

                                                                       EXHIBIT O


                             1990 STOCK OPTION PLAN
                         INCENTIVE STOCK OPTION CONTRACT



           THIS INCENTIVE STOCK OPTION CONTRACT  entered into as of July 1, 1996
between  JACLYN,  INC.,  a  Delaware  corporation  (the  "Company"),  and Robert
Chestnov (the "Optionee").

                              W I T N E S S E T H:


           1.         The Company,  in accordance with the allotment made by the
Stock Option Committee of the Company's Board of Directors (the "Committee") and
subject to the terms and conditions of the 1990 Stock Option Plan of the Company
(the  "Plan"),  grants to the  Optionee an option to purchase  an  aggregate  of
25,000  shares of the Common  Stock,  $1.00 par value per share,  of the Company
("Common Stock") at an exercise price of $4.0625 per share, being at least equal
to the fair market value of such shares of Common Stock on the date hereof. This
option is intended to constitute an incentive stock option within the meaning of
Section 422 of the  Internal  Revenue  Code of 1986,  as amended  (the  "Code"),
although  the  Company   makes  no   representation   or  warranty  as  to  such
qualification.

           2.         The term of this  option  shall be 10 years  from the date
hereof,  subject to earlier termination as provided in the Plan. This option may
be exercised  commencing  on the date hereof as to 24,615 shares of Common Stock
subject  hereto and as to an additional 385 shares of Common Stock on January 1,
1997.  The right to purchase  shares of Common  Stock  subject  hereto  shall be
cumulative,  so that if the full number of shares  purchasable in a period shall
not be  purchased,  the balance may be purchased  any time and from time to time
thereafter,  but not after the termination  hereof. This option may be exercised
by giving written notice to the Company at its principal  office,  presently 635
59th  Street,  West New York,  New Jersey  07093,  stating  that the Optionee is
exercising his incentive stock option, specifying the number of shares purchased
(provided  that not less than one hundred  (100) shares may be purchased  unless
the number  purchased is the total number of shares  purchasable  hereunder) and
accompanied  by payment of the aggregate  purchase  price therefor in accordance
with Section 3 below.  Notwithstanding  any of the foregoing,  in no event may a
fraction of a share of Common Stock be purchased under this option.

           3.         The purchase  price of shares  purchased  hereunder may be
paid in cash (or by check) and/or, in the sole discretion of the Committee,  (a)
in the form of shares of Common Stock already owned by the Optionee valued,  for
the purpose of payment of the purchase  price,  at the fair market value of such
previously  owned shares of Common Stock  determined in accordance  with Section
5(d) of the Plan;  and/or (b) one-tenth (1/10) of the purchase price in cash (or
by check) and the balance by the issuance of a recourse promissory note, in form
satisfactory to the Committee,  and, in accordance with and subject to the terms
and provisions of Section 7 of the Plan.


            
<PAGE>



           4.         The Company  may  withhold  cash  and/or  shares of Common
Stock to be issued to the Optionee in the amount which the Company determines is
necessary to satisfy its obligation to withhold taxes or other amounts  incurred
by reason of the grant or  exercise  of this  option or the  disposition  of the
underlying  shares of Common Stock.  Alternatively,  the Company may require the
Optionee to pay the Company such amount in cash promptly upon demand.

           5.         In the event of any  disposition  of the  shares of Common
Stock acquired pursuant to the exercise of this option within two years from the
date hereof or one year from the date of  transfer  of such  shares to him,  the
Optionee  shall notify the Company  thereof in writing within 30 days after such
disposition.  In addition, the Optionee shall provide the Company on demand with
such  information  as the Company shall  reasonably  request in connection  with
determining  the amount and character of the  Optionee's  income,  the Company's
deduction  and its  obligation to withhold  taxes or other  amounts  incurred by
reason of such  disqualifying  disposition,  including the amount  thereof.  The
Optionee  shall pay the Company in cash on demand the amount,  if any, which the
Company determines is necessary to satisfy such withholding obligation.

