<PAGE>
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
<TABLE>
<S> <C>
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 Rule 14a-11(c) or Rule 14a-12
</TABLE>
YES CLOTHING CO.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
YES CLOTHING CO.
- --------------------------------------------------------------------------------
(Name of Person Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
<TABLE>
<S> <C> <C>
/ / $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(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:
Not applicable.
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
Not applicable.
-----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
Not applicable.
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
Not applicable.
-----------------------------------------------------------------------
(5) Total fee paid:
Not applicable.
-----------------------------------------------------------------------
/ / 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:
Not applicable.
-----------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
Not applicable.
-----------------------------------------------------------------------
(3) Filing party:
Not applicable.
-----------------------------------------------------------------------
(4) Date filed:
Not applicable.
-----------------------------------------------------------------------
</TABLE>
<PAGE>
YES CLOTHING CO.
July 25, 1997
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of holders of Common
Stock of YES Clothing Co. to be held at the Company's principal executive
offices, 1380 West Washington Boulevard, Los Angeles, California 90007, on
October 6, 1997, at 10:00 a.m., local time.
At this meeting, Shareholders are being asked to elect three (3) Directors
to the Company's Board of Directors and to ratify management's appointment of
independent auditors for the 1998 fiscal year. Please give your attention to the
Proxy Statement appearing on the following pages, which describes these matters
in detail.
It is important that your shares be represented at the Annual Meeting
whether or not you are personally able to attend. YOU ARE THEREFORE URGED TO
COMPLETE, SIGN, DATE AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED ENVELOPE
AS PROMPTLY AS POSSIBLE.
Thank you for your cooperation.
<TABLE>
<S> <C>
Sincerely,
/s/ GUY ANTHOME
Guy Anthome
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
</TABLE>
<PAGE>
YES CLOTHING CO.
1380 WEST WASHINGTON BOULEVARD
LOS ANGELES, CALIFORNIA 90007
------------------------
NOTICE OF ANNUAL MEETING OF HOLDERS OF COMMON STOCK
TO BE HELD OCTOBER 6, 1997
------------------------
Notice is hereby given that the Annual Meeting of holders of Common Stock of
YES Clothing Co. (the "Company") will be held at the Company's principal
executive offices, 1380 West Washington Boulevard, Los Angeles, California
90007, on October 6, 1997, at 10:00 a.m., local time, for the following
purposes:
(1) To elect three (3) Directors of the Company;
(2) To ratify the selection of Grobstein, Horwath and Company, LLP, as
independent auditors of the Company for the fiscal year ending March 31,
1998; and
(3) To transact such other business as may properly come before the meeting
or any adjournments thereof.
The Board of Directors has fixed August 29, 1997 as the record date for
determining the shareholders entitled to receive notice of and to vote at the
meeting.
A copy of the Company's 1997 Annual Report to Shareholders for the fiscal
year ended March 31, 1997, is being mailed with this Notice but shall not be
considered a part of the proxy soliciting material.
You are cordially invited to attend the Annual Meeting. Whether or not you
plan to attend, you are urged to promptly complete, date and sign the enclosed
proxy and mail it to the Company in the enclosed envelope, which requires no
postage if mailed in the United States. Return of your proxy does not deprive
you of your right to attend the Annual Meeting and to vote your shares in
person.
<TABLE>
<S> <C>
By Order of the Board of Directors,
/s/ JEFFREY BUSSE
Jeffrey Busse
SECRETARY
</TABLE>
July 25, 1997
Los Angeles, California
<PAGE>
YES CLOTHING CO.
1380 WEST WASHINGTON BOULEVARD
LOS ANGELES, CALIFORNIA 90007
------------------------
PROXY STATEMENT
1997 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 6, 1997
------------------------
This Proxy Statement is furnished to shareholders of YES Clothing Co. (the
"Company" or "YES") in connection with the solicitation of proxies by and on
behalf of the Board of Directors of the Company (the "Board") for use at the
Annual Meeting of holders of Common Stock scheduled to be held at Company's
principal executive offices, 1380 West Washington Boulevard, Los Angeles,
California 90007, on October 6, 1997, at 10:00 a.m., local time, and at any
adjournments or postponements thereof. The approximate date on which this Proxy
Statement and the accompanying form of proxy are first being mailed to
shareholders is September 15, 1997.
