<PAGE>
<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
LAZARE KAPLAN INTERNATIONAL INC.
.................................................................
(Name of Registrant as Specified In Its Charter)
.................................................................
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
[ ] 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:
.................................................................
2) Aggregate number of securities to which transaction
applies:
.................................................................
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):
.................................................................
4) Proposed maximum aggregate value of transaction:
.................................................................
5) Total fee paid:
.................................................................
[ ] 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:
.................................................................
2) Form, Schedule or Registration Statement No.:
.................................................................
3) Filing Party:
.................................................................
4) Date Filed:
.................................................................
<PAGE>
<PAGE>
LAZARE KAPLAN INTERNATIONAL INC.
529 FIFTH AVENUE
NEW YORK, NEW YORK 10017
[LOGO]
----------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
WEDNESDAY, NOVEMBER 6, 1996
----------------------
The Annual Meeting of Stockholders of Lazare Kaplan International Inc. will
be held on Wednesday, November 6, 1996 at 10:00 A.M. at The Cornell Club, 6 East
44th Street, 5th Floor, Room AB, New York, New York 10017 for the following
purposes:
1. To elect directors for the ensuing year;
2. To ratify the appointment of Ernst & Young LLP, independent
certified public accountants, as auditors for the Company for the
fiscal year ending May 31, 1997; and
3. To transact such other business as may properly come before the
meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on September 11,
1996 as the record date for the determination of stockholders entitled to notice
of and to vote at the meeting and at any adjournments thereof.
By Order of the Board of Directors,
LEON TEMPELSMAN,
President
New York, New York
September 20, 1996
IMPORTANT
MANAGEMENT INVITES YOU TO ATTEND THE MEETING IN PERSON, BUT IF YOU ARE UNABLE TO
BE PRESENT PERSONALLY, PLEASE DATE, SIGN AND RETURN THE ENCLOSED PROXY AS
PROMPTLY AS POSSIBLE. NO POSTAGE IS REQUIRED IF THE PROXY IS RETURNED IN THE
ENCLOSED ENVELOPE AND MAILED IN THE UNITED STATES.
<PAGE>
<PAGE>
LAZARE KAPLAN INTERNATIONAL INC.
529 FIFTH AVENUE
NEW YORK, NEW YORK 10017
---------------------------------
PROXY STATEMENT
---------------------------------
1996 ANNUAL MEETING OF STOCKHOLDERS
This Proxy Statement is furnished to stockholders of Lazare Kaplan
International Inc., a Delaware corporation (the 'Company'), in connection with
the solicitation of proxies by the Board of Directors of the Company (the 'Board
of Directors') for use at the Annual Meeting of Stockholders of the Company to
be held at 10:00 a.m. on Wednesday, November 6, 1996 at The Cornell Club, 6 East
44th Street, 5th Floor, Room AB, New York, New York, and any adjournment or
adjournments thereof (the 'Annual Meeting'). This Proxy Statement, the attached
Notice of Annual Meeting, the accompanying form of proxy and the Annual Report
to Stockholders of the Company for the fiscal year ended May 31, 1996 are first
being sent to stockholders of the Company on or about September 20, 1996.
The record date for stockholders of the Company entitled to notice of, and
to vote at, the Annual Meeting is the close of business on September 11, 1996
(the 'Record Date'). On the Record Date, there were issued and outstanding
6,203,355 shares of the Company's common stock, par value $1.00 per share (the
'Common Stock'). All of such shares are of one class, with equal voting rights,
and each holder thereof is entitled to one vote on all matters voted on at the
Annual Meeting for each share registered in such holder's name. Presence in
person or by proxy of holders of 3,101,678 shares of Common Stock will
constitute a quorum at the Annual Meeting. Assuming a quorum is present, the
affirmative vote by the holders of a plurality of the shares represented at the
Annual Meeting and entitled to vote will be required to act on the election of
directors, and the affirmative vote by the holders of a majority of the shares
represented at the Annual Meeting and entitled to vote will be required to act
on all other matters to come before the Annual Meeting, including the
ratification of the selection of Ernst & Young LLP as independent auditors for
the current fiscal year. In accordance with applicable law, all stockholders of
record on the Record Date are entitled to receive notice of, and to vote at, the
Annual Meeting. If a stockholder, present in person or by proxy, abstains on any
matter, the stockholder's shares will not be voted on such matter. Thus, an
abstention from voting on a matter has the same legal effect as a vote 'against'
the matter, even though a stockholder may interpret such action differently. A
proxy submitted by a stockholder may indicate that all or a portion of the
shares represented by such proxy are not being voted by such stockholder with
respect to a particular matter. This could occur, for example, when a broker is
not permitted to vote shares of Common Stock held in street name on certain
matters in the absence of instructions from the beneficial owner of the shares.
The shares subject to any such proxy which are not being voted with respect to a
particular matter (the 'nonvoted shares') will be considered shares not present
and not entitled to vote on such matter, although such shares may be considered
present and entitled to vote for other purposes and will count for purposes of
determining the presence of a quorum. (Shares voted to abstain as to a
particular matter will not be considered nonvoted shares).
1
<PAGE>
<PAGE>
A proxy in the accompanying form, which is properly executed, duly returned
to the Company and not revoked will be voted in accordance with the instructions
contained thereon. If no specific instructions are indicated on the proxy, the
shares represented thereby will be voted FOR (i) the election of the persons
nominated herein as directors and (ii) the ratification of the selection of
Ernst & Young LLP as the Company's independent auditors for the current fiscal
year; as well as in the discretion of the proxies with respect to such other
business as properly may come before the Annual Meeting.
