<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended DECEMBER 31, 1998
or
( ) TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
For the transition period from ______________ to _____________
Commission File Number 1-7848 (Lazare Kaplan International Inc.)
A. Full title of the plan and the address of the plan,
if different from that of the issuer named below:
LAZARE KAPLAN INTERNATIONAL INC.
401(k) PLAN FOR SAVINGS AND INVESTMENTS
B. Name of issuer of the securities held pursuant to
the plan and the address of its principal executive office:
LAZARE KAPLAN INTERNATIONAL INC.
529 FIFTH AVENUE
NEW YORK, NY 10017
<PAGE>
LAZARE KAPLAN INTERNATIONAL INC.
401(k) PLAN FOR SAVINGS
AND INVESTMENTS
YEARS ENDED DECEMBER 31, 1998 AND 1997
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Report of Independent Auditors 2-3
Statements of Net Assets
Available for Benefits, with
Fund Information 4
Statements of Changes in Net
Assets Available for
Benefits, with Fund Information 5-6
Notes to Financial Statements 7-10
Supplemental Schedules:
Assets Held for Investment Purposes
(Item 27a) for the year ended
December 31, 1998 11
Schedule of Reportable Transactions
(Item 27d) for the year ended
December 31, 1998 12
</TABLE>
<PAGE>
REPORT OF INDEPENDENT AUDITORS
To the Trustees and Participants of
Lazare Kaplan International Inc.
401(k) Plan for Savings and Investments
We have audited the accompanying statements of net assets available for benefits
of Lazare Kaplan International Inc. 401(k) Plan for Savings and Investments as
of December 31, 1998 and 1997, and the related statements of changes in net
assets available for benefits for the years then ended. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 1998 and 1997, and the changes in its net assets available for
benefits for the years then ended, in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedules
of assets held for investment purposes at December 31, 1998, and reportable
transactions for the year then ended are presented for purposes of complying
with the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Security Act of 1974, and are not a
required part of the basic financial statements. The Fund Information in the
statements of net assets available for benefits and the statements of changes in
net assets available for benefits is presented for purposes of additional
analysis rather than to present the net assets available for benefits and
changes in net assets available for benefits of each fund. The supplemental
schedules and Fund Information have been subjected to the auditing procedures
applied in our audits of the basic financial statements and, in our opinion, are
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
The schedule of assets held for investment purposes and the schedule of
reportable transactions that accompany the Plan's financial statements do not
disclose the historical cost of investments. Disclosure of this information is
required by the Department of
<PAGE>
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974.
Ernst & Young LLP
New York, New York
May 13, 1999
<PAGE>
LAZARE KAPLAN INTERNATIONAL INC.
401(K) PLAN FOR SAVINGS AND INVESTMENTS
STATEMENTS OF NET ASSETS
AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1998
<TABLE>
<CAPTION>
FUND INFORMATION
---------- ----------- ----------- ------------ ------------- ----------- -----------
U.S. GOVT GINNIE EQUITY CAPITAL GROWTH & GROWTH
RESERVES MAE INCOME MAGELLAN APPRECIATION INCOME CO.
---------- ----------- ----------- ------------ ------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Investments $216,336 $188,249 $781,205 $1,162,646 $592,638 $468,188 $408,548
---------- ----------- ----------- ------------ ------------- ----------- -----------
TOTAL ASSETS 216,336 188,249 781,205 1,162,646 592,638 468,188 408,548
LIABILITIES 0 0 0 0 0 0 0
---------- ----------- ----------- ------------ ------------- ----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $216,336 $188,249 $781,205 $1,162,646 $592,638 $468,188 $408,548
========== =========== =========== ============ ============= =========== ===========
<CAPTION>
FUND INFORMATION
----------- ------------- ----------
DECEMBER 31, 1998 EMPLOYEE LKI
LOANS STOCK TOTAL
----------- ------------- ----------
<S> <C> <C> <C>
Investments $216,745 $4,620 $4,039,175
----------- ------------- ----------
TOTAL ASSETS 216,745 4,620 4,039,175
LIABILITIES 0 0 0
----------- ------------- ----------
NET ASSETS AVAILABLE FOR BENEFITS $216,745 $4,620 $4,039,175
=========== ============= ==========
</TABLE>
<TABLE>
<CAPTION>
FUND INFORMATION
---------- ----------- ----------- ------------ ------------- ----------- -----------
DECEMBER 31, 1997 U.S. GOVT GINNIE EQUITY CAPITAL GROWTH & GROWTH
RESERVES MAE INCOME MAGELLAN APPRECIATION INCOME CO.