MATTERS TO BE CONSIDERED
The Annual Meeting has been called to elect three (3) members of the Board
to hold office until the next annual meeting of shareholders, to ratify the
appointment of independent auditors for the fiscal year ending March 31, 1998,
and to transact such other business as may properly come before the meeting or
any adjournments or postponements thereof.
RECORD DATE
The Board has fixed the close of business on August 29, 1997 as the record
date (the "Record Date") for the determination of shareholders entitled to
receive notice of and to vote at the 1997 Annual Meeting. Only shareholders of
record at the close of business on the Record Date will be entitled to notice of
and to vote at the Annual Meeting. At the close of business on the Record Date,
the Company had 7,036,492 shares of Common Stock outstanding.
QUORUM AND VOTING PROCEDURE
The holders of a majority of the Common Stock constitute a quorum for those
portions of the meeting where action is required of holders of Common Stock.
Each holder of Common Stock will be entitled to one (1) vote, in person or by
proxy, for each share standing in its name on the books of the Company as of the
Record Date for the meeting on each of the matters duly presented for vote at
the meeting. The affirmative vote of the holders of a majority of the
outstanding shares of Common Stock represented at the meeting in person or by
proxy and entitled to vote thereat is required for the election of Directors and
for ratification of the Company's independent auditors.
In the election of directors, the nominees receiving the highest number of
votes of shares represented in person or by proxy at the meeting and entitled to
vote on such matter will be elected Directors of the Company. Accordingly,
non-voted shares with respect to the election of directors will not affect the
outcome thereof. The appointment of Grobstein, Horwath and Company, LLP, as the
Company's independent auditors for the fiscal year ending March 31, 1998, will
be approved only if a majority of the shares represented in person or by proxy
at the meeting and entitled to vote thereon casts affirmative votes
1
<PAGE>
with respect to the matter. Thus, with respect to this matter, non-voted shares
will have the effect of a negative vote.
PROXY SOLICITATION, REVOCATION AND EXPENSES
Proxies, in the form enclosed, are being solicited by the Board for use at
the 1997 Annual Meeting. Proxies may be revoked by a shareholder by written
notice (including a properly executed and later dated proxy) to the Secretary of
the Company at any time prior to the voting. In addition, a shareholder of
record who attends the Annual Meeting may vote his shares personally and revoke
his proxy at that time. All shares represented by valid proxies received
pursuant to this solicitation, and not subsequently revoked, will be voted as
provided on the proxy.
The expense of preparing, printing and mailing this Proxy Statement and the
proxies solicited hereby will be borne by the Company. In addition to the use of
the mails, proxies may be solicited by officers, Directors and regular employees
of the Company, without extra remuneration, by personal interviews, telephone,
telegraph or otherwise. The Company will also request brokerage firms, nominees,
custodians and fiduciaries to forward proxy materials to the beneficial owners
of shares held of record and will reimburse such persons for their reasonable
out-of-pocket expenses.
ACTION TO BE TAKEN UNDER PROXY
Jeffrey Busse, a director and officer of the Company, has been designated by
the Board as "proxy", and is named as such in the enclosed form of proxy. Shares
represented by all properly executed and returned proxies will be voted at the
meeting in accordance with the instructions specified thereon. If no
instructions are specified, the shares represented by any properly executed
proxy will be voted "AUTHORITY GIVEN" for the election of the nominees listed
below under ELECTION OF DIRECTORS, "FOR" ratification of the selection of
Grobstein, Horwath and Company, LLP, as independent auditors of the Company for
the fiscal year ending March 31, 1998, and "AUTHORITY GIVEN" to transact any
other business properly presented at the meeting.
A proxy submitted by a shareholder may indicate that all or a portion of the
shares of Common Stock represented by such proxy are not being voted by such
shareholder with respect to a particular matter. This could occur, for example,
when a broker is not permitted to vote stock held in street name on certain
matters in the absence of instructions from the beneficial owner of the stock.
The shares subject to any such proxy which are present but are not being voted
with respect to a particular matter (the "non-voted shares") will be considered
shares not present and 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.
The Board knows of no matters, other than those stated above, to be
presented and considered at the meeting. If, however, any other matters properly
come before the meeting or any adjournments thereof, it is the intention of
Proxy Jeffrey Busse to vote such proxy in accordance with his judgment on any
such matters. Mr. Busse may also, if a quorum is not present, vote such proxy to
adjourn or postpone the meeting from time to time.
