<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. __)
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
LJ INTERNATIONAL INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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LJ INTERNATIONAL INC.
UNIT #12, 12/F, BLOCK A
FOCAL INDUSTRIAL CENTER
21 MAN LOK STREET
HUNG HOM, KOWLOON, HONG KONG
(011) 852-2764-3622
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD WEDNESDAY, DECEMBER 9, 1998
To the Shareholders:
PLEASE TAKE NOTICE that the Annual Meeting of Shareholders (the
"Meeting") of LJ International Inc. (the "Company") will be held at The
Harbour Plaza Hotel, 20 Tak Fung Street, Hung Hom, Kowloon, Hong Kong, on
Wednesday, December 9, 1998, at 11:00 a.m., local time, for the following
purposes:
1. To elect five directors to hold office for the term specified in
the Proxy Statement or until their successors are elected and qualified;
2. To approve the establishment of the 1998 stock compensation plan
for the benefit of certain officers, directors, employees and advisors of the
Company (the "1998 Stock Compensation Plan Proposal"); and
3. To transact such other business as may properly come before the
Meeting or any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on October 30,
1998, as the record date for the determination of shareholders entitled to
notice of and to vote at the Meeting and at any adjournment or adjournments
thereof.
A Proxy Statement which describes the foregoing proposals and a form of
Proxy accompany this Notice.
By Order of the Board of Directors
Ka Man Au
Secretary
Dated: November 5, 1998
IMPORTANT
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, YOU ARE URGED TO
EXECUTE THE ACCOMPANYING PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED REPLY
ENVELOPE WHICH REQUIRES NO POSTAGE. ANY SHAREHOLDER GRANTING A PROXY MAY
REVOKE THE SAME AT ANY TIME PRIOR TO ITS EXERCISE. ALSO, WHETHER OR NOT YOU
GRANT A PROXY, YOU MAY VOTE IN PERSON IF YOU ATTEND THE MEETING.
<PAGE>
LJ INTERNATIONAL INC.
UNIT #12, 12/F, BLOCK A
FOCAL INDUSTRIAL CENTER
21 MAN LOK STREET
HUNG HOM, KOWLOON, HONG KONG
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD WEDNESDAY, DECEMBER 9, 1998
SOLICITATION OF PROXY
The accompanying proxy is solicited on behalf of the Board of Directors
of LJ International Inc. (the "Company") for use at the Annual Meeting of
Shareholders of the Company (the "Meeting") to be held at The Harbour Plaza
Hotel, 20 Tak Fung Street, Hung Hom, Kowloon, Hong Kong, on Wednesday,
December 9, 1998, and at any adjournment or adjournments thereof. In
addition to the use of the mails, proxies may be solicited by personal
interview, telephone or telegraph by officers, directors and other employees
of the Company, who will not receive additional compensation for such
services. The Company may also request brokerage houses, nominees,
custodians and fiduciaries to forward the soliciting material to the
beneficial owners of stock held of record and will reimburse such persons for
forwarding such material at the rates suggested by the New York Stock
Exchange. The Company will bear the cost of this solicitation of proxies.
Such costs are expected to be nominal. Proxy solicitation will commence with
the mailing of this Proxy Statement on or about November 5, 1998.
Execution and return of the enclosed proxy will not affect a
shareholder's right to attend the Meeting and to vote in person. Any
shareholder executing a proxy retains the right to revoke it at any time
prior to exercise at the Meeting. A proxy may be revoked by delivery of
written notice of revocation to the Secretary of the Company, by execution
and delivery of a later proxy or by voting the shares in person at the
Meeting. A proxy, when executed and not revoked, will be voted in accordance
with the instructions thereon. In the absence of specific instructions,
proxies will be voted by the person named in the proxy "FOR" the election as
directors of those nominees named in the Proxy Statement, "FOR" the proposal
to approve the establishment of the 1998 Stock Compensation Plan, and in
accordance with his best judgment on all other matters that may properly come
before the Meeting.
