







                                   EXHIBIT S








<PAGE>
                             2000 STOCK OPTION PLAN
                         INCENTIVE STOCK OPTION CONTRACT
                         -------------------------------


         INCENTIVE  STOCK OPTION  CONTRACT  dated as of December 6, 2000 between
JACLYN,  INC., a Delaware  corporation (the "Company"),  and Allan Ginsburg (the
"Optionee").  Capitalized  terms  used but not  defined  herein  shall  have the
meanings assigned to them in the Company's 2000 Stock Option Plan (the "Plan").

                              W I T N E S S E T H:

         The parties to this Agreement hereby agree as follows:

         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 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 $2.8875
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  in  whole or in part and  from  time to time  commencing  on the date
hereof, but prior to the end of the term of the option, 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  this 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 (a) in
cash (or by certified  check);  (b) with  previously  acquired  shares of Common
Stock having an aggregate fair market value,  on the date of exercise,  equal to
the aggregate exercise price of all options being exercised; (c) any combination
thereof;  or (d) subject to the terms and  provisions of the Plan,  one-tenth of
the aggregate  exercise price in cash (or by certified check) and the balance by
issuance of a recourse  promissory  note in form  satisfactory  to the Committee
(the "Note").


<PAGE>

         4. The  Company  may  withhold  (a) cash or (b) with the consent of the
Committee  shares of Common  Stock to be issued upon  exercise of an option or a
combination  of  cash  and  shares,   having  an  aggregate  fair  market  value
(determined  in  accordance  with  Paragraph  5 of the Plan) equal to the amount
which the  Committee  determines  is necessary to satisfy the  obligation of the
Company to  withhold  Federal,  state and local  income  taxes or other  amounts
incurred by reason of the grant, vesting, exercise or disposition of this option
or the disposition of the underlying shares of Common Stock. Alternatively,  the
Company may require the  Optionee to pay to 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 the Optionee, 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 or to keep
any Registration Statement current or effective.



                                      -2-
<PAGE>

         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,
Nasdaq,  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 issuance of shares of Common Stock  hereunder,  this 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 endorse such legend or 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 sole discretion, to be necessary or appropriate
to (a) prevent a violation of, or to perfect an exemption from, the registration
requirements of the Securities Act,  applicable  state  securities laws or other
legal  requirements,  (b) implement the provisions of the Plan or this Contract,
or (c) 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.

         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 Subsidiary, or
interfere in any way with any right of the Company, any Parent or any Subsidiary
to  terminate  such  employment  at any time for any reason  whatsoever  without
liability to the Company, any Parent or any Subsidiary.

         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.  Except to the
extent  provided  in the Plan,  this  option may not be  assigned,  transferred,
pledged,  hypothecated or disposed of in any way (whether by operation of law or
otherwise) and shall not be subject to execution, attachment or similar process,
and  any  such  attempted  assignment,   transfer,   pledge,   hypothecation  or
disposition shall be null and void ab initio and of no force or effect.

         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
representative.



                                      -3-
<PAGE>

         13. This Contract shall be binding upon and inure to the benefit of any
successor  or  assign of the  Company  and to the  legal  representative  of the
Optionee's estate.

         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,  or any  other  law that  would  defer to the
substantive laws of another jurisdiction.

         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
                                           ---------------------------------
                                            Alan Ginsburg, Optionee


                                            77 Pine Terrace
                                            Demarest, NJ  07627
                                           ---------------------------------
                                            Address of Optionee


                                                    ###-##-####
                                           ---------------------------------
                                           Optionee's Social Security Number



                                      -4-
<PAGE>

                             2000 STOCK OPTION PLAN
                         INCENTIVE STOCK OPTION CONTRACT
                         -------------------------------

         INCENTIVE  STOCK OPTION  CONTRACT  dated as of December 6, 2000 between
JACLYN, INC., a Delaware  corporation (the "Company"),  and Robert Chestnov (the
"Optionee").  Capitalized  terms  used but not  defined  herein  shall  have the
meanings assigned to them in the Company's 2000 Stock Option Plan (the "Plan").

                              W I T N E S S E T H:

         The parties to this Agreement hereby agree as follows:

         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 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 $2.625
per share,  being at least equal to 100% 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 10 years  from the date  hereof,
subject to earlier  termination  as  provided  in the Plan.  This  option may be
exercised  in  whole or in part and  from  time to time  commencing  on the date
hereof, but prior to the end of the term of the option, 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  this 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 (a) in
cash (or by certified  check);  (b) with  previously  acquired  shares of Common
Stock having an aggregate fair market value,  on the date of exercise,  equal to
the aggregate exercise price of all options being exercised; (c) any combination
thereof;  or (d) subject to the terms and  provisions of the Plan,  one-tenth of
the aggregate  exercise price in cash (or by certified check) and the balance by
issuance of a recourse  promissory  note in form  satisfactory  to the Committee
(the "Note").



<PAGE>

         4. The  Company  may  withhold  (a) cash or (b) with the consent of the
Committee  shares of Common  Stock to be issued upon  exercise of an option or a
combination  of  cash  and  shares,   having  an  aggregate  fair  market  value
(determined  in  accordance  with  Paragraph  5 of the Plan) equal to the amount
which the  Committee  determines  is necessary to satisfy the  obligation of the
Company to  withhold  Federal,  state and local  income  taxes or other  amounts
incurred by reason of the grant, vesting, exercise or disposition of this option
or the disposition of the underlying shares of Common Stock. Alternatively,  the
Company may require the  Optionee to pay to 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 the Optionee, 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 or to keep
any Registration Statement current or effective.