---------- ----------- ----------- ------------ ------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Investments $192,854 $183,335 $617,959 $800,202 $496,963 $285,487 $273,225
Contributions Receivable 5,039 2,793 10,044 6,097 4,261 3,370 4,830
---------- ----------- ----------- ------------ ------------- ----------- -----------
TOTAL ASSETS 197,893 186,128 628,003 806,299 501,224 288,857 278,055
LIABILITIES 0 0 0 0 0 0 0
---------- ----------- ----------- ------------ ------------- ----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $197,893 $186,128 $628,003 $806,299 $501,224 $288,857 $278,055
========== =========== =========== ============ ============= =========== ===========
</TABLE>
<TABLE>
<CAPTION>
FUND INFORMATION
----------- ------------- ----------
DECEMBER 31, 1997 EMPLOYEE LKI
LOANS STOCK TOTAL
----------- ------------- ----------
<S> <C> <C> <C>
Investments $125,749 $0 $2,975,774
Contributions Receivable 0 8,021 $44,455
----------- ------------- ----------
TOTAL ASSETS 125,749 8,021 3,020,229
LIABILITIES 0 0 0
----------- ------------- ----------
NET ASSETS AVAILABLE FOR BENEFITS $125,749 $8,021 $3,020,229
=========== ============= ==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
-4-
<PAGE>
LAZARE KAPLAN INTERNATIONAL INC.
401(K) PLAN FOR SAVINGS AND INVESTMENTS
STATEMENT OF CHANGES IN NET ASSETS
AVAILABLE FOR PLAN BENEFITS, WITH FUND
INFORMATION FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
FUND INFORMATION
---------- ----------------------- ------------ ------------- ----------- -----------
U.S. GOVT GINNIE EQUITY CAPITAL GROWTH & GROWTH
RESERVES MAE INCOME MAGELLAN APPRECIATION INCOME COMPANY
---------- ----------------------- ------------ ------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Additions:
Contributions from participants $19,879 $20,814 $97,810 $94,115 $76,600 $65,373 $69,622
Interest and dividend income 10,789 11,575 42,566 51,948 14,051 23,279 27,974
Loan interest income 1,545 2,113 4,215 2,062 1,450 1,121 1,764
Loan repayments 7,424 7,614 19,779 9,591 6,201 3,428 4,516
---------- ----------------------- ------------ ------------- ----------- -----------
Total additions/(deductions) 39,637 42,116 164,370 157,716 98,302 93,201 103,876
---------- ----------------------- ------------ ------------- ----------- -----------
Deductions:
Payments to participants (7,022) (11,102) (12,714) (41,030) (18,455) (661) (2,119)
Loans to participants (14,881) (5,610) (41,081) (19,446) (20,597) (20,735) (29,401)
---------- ----------------------- ------------ ------------- ----------- -----------
Total (deductions)/additions (21,903) (16,712) (53,795) (60,476) (39,052) (21,396) (31,520)
---------- ----------------------- ------------ ------------- ----------- -----------
Net increase/(decrease) prior
to transfers and net realized
and unrealized appreciation/
(depreciation) in fair value
of investments 17,734 25,404 110,575 97,240 59,250 71,805 72,356
Net realized and unrealized
appreciation/(depreciation)
in fair value of investments 0 (42) 42,133 232,314 73,252 72,388 56,942
Net inter fund transfers 709 (23,241) 494 26,793 (41,088) 35,138 1,195
---------- ----------------------- ------------ ------------- ----------- -----------
Net increase/(decrease) 18,443 2,121 153,202 356,347 91,414 179,331 130,493
Net assets available for benefits:
Beginning of year 197,893 186,128 628,003 806,299 501,224 288,857 278,055
---------- ----------------------- ------------ ------------- ----------- -----------
Net assets available for benefits
End of year $216,336 $188,249 $781,205 $1,162,646 $592,638 $468,188 $408,548
