SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of the
Securities Exchange Act of 1934
Check the appropriate box:
[X] Preliminary Information Statement
[ ] Definitive Information Statement
Jim Hjelm's Private Collection, Ltd.
(Name of Registrant As Specified In Charter)
Jim Hjelm's Private Collection, Ltd.
(Name of Person(s) Filing the Information Statement)
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[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14c-5(g).
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g)
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Preliminary Copy
JIM HJELM'S PRIVATE COLLECTION, LTD.
225 West 37th Street
New York, New York 10018
Information Statement
This information statement is provided by the management of
Jim Hjelm's Private Collection, Ltd. (the "Company") to inform the
Company's shareholders of the re-election of the current directors
as directors of the Company to serve until the next Annual Meeting
of Shareholders and about an amendment to the Company's Incentive
Stock Option Plan of 1986 (the "Plan") increasing the number of
shares of Common Stock of the Company for which options are
authorized to be granted under the 1986 Plan from 33,333 to 100,000
shares, par value $.0002 per share (the "Amendment to the Plan").
These actions were taken by the holders of a majority of the
outstanding shares of Common Stock by written consent in lieu of a
meeting. At such time, the Company had 1,372,803 shares of Common
Stock outstanding and entitled to vote at a meeting of
shareholders. Shareholders representing 769,222 votes executed the
written consent in lieu of meeting referred to above.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE
REQUESTED NOT TO SEND US A PROXY.
1. ELECTION OF DIRECTORS
Three directors named below were re-elected by a majority of
the outstanding votes entitled to vote thereon at a meeting of
shareholders, by written consent in lieu of a meeting. Each such
director shall hold office until the next Annual Meeting of
Shareholders and until his respective successor is elected and
qualifies.
Joseph L. Murphy
Daniel M. Sullivan
Joseph E. O'Grady
The following table sets forth certain information as to these
persons:
Position with Director
Name Age the Company Since
Joseph L. Murphy 41 Chief Executive April 1986
and Financial Officer,
Director
Daniel M. Sullivan 71 Chairman of the September 1986
Board of Directors
Joseph E. O'Grady 74 Secretary and Director February 1991
Joseph L. Murphy, a founder of the Company, has been a
director of the Company since its inception. During Fiscal 1992,
Mr. Murphy was appointed President. In February 1993, Mr. Murphy
was appointed Chief Executive Officer. Mr. Murphy is the brother
of Mark Murphy, the Company's Vice President - Operations.
Daniel M. Sullivan became a director in September 1986 and was
elected Chairman of the Board in 1989. In 1989, Mr. Sullivan
retired as President and Chief Executive Officer of Frost &
Sullivan, Inc., a publicly-traded publisher of market research
studies, a position he had held for more than five years prior to
his retirement.
Joseph E. O'Grady was appointed to the Board of Directors in
February 1991. In December 1992, Mr. O'Grady was appointed
Secretary. For more than the past five years, Mr. O'Grady has been
the President of JOG Associates, Inc., a privately-held financial
consulting firm based in Hicksville, New York. JOG Associates,
Inc. arranges business financing and provides financial consulting
services for closely-held companies.
During the fiscal year ended October 31, 1995 ("Fiscal 1995"),
the Board of Directors met on one occasion and acted four times by
unanimous consent.
OTHER EXECUTIVE OFFICERS
Mark Murphy, 30, was appointed Vice President - Operations in
May 1993. Mr. Mark Murphy joined the Company in January 1993.
Prior to his joining the Company, Mr. Mark Murphy was employed as
a manager by Accurate Testing Co., a metals testing company based
in California, a position he had held since 1988. Mr. Mark Murphy
is the brother of Joseph L. Murphy, the Company's President.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES
EXCHANGE ACT OF 1934.
The Company is unaware of any violations of Section 16(a) of
the Securities Exchange Act of 1934, as amended, by any of its
officers or directors during Fiscal 1995.
AUDIT AND COMPENSATION COMMITTEE
During Fiscal 1995, the Audit and Compensation Committee (the
"Audit Committee") did not meet or act by unanimous consent. The
purpose of the Audit Committee is to review the financial affairs
of the Company, establish compensation levels for senior executives
of the Company and administer the Company's stock option plan.