           6.         Notwithstanding  the  foregoing,  this option shall not be
exercisable  by the  Optionee  unless  (a) a  Registration  Statement  under the
Securities  Act of 1933, as amended (the  "Securities  Act") with respect to the
shares of Common Stock to be received  upon the exercise of this option shall be
effective and current at the time of exercise or (b) there is an exemption  from
registration  under the  Securities Act for the issuance of the shares of Common
Stock upon such  exercise.  The Optionee  hereby  represents and warrants to the
Company that,  unless such a Registration  Statement is effective and current at
the time of exercise  of this  option,  the shares of Common  Stock to be issued
upon the  exercise of this option will be acquired by the  Optionee  for his own
account,  for investment  only and not with a view to the resale or distribution
thereof.  In any event,  the  Optionee  shall notify the Company of any proposed
resale of the shares of Common Stock issued to him upon exercise of this option.
Any subsequent  resale or distribution of shares of Common Stock by the Optionee
shall be made only pursuant to (x) a Registration Statement under the Securities
Act which is effective  and current with respect to the sale of shares of Common
Stock being sold, or (y) a specific exemption from the registration requirements
of the Securities Act, but in claiming such exemption, the Optionee shall, prior
to any offer of sale or sale of such shares of Common Stock, provide the Company
(unless waived by the Company) with a favorable  written opinion of counsel,  in
form and substance  satisfactory to the Company, as to the applicability of such
exemption  to the  proposed  sale  or  distribution.  Such  representations  and
warranties shall also be deemed to be made by the Optionee upon each exercise of
this option.  Nothing  herein  shall be  construed  as requiring  the Company to
register the shares subject to this option under the Securities Act.

           7.         Notwithstanding anything herein to the contrary, if at any
time the  Committee  shall  determine,  in its  discretion,  that the listing or
qualification  of the  shares  of Common  Stock  subject  to this  option on any
securities  exchange or under any applicable  law, or the consent or approval of
any  governmental  regulatory body, is necessary or desirable as a condition to,
or in  connection  with,  the  granting  of an  option or the issue of shares of
Common Stock hereunder, this

                                       -2-

<PAGE>



option  may  not  be  exercised  in  whole  or  in  part  unless  such  listing,
qualification,  consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Committee.

           8.         The  Company  may  affix  appropriate   legends  upon  the
certificates  for shares of Common Stock issued upon exercise of this option and
may issue such "stop transfer"  instructions to its transfer agent in respect of
such shares as it determines,  in its discretion, to be necessary or appropriate
(a) (i) to  prevent a  violation  of,  or to  perfect  an  exemption  from,  the
registration   requirements  of  the  Securities  Act,  (ii)  to  implement  the
provisions  of the Plan or this  Contract  or any other  agreement  between  the
Company and the Optionee with respect to such shares of Common  Stock,  or (iii)
to  permit  the  Company  to  determine  the  occurrence  of  a   "disqualifying
disposition,"  as  described  in  Section  421(b) of the Code,  of the shares of
Common Stock  transferred upon the exercise of this option or (b) if applicable,
with regard to any other restriction, on the assignment,  pledge,  hypothecation
or transfer of shares acquired upon the exercise of this option.

           9.         Nothing  in the  Plan or  herein  shall  confer  upon  the
Optionee any right to continue in the employ of the  Company,  any parent or any
of its subsidiaries,  or interfere in any way with any right of the Company, any
parent or its  subsidiaries  to terminate  such  employment  at any time for any
reason  whatsoever  without  liability to the Company,  any parent or any of its
subsidiaries.

           10.        The Company and the Optionee  agree that they will both be
subject to and bound by all of the terms and  conditions  of the Plan, a copy of
which is attached hereto and made a part hereof. In the event (a) the employment
of the Optionee terminates, (b) of the disability of the Optionee, or (c) of the
death of the Optionee,  his rights hereunder shall be governed by and be subject
to the  provisions of the Plan. In the event of a conflict  between the terms of
this Contract and the terms of the Plan, the terms of the Plan shall govern.

           11.        The Optionee  shall have no rights as a  stockholder  with
respect to any shares  issuable  or  transferable  upon  exercise of this option
until the date of the issuance of a stock certificate to him for such shares. No
adjustment shall be made for dividends  (ordinary or  extraordinary,  whether in
cash,  securities or other property) or  distributions or other rights for which
the record date is prior to the date such stock certificate is issued, except as
may be otherwise provided for by pursuant to the Plan.

           12.        This option is not transferable by the Optionee  otherwise
than by will or the  laws of  descent  and  distribution  and may be  exercised,
during the  lifetime of the  Optionee,  only by the  Optionee or the  Optionee's
legal representatives.