========== ======================= ============ ============= =========== ===========
<CAPTION>
FUND INFORMATION
----------- ------------- ----------
EMPLOYEE LKI
LOANS STOCK TOTAL
----------- ------------- ----------
<S> <C> <C> <C>
Additions:
Contributions from participants $0 $0 $ 444,213
Interest and dividend income 0 0 182,182
Loan interest income 0 0 14,270
Loan repayments (58,553) 0 0
----------- ------------- ----------
Total additions/(deductions) (58,553) 0 640,665
----------- ------------- ----------
Deductions:
Payments to participants (2,202) (524) (95,829)
Loans to participants 151,751 0 0
----------- ------------- ----------
Total (deductions)/additions 149,549 (524) (95,829)
----------- ------------- ----------
Net increase/(decrease) prior
to transfers and net realized
and unrealized appreciation/
(depreciation) in fair value
of investments 90,996 (524) 544,836
Net realized and unrealized
appreciation/(depreciation)
in fair value of investments 0 (2,877) 474,110
Net inter fund transfers 0 0 0
----------- ------------- ----------
Net increase/(decrease) 90,996 (3,401) 1,018,946
Net assets available for benefits:
Beginning of year 125,749 8,021 3,020,229
----------- ------------- ----------
Net assets available for benefits
End of year $216,745 $4,620 $4,039,175
=========== ============= ==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
-5-
<PAGE>
LAZARE KAPLAN INTERNATIONAL INC.
401(K) PLAN FOR SAVINGS AND INVESTMENTS
STATEMENT OF CHANGES IN NET ASSETS
AVAILABLE FOR PLAN BENEFITS, WITH FUND
INFORMATION FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
FUND INFORMATION
---------- ----------------------- ------------ ------------- ----------- -----------
U.S. GOVT GINNIE EQUITY CAPITAL GROWTH & GROWTH
RESERVES MAE INCOME MAGELLAN APPRECIATION INCOME COMPANY
---------- ----------------------- ------------ ------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Additions:
Contributions from participants $23,427 $21,396 $84,552 $63,811 $72,671 $49,733 $51,825
Employer contributions,
net of forfeitures 5,039 2,793 10,044 6,097 4,261 3,370 4,830
Interest and dividend income 9,272 11,695 32,629 51,523 64,854 12,006 25,686
Loan interest income 1,731 2,119 2,723 1,916 724 393 278
Loan repayments 8,989 7,483 14,969 9,448 4,374 2,298 1,683
---------- ----------------------- ------------ ------------- ----------- -----------
Total additions/(deductions) 48,458 45,486 144,917 132,795 146,884 67,800 84,302
---------- ----------------------- ------------ ------------- ----------- -----------
Deductions:
Payments to participants (5,671) (4,853) (15,013) (9,695) (16,392) (4,306) (9,574)
Loans to participants (6,026) (10,487) (11,737) (16,950) (7,491) (476) (456)
---------- ----------------------- ------------ ------------- ----------- -----------
Total (deductions)/additions (11,697) (15,340) (26,750) (26,645) (23,883) (4,782) (10,030)
---------- ----------------------- ------------ ------------- ----------- -----------
Net increase prior to transfers
and net realized and unrealized
appreciation in fair value of
investments 36,761 30,146 118,167 106,150 123,001 63,018 74,272
Net realized and unrealized
appreciation in fair value
of investments 0 3,131 96,976 117,235 32,789 42,263 10,476
Net inter fund transfers (456) (20,225) 3,167 (82,171) (11,970) 58,008 53,647
---------- ----------------------- ------------ ------------- ----------- -----------
Net increase/(decrease) 36,305 13,052 218,310 141,214 143,820 163,289 138,395
Net assets available for benefits:
Beginning of year 161,588 173,076 409,693 665,085 357,404 125,568 139,660
