<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [ ]
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
JALATE, LTD.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] 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:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] 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
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
JALATE, LTD.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 12, 1997
_______________
TO THE SHAREHOLDERS OF JALATE, LTD.:
Notice is hereby given that the annual meeting (the "Meeting") of the
shareholders of Jalate, Ltd. (the "Company") will be held at the Marriott
Hotel, Los Angeles Airport, 5855 West Century Blvd., Los Angeles, California,
on Monday, May 12, 1997, at 11:00 a.m. for the purpose of considering and
voting upon the following matters.
ELECTION OF DIRECTORS. To elect nine persons to the Board of
Directors of the Company, to serve until the next annual meeting of
shareholders and until their successors have been elected and
qualified. The following persons are the Board of Directors'
nominees:
Vinton W. Bacon Joseph S. Davis
Larry Brahim I. Jay Goldfarb
Theodore B. Cooper Jan L. Grossman
Allan E. Dalshaug Victor Nichols
William Soady
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITORS. To ratify
the appointment of KPMG Peat Marwick LLP as the Company's independent
auditors for the fiscal year ending December 31, 1997.
OTHER BUSINESS. To transact such other business as properly
may come before the Meeting or any adjournment thereof.
ONLY PERSONS WHO WERE SHAREHOLDERS OF RECORD (THE "SHAREHOLDERS") AT
THE CLOSE OF BUSINESS ON MARCH 24, 1997 ARE ENTITLED TO NOTICE OF AND TO VOTE
IN PERSON OR BY PROXY AT THE MEETING OR ANY ADJOURNMENT THEREOF.
The Proxy Statement which accompanies this Notice contains additional
information regarding the proposals to be considered and voted upon at the
Meeting, and Shareholders are encouraged to read it in its entirety.
As set forth in the enclosed Proxy Statement, proxies are being
solicited by and on behalf of the Board of Directors of the Company. All
proposals set forth above are proposals of the Company. It is expected that
these materials first will be mailed to Shareholders on or about April 28,
1997.
<PAGE> 3
IT IS IMPORTANT THAT ALL SHAREHOLDERS VOTE. WE URGE YOU TO
MARK, SIGN AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE, WHETHER OR
NOT YOU PLAN TO ATTEND THE MEETING IN PERSON. IF YOU DO ATTEND THE MEETING,
YOU THEN MAY WITHDRAW YOUR PROXY AND VOTE IN PERSON IF YOU WISH TO DO SO. THE
PROXY MAY BE REVOKED AT ANY TIME PRIOR TO ITS EXERCISE. IN ORDER TO FACILITATE
THE PROVIDING OF ADEQUATE ACCOMMODATIONS, PLEASE INDICATE ON THE PROXY WHETHER
OR NOT YOU PLAN TO ATTEND THE MEETING.
By Order of the Board of Directors,
Larry Brahim,
Chairman of the Board
/s/ LARRY BRAHIM
Dated: April 28, 1997
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<PAGE> 4
JALATE, LTD.
1675 South Alameda Street
Los Angeles, California 90021
(213) 765-5000
_______________
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
May 12, 1997
_______________
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors (the "Board of Directors") of Jalate, Ltd.
(the "Company") for use at the annual meeting (the "Meeting") of the
shareholders of the Company to be held on Monday, May 12, 1997, at the Marriott
Hotel, Los Angeles Airport, 5855 W. Century Blvd., Los Angeles, California
90045, at 11:00 a.m. and at any adjournment thereof. Larry Brahim and
Frederick A. Findley, the designated proxyholders (the "Proxyholders"), are
members of the Company's management. Only shareholders of record (the
"Shareholders") on March 24, 1997 (the "Record Date") are entitled to notice of
and to vote in person or by proxy at the Meeting or any adjournment thereof.
This Proxy Statement and the accompanying Notice and proxy card (the "Proxy")
will be first mailed to Shareholders on or about April 28, 1997.
MATTERS TO BE CONSIDERED
The matters to be considered and voted upon at the Meeting will be:
ELECTION OF DIRECTORS. To elect nine persons to the Board of
Directors of the Company, to serve until the next annual meeting of
shareholders and until their successors have been elected and
qualified. The following persons are the Board of Directors'
nominees:
Vinton W. Bacon Joseph S. Davis
Larry Brahim I. Jay Goldfarb
Theodore B. Cooper Jan L. Grossman
Allan E. Dalshaug William Soady
Victor Nichols
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITORS. To
ratify the appointment of KPMG Peat Marwick LLP as the Company's
independent auditors for the fiscal year ending December 31, 1997.