INSPECTOR OF ELECTIONS
The Board has selected Chase Mellon Shareholder Services as the Inspector of
Elections for the meeting. The Inspector of Elections will determine the number
of shares of Common Stock represented, in person or by proxy, at the meeting,
whether a quorum exists, the authenticity, validity and effect of proxies and
will receive and count the votes. None of the matters to be voted on at the
meeting will be by ballot unless a shareholder demands election by ballot at the
meeting and before the voting begins.
2
<PAGE>
PROPOSAL NO. 1
ELECTION OF DIRECTORS
It is intended that Jeffrey Busse, as the person named in the enclosed form
of proxy for the Shareholders will, unless otherwise instructed, vote in favor
of the election of the three (3) nominees listed below to serve as Directors
until the next annual meeting of Shareholders following their election and until
their respective successors are elected and have qualified. If any nominee, for
any reason presently unknown, cannot be a candidate for election, the shares
represented by valid proxies will be voted in favor of the remaining nominees
and may be voted for the election of a substitute nominee recommended by the
Board.
INFORMATION CONCERNING CURRENT DIRECTORS AND NOMINEES FOR DIRECTORS
Each of the nominees listed below has consented to being named in this Proxy
Statement as a nominee for Director and has expressed his or her intention to
serve the entire term for which election is sought:
<TABLE>
<CAPTION>
NOMINEES FOR ELECTION BY SHAREHOLDERS TERMS
- ------------------------------------------------------------- -------------------------------
<S> <C>
Guy Anthome.................................................. Until 1998 Annual Meeting
Jeffrey Busse................................................ Until 1998 Annual Meeting
Kristina Altamirano.......................................... Until 1998 Annual Meeting
</TABLE>
The following information with respect to the principal occupation or
employment of each nominee and incumbent Director, the name and principal
business of the corporation or other organization in which such occupation or
employment is carried on, and other affiliations and business experience during
the past five (5) years, has been furnished to the Company by the respective
nominees and incumbent Directors. This information includes a description of
each person's service, if any, with the Company:
GUY ANTHOME, age 59, has been Chairman of the Board of Directors and Chief
Executive Officer of the Company since June 1996 and a Director since May 1995.
Mr. Anthome was the President of the Company from June 1995 to August 1995. In
addition, from 1990 through May 1995, Mr. Anthome was the President and a
principal shareholder of Gantom, Inc., a privately held apparel company.
JEFFREY BUSSE, age 44, has been the Chief Financial Officer and a Director
of the Company since May 1995 and Secretary since June 1995. From May 1991
through May 1995, Mr. Busse was Controller of the Company. From April 1988
through May 1991, Mr. Busse was the Controller for California Apparel
Corporation.
KRISTINA ALTAMIRANO, age 35, has been a Director of the Company since
January 6, 1997. Ms. Altamirano joined the Company in August 1995, first as a
Sales Representative, then as Executive Assistant to the Chairman and Chief
Executive Officer. From June 1991 through April 1995, Ms. Altamirano was the
Regional Sales Representative for Gantom, Inc.
BOARD MEETINGS
During the fiscal year ending March 31, 1997, the Board met nine (9) times.
Messrs. Anthome and Busse and Ms. Altamirano attended all meetings subsequent to
their respective appointment as Directors.
STOCK OPTION AND COMPENSATION COMMITTEE
Following the resignation from the Board of Irving B. Kroll and Maurice
Schoenholz as Directors in November 1996, the Board did not reconstitute its
Stock Option and Compensation Committee. The remaining members of the Board
assumed responsibility for Stock Option and Compensation matters, and met three
(3) times in the fiscal year ending March 31, 1997, with respect to such
matters.
3
<PAGE>
AUDIT COMMITTEE
The Company does not have a standing Audit Committee.
NOMINATING COMMITTEE
The Company does not have a standing Nominating Committee.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None of the members of the Board served as a member of the Compensation
Committee or other board committee performing similar functions of any other
entity in 1997.
BOARD FEES
All Directors are also employees of the Company and receive no compensation
for serving on the Board.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS,
DIRECTORS AND MANAGEMENT
The following table sets forth, as of July 25, 1997, certain information
regarding the beneficial ownership of the Company's Common Stock by: (i) each
person known by the Company to be the beneficial owner of more than 5% of the
outstanding shares of the Company's Common Stock, (ii) each of the Company's
Directors, (iii) each of the executive officers of the Company who own shares of
the Company's Common Stock, and (iv) all of the Company's executive officers and
Directors as a group. The following table includes shares beneficially owned by
each named person as well as shares which each such person has the right to
acquire within 60 days of July 25, 1997.