---------- ----------------------- ------------ ------------- ----------- -----------
Net assets available for benefits
End of year $197,893 $186,128 $628,003 $806,299 $501,224 $288,857 $278,055
========== ======================= ============ ============= =========== ===========
<CAPTION>
FUND INFORMATION
----------- ------------- ----------
EMPLOYEE LKI
LOANS STOCK TOTAL
----------- ------------- ----------
<S> <C> <C> <C>
Additions:
Contributions from participants $0 $0 $367,415
Employer contributions,
net of forfeitures 0 8,021 44,455
Interest and dividend income 0 0 207,665
Loan interest income 0 0 9,884
Loan repayments (49,244) 0 0
----------- ------------- ----------
Total additions/(deductions) (49,244) 8,021 629,419
----------- ------------- ----------
Deductions:
Payments to participants (4,099) 0 (69,603)
Loans to participants 53,623 0 0
----------- ------------- ----------
Total (deductions)/additions 49,524 0 (69,603)
----------- ------------- ----------
Net increase prior to transfers
and net realized and unrealized
appreciation in fair value of
investments 280 8,021 559,816
Net realized and unrealized
appreciation in fair value
of investments 0 0 302,870
Net inter fund transfers 0 0 0
----------- ------------- ----------
Net increase/(decrease) 280 8,021 862,686
Net assets available for benefits:
Beginning of year 125,469 0 2,157,543
----------- ------------- ----------
Net assets available for benefits
End of year $125,749 $8,021 $3,020,229
=========== ============= ==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
-6-
<PAGE>
LAZARE KAPLAN INTERNATIONAL INC.
401(k) PLAN FOR SAVINGS
AND INVESTMENTS
Notes to Financial Statements
December 31, 1998
1. DESCRIPTION OF THE PLAN
The Lazare Kaplan International Inc. 401(k) Plan for Savings
and Investments (the "Plan") became effective January 1, 1990. The Plan is a
defined contribution profit-sharing plan applicable to full-time employees who
complete at least one year of service or were a full-time employee as of January
1, 1990. The Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974 ("ERISA").
The following description of the Plan provides only general
information. Participants should refer to the Plan Document for a more complete
description of the Plan's provisions.
Employees may elect to contribute, subject to defined
limitations, a portion of their salary to the Plan, to be deducted from each
paycheck under a deferred arrangement pursuant to Section 401(k) of the Internal
Revenue Code. Lazare Kaplan International Inc. (the "Company") intends to match
contributions in an amount equal to 50[c] for every pretax dollar contributed
up to the first six percent on the first $20,000 of compensation, as defined,
providing the Company's pretax earnings for that fiscal year exceed $3,500,000.
Matching contributions will be made at the end of each calendar year. During the
year ended December 31, 1997, the Company offered eligible participants the
option of receiving their employer matching contribution in cash or the
equivalent amount of the Company's common stock. Employees who elected to
receive their matching contributions in the form of stock had $8,021 of the
Company's common stock contributed to their account balances under the Plan for
the Plan year ending December 31, 1997.
The Plan is funded from each payroll directly to Fidelity
Investments (the "Custodian"). Each Plan participant's contribution with any
employer's contribution, is invested in or among seven funds or the Company's
stock at the sole discretion of the participant.
All employee contributions are fully vested when made.