           13.        This  Contract  shall be  binding  upon  and  inure to the
benefit of any successor or assign of the Company and to any heir,  distributee,
executor,  administrator  or legal  representative  entitled  to the  Optionee's
rights hereunder.


                                       -3-

<PAGE>


           14.        This  Contract  shall be governed  by, and  construed  and
enforced in accordance  with, the laws of the State of Delaware,  without regard
to the conflicts of law rules thereof.

           15.        The  invalidity,  illegality  or  unenforceability  of any
provision herein shall not affect the validity,  legality or  enforceability  of
any other provision.

           16.        The  Optionee  agrees  that the Company may amend the Plan
and  the  options  granted  to the  Optionee  under  the  Plan,  subject  to the
limitations  contained  in  the  Plan.  Without  limiting  the  foregoing,   the
Committee,  in its sole  discretion,  may at any time make or  provide  for such
adjustments to the Plan, to the number and class of shares available  thereunder
and to this  option as it shall deem  appropriate,  all in  accordance  with the
provisions of the Plan.


           IN WITNESS WHEREOF, the parties hereto have executed this Contract as
of the day and year first above written.


                                                  JACLYN, INC.


                                                  By:   /s/ Allan Ginsburg
                                                     ------------------------
                                                       Title:  Chairman

                                                       /s/ Robert Chestnov
                                                     ------------------------
                                                       Robert Chestnov, Optionee

                                                           602 Orchard Lane
                                                     ------------------------
                                                               Address

                                                       Franklin Lakes, NJ 07417
                                                     ------------------------



                                       -4-

<PAGE>



                             1990 STOCK OPTION PLAN
                    10% OWNER INCENTIVE STOCK OPTION CONTRACT



           THIS INCENTIVE STOCK OPTION CONTRACT  entered into as of July 1, 1996
between JACLYN, INC., a Delaware corporation (the "Company"), and Allan Ginsburg
(the "Optionee").

                              W I T N E S S E T H:


           1.         The Company,  in accordance with the allotment made by the
Stock Option Committee of the Company's Board of Directors (the "Committee") and
subject to the terms and conditions of the 1990 Stock Option Plan of the Company
(the  "Plan"),  grants to the  Optionee an option to purchase  an  aggregate  of
25,000  shares of the Common  Stock,  $1.00 par value per share,  of the Company
("Common  Stock") at an  exercise  price of $4.46875  per share,  being at least
equal to 110% of the fair  market  value of such  shares of Common  Stock on the
date hereof.  This option is intended to  constitute  an incentive  stock option
within the  meaning of Section  422 of the  Internal  Revenue  Code of 1986,  as
amended (the "Code"),  although the Company makes no  representation or warranty
as to such qualification.

           2.         The term of this  option  shall  be 5 years  from the date
hereof,  subject to earlier termination as provided in the Plan. This option may
be exercised  commencing  on the date hereof as to 22,377 shares of Common Stock
subject  hereto and as to an additional  2,623 shares of Common Stock on January
1, 1997.  The right to purchase  shares of Common Stock subject  hereto shall be
cumulative,  so that if the full number of shares  purchasable in a period shall
not be  purchased,  the balance may be purchased  any time and from time to time
thereafter,  but not after the termination  hereof. This option may be exercised
by giving written notice to the Company at its principal  office,  presently 635
59th  Street,  West New York,  New Jersey  07093,  stating  that the Optionee is
exercising his incentive stock option, specifying the number of shares purchased
(provided  that not less than one hundred  (100) shares may be purchased  unless
the number  purchased is the total number of shares  purchasable  hereunder) and
accompanied  by payment of the aggregate  purchase  price therefor in accordance
with Section 3 below.  Notwithstanding  any of the foregoing,  in no event may a
fraction of a share of Common Stock be purchased under this option.

           3.         The purchase  price of shares  purchased  hereunder may be
paid in cash (or by check) and/or, in the sole discretion of the Committee,  (a)
in the form of shares of Common Stock already owned by the Optionee valued,  for
the purpose of payment of the purchase  price,  at the fair market value of such
previously  owned shares of Common Stock  determined in accordance  with Section
5(d) of the Plan;  and/or (b) one-tenth (1/10) of the purchase price in cash (or
by check) and the balance by the issuance of a recourse promissory note, in form
satisfactory to the Committee,  and, in accordance with and subject to the terms
and provisions of Section 7 of the Plan.