<TABLE>
<CAPTION>
PERCENT OF
COMMON STOCK COMMON STOCK
BENEFICIAL OWNER OWNED OWNED
- -------------------------------------------------------------- -------------- ----------------
<S> <C> <C>
Guy Anthome(1)................................................ 3,764,693 50.49%
Georges Marciano(2)........................................... 2,700,000 36.21%
Jeffrey Busse(3).............................................. 150,000 2.01%
Kristina Altamirano(4)........................................ 20,000 .27%
All Officers and Directors as a group (3 persons)............. 3,934,693 52.77%
</TABLE>
- ------------------------
(1) The address of Mr. Anthome is 1380 West Washington Boulevard, Los Angeles,
California 90007. Mr. Anthome holds a stock option to purchase 250,000
shares which vested on January 28, 1997.
(2) The address of Mr. Marciano is 9465 Wilshire Boulevard, Suite 700, Los
Angeles, California 90212. The shares listed above are held by The Georges
Marciano Trust of which Mr. Marciano is the sole trustee.
(3) The address of Mr. Busse is 1380 West Washington Boulevard, Los Angeles,
California 90007. Mr. Busse holds a stock option to purchase 150,000 shares
which vested on January 28, 1997.
(4) The address of Ms. Altamirano is 1380 West Washington Boulevard, Los
Angeles, California 90007. Ms. Altamirano holds a stock option to purchase
20,000 shares which vested on January 28, 1997.
4
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company has entered into certain relationships and transactions with
related parties. Such relationships and transactions include, without
limitation, the following:
EMPLOYMENT AGREEMENTS
The Company entered into a written employment agreement with current
Director Guy Anthome, and entered into oral employment agreements with current
Directors Jeffrey Busse and Kristina Altamirano, all described in EXECUTIVE
COMPENSATION AND OTHER REMUNERATION--EMPLOYMENT AND CONSULTING AGREEMENTS.
NON-QUALIFIED STOCK OPTION AGREEMENTS
The Company entered into Non-Qualified Stock Option Agreements on January
28, 1997, with current Directors Guy Anthome, Jeffrey Busse and Kristina
Altamirano in which the Company granted options to purchase, respectively, up to
250,000, 150,000 and 20,000 shares of Common Stock each at $0.07 per share.
Also, see EXECUTIVE COMPENSATION AND OTHER REMUNERATION--EMPLOYMENT AND
CONSULTING AGREEMENTS.
OTHER AGREEMENTS
The Company has entered into indemnification agreements with current
Directors Guy Anthome, Jeffrey Busse and Kristina Altamirano pursuant to which
the Company has agreed to indemnify such individuals to the fullest extent
permitted by California law.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES ACT OF 1934
Section 16(a) of the Securities Act of 1934 requires the Company's Directors
and executive officers, and persons who own more than ten (10) percent of a
registered class of the Company's equity securities, to file with the Securities
and Exchange Commission ("SEC") and the National Association of Securities
Dealers, Inc. initial reports of ownership and reports of changes in ownership
of Common Stock and other equity securities of the Company. Officers, directors
and greater-than-ten-percent shareholders are required by SEC regulation to
furnish the Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the year ended March 31, 1997, all Section 16(a)
filing requirements applicable to its officers, directors and greater-than-
ten-percent beneficial owners were complied with.
5
<PAGE>
MANAGEMENT
The following table sets forth certain information with respect to the
Directors and executive officers of the Company:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------------------------- --- -------------------------------------------------
<S> <C> <C>
Guy Anthome.......................... 59 Chairman, CEO and Director
Jeffrey Busse........................ 44 Corporate Secretary, Chief Financial Officer and
Director
Kristina Altamirano.................. 35 Executive Assistant and Director
</TABLE>
Directors are currently elected for terms of one (1) year each.
The Company's Bylaws allow the Board to fix the number of Board members
between five (5) and ten (10) Directors. The number has been fixed, at present,
at six (6), but the Board can increase the number to ten (10) at any time
without shareholder consent. There are currently three (3) vacancies on the
Board, which the Board intends to fill as soon as practicable at such time as
suitable additional Directors are identified.
