richmond, Virginia. C. The effect of rules of law governing specific performance and injunctive relief and such other principles of equity as the courts having jurisdiction may apply at their discretion whether in a proceeding at law or in equity. Based upon the foregoing and upon such other information, documents, and inquiry as we believe necessary to enable us to render this opinion, we are of the opinion that the 200,000 shares of Common Stock issuable under the Plan have been duly authorized and, when issued and paid for in accordance with the terms of any option granted under the Plan, will be validly issued, fully paid, and non- assessable. We hereby consent to the filing of this opinion as Exhibit 5.1 to the Registration Statement. Respectfully submitted, /s/ Tannenbaum Dubin & Robinson, LLP ------------------------------------- TANNENBAUM DUBIN & ROBINSON, LLP EX-23.2 4 CONSENT OF CITRIN, COOPERMAN & COMPANY, LLP EXHIBIT 23.2 CONSENT OF CITRIN, COOPERMAN & COMPANY, LLP INDEPENDENT AUDITORS We consent to the incorporation by reference in this Registration Statement on Form S-8 of our report dated November 11, 1997, on our audits of the consolidated financial statements of Garan, Incorporated as of September 30, 1997 and 1996 filed with the Securities and Exchange Commission pursuant to the Securities Act of 1933. /s/ Citrin, Cooperman & Company, LLP ------------------------------------ CITRIN, COOPERMAN & COMPANY, LLP New York, New York October 22, 1998 -----END PRIVACY-ENHANCED MESSAGE-----