           
<PAGE>



           4.         The Company  may  withhold  cash  and/or  shares of Common
Stock to be issued to the Optionee in the amount which the Company determines is
necessary to satisfy its obligation to withhold taxes or other amounts  incurred
by reason of the grant or  exercise  of this  option or the  disposition  of the
underlying  shares of Common Stock.  Alternatively,  the Company may require the
Optionee to pay the Company such amount in cash promptly upon demand.

           5.         In the event of any  disposition  of the  shares of Common
Stock acquired pursuant to the exercise of this option within two years from the
date hereof or one year from the date of  transfer  of such  shares to him,  the
Optionee  shall notify the Company  thereof in writing within 30 days after such
disposition.  In addition, the Optionee shall provide the Company on demand with
such  information  as the Company shall  reasonably  request in connection  with
determining  the amount and character of the  Optionee's  income,  the Company's
deduction  and its  obligation to withhold  taxes or other  amounts  incurred by
reason of such  disqualifying  disposition,  including the amount  thereof.  The
Optionee  shall pay the Company in cash on demand the amount,  if any, which the
Company determines is necessary to satisfy such withholding obligation.

           6.         Notwithstanding  the  foregoing,  this option shall not be
exercisable  by the  Optionee  unless  (a) a  Registration  Statement  under the
Securities  Act of 1933, as amended (the  "Securities  Act") with respect to the
shares of Common Stock to be received  upon the exercise of this option shall be
effective and current at the time of exercise or (b) there is an exemption  from
registration  under the  Securities Act for the issuance of the shares of Common
Stock upon such  exercise.  The Optionee  hereby  represents and warrants to the
Company that,  unless such a Registration  Statement is effective and current at
the time of exercise  of this  option,  the shares of Common  Stock to be issued
upon the  exercise of this option will be acquired by the  Optionee  for his own
account,  for investment  only and not with a view to the resale or distribution
thereof.  In any event,  the  Optionee  shall notify the Company of any proposed
resale of the shares of Common Stock issued to him upon exercise of this option.
Any subsequent  resale or distribution of shares of Common Stock by the Optionee
shall be made only pursuant to (x) a Registration Statement under the Securities
Act which is effective  and current with respect to the sale of shares of Common
Stock being sold, or (y) a specific exemption from the registration requirements
of the Securities Act, but in claiming such exemption, the Optionee shall, prior
to any offer of sale or sale of such shares of Common Stock, provide the Company
(unless waived by the Company) with a favorable  written opinion of counsel,  in
form and substance  satisfactory to the Company, as to the applicability of such
exemption  to the  proposed  sale  or  distribution.  Such  representations  and
warranties shall also be deemed to be made by the Optionee upon each exercise of
this option.  Nothing  herein  shall be  construed  as requiring  the Company to
register the shares subject to this option under the Securities Act.

           7.         Notwithstanding anything herein to the contrary, if at any
time the  Committee  shall  determine,  in its  discretion,  that the listing or
qualification  of the  shares  of Common  Stock  subject  to this  option on any
securities  exchange or under any applicable  law, or the consent or approval of
any  governmental  regulatory body, is necessary or desirable as a condition to,
or in  connection  with,  the  granting  of an  option or the issue of shares of
Common Stock hereunder, this

                                       -2-

<PAGE>



option  may  not  be  exercised  in  whole  or  in  part  unless  such  listing,
qualification,  consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Committee.

           8.         The  Company  may  affix  appropriate   legends  upon  the
certificates  for shares of Common Stock issued upon exercise of this option and
may issue such "stop transfer"  instructions to its transfer agent in respect of
such shares as it determines,  in its discretion, to be necessary or appropriate
(a) (i) to  prevent a  violation  of,  or to  perfect  an  exemption  from,  the
registration   requirements  of  the  Securities  Act,  (ii)  to  implement  the
provisions  of the Plan or this  Contract  or any other  agreement  between  the
Company and the Optionee with respect to such shares of Common  Stock,  or (iii)
to  permit  the  Company  to  determine  the  occurrence  of  a   "disqualifying
disposition,"  as  described  in  Section  421(b) of the Code,  of the shares of
Common Stock  transferred upon the exercise of this option or (b) if applicable,
with regard to any other restriction, on the assignment,  pledge,  hypothecation
or transfer of shares acquired upon the exercise of this option.