Each proxy granted may be revoked by the person who granted it at any time
(i) by giving written notice to such effect to the Secretary of the Company,
(ii) by execution and delivery of a proxy bearing a later date, or (iii) by
attendance and voting in person at the Annual Meeting; except as to any matter
upon which, prior to such revocation, a vote shall have been cast at the Annual
Meeting pursuant to the authority conferred by such proxy. The mere presence at
the Annual Meeting of a person appointing a proxy does not revoke the
appointment.
1. ELECTION OF DIRECTORS
Eight directors are to be elected at the Annual Meeting, to hold office
until the next annual meeting of stockholders and until their successors are
elected and have qualified. The eight nominees for directors consist of persons
currently serving as directors of the Company.
Set forth below are the names, principal occupations and certain other
information concerning the nominees.
<TABLE>
<CAPTION>
POSITIONS AND OFFICES WITH DIRECTOR
NAME COMPANY OR PRINCIPAL OCCUPATION SINCE AGE
- -------------------------------- --------------------------------------------------------- -------- ----
<S> <C> <C> <C>
Maurice Tempelsman.............. Chairman of the Board of the Company since April 1984;
General Partner of Leon Tempelsman & Son, an investment
limited partnership 1984 67
Leon Tempelsman................. Vice Chairman of the Board of the Company since April
1984; President of the Company since April 1986;
General Partner of Leon Tempelsman & Son since January
1984 1984 40
George R. Kaplan................ Vice Chairman of the Board of the Company since April
1984 1972 78
Lucien Burstein................. Partner, Warshaw Burstein Cohen Schlesinger & Kuh, LLP,
Attorneys; Secretary of the Company since 1984 1984 74
Michael W. Butterwick........... Business Consultant 1982 69
Myer Feldman.................... Partner, Ginsburg, Feldman and Bress, Chartered Attorneys 1984 79
Robert Speisman................. Vice President Sales of the Company since January 1986 1989 43
Sheldon L. Ginsberg............. Executive Vice President since February 1996; Chief
Financial Officer of the Company since April 1991; Vice
President -- Finance from January 1986 through April
1991 1989 42
</TABLE>
Unless directed to the contrary, the persons named in the proxy will vote
the shares represented thereby FOR the election of the nominees listed above.
Management is informed that
2
<PAGE>
<PAGE>
all of the nominees are willing to serve as directors, but if any of them should
decline or be unable to act as a director, which is not anticipated, the persons
named in the proxy will vote for the election of such other person or persons as
management may recommend.
The Company has standing Audit, Compensation and Stock Option Committees of
the Board of Directors. The current members of each committee hold office until
the next Annual Meeting of the Board of Directors and until their respective
successors have been elected and qualified. The Audit Committee consists of
Michael W. Butterwick, Lucien Burstein and Myer Feldman. The Compensation
Committee consists of Maurice Tempelsman, Michael W. Butterwick, Myer Feldman
and Lucien Burstein. The Stock Option Committee consists of Michael W.
Butterwick and Myer Feldman.
The Audit Committee is authorized to confer with the auditors and financial
officers of the Company, review reports submitted by the auditors, establish or
review, and monitor compliance with codes of conduct of the Company, inquire
about procedures for compliance with laws and regulations relating to the
management of the Company, and report and make recommendations to the Board of
Directors. The Compensation Committee is responsible for recommending to the
Board of Directors policies with respect to compensation and benefits of the
Chairman of the Board, Vice Chairmen of the Board and President of the Company,
for fixing the compensation and benefits of other officers and employees of the
Company and its subsidiaries whose compensation is $75,000 per year or more. The
Stock Option Committee, which was formed in August 1996, is responsible for
administering the Company's 1988 Stock Option Incentive Plan (the 'Plan'),
including the designating of employees to be granted options, prescribing the
terms and conditions of options granted under the Plan, interpreting the Plan
and making all other determinations deemed necessary for the administration of
the Plan. Prior to August 1996, the functions of the Stock Option Committee were
performed by the Compensation Committee. The Board of Directors does not have a
Nominating Committee or a committee performing similar functions.
During the fiscal year ended May 31, 1996, there were three meetings of the
Board of Directors, one meeting of the Audit Committee, and one meeting of the
Compensation Committee. In addition, action was taken by unanimous written
consent of the Executive Committee of the Board of Directors. Each incumbent
director attended at least 75% of the total number of meetings of the Board and
all of the committees thereof on which he served during the fiscal year. All
outside directors receive a fee equal to $1,250 per quarter. Mr. Lucien
Burstein, an outside director, credits his fee against legal fees of Warshaw
Burstein Cohen Schlesinger & Kuh, LLP incurred by the Company for each period
for which a directors' fee is paid.
SECURITY OWNERSHIP
The following table sets forth information regarding the ownership of
shares of the Company's Common Stock as of September 11, 1996 by those persons
known by the Company to own beneficially more than 5% of the outstanding shares
of the Company's Common Stock. All information in the table is based upon
reports filed by such persons with the Securities and Exchange Commission and
upon responses to questionnaires submitted by such persons to the Company in
connection with the preparation of this proxy statement. Except as noted in the
3
<PAGE>
<PAGE>
footnotes, such persons have indicated that they have the sole power to vote and
to dispose of their respective shares of the Company's Common Stock.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
NAME AND ADDRESS BENEFICIAL PERCENT
OF BENEFICIAL OWNER OWNERSHIP OF CLASS
- ------------------------------------------------------------------------------------ ---------- --------
<S> <C> <C>
Maurice Tempelsman(1) .............................................................. 3,838,825 61.9%
529 Fifth Avenue
New York, New York 10017
Leon Tempelsman(1)(2) .............................................................. 1,860,629 29.0%
529 Fifth Avenue
New York, New York 10017
Myer Feldman ....................................................................... 338,259 5.5%
1250 Connecticut Avenue, NW
Washington, D.C. 20036
Dimensional Fund Advisors, Inc.(3) ................................................. 317,300 5.1%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
Quest Advisory Corp.(4) ............................................................ 274,300 4.4%
1414 Avenue of the Americas
New York, New York 10019
</TABLE>
- ------------
(1) Number and percentage of shares include the 1,528,416 shares owned by Leon
Tempelsman & Son, a New York limited partnership ('LTS') of which each of
Maurice Tempelsman and Leon Tempelsman, as the sole general partners, has
sole power to vote and dispose.