The enclosed form of proxy provides a method for shareholders to
withhold authority to vote for any one or more of the nominees for director
while granting authority to vote for the remaining nominees. The names of
all nominees are listed on the proxy. If you wish to grant authority to vote
for all nominees, check the box marked "FOR." If you wish to withhold
authority to vote for all nominees, check the box marked "WITHHOLD." If you
wish your shares to be voted for some nominees and not for one or more of the
others, check the box marked "FOR" and indicate the name(s) of the nominee(s)
for whom you are withholding the authority to vote by writing the name(s) of
such nominee(s) on the proxy in the space provided.
<PAGE>
PURPOSE OF MEETING
As stated in the Notice of Annual Meeting of Shareholders accompanying
this Proxy Statement, the business to be conducted and the matters to be
considered and acted upon at the Meeting are as follows:
1. To elect five directors to hold office for the term specified
herein or until their successors are elected and qualified;
2. To approve the establishment of the 1998 stock compensation plan
for the benefit of certain officers, directors, employees and advisors of the
Company (the "1998 Stock Compensation Plan Proposal"); and
3. To transact such other business as may properly come before the
Meeting or any adjournment or adjournments thereof.
VOTING AT MEETING
The voting securities of the Company consist solely of common stock,
$.01 par value per share (the "Common Stock").
The record date for shareholders entitled to notice of and to vote at
the Meeting is the close of business on October 30, 1998, at which time the
Company had outstanding and entitled to vote at the Meeting 6,365,646 shares
of Common Stock. Shareholders are entitled to one vote, in person or by
proxy, for each share of Common Stock held in their name on the record date.
Shareholders representing a majority of the Common Stock outstanding and
entitled to vote must be present or represented by proxy to constitute a
quorum.
The election of directors and approval of the 1998 Stock Compensation
Plan Proposal each will require the affirmative vote of the holders of a
majority of the Common Stock present or represented by proxy at the Meeting
and entitled to vote thereon. Cumulative voting for directors is not
authorized and proxies cannot be voted for more than five nominees.
STOCK OWNERSHIP
The following table sets forth the number of shares of Common Stock
owned beneficially as of September 1, 1998 by each person known by the
Company to have owned beneficially more than ten percent of such shares then
outstanding, by each officer and director of the Company and by all of the
Company's officers and directors as a group. This information gives effect
to securities deemed outstanding pursuant to Rule 13d-3(d)(1) under the
Securities Exchange Act of 1934, as amended. As far as is known to
management of the Company, no person owned beneficially more than ten percent
of the outstanding shares of Common Stock as of September 1, 1998 except as
set forth below.
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<TABLE>
<CAPTION>
NUMBER PERCENT
NAME OF BENEFICIAL HOLDER SHARES BENEFICIALLY OWNED
- ------------------------- ------------------- -------
<S> <C> <C>
Yu Chuan Yih . . . . . . . . . . . . . . . . . . 3,787,200(1) 59.5%
Jeffrey W. Taraschi. . . . . . . . . . . . . . . 0
Debora Mu Yong Yih(2). . . . . . . . . . . . . . 600,000 9.4%
Ka Man Au. . . . . . . . . . . . . . . . . . . . 0 --
Joseph Tuszer. . . . . . . . . . . . . . . . . . 0 --
Hon Tak Ringo Ng . . . . . . . . . . . . . . . . 0 --
Kui Shing Andy Lai . . . . . . . . . . . . . . . 0 --
Lionel C. Wang . . . . . . . . . . . . . . . . . 0 --
All directors and executive officers
as a group (7 persons). . . . . . . . . . . . . 3,787,200 59.5%
</TABLE>
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(1) Of these shares, 1,500,000 shares are owned of record by Pacific Growth
Developments Ltd., a British Virgin Islands corporation which is owned by
Mr. Yih (60%), his wife Tammy Yih (20%) and an adult daughter, Bianca Tzu
Hsiu Yih (20%). In addition, Mr. Yih is the sole shareholder of the
following three British Virgin Islands corporations which own shares of the
Company as follows: Welgram International Limited--236,000 shares;
Sunflower Gold Holdings Limited--235,000 shares; and Panama Gold Holdings
Limited--235,000 shares.
(2) Debora Mu Yong Yih is an adult daughter of Mr. Yih.
BOARD OF DIRECTORS
The Board of Directors has the responsibility for establishing broad
corporate policies and for the overall performance of the Company, although
it is not involved in day-to-day operating details. The Board meets
regularly throughout the year, including the annual organization meeting
following the Annual Meeting of Shareholders, to review significant
developments affecting the Company and to act upon matters requiring Board
approval. It also holds special meetings as required from time to time when
important matters arise requiring Board action between scheduled meetings.