GUY ANTHOME. See "Information Concerning Current Directors and Nominees for
Directors."
JEFFREY BUSSE. See "Information Concerning Current Directors and Nominees
for Directors."
KRISTINA ALTAMIRANO. See "Information Concerning Current Directors and
Nominees for Directors."
The Company does not maintain a Stock Option and Compensation Committee or
an Audit Committee. There are no members of the Board who are not also employees
of the Company.
The Company entered into a written employment agreement with Mr. Anthome and
oral employment agreements with Mr. Busse and Ms. Altamirano. See EXECUTIVE
COMPENSATION AND OTHER REMUNERATION.
6
<PAGE>
EXECUTIVE COMPENSATION AND OTHER REMUNERATION
The following table sets forth all cash and non-cash compensation paid to
each of the named executive officers with respect to services rendered during
each of the last three (3) fiscal years:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
-------------------------------
ANNUAL COMPENSATION COMMON STOCK ALL OTHER
FYE --------------------- UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION MARCH 31, SALARY BONUS OPTIONS (2)
- --------------------------------- ----------- ---------- --------- -------------- ---------------
<S> <C> <C> <C> <C> <C>
Georges Marciano(1) ............. 1997 $ 0 $ 0 0 $ 0
Chairman of the Board, Chief 1996 1 0 2,000,000(3) 0
Executive Officer and Director 1995 0 0 0 0
Guy Anthome ..................... 1997 167,858 50,000 250,000 0
President (June to August 1995) 1996 35,000 0 50,000(4) 0
Asst. Secretary and Director 1995 0 0 0 0
Daniel V. Goodstein(1) .......... 1997 0 0 0 0
Executive Vice President, Chief 1996 55,000 0 0 0
Financial Officer, Secretary 1995 178,000 0 0 0
and Director
Jeffrey Busse ................... 1997 91,110 0 150,000 0
Chief Financial Officer, 1996 75,000 0 10,000(5) 0
Secretary and Director 1995 0 0 0 0
</TABLE>
- ------------------------
(1) No longer with the Company
(2) Represents amounts contributed by the Company to the Company's Pension Plan
(3) Canceled on June 4, 1996
(4) Canceled on August 2, 1995
(5) Expired on June 30, 1996
STOCK OPTIONS
In September 1989, the Board adopted, and the Company's shareholders
approved, the YES Clothing Co. 1989 Stock Option Plan (the "Plan"). The
shareholders approved an amendment to the Plan in 1991 increasing the maximum
number of shares of Common Stock available for issuance under the Plan to
400,000, and thereafter in October 1996, to 1,000,000 shares. The Plan provides
for the grant of both incentive and non-qualified stock options to the Company's
Directors, officers, employees and consultants.
The Plan is administered by the Board, who determine, subject to the
limitations of the Plan and applicable law, the option recipients, the number of
shares subject to options, the options exercise price and other option terms,
including vesting schedules. Options may be granted under the Plan for terms of
up to ten (10) years and one (1) week. The exercise price for incentive stock
options must not be less than the fair market value of the Common Stock on the
date of grant. The exercise price may be paid in cash or in such other lawful
consideration as the Board may determine. No option may be granted under the
Plan after September 11, 1999. Eighty thousand (80,000) options were granted
under the Plan in fiscal 1996, and six hundred ten thousand (610,000) options
were granted under the Plan in fiscal 1997.
7
<PAGE>
(I) The following table sets forth certain information regarding the Chief
Executive Officer and the other Named Executives identified in the above SUMMARY
COMPENSATION TABLE:
OPTION/SAR GRANTS IN THE LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES
OF STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM
- --------------------------------------------------------------- ----------------------------------------------------
% OF TOTAL 5% SHARE 10% SHARE
OPTIONS/SARS PRICE PRICE
GRANTED TO EXERCISE OR INCREASE INCREASE
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION ($) ($)
NAME GRANTED (#) FISCAL YEAR(1) ($/SHARE)(2) DATE (3) (3)
- ------------------------------- ------------- --------------- ------------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Guy Anthome.................... 250,000 40.9% $ 0.07 1/28/07 11,000 28,000
Jeffrey Busse.................. 150,000 24.6% $ 0.07 1/28/07 6,600 16,800
</TABLE>
- ------------------------
(1) Total of 610,000 options granted.
(2) The closing price of the Company's Common Stock on the NASDAQ
Over-the-Counter Bulletin Board on March 24, 1997 was $0.125.
