SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
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
JLM Couture, Inc.
(Name of Registrant as Specified In Its Charter)
RICHARD S. KALIN
(Name of Person(s) Filing Proxy Statement if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
<PAGE>
PROXY
JLM COUTURE, INC.
225 West 37th Street, 5th Floor
New York, NY 10018
This Proxy is solicited on behalf of the Board of Directors.
The undersigned, revoking all previous proxies, hereby
appoints Joseph L. Murphy, Daniel M. Sullivan and Joseph E.
O'Grady, and each of them, proxies with power of substitution to
each, for and in the name of the undersigned to vote all shares of
Common Stock of JLM Couture, Inc. (the "Company") which the
undersigned would be entitled to vote if present at the Annual
Meeting of Shareholders of the Company to be held on June 25, 1998,
at 10:00 A.M. at the offices of Kalin & Associates, P.C. located at
One Penn Plaza, Suite 1425, New York, NY, and any adjournments
thereof, upon the matters set forth in the Notice of Annual
Meeting.
The undersigned acknowledges receipt of the Notice of Annual
Meeting, Proxy Statement and the Company's 1997 Annual Report.
1. ELECTION OF DIRECTORS
FOR all nominees listed WITHHOLD Authority to
below (except as marked vote for all nominees
to the contrary below) listed below
(INSTRUCTION: To withhold authority to vote for an individual
nominee, strike a line through such nominee's name in the list
below.)
JOSEPH L. MURPHY, DANIEL M. SULLIVAN AND
JOSEPH E. O'GRADY
2. IN THEIR DISCRETION, ON SUCH OTHER MATTERS AS MAY PROPERLY
COME BEFORE THE MEETING.
FOR _______________ AGAINST _______________
PLEASE SIGN ON THE NEXT PAGE AND RETURN THIS PROXY
PROMPTLY IN THE ENCLOSED ENVELOPE.
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THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
and when properly executed will be voted as directed herein. If no
direction is given, this Proxy will be voted FOR proposals 1 and 2.
DATED: , 1998
(Signature)
(Signature, if held jointly)
Where stock is registered in the
names of two or more persons ALL
should sign. Signature(s) should
correspond exactly with the name(s)
as shown above. Please sign, date
and return promptly in the enclosed
envelope. No postage need be affixed
if mailed in the United States.
Requests for copies of proxy statements, the Company's Annual
Report for its fiscal year ended October 31, 1997 or the Company's
Annual Report for its fiscal year ended October 31, 1997 on Form
10-KSB should be addressed to Shareholder Relations, JLM Couture,
Inc., 225 West 37th Street, New York, NY 10018. This material will
be furnished without charge to any shareholder requesting it.
<PAGE>
JLM COUTURE, INC.
(a Delaware Corporation)
Notice of 1998 Annual Meeting
of Shareholders to be held
at 10:00 A.M. on June 25, 1998
To the Shareholders of
JLM COUTURE, Inc.:
NOTICE IS HEREBY GIVEN that the 1998 Annual Meeting of
Shareholders (the "Meeting") of JLM COUTURE, INC. (the "Company")
will be held on June 25, 1998 at 10:00 A.M. at the offices of Kalin
& Associates, P.C. located at One Penn Plaza, Suite 1425, New York,
NY, to consider and vote on the following matters described under
the corresponding numbers in the attached Proxy Statement:
1. Election of three directors; and
2. Such other matters as may be properly come before the
Meeting.
The Board of Directors has fixed May 1, 1998, at the close of
business, as the record date for the determination of shareholders
entitled to vote at the Meeting, and only holders of shares of
Common Stock of the Company of record at the close of business on
that day will be entitled to vote. The stock transfer books of the
Company will not be closed.
A complete list of shareholders entitled to vote at the
Meeting shall be available for examination by any shareholder, for
any purpose germane to the Meeting, during ordinary business hours
from May 25, 1998 until the Meeting at the offices of the Company.
The list will also be available at the Meeting.
Whether or not you expect to be present at the Meeting, please
fill in, date, sign, and return the enclosed Proxy, which is
solicited by management. The Proxy is revocable and will not
affect your vote in person in the event you attend the Meeting.
By Order of the Board of Directors
Joseph E. O'Grady, Secretary
Date: May 1, 1998
Request for additional copies of proxy material and the Company's
Annual Report for its fiscal year ended October 31, 1997 should be
addressed to Shareholder Relations, JLM Couture, Inc., 225 West
37th Street, New York, NY 10018. This material will be furnished
without charge to any shareholder requesting it.
JLM COUTURE, INC.