During the last fiscal year, the Board met six times.
The Board of Directors has established an Audit Committee to devote
attention to specific subjects and to assist it in the discharge of its
responsibilities. The functions of the Audit Committee, its current members,
and the number of meetings held during fiscal year 1998 are described below.
The Audit Committee consists of Messrs. Yih, Lai and Wang. The
functions of the Audit Committee are to recommend annually to the Board of
Directors the appointment of the independent public accountants of the
Company, discuss and review the scope and the fees of the prospective annual
audit and review the results thereof with the independent public accountants,
review and approve non-audit services of the independent public accountants,
review compliance with existing accounting and financial policies of the
Company, review the adequacy of the financial organization of the Company and
review management's procedures and policies relative to the adequacy of the
Company's internal accounting controls and compliance with federal and state
laws relating to financial reporting. The Audit Committee met once during
the fiscal year ended April 30, 1998.
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The Company does not have a nominating committee. The functions
customarily attributable to a nominating committee are performed by the Board
of Directors as a whole.
No director attended fewer than 75 percent of the aggregate of the total
number of meetings of the Board of Directors and the total number of meetings
held by all committees of the Board on which he served.
Each non-employee director is compensated separately for service on the
Board and is reimbursed for expenses to attend Board meetings.
ELECTION OF DIRECTORS
At the Meeting, five directors are to be elected. Each director will be
elected for a one-year term or until his successor is elected and qualified.
Shares represented by properly executed proxies will be voted, in the
absence of contrary indication therein or revocation thereof by the
shareholder granting such proxy, in favor of the election of the persons
named below as directors, to hold office for the term stated in the preceding
paragraph. The person named as proxy in the enclosed proxy has been
designated by management and intends to vote for the election to the Board of
Directors of the persons named below, each of whom is now a director of the
Company. If the contingency should occur that any such nominee is unable to
serve as a director, it is intended that the shares represented by the
proxies will be voted, in the absence of contrary indication, for any
substitute nominee that management may designate. Management knows of no
reason why any nominee would be unable to serve. The information presented
herein with respect to the nominees was obtained in part from the respective
persons, and in part from the records of the Company.
NOMINEES FOR ELECTION AS DIRECTORS
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
Yu Chuan Yih. . . . . . . 59 Chairman of the Board of Directors
Jeffrey W. Taraschi . . . 46 President, Chief Executive Officer and Director
Ka Man Au . . . . . . . . 34 Executive Vice President, Secretary and Director
Kui Shing Andy Lai. . . . 49 Non-Executive Director
Lionel C. Wang. . . . . . 42 Non-Executive Director
</TABLE>
None of the directors and officers was selected pursuant to any
agreement or understanding with any other person. There is no family
relationship between any director or executive officer and any other director
or executive officer.
MR. YIH established the business of Lorenzo Jewelry Mfg. (HK) Ltd. and
has served as its President and Managing Director since 1987. Mr. Yih is
primarily responsible for business development and overall Company
management. He has over 20 years of experience in semi-precious stone
production and marketing. Mr. Yih has been a gemstone trader in Brazil and
has extensive experience and relationships in gem sourcing and jewelry
design. Mr. Yih is also president of the Hong Kong branch of the Gemological
Institute of America (GIA), the nonprofit educational organization for the
jewelry industry.
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MR. TARASCHI has served as a director of the Company since September
1997 and as President and Chief Executive Officer of the Company since June
1998. He received his Bachelor of Arts degree in economics from Rutgers
University in 1974. From 1986 to 1996, Mr. Taraschi has served in senior
executive positions at Town & Country, QVC Inc. and R.H. Macy Inc. with
responsibilities for business marketing and product development. In December
1996, he formed International Business Partners, a consulting company which
formulates and administers business, marketing and product plans for major
manufacturers and retailers worldwide.
MS. AU has served as a director of Lorenzo Jewelry Mfg. (HK) Ltd. since
its incorporation in 1987. Ms. Au is primarily responsible for the general
administration, human resources, operations and management of the Company.