(3) Based upon the number of shares of the Company's Common Stock outstanding as
of March 31, 1997 (7,036,492), a 5% and 10% increase in the annual rates of
stock price appreciation over the option term would result in an aggregate
increase of $555,883 and $1,400,262, respectively, in the value of the
Common Stock held by all the Company's Common Stockholders (assuming no
exercise of warrants or stock options).
(II) The following table sets forth certain information regarding option
exercises and option values for the Chief Executive Officer and the other Named
Executives identified in the above SUMMARY COMPENSATION TABLE:
AGGREGATE OPTION/SAR EXERCISES IN THE LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS/SARS AT
ACQUIRED ON VALUE OPTIONS/SARS AT FY-END (#) FY-END ($)
NAME EXERCISE (#) REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ---------------------------------- ----------------- ----------- -------------------------- -------------------------------
<S> <C> <C> <C> <C>
Guy Anthome....................... 0 -- 250,000(E) 0(E)
0(U) 0(U)
Jeffrey Busse..................... 0 -- 150,000(E) 0(E)
0(U) 0(U)
</TABLE>
EMPLOYMENT AND CONSULTING AGREEMENTS
Mr. Anthome is employed by the Company pursuant to an employment agreement
dated as of June 6, 1996. Mr. Anthome receives $200,000 per year plus
reimbursement of his business expenses during the term of his employment. Mr.
Busse, who is employed on an at will basis, receives $100,000 per year plus
reimbursement of his business expenses. Ms. Altamirano, also employed on an at
will basis, receives $65,000 per year. Messrs. Anthome and Busse and Ms.
Altamirano received options to acquire 250,000, 150,000, and 20,000 shares,
respectively, of Company Common Stock on January 28, 1997.
REPORT OF THE BOARD WITH RESPECT TO COMPENSATION
The following report and the performance graphs in the next section shall
not be deemed to be "soliciting material" or to be "filed" with the SEC or
subject to Regulations 14A or 14C of the SEC or to
8
<PAGE>
the liabilities of Section 18 of the Securities Exchange Act of 1934 (the
"Exchange Act") and shall not be deemed incorporated by reference into any
filing under the Securities Act of 1933, as amended (the "Securities Act"), or
the Exchange Act, notwithstanding any general incorporation by reference of this
Proxy Statement into any other document.
INTRODUCTION
The Company does not have a standing compensation committee. Instead, the
Board reviews the compensation of each member of senior management and assesses
the effectiveness of the Company's compensation policies.
The Board is responsible for administering total compensation programs which
are designed to enable the Company to:
- Hire, reward, motivate and retain the highest quality managers possible;
- Match the Company's compensation plans to its business strategies, as well
as the external business environment;
- Emphasize the relationship between pay and performance by placing a
significant portion of compensation at risk and subject to the achievement
of financial goals and objectives;
- Maximize profitability through growth and efficiency, balancing
appropriately the short-term and long-term goals of the Company; and
- Align the interests of managers with those of stockholders through the use
of equity-based incentive awards to link a significant portion of
compensation to stockholder value.
The Board has granted the following individuals options to acquire shares of
Company Common Stock, in order to align their interests and incentives with the
interests of the Company's shareholders:
<TABLE>
<S> <C> <C>
250,000
Guy Anthome................................ January 28, 1997 shares
150,000
Jeffrey Busse.............................. January 28, 1997 shares
February 17, 100,000
Stephen Resnick............................ 1997 shares
Kristina Altamirano........................ January 28, 1997 20,000 shares
Tessie Garcia.............................. January 28, 1997 10,000 shares
Dennis Zapata.............................. January 28, 1997 20,000 shares
Alexander Ticse............................ March 10, 1997 10,000 shares
Anita Morrisey............................. March 10, 1997 50,000 shares
</TABLE>
All of the foregoing options may be exercised, if at all, at a purchase
price of $0.07 per share.
POLICY WITH RESPECT TO QUALIFYING COMPENSATION FOR DEDUCTIBILITY
Section 162(m) of the Internal Revenue Code generally limits to $1,000,000
the tax deductible compensation paid to the Chief Executive Officer and the four
highest-paid executive officers who are employed as executive officers on the
last day of the year. However, the limitation does not apply to
performance-based compensation provided certain conditions are satisfied.
