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 240.14a-11(c)
or 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>
JLM COUTURE, INC.
(a Delaware Corporation)
Notice of 1999 Annual Meeting
of Shareholders to be held
at 10:00 A.M. on June 7, 1999
To the Shareholders of
JLM COUTURE, Inc.:
NOTICE IS HEREBY GIVEN that the 1999 Annual Meeting of
Shareholders (the "Meeting") of JLM COUTURE, INC. (the "Company")
will be held on June 7, 1999 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 April 8, 1999, 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 7, 1999 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: April 26, 1999
Request for additional copies of proxy material and the
Company's Annual Report for its fiscal year ended October 31, 1998
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 1999 Annual
Meeting of Shareholders (the "Meeting") to be held on June 7, 1999
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 April 8, 1999 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, 1998 ("Fiscal 1998")(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 2,057,405 shares
of Common Stock (the "Common Stock") outstanding at the close of
business on April 7, 1999 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 April
26, 1999. The mailing address of the Company's principal executive
offices is 225 West 37th Street, New York, NY 10018.
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 of
the Company. 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 1998, the Board of Directors met informally. It
acted four times by unanimous written consent.
OTHER EXECUTIVE OFFICERS
Position with Position
Name Age the Company Held Since
Mark Murphy 34 Secretary and May 1993
Vice President-
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.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT
OF 1934.
Section 16(a) of the Securities Exchange Act of 1934 requires
the Company's executive officers and directors, and persons who own
more than ten percent of a registered class of the Company's equity
securities to file reports of ownership and changes in ownership
with the Securities and Exchange Commission. Based solely on its
review of the copies of such forms received by it, the Company
believes that during Fiscal 1998 all executive officers and
directors of the Company complied with all applicable filing
requirements.
AUDIT AND COMPENSATION COMMITTEE
During Fiscal 1998, 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 President. None of the Company's other
officers had cash compensation in Fiscal 1998 of more than $100,000
per year:
SUMMARY COMPENSATION TABLE
Name and Annual Com- Other Long Term Other
Principal Fiscal pensation Annual Com- Compensation Compen-
Position Year Salary ($) pensation ($) Options sation($)
Joseph L. 1998 178,833 45,703 200,000 10,132
Murphy, 1997 150,000 76,102 100,000 10,639
President 1996 150,000 47,262 50,000 14,708
EMPLOYMENT AGREEMENT
On May 19, 1998, Mr. Joseph L. Murphy entered into an amended
employment agreement (the "Agreement") with the Company. The Agreement
terminates May 19, 2003, unless terminated earlier. The base salary
commences at $200,000 per annum. As additional compensation, Mr. Murphy
receives five percent (5%) of the Company's annual pre-tax profits. As
additional compensation, Mr. Murphy was granted a five year option to
purchase 200,000 shares of Common Stock of the Company exercisable at a
rate of 50,000 shares immediately and 50,000 shares on each yearly
anniversary date thereof at an exercise price of $2.5625 per share, that
being the fair market value of a share of Common Stock on the date of
grant.
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.
On August 26, 1996, the Company adopted a second stock option
plan (the "1996 Plan"). The 1996 Plan provides for the issuance of
incentive and non statutory stock options to employees, consultants
advisors and/or directors for a total of up to 100,000 shares of
Common Stock. The 1996 Plan was amended by the Board of Directors
(subject to stockholder approval) in September 1998 to increase the
authorized number of shares thereunder from 100,000 to 250,000
shares. A majority of the Company's stockholders approved the
amendment to the 1996 Plan in October 1998, at the Company's last
Annual Meeting of Shareholders. The exercise price of options
granted may not be less than the fair market of the shares on the
date of grant (110% of such fair market value for a holder of more
than 10% of the Company's Common Stock). The 1996 Plan will
terminate on August 26, 2006.
During Fiscal 1998, Mr. Joseph L. Murphy, received a non-
incentive stock option for 200,000 shares of Common Stock,
exercisable at $2.5625 per share.
AGGREGATED OPTION EXERCISES IN LAST FISCAL
YEAR AND FISCAL YEAR-END (FYE) OPTION VALUES
Value of
Unexercised
Number In-the-Money
Of Unexercised Options
Options At FYE End
Shares At FYE Acquired ($)
Acquired Value Exercisable/ Exercisable/
Name On Exercise Realized(1) Unexercisable Unexercisable (1)
Joseph L.
Murphy - - 150,000/150,000 0/0
Mark
Murphy 38,333 41,687 0/0 0/0
Joseph E.
O'Grady - - 3,334/6,666 0/0
Daniel M.
Sullivan - - 10,334/6,666 575/0
________________
(1) Represents fair market value of Common Stock at October 31,
1998 of $2.4375 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 1998,
Mr. Sullivan received $30,000 and Mr. O'Grady received $47,265 as
consultant fees. Mr. O'Grady's remuneration is also reported in
the Summary Compensation Table above. See "Stock Option Plans"
above.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth as of February 19, 1999, 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 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 598,097(2)(5) 26.5%
225 West 37th Street
New York, NY 10123
Daniel M. Sullivan 174,673(2)(5) 8.4%
225 West 37th Street
New York, NY 10123
Harvest Capital 78,740 3.8%
Corporation
225 West 37th Street
New York, NY 10123
Joseph E. O'Grady 8,000(2) (6)
FMR Corp. 181,500(3) 8.8%
82 Devonshire Street
Boston, MA 02109
Carl Seaman 281,666(4) 13.6%
12 The Poplars
Roslyn, NY 11576
All Directors and
officers as a
group (4 persons) 711,811(2)(5) 31.3%
_________________
(1) Unless otherwise indicated, all shares of Common Stock are
owned directly.
(2) Includes 200,000, 13,334, 3,334 and 213,668 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 $4.32 per share.
(3) Based on information on Schedule 13G/A dated February 1, 1999.
(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. Messrs. Murphy
and Sullivan disclaim beneficial ownership of these shares.
(6) Less than one percent.
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 RELATIONSHIPS AND RELATED TRANSACTIONS
On December 22, 1998, Mr. Joseph L. Murphy purchased from the
Company 200,000 shares of Common Stock at a price of $2.25 per
share, the market value of such shares on such date. The purchase
was financed by Mr. Murphy executing a ten year promissory note due to the
Company in the principal amount of $450,000. The promissory note
bears interest at 5% per annum and requires annual principal
payments of $45,000 with accrued interest. The purchase was
approved by the unanimous consent of the Board of Directors of the
Company. The Company sold these shares to Mr. Murphy because it
was deemed to be in the best interests of the Company for him to increase
his equity ownership in the Company to better align his interest with
that of the other shareholders of the Company.
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
1998 financial statements, as the auditors of the financial
statements of the Company for its current fiscal year ending
October 31, 1999. 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
December 7, 1999.
By Order of the Board of Directors
Joseph E. O'Grady
Secretary
Dated: April 26, 1999
<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 7, 1999,
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 1998 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
FOR _______________ AGAINST _______________
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<PAGE>
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: , 1999
(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, 1998 or the Company's
Annual Report for its fiscal year ended October 31, 1998 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.
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