MR. LAI has served as a non-executive director of the Company since
September 1997. He received his Bachelor of Arts degree and his Masters of
Business Administration from The Chinese University of Hong Kong. From 1988
to 1992, Mr. Lai served as president of Toplus Development Ltd., a company
engaged in investment and business development. Since 1993, he has served as
president of International Asset Management Ltd., an organization which
focuses on project and business development, investment opportunity and
consultancy services to major corporations in the U.S. and China.
MR. WANG has served as a non-executive director of the Company since
June 1998. He received his Bachelor of Commerce from Tamkung University,
Taipei, Taiwan in 1978, his Master of Business Administration from California
State Polytechnic University in 1980 and his Master of Science from Stanford
University in 1981. From 1984 to 1990, Mr. Wang served as marketing research
analyst and senior strategic planning analyst for The Gillette Company,
Boston, Massachusetts. From 1990 to 1995, he served as associate director
and then director of product development for Information Resources, Inc.,
Waltham, Massachusetts. From 1995 to 1996, Mr. Wang served as vice-president
as Nielsen North America with responsibility for analytical and modeling
projects on Kraft Foods/White Plains account. Since 1996, Mr. Wang has
served as director of analytical services for The NPD Group, Inc., Port
Washington, New York.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
The aggregate compensation paid by the Company to all directors and
executive officers of the Company as a group with respect to its fiscal year
ended April 30, 1998 on an accrual basis, for services in all capacities, was
HK$2,582,000 (US$334,000). During the fiscal year ended April 30, 1998, the
Company contributed an aggregate amount of HK$31,000 (US$4,000) toward the
pension plans of the directors and executive officers.
EXECUTIVE SERVICE CONTRACT
The Company entered into an employment agreement with Mr. Yu Chuan Yih
effective October 1, 1997 pursuant to which he serves the Company for a
period of three years at an annual salary of HK$1,600,000 (US$207,000). Mr.
Yih's remuneration package includes benefits with respect to a motor car. In
addition, Mr. Yih will be entitled to an annual management bonus of a sum to
be determined by the Board at its absolute discretion having regard for the
operating results of the Company and the performance of Mr. Yih during the
relevant financial year. The amount payable to Mr. Yih will be decided by
majority decision of the members of the Board present in the meeting called
for that
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purpose, provided that Mr. Yih shall abstain from voting and not be counted
in the quorum in respect of the resolution regarding the amount so payable to
him.
THE BOARD OF DIRECTORS RECOMMENDS TO THE SHAREHOLDERS THAT THEY VOTE
"FOR" THE ELECTION OF SUCH NOMINEES.
CERTAIN TRANSACTIONS
Yu Chuan Yih, President and Chairman of the Company, is a director and
principal shareholder of Gemological Institute of America, Hong Kong Limited;
Italon Limited; Lorenzo Consultant & Investment (China) Limited; and Hong
Kong Brasil Lapidary Limited. During the fiscal years ended April 30, 1996,
1997 and 1998, Mr. Yih and the foregoing affiliated companies received
unsecured advances from, and made unsecured advances to, the Company which
were interest free and repayable on demand. In addition, the Company
purchased gold from Mr. Yih at a fixed price of HK$93/gram. As of April 30,
1996 and 1997, the market price of gold was HK$96.06/gram and HK$84.17/gram,
respectively. Subsequent to the fiscal year ended April 30, 1997, this
arrangement has been terminated. Further, the Company had subcontracted with
Italon Limited for the manufacture of the Company's jewelry pending
completion of the Company's new manufacturing plant. During the fiscal year
ended April 30, 1997, the Company completed construction of its manufacturing
plant in the PRC, and all further subcontracting with Italon Limited was
discontinued thereafter.
During the fiscal year ended April 30, 1998, the Company sold an
investment property to Mr. Yih at its appraised value of HK$3,800,000
(US$492,000), resulting in a gain to the Company of HK$2,904,000
(US$376,000). The sale price of the property was based on a valuation report
prepared by an independent professional property valuer.