           9.         Nothing  in the  Plan or  herein  shall  confer  upon  the
Optionee any right to continue in the employ of the  Company,  any parent or any
of its subsidiaries,  or interfere in any way with any right of the Company, any
parent or its  subsidiaries  to terminate  such  employment  at any time for any
reason  whatsoever  without  liability to the Company,  any parent or any of its
subsidiaries.

           10.        The Company and the Optionee  agree that they will both be
subject to and bound by all of the terms and  conditions  of the Plan, a copy of
which is attached hereto and made a part hereof. In the event (a) the employment
of the Optionee terminates, (b) of the disability of the Optionee, or (c) of the
death of the Optionee,  his rights hereunder shall be governed by and be subject
to the  provisions of the Plan. In the event of a conflict  between the terms of
this Contract and the terms of the Plan, the terms of the Plan shall govern.

           11.        The Optionee  shall have no rights as a  stockholder  with
respect to any shares  issuable  or  transferable  upon  exercise of this option
until the date of the issuance of a stock certificate to him for such shares. No
adjustment shall be made for dividends  (ordinary or  extraordinary,  whether in
cash,  securities or other property) or  distributions or other rights for which
the record date is prior to the date such stock certificate is issued, except as
may be otherwise provided for by pursuant to the Plan.

           12.        This option is not transferable by the Optionee  otherwise
than by will or the  laws of  descent  and  distribution  and may be  exercised,
during the  lifetime of the  Optionee,  only by the  Optionee or the  Optionee's
legal representatives.

           13.        This  Contract  shall be  binding  upon  and  inure to the
benefit of any successor or assign of the Company and to any heir,  distributee,
executor,  administrator  or legal  representative  entitled  to the  Optionee's
rights hereunder.


                                       -3-

<PAGE>


           14.        This  Contract  shall be governed  by, and  construed  and
enforced in accordance  with, the laws of the State of Delaware,  without regard
to the conflicts of law rules thereof.

           15.        The  invalidity,  illegality  or  unenforceability  of any
provision herein shall not affect the validity,  legality or  enforceability  of
any other provision.

           16.        The  Optionee  agrees  that the Company may amend the Plan
and  the  options  granted  to the  Optionee  under  the  Plan,  subject  to the
limitations  contained  in  the  Plan.  Without  limiting  the  foregoing,   the
Committee,  in its sole  discretion,  may at any time make or  provide  for such
adjustments to the Plan, to the number and class of shares available  thereunder
and to this  option as it shall deem  appropriate,  all in  accordance  with the
provisions of the Plan.


           IN WITNESS WHEREOF, the parties hereto have executed this Contract as
of the day and year first above written.


                                             JACLYN, INC.


                                             By:  /s/ Robert Chestnov
                                                 --------------------------
                                                  Title:  President

                                                  /s/ Allan Ginsburg
                                                 --------------------------
                                                  Allan Ginsburg, Optionee

                                                       77 Pine Terrace
                                                 --------------------------
                                                           Address

                                                     Demarest, NJ 07627
                                                 --------------------------



                                       -4-

<PAGE>


                             1990 STOCK OPTION PLAN
                    10% OWNER INCENTIVE STOCK OPTION CONTRACT



           THIS INCENTIVE STOCK OPTION CONTRACT  entered into as of July 1, 1996
between  JACLYN,  INC.,  a  Delaware  corporation  (the  "Company"),  and Howard
Ginsburg (the "Optionee").

                              W I T N E S S E T H:


           1.         The Company,  in accordance with the allotment made by the
Stock Option Committee of the Company's Board of Directors (the "Committee") and
subject to the terms and conditions of the 1990 Stock Option Plan of the Company
(the  "Plan"),  grants to the  Optionee an option to purchase  an  aggregate  of
25,000  shares of the Common  Stock,  $1.00 par value per share,  of the Company
("Common  Stock") at an  exercise  price of $4.46875  per share,  being at least
equal to 110% of the fair  market  value of such  shares of Common  Stock on the
date hereof.  This option is intended to  constitute  an incentive  stock option
within the  meaning of Section  422 of the  Internal  Revenue  Code of 1986,  as
amended (the "Code"),  although the Company makes no  representation or warranty
as to such qualification.