Employer contributions are earned at a rate of 33-1/3 percent after two years of
service, 66-2/3 percent after three years and full vesting after four years of
service. Service is based on date of hire. Forfeited balances of terminated
participants' non-vested accounts are used to reduce Company contributions.
-7-
<PAGE>
1. DESCRIPTION OF THE PLAN (continued)
Employees may borrow up to fifty percent of their vested
account balance with a minimum loan of $1,000 and a maximum loan of $50,000.
Repayment of the loan, made through payroll deductions, must be made over a
period not to exceed five years except for the purchase of a primary residence
which can be for a period not to exceed twenty years. Interest is charged at 1/4
percent over the prime rate at the time the loan is requested.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Valuation of Investments - The Plan's investments are stated
at fair value. Unrealized appreciation or depreciation of the securities is
reflected in the asset balances. Fair values are determined by the Custodian of
the Fidelity Equity Income Fund, Fidelity Magellan Fund, Fidelity Capital
Appreciation Fund, Fidelity Growth & Income Portfolio and Fidelity Growth
Company Fund based upon closing prices of securities traded on national stock
exchanges and at closing bid-and-asked quotations for those securities traded by
over-the-counter markets. The Fidelity Ginnie Mae Portfolio is valued primarily
on the basis of valuations furnished by a pricing service, which utilizes both
dealer-supplied valuations and EDP techniques. The U.S. Government Reserves is
valued utilizing an amortized cost valuation technique. The Company's common
stock is valued at the price on the day of purchase in the year of the match.
Thereafter, it is valued at the closing price of the common stock on the last
day of the Plan year.
Except for the Company's common stock, the Plan's investments
are pooled with other investments administered by the Custodian. The combined
net investment income from other investments is allocated to each fund
participant based upon his or her share of the total shares of the fund.
Earnings are accrued daily and posted monthly by the Custodian.
Each of the Plan's investments, except for the Fidelity Ginnie
Mae Portfolio and the Company's common stock, exceeds 5% of Plan net assets as
of December 31, 1998. At December 31, 1997, only the Company's common stock did
not exceed 5% of Plan net assets
Fees and Expenses - The administration fees and expenses
of the Plan are paid by the Company and not charged to the Plan.
Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make certain estimates and assumptions that could affect the amounts reported in
the financial statements and accompanying notes. Actual results could differ
from these estimates.
-8-
<PAGE>
3. INTERNAL REVENUE STATUS
The Plan is intended to be qualified under Section 401(a) of
the Internal Revenue Code of 1986 (the "Code") and its related trust is intended
to be exempt from taxation under Section 501(a) of the Code. The Plan received a
favorable IRS determination letter dated July 12, 1994. Subsequent to that date,
the Plan has been amended. The Plan administrator intends to restate the Plan
and to apply for a new determination letter in accordance with the requirements
of the IRS. The Plan's administrator believes the Plan continues to qualify
under the Code.
4. PLAN TERMINATION
It is the intention of the Company to continue the Plan
indefinitely. However, the Company has the right to terminate the Plan at any
time subject to the provisions of ERISA. In the event of Plan termination, all
participants' accounts will be fully vested.
5. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for
benefits per the financial statements to the Form 5500 as of December 31, 1998
and 1997.