EXECUTIVE COMPENSATION
The following table sets forth information relating to the
cash compensation received during the Company's last three fiscal
years by the Company's executive officers:
SUMMARY COMPENSATION TABLE
Name and Annual Com- Other Long Term Other
Principal Fiscal pensation Annual Com- Compensation Compen-
Position Year Salary ($) pensation ($) Options sation($)
[S] [C] [C] [C] [C] [C]
Joseph L. 1995 104,000 - 50,000 20,864
Murphy, 1994 114,000 - - 3,748
President 1993 106,200 - - 3,000
Joseph O'Grady,1995 41,105 - - -
Secretary 1994 32,840 - - -
1993 25,632 - - -
Mark Murphy, 1995 52,520 - - 4,758
Vice Pres- 1994 44,260 - - -
ident - 1993 28,900 - 115,000 -
Operations
STOCK OPTION PLANS
On November 17, 1986, the Company adopted an Incentive Stock
Option Plan (the "Plan") pursuant to which options to purchase up
to an aggregate of 33,333 shares of Common Stock could be granted.
Such options are intended to qualify as "incentive stock options"
within the meaning of Section 422A of the Code ("Incentive
Options"). On February 6, 1996, the Board of Directors amended the
Plan to increase the number of Incentive Options that may be
granted pursuant to the Plan to 100,000. On March 23, 1996, a
majority of the holders of shares of Common Stock of the Company
entitled to vote thereon approved this amendment. See "2. Amendment
to The Plan" below.
The Plan is administered by the Audit Committee which has the
authority to determine the persons to whom Incentive Options may be
granted, the number of shares of Common Stock to be covered by each
Incentive Option, the time or times at which the Incentive Options
may be granted or exercised and, for the most part, the terms and
provisions of the Incentive Options. The exercise price of
Incentive Options granted under the Plan may not be less than the
fair market value of the shares of Common Stock on the date of
grant. A non-incentive stock option for 50,000 shares was granted
during Fiscal 1995 to Mr. Joseph L. Murphy.
AGGREGATED OPTION EXERCISES IN LAST FISCAL
YEAR AND FISCAL YEAR-END (FYE) OPTION VALUES
Value of
Unexercised
Number In-the-Money
Of Unexercised Options
Options At FYE End
Shares At FYE Acquired ($)
Acquired Value Exercisable/ Exercisable/
Name On Exercise Realized Unexercisable Unexercisable (1)
Joseph
Murphy - - 6,666/50,000 0/7,500
Mark Murphy - - 38,333/0 0/0
Joseph O'Grady - - 3,333/0 0/0
(1) Represents fair market value of Common Stock at October 31,
1995 of $1.25 as reported by NASDAQ, less the exercise price.
COMPENSATION OF DIRECTORS
Directors are compensated for the time spent on Company
matters, including attendance at directors' and other meetings.
During Fiscal 1995, Mr. Sullivan and Mr. O'Grady were employed on
a part-time basis by the Company as consultants. Mr. Sullivan
received $30,577 and Mr. O'Grady received $41,105 as consultant
fees. Mr. O'Grady's renumeration is also reported in the Summary
Compensation Table above.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth as of February 14, 1996, the
number of shares of Common Stock held of record or beneficially (i)
by each person who held of record, or was known by the Company to
own beneficially, more than five percent of the outstanding shares
of the Common Stock, (ii) by each director and (iii) by all
officers and directors as a group:
Number of Percent of
Names and Address Shares Owned (1) Outstanding Shares
Jim Hjelm 103,887(2) 7.6%
225 West 37th Street
New York, NY 10018
Joseph L. Murphy 133,666(2) 9.7%
225 West 37th Street
New York, NY 10123
Daniel M. Sullivan 82,599 6.0%
225 West 37th Street
New York, NY 10018
Harvest Capital 78,740 5.7%
Corporation
225 West 37th Street
New York, NY 10018
Joseph E. O'Grady 21,999(2) 1.6%
225 West 37th Street
New York, NY 10018
Carl Seaman 281,666(3) 20.5%
12 The Poplars
Roslyn, NY 11576
All Directors and 340,659(2)(4) 32.4%
officers as a
group (4 persons)
(1) Unless otherwise indicated, all shares of Common Stock are
owned directly.