(2) Number and percentage of shares include 2,240 shares held by the spouse of
Leon Tempelsman, 26,816 shares owned by his sister, Rena Speisman, 26,725
shares owned by his sister, Marcy Meiller, 34,641 shares owned by Rena
Speisman as custodian for her children, and 1,600 shares held by his
brother-in-law, Scott Meiller, as to all of which shares Leon Tempelsman has
been granted a proxy. Number and percentage of shares also include 34,641
shares held by Leon Tempelsman as custodian for his children, 205,550 shares
which are the subject of currently exercisable options granted to Mr.
Tempelsman pursuant to the Company's 1988 Stock Option Incentive Plan (the
'Plan'), and 1,528,416 shares owned by LTS, of which each of Maurice and
Leon Tempelsman, as the sole general partners, has sole power to vote and
dispose.
(3) All of such shares are held in portfolios of DFA Investment Dimensions Group
Inc., a registered open-end investment company, or in series of the DFA
Investment Trust Company, a Delaware business trust, or the DFA Group Trust
and DFA Participation Group Trust, investment vehicles for qualified
employee benefit plans, as to all of which Dimensional Fund Advisors Inc.
serves as investment manager. Dimensional Fund Advisors Inc. disclaims
beneficial ownership of all of such shares.
(4) Includes shares owned in portfolios managed by Quest Advisory Corp. and
Quest Management Company, registered investment advisors. Charles M. Royce
is a deemed controlling person of Quest Advisory Corp. and Quest Management
Company. Mr. Royce disclaims beneficial ownership of all of the foregoing
shares.
4
<PAGE>
<PAGE>
The following table reflects as of September 11, 1996 the beneficial
ownership of shares of Common Stock of the Company by each of the directors,
nominees and executive officers and by all directors and officers as a group.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
NAME BENEFICIAL OWNERSHIP PERCENT OF CLASS
- -------------------------------------------------------- -------------------- ----------------
<S> <C> <C>
Maurice Tempelsman(1)(2)................................ 3,838,825 61.9%
Leon Tempelsman(1)(2)(3)................................ 1,860,629 29.0
Myer Feldman............................................ 338,259 5.5
Sheldon L. Ginsberg(4).................................. 46,305 0.7
Robert Speisman(1)(5)................................... 44,800 0.7
George R. Kaplan(6)..................................... 23,965 0.4
Lucien Burstein......................................... 1,500 less than 0.1
Michael W. Butterwick................................... 0 0.0
All directors and officers as a group(1)-(6)............ 4,625,867 71.2%
</TABLE>
- ------------
(1) Maurice Tempelsman, the Chairman of the Board and a director of the Company,
is the father of Leon Tempelsman and the father-in-law of Robert Speisman,
Vice President-Sales of the Company. Each of Maurice Tempelsman, Leon
Tempelsman and Robert Speisman disclaims beneficial ownership of shares
beneficially owned by the others.
(2) Number and percentage of shares include the 1,528,416 shares owned by Leon
Tempelsman & Son, a New York limited partnership ('LTS') of which each of
Maurice Tempelsman and Leon Tempelsman, as the sole general partners, has
sole power to vote and dispose.
(3) Number and percentage of shares include 2,240 shares held by the spouse of
Leon Tempelsman, 26,816 shares owned by his sister, Rena Speisman, 26,725
shares owned by his sister, Marcy Meiller, 34,641 shares owned by Rena
Speisman as custodian for her children, and 1,600 shares held by his
brother-in-law, Scott Meiller, as to all of which shares Leon Tempelsman has
been granted a proxy. Number and percentage of shares also include 34,641
shares held by Leon Tempelsman as custodian for his children, 205,550 shares
which are the subject of currently exercisable options granted to Mr.
Tempelsman pursuant to the Plan, and 1,528,416 shares owned by LTS, of which
each of Maurice and Leon Tempelsman, as the sole general partners, has sole
power to vote and dispose.
(4) Number and percentage include an aggregate of 46,300 shares which are the
subject of currently exercisable options granted to Sheldon L. Ginsberg
pursuant to the Plan.
(5) Number and percentage of shares do not include the 1,528,416 shares owned by
LTS, of which Rena Speisman, the wife of Robert Speisman, is a limited
partner. Number and percentage of shares also do not include 61,457 shares
owned by Rena Speisman for herself and as custodian for the children of
Robert and Rena Speisman, as to all of which beneficial ownership is
disclaimed by Mr. Speisman. Number and percentage include 44,800 shares
which are the subject of currently exercisable options granted to Mr.
Speisman pursuant to the Plan.
(6) Number and percentage of shares do not include 1,500 shares owned by the
spouse of George Kaplan, the beneficial ownership of which is disclaimed by
Mr. Kaplan.
5
<PAGE>
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely upon a review of Forms 3, 4 and 5 filed with the Securities
and Exchange Commission and the Company under the Securities Exchange Act of
1934 (the 'Exchange Act') and a review of written representations received by
the Company, no person who at any time during the fiscal year ended May 31, 1996
was a director, executive officer or beneficial owner of more than 10% of the
outstanding shares of Common Stock failed to file, on a timely basis, reports
required by Section 16(a) of the Exchange Act.
