The "archive" attribute lists just the names of the jar files, not any directory information. If the jar files are not in the same directory as the HTML file containing the applet, then the applet tag needs to contain a "codebase" attribute. Note that this is used for finding loose class files as well, which means that the file layout you currently have will not work. You'll need to move the jar files up a level.
By the way, I don't see any wildcards in the applet tag, so I'm not sure what Ujjwal's comment is about.