The Company's policy is generally to preserve the Federal income tax
deductibility of compensation paid to the extent feasible. Notwithstanding the
Company's general policy to preserve the Federal income tax deductibility of
compensation payments, under certain circumstances, elements of annual
compensation, such as the value of stock options, may cause an executive
officer's income to exceed deductible limits. In addition, the Board retains the
authority to authorize other payments, including salary and bonuses, that may
not be deductible, if that is in the best interests of the Company and its
stockholders.
9
<PAGE>
PERFORMANCE GRAPH
The following graph shows a comparison over the five-year period ending
March 31, 1997, of the yearly percentage change in the cumulative total return
of the Company's Common Stock, the cumulative total return of the NASDAQ
Composite Stock Index and a group of peer companies contained in the Standard &
Poor Compustat Database. The peer group is comprised of companies with the
Standard Industrial Classification codes 2320 (men's and boys' clothing) and
2330 (women's, misses' and juniors' clothing), and includes more than fifty (50)
publicly traded apparel companies.
It is assumed in the graph that $100 was invested in the Company's Common
Stock, in the stock of the companies in the NASDAQ Composite Stock Index and in
the stocks of the peer group companies just prior to the commencement of the
comparison period depicted in the graph, and that all dividends received within
a quarter were reinvested in that quarter:
TOTAL RETURN TO SHAREHOLDER
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
DOLLARS
<S> <C> <C> <C> <C> <C> <C>
Fiscal Years Ending Mar-92 Mar-93 Mar-94 Mar-95 Mar-96 Mar-97
YES CLOTHING CO. 100 60 35.84 226.67 33.33 1.87
NASDAQ COMPOSITE 100 114.91 124.06 138.29 187.71 208.32
PEER GROUP 100 91.65 102.6 82.99 124.59 139.08
</TABLE>
THE BOARD RECOMMENDS A VOTE OF "AUTHORITY GIVEN" FOR THIS PROPOSAL NO. 1
PROPOSAL NO. 2
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board recommends that Shareholders vote for the approval of the
appointment of Grobstein, Horwath and Company, LLP, as the Company's independent
auditors for the current fiscal year. Grobstein, Horwath served as the Company's
independent auditors for the fiscal year ended March 31, 1997. Representatives
of Grobstein, Horwath are expected to be present at the meeting with the
opportunity to make a statement if they desire to do so and to respond to
appropriate questions.
Grobstein, Horwath replaced the Company's former auditors after Mr. Marciano
relinquished control of the Company. There were no disagreements between the
Company and the Company's former auditors. The Board has been advised that
Grobstein, Horwath is independent with respect to the Company within the meaning
of the Securities Act and the applicable published rules and regulations
thereunder.
A majority vote of the shares entitled to vote represented at the meeting is
necessary for approval.
THE BOARD RECOMMENDS A VOTE "FOR" THIS PROPOSAL NO. 2
10
<PAGE>
PROPOSAL NO. 3
OTHER BUSINESS
The Board is not aware of any other business or matter that may properly
come before the meeting. If any matter not mentioned in this Proxy Statement is
brought before the meeting, the person named in the enclosed form of proxy will
have discretionary authority to vote all proxies with respect thereto in
accordance with his judgment.
THE BOARD RECOMMENDS A VOTE OF "AUTHORITY GIVEN" FOR THIS PROPOSAL NO. 3
SHAREHOLDER PROPOSALS
Shareholders are advised that any shareholder proposals intended for
consideration at the 1998 Annual Meeting of Shareholders must be received by the
Company at its principal executive offices on or before March 31, 1998, in order
to be included in the proxy materials for the 1998 Annual Meeting. It is
recommended that shareholders submitting proposals direct them to the Secretary
of the Company and utilize certified mail, return receipt requested.
FORM 10-K
A copy of the Company's Annual Report on Form 10-K, exclusive of exhibits,
accompanies this proxy statement. Additional copies and copies of the exhibits
to the Form 10-K will be mailed without charge to any shareholder entitled to
vote at the meeting, upon written request to: Jeffrey Busse, YES Clothing Co.,
1380 West Washington Boulevard, Los Angeles, California 90007.
<TABLE>
<S> <C>
By Order of the Board of Directors,
/s/ JEFFREY BUSSE
Jeffrey Busse
SECRETARY
</TABLE>
July 25, 1997
Los Angeles, California
SHAREHOLDERS ARE URGED TO COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY
IN THE ENCLOSED ENVELOPE. PROMPT RESPONSE IS HELPFUL AND YOUR COOPERATION WILL
BE APPRECIATED.