EXECUTIVE COMPENSATION
The Company's executive compensation program (other than as it relates to
stock options) is administered by the Compensation Committee of the Board of
Directors, and the Plan is administered by the Stock Option Committee of the
Board of Directors. The Compensation Committee includes three non-employee
directors and one employee director. The Stock Option Committee, which was
formed in August 1996, is comprised of two non-employee directors, neither of
whom is eligible to participate in the Plan. The Compensation Committee annually
recommends the cash compensation and benefits for the Chairman, Vice Chairmen,
President and all employees of the Company earning more than $75,000. Following
Compensation Committee review and approval, all matters relating to executive
compensation (other than as it relates to stock options) are submitted to the
full Board for approval. In its administration of the Plan, the Stock Option
Committee, in its sole discretion, determines option recipients and the number
of shares subject to each option. Prior to August 1996, the functions of the
Stock Option Committee were performed by the Compensation Committee.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
COMPENSATION POLICIES
During Fiscal 1996, the following policies were used by the Compensation
Committee to set a general framework within which specific compensation
decisions were made.
-- The Company's executive pay program is intended to attract and
retain top management talent and to motivate and reward
performance.
-- Incentive compensation varies with relative Company performance
and a given individual's contribution to that performance.
-- The Company's 1988 Stock Option Incentive Plan (the 'Plan') is
designed to reinforce and encourage achievement of the Company's
short-term and long-term financial and strategic goals by aligning
the interests of certain key Company employees and the Company's
stockholders.
COMPONENTS OF COMPENSATION
BASE SALARY
The Compensation Committee determined base salary levels by evaluating
individual performance with specific input from the President (excluding input
for his own performance). Increases in base salary were based upon periodic
evaluations of such factors as demonstrated leadership ability, competitive
trends within the industry, level of responsibility, and overall perceived
future contribution to the Company.
6
<PAGE>
<PAGE>
CASH BONUS
Bonus payments were recommended to the Board by the Compensation Committee
for employees it felt performed exceptionally during the past year. This
component of the compensation package is designed to reward past performance and
encourage similarly exceptional future performance. Bonuses are paid after the
end of the calendar year to which they relate.
MATCHING 401(k) PLAN
The Company offers all full-time employees in the United States and Puerto
Rico the opportunity to participate in a matching 401(k) plan. Employees may
participate up to an annual maximum which is the lesser of 20% of the employee's
compensation or $9,500 (subject to adjustments by the U. S. Secretary of the
Treasury). The Company will match those contributions in an amount equal to $.50
for every pre-tax dollar contributed by the employee up to a maximum of 6% of
the first $20,000 of the employee's compensation, provided the Company's pre-tax
earnings exceed $3.5 million for the fiscal year ending within the calendar year
to which the matching contribution relates.
STOCK OPTION GRANTS
The Company periodically grants stock options in order to provide certain
of its key employees with a competitive total compensation package, a long-term
incentive award and to reward them for their contribution to the ongoing process
of achieving the Company's long-term goals. These grants are also intended to
align the interests of the Company's key employees with those of the
stockholders, thereby encouraging these employees to increase stockholder value.
During Fiscal 1996, the Plan was administered by the Compensation Committee
consisting of four directors of the Company who were not eligible to participate
in the Plan. The Compensation Committee, in its sole discretion, determined
option recipients and the number of shares subject to each option. In
determining the number of shares to be covered by each option, the Compensation
Committee took into account the present and potential contributions of the
respective participants to the success of the Company, the anticipated number of
years of effective service remaining and such other factors as the Compensation
Committee deemed relevant in connection with accomplishing the purposes of the
Plan. In August 1996, a Stock Option Committee, consisting of two non-employee
directors not eligible to participate in the Plan, was formed to administer the
Plan and perform the foregoing functions.
Each option granted under the Plan expires ten years after the date of
grant and is exercisable at the fair market value of the shares subject to the
option on the date of grant; except that incentive stock options granted to any
person who, at the time the option is granted, owns stock possessing more than
10% of the combined voting power of all classes of the stock of the Company,
expire five years after the date of grant and are exercisable at 110% of the
fair market value of the shares subject to the option on the day immediately
preceding the day of grant.
COMPENSATION OF THE PRESIDENT
Leon Tempelsman's salary was increased for Fiscal 1996 from its Fiscal 1995
level, the first increase in his salary since 1984. It has long been the opinion
of the Compensation Committee that Mr. Tempelsman's salary stood well below
those of executives with similar responsibilities in companies of similar size.
In addition, in November 1995, as part of the Company's overall repricing of
certain options previously granted to certain key employees of the Company, the
Compensation Committee granted Mr. Tempelsman 48,500 new incentive stock options
in
7
<PAGE>
<PAGE>
replacement of an equal number of options. (See Option Repricings, p. 10.) The
Compensation Committee continues to recognize Mr. Tempelsman's contribution to
the overall management of the Company and the Company's retention of its
strategic and market positions in the world diamond market.
Compensation Committee:
-----------------------
Maurice Tempelsman
Lucien Burstein
Myer Feldman
Michael W. Butterwick
EXECUTIVE COMPENSATION
SUMMARY OF COMPENSATION IN FISCAL 1994, FISCAL 1995 AND FISCAL 1996
The following Summary Compensation Table sets forth information concerning
compensation for services in all capacities awarded to, earned by or paid to the
Company's chief executive officer and the other most highly compensated
executive officers of the Company earning more than $100,000 during the fiscal
years ended May 31, 1994, May 31, 1995 and May 31, 1996.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION ------------
---------------------------------------------- AWARDS
OTHER ------------
NAME AND FISCAL ANNUAL OPTIONS
PRINCIPAL POSITION YEAR SALARY BONUS(1) COMPENSATION (SHARES)
- ---------------------------------------------- ------ -------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Leon Tempelsman .............................. 1996 $200,000 $ 0 $0 48,500(2)
Vice Chairman of the Board 1995 50,000 0 0 10,000
and President 1994 50,000 0 0 38,500
Sheldon L. Ginsberg .......................... 1996 188,000 40,000 0 16,500(3)
Executive Vice President and 1995 170,000 30,000 0 6,000
Chief Financial Officer 1994 157,000 17,000 0 10,500
1996 115,000 0 0 11,000(4)
Robert Speisman .............................. 1995 70,000 0 0 4,000
Vice President -- Sales 1994 70,000 0 0 7,000
</TABLE>
- ------------
(1) Bonuses are determined by the Compensation Committee based on the
executive's performance. Bonus amounts are paid after the end of the fiscal
year to which they relate. See Compensation Committee Report, page 6.