<TABLE>
<CAPTION>
December 31,
1998 1997
---------- ----------
<S> <C> <C>
Net assets available for
benefits per the financial
statements $4,039,175 $3,020,229
Contributions refundable (9,364) (5,905)
Withdrawals payable (1,667) (2,234)
---------- ----------
Net assets available for
benefits per Form 5500 $4,028,144 $3,012,090
========== ==========
</TABLE>
-9-
<PAGE>
5. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 (continued)
The following is a reconciliation of benefits paid to
participants per the financial statements to the Form 5500 for the years ended
December 31, 1998 and 1997:
<TABLE>
<CAPTION>
Year Ended
December 31,
1998 1997
-------- --------
<S> <C> <C>
Benefits paid to participants
per the financial statements $ 95,829 $ 69,603
Add: amounts allocated to
withdrawn participants at
December 31 1,667 2,234
Add: amounts allocated to
be distributed to participants
at December 31 9,364 5,905
Less: amounts allocated to
withdrawn participants in
prior year (2,234) (2,060)
Less: amounts allocated to be
distributed to participants
in prior year (5,905) (20,197)
-------- --------
Benefits paid to participants
per Form 5500 $ 98,721 $ 55,485
======== ========
</TABLE>
6. YEAR 2000 ISSUE (UNAUDITED)
The Plan Sponsor has developed a plan to modify its internal
information technology to be ready for the year 2000 and has begun converting
critical data processing systems. The project also includes determining whether
third party service providers have reasonable plans in place to become year 2000
compliant. The Plan Sponsor currently expects the project to be substantially
complete by August 31, 1999. The Plan Sponsor does not expect this project to
have a significant effect on Plan operations.
-10-
<PAGE>
EN # 13-6966063
Plan #001
Lazare Kaplan International Inc.
401(k) Plan for Savings
and Investments
Supplemental Schedule of Assets Held for Investment Purposes
(Item 27a)
December 31, 1998
<TABLE>
<CAPTION>
Description Fair Value
- ----------- ----------
<S> <C>
Fidelity U.S. Government Reserves $ 216,336
Fidelity Ginnie Mae Portfolio 188,249
Fidelity Equity Income Fund 781,205
Fidelity Magellan Fund 1,162,646
Fidelity Capital Appreciation Fund 592,638
Fidelity Growth & Income Portfolio 468,188
Fidelity Growth Company Fund 408,548
LKI Stock 4,620
Loans to participants (interest rates
from 6.25% to 9.25%) 216,745
----------
$4,039,175
==========
</TABLE>
Historical cost information is not available and has not been provided for
purposes of this schedule.
-11-
<PAGE>
EN # 13-6966063
Plan #001
Lazare Kaplan International Inc.
401(k) Plan for Savings
and Investments
Supplemental Schedule of Reportable Transactions
(Item 27d)
For the year ended December 31, 1998
<TABLE>
<CAPTION>
Number of Number of
Description Purchases Sales purchases Sales
- ----------- --------- ----- --------- ---------
<S> <C> <C> <C> <C>
Fidelity U.S. Government
Reserves 272,074 248,588 163 56
Fidelity Equity Income
Fund 186,437 65,321 91 17
Fidelity Magellan Fund 201,139 71,007 90 18
Fidelity Capital
Appreciation Fund 114,082 91,654 86 17
Fidelity Growth &
Income Portfolio 132,895 22,578 88 11
</TABLE>
The reportable transactions above represent series of transactions in excess of
five percent of the Plan's assets as of January 1, 1998.
There were no category (i), (ii) or (iv) reportable transactions during the year
ended December 31, 1998.
Historical cost information is not available and has not been provided for
purposes of this schedule.
-12-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees have duly caused this annual report to be signed on its behalf by the
undersigned thereunto duly authorized.
LAZARE KAPLAN INTERNATIONAL INC.
401(k) PLAN FOR SAVINGS
AND INVESTMENT
By: /s/ S.L. Ginsberg
---------------------------------
S. L. Ginsberg
Trustee
Dated: June 29, 1999
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
- ----------
<S> <C>
23.1 Consent of Ernst & Young LLP
</TABLE>
STATEMENT OF DIFFERENCES
The cent sign shall be expressed as.....................................[c]
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8) pertaining to the Lazare Kaplan International Inc. 401(k) Plan for Savings
and Investment of our report dated May 13, 1999, with respect to the financial
statements and schedules of the Lazare Kaplan International Inc. 401(k) Plan for
Savings and Investment included in this Annual Report (Form 11-K) for the year
ended December 31, 1998.
Ernst & Young LLP
New York, New York
June 29, 1999