11
<PAGE>
________________________________________________________________________________
YES CLOTHING CO.
ANNUAL MEETING OF SHAREHOLDERS
OCTOBER 6, 1997
The undersigned Shareholder of YES Clothing Co. (the "Company") hereby
nominates, constitutes and appoints Jeffrey Busse the agent and proxy of the
undersigned, with full power of substitution, to vote all shares of Common Stock
of the Company which the undersigned is entitled to vote at the Annual Meeting
of Shareholders of the Company to be held at the Company's principal executive
offices, 1380 West Washington Boulevard, Los Angeles, California 90007, on
October 6, 1997, at 10:00 a.m., local time, and at any and all adjournments or
postponements thereof, as fully and with the same force and effect as the
undersigned might or could do if personally present thereat, as follows:
________________________________________________________________________________
TRIANGLE SOLID FOLD AND DETACH HERE TRIANGLE SOLID
<PAGE>
________________________________________________________________________________
Please mark
your votes as
indicated in /X/
this example
<TABLE>
<CAPTION>
AUTHORITY AUTHORITY
GIVEN WITHHELD FOR AGAINST ABSTAIN
<S> <C> <C> <C> <C> <C> <C>
1. ELECTION OF DIRECTORS. Electing / / / / 2. RATIFICATION OF SELECTION OF / / / / / /
Guy Anthome, Jeffrey Busse and INDEPENDENT AUDITORS. Approving
Kristina Altamirano to serve on the the selection of Grobstein, Horwath
Board of Directors of the Company and Company, LLP, to serve as
until the next annual meeting independent auditors of the Company
following their election and until for the fiscal year ending March 31,
their successors are elected and 1998.
have qualified. AUTHORITY AUTHORITY
GIVEN WITHHELD
3. OTHER BUSINESS. To transact such / / / /
other business as may properly come
before the meeting or any adjournments
or postponements thereof.
(INSTRUCTION: TO GRANT AUTHORITY TO VOTE FOR ALL OF THE THE BOARD OF DIRECTORS RECOMMENDS A VOTE OF "AUTHORITY GIVEN"
NOMINEES NAMED ABOVE CHECK THE "AUTHORITY GIVEN" BOX; TO ON PROPOSALS 1 AND 3 AND A VOTE OF "FOR" ON PROPOSAL 2. THIS
WITHHOLD AUTHORITY FOR ANY INDIVIDUAL NOMINEE CHECK THE PROXY CONFERS AUTHORITY TO AND SHALL BE VOTED IN ACCORDANCE WITH
"AUTHORITY GIVEN" BOX AND CROSS OUT THE NAME OF THE INDIVIDUAL SUCH RECOMMENDATIONS OF THE BOARD OF DIRECTORS UNLESS A CONTRARY
ABOVE; TO WITHHOLD AUTHORITY FOR ALL NOMINEES CHECK THE INSTRUCTION IS INDICATED, IN WHICH CASE THE PROXY SHALL BE VOTED
"AUTHORITY WITHHELD" BOX.). IN ACCORDANCE WITH SUCH INSTRUCTIONS. IN ALL OTHER MATTERS, IF
ANY ARE PRESENTED AT THE MEETING, THIS PROXY SHALL BE VOTED IN
ACCORDANCE WITH THE JUDGMENT OF THE PROXY HOLDER.
PLEASE CHECK THE APPROPRIATE SPACE, SIGN AND DATE BELOW:
/ / I DO / / I DO NOT EXPECT TO ATTEND THE ANNUAL
____ MEETING OF SHAREHOLDERS ON
| MONDAY, OCTOBER 6, 1997.
|
BY:
----------------------------------------------------
TITLE:
----------------------------------------------------
DATE:
----------------------------------------------------
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS, AND MAY BE REVOKED PRIOR TO ITS EXERCISE BY
FILING WITH THE SECRETARY OF THE COMPANY AN INSTRUMENT
REVOKING THIS PROXY OR A DULY EXECUTED PROXY BEARING A
LATER DATE OR BY APPEARING AND VOTING IN PERSON AT THE
MEETING.
</TABLE>
________________________________________________________________________________
TRIANGLE SOLID FOLD AND DETACH HERE TRIANGLE SOLID