(2) Represents incentive stock options granted under the Plan on November 21,
1995 to purchase 48,500 shares of Common Stock at an exercise price of
$7.013 per share, in substitution for 10,000 canceled options previously
granted under the Plan on March 7, 1995 to purchase 10,000 shares of Common
Stock at an exercise price of $9.35 per share, and 38,500 canceled options
previously granted under the Plan on January 14, 1994 to purchase 38,500
shares of Common Stock at an exercise price of $8.387 per share.
(3) Represents incentive stock options granted under the Plan on November 21,
1995 to purchase 16,500 shares of Common Stock at an exercise price of
$6.375 per share, in substitution for 6,000 canceled options previously
granted under the Plan on March 7, 1995 to purchase 6,000 shares of Common
Stock at an exercise price of $8.50 per share, and 10,500 canceled options
previously granted under the Plan on January 14, 1994 to purchase 10,500
shares of Common Stock at an exercise price of $7.625 per share.
(footnotes continued on next page)
8
<PAGE>
<PAGE>
(footnotes continued from previous page)
(4) Represents incentive stock options granted under the Plan on November 21,
1995 to purchase 11,000 shares of Common Stock at an exercise price of
$6.375 per share, in substitution for 4,000 canceled options previously
granted under the Plan on March 7, 1995 to purchase 4,000 shares of Common
Stock at an exercise price of $8.50 per share, and 7,000 canceled options
previously granted under the Plan on January 14, 1994 to purchase 7,000
shares of Common Stock at an exercise price of $7.625 per share.
STOCK OPTIONS GRANTED IN FISCAL 1996
The following table sets forth information concerning individual grants of
stock options made during fiscal year ended May 31, 1996 to each executive
officer listed in the Summary Compensation Table. The Company did not grant any
stock appreciation rights during Fiscal 1996.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS IN FISCAL 1996 POTENTIAL
--------------------------------------------------------- REALIZABLE VALUE AT
% OF TOTAL ASSUMED ANNUAL
NUMBER OF OPTIONS/ RATES OF STOCK
SECURITIES SARS PRICE
UNDERLYING GRANTED TO APPRECIATION FOR
OPTIONS/SARS EMPLOYEES EXERCISE OPTION TERM(3)
GRANTED IN FISCAL OR BASE PRICE EXPIRATION -------------------
NAME (SHARES)(1)(2) YEAR (PER SHARE) DATE 5% 10%
- ----------------------------- ------------ ---------- ------------- ---------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Leon Tempelsman.............. 48,500 63.8% $ 7.013 11/21/00 $54,504 $157,843
Sheldon L. Ginsberg.......... 16,500 21.7% $ 6.375 11/21/05 $66,152 $167,642
Robert Speisman.............. 11,000 14.5% $ 6.375 11/21/05 $44,101 $111,761
</TABLE>
- ------------
(1) All of such options were issued in replacement of previously granted
options. See Summary of Compensation in Fiscal 1994, Fiscal 1995 and Fiscal
1996 on Page 8.
(2) All of such options become exercisable as to one-third ( 1/3) of the shares
included in the grant, commencing on December 15 in the year following the
grant. The right to purchase stock pursuant to all options outstanding is
cumulative, and the optionees may exercise the right to purchase stock at
any time and from time to time after the option has become exercisable and
prior to the expiration, termination or surrender of the option.
Each optionee who receives an option under the Plan agrees (a) to remain in
the employ of either of the Company or its subsidiaries for at least one
year from the date the option is granted but in no event later than the
optionee's 70th birthday and (b) to refrain from engaging in the diamond
business, directly or indirectly, for a period of two years after his or her
employment by the Company or a subsidiary terminates. If an optionee fails
to comply with either part of such an agreement, the Compensation Committee,
in its discretion, may require the optionee to resell to the Company all
shares purchased pursuant to the option at the exercise price and to repay
the Company any amounts paid to the optionee upon the surrender of all or
part of an option.
In the event of the termination of employment for any reason of an optionee,
the option may be exercised or surrendered by the optionee or his or her
legal representative within such period as may be provided in the option
instrument not to exceed the earlier of the balance of
(footnotes continued on next page)
9
<PAGE>
<PAGE>
(footnotes continued from previous page)
the option term or three months from the date of termination (one year in
the case of a disabled employee or in the event of death); provided that the
Compensation Committee may, in its absolute discretion, authorize the
purchase of such additional shares subject to options as are not then
exercisable.
(3) Based upon the per share market price on the date of grant, which was $6.375
on November 21, 1995, and an annual cumulative appreciation at the rate
stated of such market price through the expiration date of such options.
Gains, if any, are dependent upon the actual performance of the Common
Stock, as well as the continued employment of the executive officers through
the vesting period. The potential realizable values indicated have not taken
into account amounts required to be paid as income tax under the Internal
Revenue Code of 1986, as amended, and any applicable state laws.