225 West 37th Street
New York, NY 10018
Proxy Statement
The enclosed proxy is solicited by the management of JLM
Couture, Inc. (the "Company") in connection with the 1998 Annual
Meeting of Shareholders (the "Meeting") to be held on June 25, 1998
at 10:00 A.M. at the offices of Kalin & Associates, P.C., One Penn
Plaza, Suite 1425, New York, NY and any adjournment thereof. The
Board of Directors has set May 1, 1998 as the record date for the
determination of shareholders entitled to vote at the Meeting. A
shareholder executing and returning a proxy has the power to revoke
it at any time before it is exercised by filing a later proxy with,
or other communication to, the Secretary of the Company or by
attending the Meeting and voting in person.
The proxy will be voted in accordance with your directions as
to:
(1) The election of the persons listed herein as directors of
the Company; and
(2) Such other matters as may properly come before the
Meeting.
In the absence of direction, the proxy will be voted in favor
of management's proposals.
The entire cost of soliciting proxies will be borne by the
Company. The costs of solicitation, which represent an amount
believed to be normally expended for a solicitation relating to an
uncontested election of directors, will include the costs of
supplying necessary additional copies of the solicitation materials
and the Company's Annual Report to Shareholders for its fiscal year
ended October 31, 1997 ("Fiscal 1997")(the "Annual Report") to
beneficial owners of shares held of record by brokers, dealers,
banks, trustees, and their nominees, including the reasonable
expenses of such recordholders for completing the mailing of such
materials and Annual Reports to such beneficial owners.
Only shareholders of record of the Company's 1,828,973 shares
of Common Stock (the "Common Stock") outstanding at the close of
business on May 1, 1998 will be entitled to vote. Each share of
Common Stock is entitled to one vote. Holders of a majority of the
outstanding shares of Common Stock must be represented in person or
by proxy in order to achieve a quorum. The proxy statement, the
attached notice of meeting, the enclosed form of proxy and the
Annual Report are being mailed to shareholders on or about May 5,
1998.
1. ELECTION OF DIRECTORS
Three directors are to be elected by a majority of the votes
cast at the Meeting, each to hold office until the next Annual
Meeting of Shareholders and until his respective successor is
elected and qualifies. The persons named in the accompanying proxy
have advised management that it is their intention to vote for the
election of the following nominees as directors unless authority is
withheld:
Joseph L. Murphy
Daniel M. Sullivan
Joseph E. O'Grady
Management has no reason to believe that any nominee will be
unable to serve. In the event that any nominee becomes
unavailable, the proxies may be voted for the election of such
person or persons who may be designated by the Board of Directors.
The following table sets forth certain information as to the
persons nominated for election as directors of the Company at the
Meeting, all of whom are presently directors of the Company:
Position with Director
Name Age the Company Since
Joseph L. Murphy 43 Chief Executive April 1986
and Financial Officer,
Director
Daniel M. Sullivan 73 Chairman of the September 1986
Board of Directors
Joseph E. O'Grady 76 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.
Directors serve until the next annual meeting of stockholders
and until their respective successors are elected and qualify.
During Fiscal 1997, the Board of Directors met only
informally. It acted 4 times by unanimous written consent.
OTHER EXECUTIVE OFFICERS
Position with Position
Name Age the Company Held Since
Mark Murphy 34 Vice President - May 1993
Operations
Mark Murphy, 34, 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.
AUDIT AND COMPENSATION COMMITTEE
During Fiscal 1997, the Audit and Compensation Committee (the
"Audit Committee") consisting of Messrs. O'Grady and Sullivan did
not meet or act by unanimous written consent.
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($)
Joseph L. 1997 150,000 76,102 100,000 10,639
Murphy, 1996 150,000 47,262 50,000 14,708
President 1995 104,000 - 50,000 20,864
Joseph E. 1997 55,655 - - -
O'Grady 1996 49,093 - 10,000 -
Secretary 1995 41,105 - - -
Name and Annual Com- Other Long Term Other
Principal Fiscal pensation Annual Com- Compensation Compen-
Position Year Salary ($) pensation ($) Options sation($)
Mark Murphy, 1997 75,637 - - 10,415
Vice 1996 55,592 - 10,000 7,861
President- 1995 52,520 - - 4,758
Operations
EMPLOYMENT AGREEMENT
On June 17, 1996, Mr. Joseph L. Murphy entered into an amended
employment agreement (the "Agreement") with the Company. The Agreement
terminates June 16, 2001, unless terminated earlier. The base salary
commences at $150,000 per annum. As additional compensation, Mr. Murphy
receives five percent (5%) of the Company's annual, fiscal year pre-tax
profits payable quarterly, three percent (3%) of which is paid in cash
concurrently with the Company's filing of its Form 10-QSB Quarterly
Report or within 60 days of the close of the preceding fiscal quarter of
the Company, and the remaining two percent (2%) accrues and is paid
concurrently with the Company's filing of its Form 10-KSB Annual Report
or within 120 days of the close of the Company's fiscal year, whichever
occurs first. The Agreement also provides for a yearly $6,000 clothing
allowance and a monthly $500 car allowance.