(2) Includes 15,000, 6,666, 3,333, and 48,332 shares for Messrs.
Hjelm, Murphy, O'Grady, and all officers and directors as a
group, respectively, that are issuable upon exercise of
presently exercisable options at an average exercise price of
approximately $1.50 per share.
(3) Based on information on Schedule 13D dated June 1, 1995 filed
with the Company on behalf of Mr. Seaman.
(4) Pursuant to the Securities Exchange Act of 1934, in addition
to the ownership of Common Stock set forth above, Mr. Joseph
L. Murphy, by virtue of his position with (President and a
director) and ownership of 22.1% of the outstanding Common
Stock of Harvest Capital Corporation ("Harvest") and Mr.
Sullivan, by virtue of his position with Harvest (Secretary
and a director), are considered to be the beneficial owners of
the shares of Common Stock owned by Harvest.
The Company is unaware of any arrangement, the operation of
which, at a subsequent date, may result in a change of control of
the Company.
CERTAIN TRANSACTIONS
On November 21, 1994, Mr. Carl Seaman lent the Company
$200,000 at an interest rate of six (6%) percent per annum in
excess of Chemical Bank's floating prime rate to be payable in one
year (the "Seaman Loan"). As security for the Seaman Loan, the
Company granted Mr. Seaman a security interest in the Company's
account receivables. On February 2, 1996, the Company entered into
a loan agreement with CBC of New York Inc., trading as Continental
Business Credit, to obtain a credit line up to $1,500,000 (the "CBC
Loan"). The CBC Loan, which bears a minimum interest rate of
12.25% per annum (which may be increased due to any fluctuation of
the prime rate announced from time to time by Chemical Bank) is
payable through the direct deposits to CBC Bank of the Company's
receivables.
As additional security, Messrs. Joseph L. Murphy, Joseph E.
O'Grady and Jim Hjelm personally guaranteed repayment of the CBC
Loan. Mr. Seaman agreed to subordinate the Seaman Loan to the CBC
Loan.
Messrs. Carl Seaman and Joseph L. Murphy participated in the
Company's private placement in May 1995. Mr. Seaman purchased 8
units, each unit consisting of 25,000 shares, for $200,000. Mr.
Joseph L. Murphy purchased 1.2 units for $30,000.
On February 1, 1995, Mr. Joseph L. Murphy entered into an
employment agreement with the Company. The agreement will
terminate January 31, 2000, unless terminated earlier. The base
salary commences at $120,000 per annum with a yearly increase of
$10,000. In addition, Mr. Joseph L. Murphy received a stock option
for 50,000 shares of common stock exercisable at the rate of 12,500
shares per year at 110% of the fair market value of the Company's
common stock on the date of this stock option.
2. AMENDMENT TO THE PLAN
On February 6, 1996, the Board of Directors amended the Plan
to increase the number of options that may be granted pursuant to
it to 100,000. On March 23, 1996, a majority of the holders of
outstanding shares of Common Stock entitled to vote thereon
approved the amendment to the Plan pursuant to written consent in
lieu of meeting.
The purpose of the amendment was to increase the number of
options that could be granted pursuant to the Plan to permit the
Company to grant options to key employees or consultants to
encourage them to further enhance the Company's business operations
and opportunities.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors has selected Arthur Andersen LLP,
independent certified public accountants, auditors of its Fiscal
1995 financial statements, as the auditors of the financial
statements of the Company for its current fiscal year ending
October 31, 1996.
SHAREHOLDERS' PROPOSALS
Any shareholder of the Company who wishes to present a
proposal to be considered at the next annual meeting of
shareholders of the Company and who wishes to have such proposal
presented in the Company's Proxy Statement for such meeting must
deliver such proposal in writing to the Company at 225 West 37th
Street, Fifth Floor, New York, New York 10018 on or before April
30, 1997.
3. FINANCIAL INFORMATION
The financial statements of the Company are incorporated by
reference to the Company's Annual Report on Form 10-K filed for the
fiscal year ended October 31, 1995, which had been distributed to
the Company's shareholders in its annual report for its fiscal year
dated October 31, 1995.
By Order of the Board of Directors
Joseph E. O'Grady,
Secretary
Dated: May 30, 1996
Hjelm\info-sta.596