STOCK OPTIONS HELD AT END OF FISCAL 1996
The following table indicates the total number of exercisable and
unexercisable stock options held by each executive officer named in the Summary
Compensation Table as of May 31, 1996. No options to purchase Common Stock were
exercised during Fiscal 1996 by such individuals and no stock appreciation
rights were outstanding during Fiscal 1996.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS/SARS
OPTIONS/SARS AT MAY 31, 1996 AT MAY 31, 1996
------------------------------- -------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------------------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Leon Tempelsman....................... 205,550 48,500 $ 1,715,764 $ 363,120
Sheldon L. Ginsberg................... 52,800 16,500 469,000 134,063
Robert Speisman....................... 44,800 11,000 403,250 89,375
</TABLE>
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
The Company has no employment contract with any of Leon Tempelsman, Sheldon
L. Ginsberg or Robert Speisman. Other than the Plan, the Company does not have
any program providing compensation to its executive officers which is intended
to serve as an incentive for performance to occur over a period longer than one
fiscal year. The incentive stock options granted to Messrs. Tempelsman, Ginsberg
and Speisman provide that if their respective employments are terminated for any
reason other than death or retirement, the options must be exercised within the
earlier of the balance of the option period or three months from the date of
termination (one year in the case of termination as a result of disability).
OPTION REPRICINGS
During Fiscal 1996, the Compensation Committee determined that participants
of the Plan who were previously granted options at exercise prices greater than
the then current market price of the Common Stock of the Company were no longer
being provided with the proper incentive for which such options were intended.
The Compensation Committee concluded that in order to ensure the continued use
of the Plan as an incentive to key employees, it would be prudent to
10
<PAGE>
<PAGE>
lower the exercise price of such previously granted stock options held by
participants of the Plan, including executive officers.
Accordingly, on November 21, 1995, employees were given the opportunity to
exchange previously granted options for a like number of options in substitution
therefor. Consistent with the terms of the Plan, the Compensation Committee
repriced the options at the market price for all employees and at 10% above the
market price for Leon Tempelsman, since he is the beneficial owner of more than
10% of the Company's Common Stock.
The following table sets forth information concerning such repricing as to
the Company's executive officers:
<TABLE>
<CAPTION>
TEN YEAR OPTION REPRICINGS
----------------------------------------------------------------- LENGTH OF ORIGINAL
NUMBER OF MARKET PRICE OF EXERCISE NEW OPTION TERM
OPTIONS STOCK AT TIME PRICE AT TIME EXERCISE REMAINING
NAME DATE REPRICED OF REPRICING(1) OF REPRICING PRICE(1) AT DATE OF REPRICING
- --------------------------- -------- --------- --------------- ------------- -------- --------------------
<S> <C> <C> <C> <C> <C> <C>
Leon Tempelsman ........... 11/21/95 38,500 $ 6.375 $ 8.387 $7.013 3 yrs./1 mo.
Vice Chairman of 8/14/92 10,000 6.375 9.35 7.013 4 yrs./3 mos.
the Board and President 38,000 5.125 5.50 5.638 8 mos.
47,550 5.125 8.80 5.638 2 yrs./4 mos.
10,000 5.125 11.275 5.638 3 yrs./7 mos.
Sheldon L. Ginsberg ....... 11/21/95 6,000 6.375 8.50 6.375 9 yrs./3 mos.
Executive Vice President 8/14/92 10,500 6.375 7.625 6.375 8 yrs./1 mos.
and 8,800 5.125 8.00 5.125 7 yrs./4 mos.
Chief Financial Officer 12,000 5.125 10.25 5.125 8 yrs./7 mos.
Robert Speisman ........... 11/21/95 4,000 6.375 8.50 6.375 9 yrs./3 mos.
Vice President-Sales 8/14/92 7,000 6.375 7.625 6.375 8 yrs./1 mos.
8,800 5.125 8.00 5.125 7 yrs./4 mos.
10,000 5.125 10.25 5.125 8 yrs./7 mos.
</TABLE>
- ------------
(1) The exercise price of all options granted under the Plan may not be less
than 100% of the fair market value of the Common Stock on the day
immediately preceding the day of grant; except that since Leon Tempelsman is
the beneficial owner of more than 10% of the Company's Common Stock, the
option price for options granted to him must be equal to 110% of the fair
market value of the Common Stock on the day immediately preceding the day of
grant in order for such options to be qualified as incentive stock options
under the Internal Revenue Code.
Compensation Committee:
-----------------------
Maurice Tempelsman
Lucien Burstein
Myer Feldman
Michael W. Butterwick
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors consists of Maurice
Tempelsman, Myer Feldman, Michael W. Butterwick and Lucien Burstein. Messrs.
Feldman, Butterwick and
11
<PAGE>
<PAGE>
Burstein are outside directors of the Company. Neither Mr. Butterwick nor Mr.
Feldman is an officer of the Company. Mr. Burstein is Secretary of the Company.
None of Messrs. Butterwick, Feldman or Burstein is affiliated with any principal
stockholder of the Company. Maurice Tempelsman is the Chairman of the Board of
the Company and the father of Leon Tempelsman, Vice Chairman of the Board and
President of the Company.
COMPARATIVE PERFORMANCE BY THE COMPANY
The following graph compares the market performance of the Company's Common
Stock for the previous five fiscal years to the American Stock Exchange Market
Value Index (the 'AMEX Index') and a peer group of companies in the fine jewelry
and accessories industry (the 'Peer Group').