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 100,000 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").
In November 1994, the Board adopted and a majority of the
Company's shareholders approved a 1 for 3 reverse stock split,
which automatically decreased the authorized shares of Common Stock
under the Plan to 33,333. The Plan was amended in February 1996 to
increase the number of shares for which options could be granted to
100,000. A majority of the Company's stockholders approved the
Plan, as amended, in March 1996. During Fiscal 1996, options to
purchase an aggregate of 100,000 shares of Common Stock were
granted to 10 employees of the Company. These options expire four
and three years from the date of issuance and are exercisable at
prices ranging from $.87 and $2.125 per share.
The Plan is administered by the Board of Directors 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.
During Fiscal 1997, Mr. Joseph L. Murphy, received non-
incentive stock options for 100,000 shares of Common Stock,
exercisable at $4.625 per share.
AGGREGATED OPTION EXERCISES IN LAST FISCAL
YEAR AND FISCAL YEAR-END (FYE) OPTION VALUES
Value of
Unexercised
Number In-the-Money
Of Unexercised Options
Options At FYE End
Shares At FYE Acquired ($)
Acquired Value Exercisable/ Exercisable/
Name On Exercise Realized(1) Unexercisable Unexercisable (1)
Joseph L.
Murphy - - 100,000/0 137,500/0
Mark
Murphy - - 38,333/0 178,248/0
Joseph E.
O'Grady - - 10,000/0 51,300/0
________________
(1) Represents fair market value of Common Stock at October 31,
1997 of $6.00 as reported by NASDAQ, less the exercise price.
COMPENSATION OF DIRECTORS
Directors not employed by the Company are compensated as
consultants for the time spent on Company matters, including
attendance at directors' and other meetings. During Fiscal 1997,
Mr. Sullivan received $30,000 and Mr. O'Grady received $55,655 as
consultant fees. Mr. O'Grady's renumeration is also reported in
the Summary Compensation Table above. See "Stock Option Plans"
above.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth as of February __, 1998, 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
Joseph L. Murphy 233,633(2) 12.1%
225 West 37th Street
New York, NY 10123
Daniel M. Sullivan 92,599(2) 5.0%
225 West 37th Street
New York, NY 10123
Harvest Capital 78,740 4.3%
Corporation
225 West 37th Street
New York, NY 10123
Joseph E. O'Grady 14,666(2) (3)
Carl Seaman 281,666(4) 15.4%
12 The Poplars
Roslyn, NY 11576
All Directors and
officers as a
group (4 persons) 457,971(2)(5) 23.0%
_________________
(1) Unless otherwise indicated, all shares of Common Stock are
owned directly.
(2) Includes 100,000, 10,000, 10,000 and 158,333 shares for
Messrs. J. L. Murphy, Sullivan, 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 $1.53 per share.
(3) Less than one percent.
(4) Based on information on Schedule 13D dated June 1, 1995 filed
with the Company on behalf of Mr. Seaman.
(5) 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 February 2, 1996, the Company entered into a loan agreement
with CBC of New York Inc., trading as Continental Business Credit
("CBC"), to obtain a credit line up to $1,500,000 (the "CBC Loan").
The CBC Loan, which bears a minimum interest rate of prime plus 1%
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. The CBC Loan was increased to $1,700,000 in July
1996. CBC also has a first lien on all of the Company's accounts
receivable. As additional security, Messrs. Joseph L. Murphy and
Joseph E. O'Grady, directors of the Company, personally guaranteed
repayment of the CBC Loan.
2. OTHER MATTERS
The Board of Directors has no knowledge of any other matters
which may come before the Meeting and does not intend to present
any other matters. However, if any other matters shall properly
come before the Meeting or any adjournment thereof, the persons
named as proxies will have discretionary authority to vote the
shares of Common Stock represented by the accompanying proxy in
accordance with their best judgment.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors has selected Arthur Andersen LLP,
independent certified public accountants, auditors of its Fiscal
1997 financial statements, as the auditors of the financial
statements of the Company for its current fiscal year ending
October 31, 1998. A member of such firm is expected to be at the
Meeting and will be given the opportunity to make a statement and
to answer questions any shareholders may have.
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 January
10, 1999.
By Order of the Board of Directors
Joseph E. O'Grady,
Secretary
Dated: May 5, 1998
WP51\HJELM\PXY.98