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ADDITIONAL MATTER TO BE VOTED UPON BY SHAREHOLDERS
THE 1998 STOCK COMPENSATION PLAN PROPOSAL
On June 1, 1998, the Board of Directors adopted and approved the 1998
Stock Compensation Plan (the "1998 Plan"). The purpose of the 1998 Plan is
to encourage ownership of the Common Stock of the Company by certain
officers, directors, employees and advisors of the Company or any subsidiary
of the Company in order to provide additional incentive for such persons to
promote the success and the business of the Company or its subsidiaries and
to encourage them to remain in the employ of the Company or its subsidiaries
by providing such persons an opportunity to benefit from any appreciation of
the Common Stock of the Company through the issuance of stock options to such
persons in accordance with the terms of the 1998 Plan. The Board of
Directors believes that the best interests of the Company and its
subsidiaries, if any, would be served by increasing their ability to secure
and retain highly qualified and experienced officers, directors, employees
and advisors through affording them an opportunity to acquire a stake in the
future of the Company or its subsidiary by acquiring an equity position in
the Company. It is the desire of the Board of Directors to assure by
appropriate means the maximum efforts and fullest measure of continued loyal
association with the Company or its subsidiaries on the part of their
respective officers, directors, employees and advisors. It is intended that
options granted pursuant to the 1998 Plan shall constitute either incentive
stock options ("Incentive Options") within the meaning of Section 422 of the
United States Internal Revenue Code of 1986, as amended (the "Code"), or
options which do not constitute Incentive Options ("Nonqualified Options") at
the time of issuance of such options.
THE BOARD OF DIRECTORS RECOMMENDS TO THE SHAREHOLDERS THAT THEY VOTE
"FOR" THE ESTABLISHMENT AND ADOPTION OF THE 1998 STOCK COMPENSATION PLAN.
The 1998 Plan provides that incentive stock options and non-qualified
stock options would be granted to certain officers, directors, employees and
advisors of the Company or its subsidiaries, if any, selected by the
Compensation Committee. A total of 2,000,000 shares of Common Stock would be
authorized and reserved for issuance under the 1998 Plan, subject to
adjustment to reflect changes in the Company's capitalization in the case of
a stock split, stock dividend or similar event. The 1998 Plan would be
administered by the Compensation Committee which would have the sole
authority to interpret the 1998 Plan and to make all determinations necessary
or advisable for administering the 1998 Plan, including but not limited to
(i) who shall be granted options under the 1998 Plan, (ii) the term of each
option, (iii) the number of shares covered by such option, (iv) whether the
option shall constitute an incentive option or a nonqualified option, (v) the
exercise price for the purchase of the shares of the Common Stock covered by
the option, provided that the exercise price for any incentive option must be
at least equal to the fair market value of the shares covered thereby as of
the date of grant of such option, (vi) the period during which the option may
be exercised, (vii) whether the right to purchase the number of shares
covered by the option shall be fully vested on issuance of the option so that
such shares may be purchased in full at one time or whether the right to
purchase such shares shall become vested over a period of time so that such
shares may only be purchased in installments, and (viii) the time or times at
which the options shall be granted. Except in the case of disability or
death, no option shall be exercisable after an optionee who is an employee of
the Company ceases to be employed by the Company; provided, however, that the
Compensation Committee has the right to extend the exercise period following
the date of termination of such optionee's employment. If an optionee's
employment is terminated by reason of death or disability, the Compensation
Committee may extend the option term
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following the date of termination of the optionee's employment. Upon the
exercise of the option, the exercise price thereof must be paid in full
either in cash, shares of stock of the Company or a combination thereof.
As of this date, the Company has not granted any options under the 1998
Plan.
If and to the extent that any option to purchase reserved shares shall
not be exercised by an optionee for any reason or if such option to purchase
shall terminate as provided by the 1998 Plan, such shares which have not been
so purchased thereunder shall again become available for the purposes of the
1998 Plan unless the 1998 Plan shall have been terminated.
INDEPENDENT PUBLIC ACCOUNTANTS
A representative of Moores Rowland Hong Kong will attend the Meeting and
will have the opportunity to make a statement if he so desires. This
representative will be available to respond to appropriate shareholder
questions at that time.
PROPOSALS OF SHAREHOLDERS FOR PRESENTATION
AT NEXT ANNUAL MEETING OF SHAREHOLDERS
Any shareholder of record of the Company who desires to submit a proper
proposal for inclusion in the proxy materials relating to the next Annual
Meeting of Shareholders must do so in writing and it must be received at the
Company's principal executive offices by April 29, 1999. The proponent must
be a record or beneficial owner entitled to vote at the next Annual Meeting
on his proposal and must continue to own such security entitling him to vote
through the date on which the meeting is held.