           2.         The term of this  option  shall  be 5 years  from the date
hereof,  subject to earlier termination as provided in the Plan. This option may
be exercised  commencing  on the date hereof as to 22,377 shares of Common Stock
subject  hereto and as to an additional  2,623 shares of Common Stock on January
1, 1997.  The right to purchase  shares of Common Stock subject  hereto shall be
cumulative,  so that if the full number of shares  purchasable in a period shall
not be  purchased,  the balance may be purchased  any time and from time to time
thereafter,  but not after the termination  hereof. This option may be exercised
by giving written notice to the Company at its principal  office,  presently 635
59th  Street,  West New York,  New Jersey  07093,  stating  that the Optionee is
exercising his incentive stock option, specifying the number of shares purchased
(provided  that not less than one hundred  (100) shares may be purchased  unless
the number  purchased is the total number of shares  purchasable  hereunder) and
accompanied  by payment of the aggregate  purchase  price therefor in accordance
with Section 3 below.  Notwithstanding  any of the foregoing,  in no event may a
fraction of a share of Common Stock be purchased under this option.

           3.         The purchase  price of shares  purchased  hereunder may be
paid in cash (or by check) and/or, in the sole discretion of the Committee,  (a)
in the form of shares of Common Stock already owned by the Optionee valued,  for
the purpose of payment of the purchase  price,  at the fair market value of such
previously  owned shares of Common Stock  determined in accordance  with Section
5(d) of the Plan;  and/or (b) one-tenth (1/10) of the purchase price in cash (or
by check) and the balance by the issuance of a recourse promissory note, in form
satisfactory to the Committee,  and, in accordance with and subject to the terms
and provisions of Section 7 of the Plan.


           
<PAGE>



           4.         The Company  may  withhold  cash  and/or  shares of Common
Stock to be issued to the Optionee in the amount which the Company determines is
necessary to satisfy its obligation to withhold taxes or other amounts  incurred
by reason of the grant or  exercise  of this  option or the  disposition  of the
underlying  shares of Common Stock.  Alternatively,  the Company may require the
Optionee to pay the Company such amount in cash promptly upon demand.

           5.         In the event of any  disposition  of the  shares of Common
Stock acquired pursuant to the exercise of this option within two years from the
date hereof or one year from the date of  transfer  of such  shares to him,  the
Optionee  shall notify the Company  thereof in writing within 30 days after such
disposition.  In addition, the Optionee shall provide the Company on demand with
such  information  as the Company shall  reasonably  request in connection  with
determining  the amount and character of the  Optionee's  income,  the Company's
deduction  and its  obligation to withhold  taxes or other  amounts  incurred by
reason of such  disqualifying  disposition,  including the amount  thereof.  The
Optionee  shall pay the Company in cash on demand the amount,  if any, which the
Company determines is necessary to satisfy such withholding obligation.

           6.         Notwithstanding  the  foregoing,  this option shall not be
exercisable  by the  Optionee  unless  (a) a  Registration  Statement  under the
Securities  Act of 1933, as amended (the  "Securities  Act") with respect to the
shares of Common Stock to be received  upon the exercise of this option shall be
effective and current at the time of exercise or (b) there is an exemption  from
registration  under the  Securities Act for the issuance of the shares of Common
Stock upon such  exercise.  The Optionee  hereby  represents and warrants to the
Company that,  unless such a Registration  Statement is effective and current at
the time of exercise  of this  option,  the shares of Common  Stock to be issued
upon the  exercise of this option will be acquired by the  Optionee  for his own
account,  for investment  only and not with a view to the resale or distribution
thereof.  In any event,  the  Optionee  shall notify the Company of any proposed
resale of the shares of Common Stock issued to him upon exercise of this option.
Any subsequent  resale or distribution of shares of Common Stock by the Optionee
shall be made only pursuant to (x) a Registration Statement under the Securities
Act which is effective  and current with respect to the sale of shares of Common
Stock being sold, or (y) a specific exemption from the registration requirements
of the Securities Act, but in claiming such exemption, the Optionee shall, prior
to any offer of sale or sale of such shares of Common Stock, provide the Company
(unless waived by the Company) with a favorable  written opinion of counsel,  in
form and substance  satisfactory to the Company, as to the applicability of such
exemption  to the  proposed  sale  or  distribution.  Such  representations  and
warranties shall also be deemed to be made by the Optionee upon each exercise of
this option.  Nothing  herein  shall be  construed  as requiring  the Company to
register the shares subject to this option under the Securities Act.