                                      -2-
<PAGE>

         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,
Nasdaq,  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 issuance of shares of Common Stock  hereunder,  this 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 endorse such legend or 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 sole discretion, to be necessary or appropriate
to (a) prevent a violation of, or to perfect an exemption from, the registration
requirements of the Securities Act,  applicable  state  securities laws or other
legal  requirements,  (b) implement the provisions of the Plan or this Contract,
or (c) 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.

         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 Subsidiary, or
interfere in any way with any right of the Company, any Parent or any Subsidiary
to  terminate  such  employment  at any time for any reason  whatsoever  without
liability to the Company, any Parent or any Subsidiary.

         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.  Except to the
extent  provided  in the Plan,  this  option may not be  assigned,  transferred,
pledged,  hypothecated or disposed of in any way (whether by operation of law or
otherwise) and shall not be subject to execution, attachment or similar process,
and  any  such  attempted  assignment,   transfer,   pledge,   hypothecation  or
disposition shall be null and void ab initio and of no force or effect.

         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
representative.



                                      -3-
<PAGE>

         13. This Contract shall be binding upon and inure to the benefit of any
successor  or  assign of the  Company  and to the  legal  representative  of the
Optionee's estate.

         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,  or any  other  law that  would  defer to the
substantive laws of another jurisdiction.

         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 of the Board


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


                                            602 Orchard Lane
                                            Franklin Lakes, NJ 07417
                                           ---------------------------------
                                            Address of Optionee


                                                    ###-##-####
                                           ---------------------------------
                                           Optionee's Social Security Number


                                      -4-
<PAGE>

                             2000 STOCK OPTION PLAN
                         INCENTIVE STOCK OPTION CONTRACT
                         -------------------------------

         INCENTIVE  STOCK OPTION  CONTRACT  dated as of December 6, 2000 between
JACLYN, INC., a Delaware  corporation (the "Company"),  and Howard Ginsburg (the
"Optionee").  Capitalized  terms  used but not  defined  herein  shall  have the
meanings assigned to them in the Company's 2000 Stock Option Plan (the "Plan").

                              W I T N E S S E T H:

         The parties to this Agreement hereby agree as follows:

         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 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 $2.8875
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  in  whole or in part and  from  time to time  commencing  on the date
hereof, but prior to the end of the term of the option, 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  this 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 (a) in
cash (or by certified  check);  (b) with  previously  acquired  shares of Common
Stock having an aggregate fair market value,  on the date of exercise,  equal to
the aggregate exercise price of all options being exercised; (c) any combination
thereof;  or (d) subject to the terms and  provisions of the Plan,  one-tenth of
the aggregate  exercise price in cash (or by certified check) and the balance by
issuance of a recourse  promissory  note in form  satisfactory  to the Committee
(the "Note").



<PAGE>

         4. The  Company  may  withhold  (a) cash or (b) with the consent of the
Committee  shares of Common  Stock to be issued upon  exercise of an option or a
combination  of  cash  and  shares,   having  an  aggregate  fair  market  value
(determined  in  accordance  with  Paragraph  5 of the Plan) equal to the amount
which the  Committee  determines  is necessary to satisfy the  obligation of the
Company to  withhold  Federal,  state and local  income  taxes or other  amounts
incurred by reason of the grant, vesting, exercise or disposition of this option
or the disposition of the underlying shares of Common Stock. Alternatively,  the
Company may require the  Optionee to pay to 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 the Optionee, 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 or to keep
any Registration Statement current or effective.



                                      -2-
<PAGE>

         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,
Nasdaq,  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 issuance of shares of Common Stock  hereunder,  this 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 endorse such legend or 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 sole discretion, to be necessary or appropriate
to (a) prevent a violation of, or to perfect an exemption from, the registration
requirements of the Securities Act,  applicable  state  securities laws or other
legal  requirements,  (b) implement the provisions of the Plan or this Contract,
or (c) 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.

         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 Subsidiary, or
interfere in any way with any right of the Company, any Parent or any Subsidiary
to  terminate  such  employment  at any time for any reason  whatsoever  without
liability to the Company, any Parent or any Subsidiary.

         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.  Except to the
extent  provided  in the Plan,  this  option may not be  assigned,  transferred,
pledged,  hypothecated or disposed of in any way (whether by operation of law or
otherwise) and shall not be subject to execution, attachment or similar process,
and  any  such  attempted  assignment,   transfer,   pledge,   hypothecation  or
disposition shall be null and void ab initio and of no force or effect.

         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
representative.



                                      -3-
<PAGE>

         13. This Contract shall be binding upon and inure to the benefit of any
successor  or  assign of the  Company  and to the  legal  representative  of the
Optionee's estate.

         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,  or any  other  law that  would  defer to the
substantive laws of another jurisdiction.

         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
                                           ---------------------------------
                                            Alan Ginsburg, Optionee


                                            425 East 58th Street
                                            New York, NY 10022
                                           ---------------------------------
                                            Address of Optionee


                                                    ###-##-####
                                           ---------------------------------
                                           Optionee's Social Security Number


                                      -4-