TOTAL RETURN CHART
<TABLE>
<CAPTION>
Date Company Index Market Index Peer Index
<S> <C> <C> <C>
05/31/91 100.000 100.000 100.000
06/28/91 96.591 95.802 98.931
07/31/91 82.386 99.648 94.681
08/30/91 79.545 100.061 98.765
09/30/91 94.318 100.954 93.907
10/31/91 85.795 104.535 88.229
11/29/91 73.295 101.040 87.290
12/31/91 68.182 111.089 87.867
01/31/92 76.705 115.076 83.793
02/28/92 70.455 117.053 89.216
03/31/92 68.182 111.242 95.317
04/30/92 53.977 109.551 84.655
05/29/92 57.955 108.965 73.799
06/30/92 54.545 104.902 71.295
07/31/92 46.591 107.222 63.509
08/31/92 46.591 104.641 59.219
09/30/92 44.318 104.812 56.777
10/30/92 51.136 107.504 58.548
11/30/92 61.364 115.073 65.549
12/31/92 61.364 116.676 69.888
01/29/93 51.136 120.931 67.590
02/26/93 51.136 117.557 58.233
03/31/93 56.818 121.795 61.060
04/30/93 60.795 119.592 56.185
05/28/93 57.955 123.930 60.845
06/30/93 53.409 124.673 66.295
07/30/93 64.773 126.578 61.974
08/31/93 63.636 133.014 61.961
09/30/93 53.977 135.516 59.490
10/29/93 56.818 139.462 65.075
11/30/93 61.364 133.541 63.540
12/31/93 63.636 137.169 66.007
01/31/94 85.227 139.013 61.158
02/28/94 78.409 135.877 63.613
03/31/94 77.273 127.562 63.599
04/29/94 85.227 126.310 62.527
05/31/94 80.682 126.104 70.316
06/30/94 82.955 122.333 69.710
07/29/94 85.227 126.703 71.220
08/31/94 81.818 130.535 73.220
09/30/94 86.364 132.892 71.952
10/31/94 87.500 131.901 72.975
11/30/94 87.500 126.217 75.867
12/30/94 86.364 128.057 70.197
01/31/95 79.545 131.525 56.866
02/28/95 80.682 135.796 60.761
03/31/95 76.136 137.833 59.309
04/28/95 71.591 141.265 63.635
05/31/95 68.182 145.168 62.133
06/30/95 68.182 148.511 63.315
07/31/95 63.352 156.203 69.588
08/31/95 67.045 160.309 75.774
09/29/95 64.773 163.648 76.022
10/31/95 63.636 157.326 75.238
11/30/95 60.227 161.914 86.897
12/29/95 72.159 164.972 84.413
01/31/96 70.455 164.982 90.907
02/29/96 77.273 167.673 89.721
03/29/96 73.295 169.294 93.918
04/30/96 93.182 175.151 104.054
05/31/96 131.818 180.821 119.943
</TABLE>
DATA PERIOD: MAY 31, 1991 THROUGH MAY 31, 1996
The Peer Group consists of the following companies: A.T. Cross Company,
Michael Anthony Jewelers, Inc., Jewelmasters Inc., Tiffany & Co., and Town &
Country Corporation. The Company's management is of the opinion that despite the
existence of some similarities between the group of companies comprising its
peer group and the Company, the Company is unique because of the product it
produces, the markets in which its products are sold, and in its position as the
only publicly traded diamond cutting and polishing company in the United States.
Thus, comparisons made between the Company and the peer group are not
necessarily accurate or reliable and do not necessarily reflect the relative
performance data for the Company's primary competition.
(1) The cumulative total return for the securities comprising the Peer
Group and the AMEX Index assumes the reinvestment of dividends. The
total return for the Company's Common Stock does not assume the
reinvestment of dividends, since no dividends were declared on the
Company's Common Stock during the measurement period. The weighing of
the securities comprising each index, according to their market
capitalization, has been calculated at the end of each monthly period.
12
<PAGE>
<PAGE>
(2) The AMEX Index tracks the aggregate price performance of equity
securities of companies traded on the American Stock Exchange. The
Company's Common Stock is traded on the American Stock Exchange.
TRANSACTIONS WITH MANAGEMENT
The Company has entered into a sublease with Leon Tempelsman & Son, a New
York limited partnership of which Maurice Tempelsman and Leon Tempelsman are the
sole general partners ('LTS'), under which approximately 30% of the 20th Floor
at 529 Fifth Avenue, New York, New York is sublet to LTS. The sublease is
prorated to the same rental rate per square foot which the Company is paying to
the landlord under its lease for the 19th and 20th Floors at the same location.
Rental payments under the sublease amount to a base annual rent of $89,518
(excluding escalations).
The Company is a party to an agreement dated August 11, 1982, as amended on
April 8, 1983 (the 'Agreement'), with GIA Gem Trade Laboratory, Inc. ('GTL'), a
wholly owned subsidiary of Gemological Institute of America, Inc., pursuant to
which the Company has granted a license to GTL to use a laser micro-inscription
system developed by the Company in connection with GTL's business of grading
diamonds and identifying gem stones and issuing reports thereon. The Agreement,
unless earlier terminated in accordance with its terms, expires in the year
2000, when the United States patent on the laser micro-inscription device
expires. George R. Kaplan, Vice Chairman of the Board of the Company, is a Board
Member Emeritus of the Board of Governors of the Gemological Institute of
America. The Agreement, which requires GTL to pay to the Company royalties based
on fees charged by GTL for inscribing gem stones, was the result of arms-length
negotiations between the Company and GTL.
2. RATIFICATION OF THE APPOINTMENT OF AUDITORS
The Board of Directors has appointed the firm of Ernst & Young LLP,
independent certified public accountants, to be auditors for the Company and its
subsidiaries for the fiscal year ending May 31, 1997 and recommends that the
stockholders ratify that appointment. If a majority of the shares are not voted
in favor of ratification, the Board will consider the appointment of other
auditors for the ensuing fiscal year. The Board is advised that there is and has
been, no relationship between Ernst & Young LLP and the Company or any of its
subsidiaries other than the rendition of professional services. A representative
of Ernst & Young LLP is expected to be present at the annual meeting. The
representative will have an opportunity to make a statement and will be
available to respond to questions.
The Board of Directors recommends a vote FOR ratification of the
appointment of Ernst & Young LLP.