           7.         Notwithstanding anything herein to the contrary, if at any
time the  Committee  shall  determine,  in its  discretion,  that the listing or
qualification  of the  shares  of Common  Stock  subject  to this  option on any
securities  exchange or under any applicable  law, or the consent or approval of
any  governmental  regulatory body, is necessary or desirable as a condition to,
or in  connection  with,  the  granting  of an  option or the issue of shares of
Common Stock hereunder, this

                                       -2-

<PAGE>



option  may  not  be  exercised  in  whole  or  in  part  unless  such  listing,
qualification,  consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Committee.

           8.         The  Company  may  affix  appropriate   legends  upon  the
certificates  for shares of Common Stock issued upon exercise of this option and
may issue such "stop transfer"  instructions to its transfer agent in respect of
such shares as it determines,  in its discretion, to be necessary or appropriate
(a) (i) to  prevent a  violation  of,  or to  perfect  an  exemption  from,  the
registration   requirements  of  the  Securities  Act,  (ii)  to  implement  the
provisions  of the Plan or this  Contract  or any other  agreement  between  the
Company and the Optionee with respect to such shares of Common  Stock,  or (iii)
to  permit  the  Company  to  determine  the  occurrence  of  a   "disqualifying
disposition,"  as  described  in  Section  421(b) of the Code,  of the shares of
Common Stock  transferred upon the exercise of this option or (b) if applicable,
with regard to any other restriction, on the assignment,  pledge,  hypothecation
or transfer of shares acquired upon the exercise of this option.

           9.         Nothing  in the  Plan or  herein  shall  confer  upon  the
Optionee any right to continue in the employ of the  Company,  any parent or any
of its subsidiaries,  or interfere in any way with any right of the Company, any
parent or its  subsidiaries  to terminate  such  employment  at any time for any
reason  whatsoever  without  liability to the Company,  any parent or any of its
subsidiaries.

           10.        The Company and the Optionee  agree that they will both be
subject to and bound by all of the terms and  conditions  of the Plan, a copy of
which is attached hereto and made a part hereof. In the event (a) the employment
of the Optionee terminates, (b) of the disability of the Optionee, or (c) of the
death of the Optionee,  his rights hereunder shall be governed by and be subject
to the  provisions of the Plan. In the event of a conflict  between the terms of
this Contract and the terms of the Plan, the terms of the Plan shall govern.

           11.        The Optionee  shall have no rights as a  stockholder  with
respect to any shares  issuable  or  transferable  upon  exercise of this option
until the date of the issuance of a stock certificate to him for such shares. No
adjustment shall be made for dividends  (ordinary or  extraordinary,  whether in
cash,  securities or other property) or  distributions or other rights for which
the record date is prior to the date such stock certificate is issued, except as
may be otherwise provided for by pursuant to the Plan.

           12.        This option is not transferable by the Optionee  otherwise
than by will or the  laws of  descent  and  distribution  and may be  exercised,
during the  lifetime of the  Optionee,  only by the  Optionee or the  Optionee's
legal representatives.

           13.        This  Contract  shall be  binding  upon  and  inure to the
benefit of any successor or assign of the Company and to any heir,  distributee,
executor,  administrator  or legal  representative  entitled  to the  Optionee's
rights hereunder.


                                       -3-

<PAGE>


           14.        This  Contract  shall be governed  by, and  construed  and
enforced in accordance  with, the laws of the State of Delaware,  without regard
to the conflicts of law rules thereof.

           15.        The  invalidity,  illegality  or  unenforceability  of any
provision herein shall not affect the validity,  legality or  enforceability  of
any other provision.

           16.        The  Optionee  agrees  that the Company may amend the Plan
and  the  options  granted  to the  Optionee  under  the  Plan,  subject  to the
limitations  contained  in  the  Plan.  Without  limiting  the  foregoing,   the
Committee,  in its sole  discretion,  may at any time make or  provide  for such
adjustments to the Plan, to the number and class of shares available  thereunder
and to this  option as it shall deem  appropriate,  all in  accordance  with the
provisions of the Plan.


           IN WITNESS WHEREOF, the parties hereto have executed this Contract as
of the day and year first above written.


                                                  JACLYN, INC.


                                                  By: /s/ Robert Chestnov
                                                   -----------------------------
                                                       Title:  President

                                                      /s/ Howard Ginsburg
                                                   -----------------------------
                                                       Howard Ginsburg, Optionee

                                                   425 East 58th Street, Apt.19H
                                                   -----------------------------
                                                             Address

                                                       New York, NY 10022
                                                   -----------------------------



                                       -4-