ANNUAL REPORT
The Annual Report to Shareholders concerning the operations of the
Company during the fiscal year ended April 30, 1998, including audited
financial statements for the year then ended, has been distributed to all
record holders as of the record date. The Annual Report is not incorporated
in the Proxy Statement and is not to be considered a part of the soliciting
material.
OTHER BUSINESS
Management of the Company is not aware of any other matters which are to
be presented at the Meeting, nor has it been advised that other persons will
present any such matters. However, if other matters properly come before the
Meeting, the individual named in the accompanying proxy shall vote on such
matters in accordance with his best judgment.
AVAILABILITY OF ANNUAL REPORT ON FORM 20-F
UPON WRITTEN REQUEST, THE COMPANY WILL PROVIDE, WITHOUT CHARGE, A COPY
OF ITS ANNUAL REPORT ON FORM 20-F FOR THE FISCAL YEAR ENDED APRIL 30, 1998,
TO EACH SHAREHOLDER OF RECORD OR TO EACH SHAREHOLDER WHO OWNED
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COMMON STOCK OF THE COMPANY LISTED IN THE NAME OF A BANK OR BROKER, AS
NOMINEE, AT THE CLOSE OF BUSINESS ON OCTOBER 30, 1998. ANY REQUEST BY A
SHAREHOLDER FOR THE COMPANY'S ANNUAL REPORT ON FORM 20-F SHOULD BE SENT TO
THE COMPANY'S SECRETARY, LJ INTERNATIONAL INC., UNIT #12, 12/F, BLOCK A,
FOCAL INDUSTRIAL CENTER, 21 MAN LOK STREET, HUNG HOM, KOWLOON, HONG KONG.
The above notice and Proxy Statement are sent by order of the Board of
Directors.
KA MAN AU
Secretary
November 5, 1998
9
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PROXY
FOR THE ANNUAL MEETING OF SHAREHOLDERS OF
LJ INTERNATIONAL INC.
TO BE HELD DECEMBER 9, 1998
The undersigned hereby appoints Yu Chuan Yih as the lawful agent and
Proxy of the undersigned (with all powers the undersigned would possess if
personally present, including full power of substitution), and hereby
authorizes him to represent and to vote, as designated below, all the shares
of Common Stock of LJ International Inc. held of record by the undersigned as
of the close of business on October 30, 1998, at the Annual Meeting of
Shareholders to be held on Wednesday, December 9, 1998, or any adjournment or
postponement thereof.
1. ELECTION OF DIRECTORS
___ FOR all nominees listed below ___ WITHHOLD AUTHORITY
(except as marked to the to vote for all nominees
contrary below) listed below
Y.C. Yih, J. Taraschi, K.M. Au, A. Lai, L. Wang
(INSTRUCTION: To withhold authority to vote for any nominees, write the
nominees' names on the space provided below.)
- --------------------------------------------------------------------------
2. To approve the establishment of the 1998 stock compensation plan for the
benefit of certain officers, directors, employees and advisors of the
Company (the "1998 Stock Compensation Plan Proposal").
_____ FOR _____ AGAINST _____ ABSTAIN
3. In his discretion, the Proxy is authorized to vote upon any matters which
may properly come before the Meeting, or any adjournment or postponement
thereof.
It is understood that when properly executed, this proxy will be voted in
the manner directed herein by the undersigned shareholder. WHERE NO CHOICE IS
SPECIFIED BY THE SHAREHOLDER, THE PROXY WILL BE VOTED FOR THE ELECTION OF
DIRECTORS PROPOSED IN ITEM (1) AND IN FAVOR OF ITEM (2).
<PAGE>
The undersigned hereby revokes all previous proxies relating to the
shares covered hereby and confirms all that said proxy or his substitutes may
do by virtue hereof.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
Dated:____________________, 1998 -------------------------------
Signature
-------------------------------
Signature if held jointly
PLEASE MARK, SIGN, DATE AND
RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
/ / PLEASE CHECK THIS BOX IF YOU INTEND TO BE PRESENT AT THE MEETING.