3. OTHER BUSINESS
As of the date hereof, the Board of Directors does not know of any matter
which will come before the meeting other than the business specified in the
foregoing notice of meeting. If any other matter is presented at the meeting or
any adjournment thereof, it is intended that the persons named in the proxy will
vote in accordance with their best judgment.
13
<PAGE>
<PAGE>
SOLICITATION OF PROXIES
Solicitation of proxies is being made by the Board of Directors through the
mail, in person, and by telegraph and telephone. In addition, the Company will
request banks, brokers, and other custodians, nominees, and fiduciaries to
obtain voting instructions from the beneficial owners and will pay their
expenses for so doing. The cost of soliciting proxies will be borne by the
Company.
STOCKHOLDER PROPOSALS FOR THE 1997 ANNUAL MEETING OF STOCKHOLDERS
Stockholders who wish to have proposals included in the proxy statement and
form of proxy to be furnished by the Board of Directors in connection with the
Company's 1997 Annual Meeting of Stockholders must submit such proposals so that
they are received by the Company no later than May 27, 1997. Please direct such
proposals to the attention of the Secretary of the Company.
By order of the Board of Directors,
LEON TEMPELSMAN,
President
New York, New York
September 20, 1996
14
<PAGE>
<PAGE>
LAZARE KAPLAN INTERNATIONAL INC.
[LOGO]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN NOTICE OF
TO ATTEND THE MEETING, PLEASE DATE, MARK, AND SIGN ANNUAL MEETING
THE ENCLOSED PROXY CARD AND RETURN IT IN THE OF STOCKHOLDERS
ENVELOPE PROVIDED AND
PROXY STATEMENT
</TABLE>
- --------------------------------------------------------------------------------
September 20, 1996
<PAGE>
<PAGE>
APPENDIX 1-PROXY CARD
LAZARE KAPLAN INTERNATIONAL INC.
Proxy-Annual Meeting of Stockholders -- November 6, 1996
(Solicited on Behalf of the Board of Directors)
Know All Men By These Presents that the undersigned stockholder of Lazare
Kaplan International Inc. hereby constitutes and appoints Leon Tempelsman,
Lucien Burstein and Sheldon L. Ginsberg, and each and any of them, the attorneys
and proxies of the undersigned, with full power of substitution and revocation,
to vote for and in the name, place and stead of the undersigned, at the Annual
Meeting of Stockholders of said corporation, to be held on the 5th Floor, Room
AB, The Cornell Club, Six East 44th Street, New York, New York on November 6,
1996 at 10:00 A.M. and at any adjournments thereof, the number of votes the
undersigned would be entitled to cast if present:
(Continued, to be dated and signed on reverse)
FOLD AND DETACH HERE
<PAGE>
<PAGE>
<TABLE>
<S> <C>
This Proxy when properly executed, will be voted in the manner Please mark
directed herein by the undersigned stockholder. IF NO DIRECTION your votes as [X]
IS MADE, THIS PROXY WILL BE VOTED FOR ALL THE BOARD'S NOMINEES indicated in
FOR DIRECTORS, FOR PROPOSAL 2 AND IN THE DISCRETION OF THE this example
PROXIES ON ALL OTHER MATTERS.
</TABLE>
<TABLE>
<S> <C> <C> <C>
FOR WITHHOLD (1) ELECTION OF DIRECTORS (2) Approval of Ernst &
all nominees AUTHORITY MAURICE TEMPELSMAN, LEON TEMPELSMAN, GEORGE R. KAPLAN, Young LLP as the
listed to the right to vote for all LUCIEN BURSTEIN, MYER FELDMAN, MICHAEL W. BUTTERWICK, independent public
(except as marked nominees listed SHELDON L. GINSBERG AND ROBERT SPEISMAN accountants for the
to the contrary) to the right (INSTRUCTION: To withhold authority to vote for any fiscal year ending
individual nominee, strike a line through the nominee's May 31, 1997.
name in the list above)
FOR AGAINST ABSTAIN
[ ] [ ] [ ] [ ] [ ]
(3) In their discretion, upon Any of such attorneys and proxies, or their substitute at The foregoing matter has
such other matters as may said meeting, or any adjournment thereof, may exercise been proposed by the
properly come before the all of the powers hereby given. Any Proxy heretofore Company and is not
meeting. given is hereby revoked. conditioned on the
approval of any other
Receipt is acknowledged of the Notice of Annual Meeting matter.
of Stockholders, the Proxy Statement accompanying such
Notice and the Annual Report to Stockholders for the
fiscal year ended May 31, 1996.
IN WITNESS WHEREOF, the undersigned has signed this proxy.
Dated:_______________________________________________________1996
___________________________________________________________
(Stockholder(s) signature(s)
___________________________________________________________
Signature(s) of stockholder(s) should correspond exactly with the
name(s) shown hereon. If shares are jointly held, both holders
should sign. Attorneys, executors, administrators, trustees,
guardians or others signing in a representative capacity should
give their full titles. Proxies executed in the name of a
corporation should be signed on behalf of the corporation by its
president or other authorized officer.
NOTE: This proxy, properly filled in, dated and signed, should be
returned promptly in the enclosed postpaid envelope to Lazare
Kaplan International Inc., Midtown Station, P.O. Box 812, New
York, New York 10138-0832.
===================================================================================================================================
</TABLE>
FOLD AND DETACH HERE
ANNUAL MEETING
OF STOCKHOLDERS
LAZARE KAPLAN INTERNATIONAL INC.
WEDNESDAY, NOVEMBER 6, 1996
10:00 A.M.
THE CORNELL CLUB
SIX EAST 44th STREET
FIFTH FLOOR, ROOM AB
NEW YORK, NY 10017
______________________________________________________________
AGENDA:
. ELECTION OF DIRECTORS
. RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
. OTHER BUSINESS
______________________________________________________________