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<PAGE> 5
OTHER BUSINESS. To transact such other business as properly
may come before the Meeting or any adjournment thereof.
All proposions set forth above are proposals of the Company.
VOTING AND REVOCABILITY OF PROXIES
A Proxy for use at the Meeting is enclosed. The Proxy must be signed
and dated by you or your authorized representative or agent. Telegraphed or
cabled Proxies are also valid. You may revoke a Proxy at any time before it is
exercised at the Meeting by submitting to the Secretary of the Company a
written revocation or a duly executed Proxy bearing a later date, or by voting
in person at the Meeting.
Brokers and nominees holding Common Stock in "street name" which are
members of a stock exchange are required by the rules of the exchange to
transmit this Proxy Statement to the beneficial owner of the Common Stock and
to solicit voting instructions with respect to the matters submitted to the
Shareholders. In the event any such broker or nominee has not received
instructions from the beneficial owner by the date specified in the statement
accompanying such material, the broker or nominee may give or authorize the
giving of a Proxy to vote such Common Stock on the matters to be considered at
the Meeting; provided, however, that the broker or nominee may not give or
authorize the giving of a Proxy for any matter if it has notice of any contest
with respect to any matter, and provided, further, that the broker or nominee
may not vote the Common Stock "FOR" any matter which substantially affects the
rights or privileges of the Common Stock without specific instructions from the
beneficial owner. If you hold Common Stock in "street name" and you fail to
instruct your broker or nominee as to how to vote such Common Stock, your
broker or nominee may, in its discretion, vote such Common Stock (i)"FOR" the
election of the Board of Directors' nominees identified herein and (ii) "FOR"
the ratification of the appointment of KPMG Peat Marwick LLP as the Company's
independent auditors for the fiscal year ending December 31, 1997.
Unless revoked, the shares of Common Stock represented by Proxies will
be voted by the Proxyholders in accordance with the instructions given thereon.
In the absence of any instruction in the Proxy, such shares of Common Stock
will be voted (i) "FOR" the election of the Board of Directors' nominees
identified herein and (ii) "FOR" the ratification of the appointment of KPMG
Peat Marwick LLP as the Company's independent auditors for the fiscal year
ending December 31, 1997.
The enclosed Proxy confers discretionary authority with respect to any
other proposals which properly may be brought before the Meeting. As of the
date hereof, management is not aware of any other matters to be presented for
action at the Meeting. However, if any other matters properly come before the
Meeting, the Proxies will be voted by the Proxyholders in accordance with the
recommendations of the Board of Directors. Such authorization includes
authority to appoint a substitute nominee for any Board of Directors' nominee
identified herein where death, illness or other circumstances arise which
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<PAGE> 6
prevent such nominee from serving in such position and to vote such Proxy for
such substitute nominee.
COST OF SOLICITATION OF PROXIES
This Proxy solicitation is made on behalf of the Board of Directors of
the Company, and the Company will bear the costs of this solicitation,
including the expense of preparing, assembling, printing and mailing this Proxy
Statement and any other material used in this solicitation of Proxies. The
solicitation of Proxies will be made by mail and may be supplemented by
telephone, facsimile transmissions, telegraph or other personal contact made
without special compensation by directors, officers and regular employees of
the Company. The Company will reimburse banks, brokerage houses and other
custodians, nominees and fiduciaries for their reasonable expenses in
forwarding proxy materials to their principals. The total estimated cost of
the solicitation of Proxies is $3,000.
OUTSTANDING SECURITIES AND VOTING RIGHTS
The authorized capital of the Company consists of (i) 20,000,000
shares of Common Stock, of which 3,403,000 shares were issued and outstanding
on the Record Date, and (ii) 3,000,000 shares of Preferred Stock, none of which
were issued and outstanding on the Record Date. A majority of the outstanding
shares of the Common Stock constitutes a quorum for the conduct of business at
the Meeting. Abstentions will be treated as shares present and entitled to
vote for purposes of determining the presence of a quorum.
Each Shareholder will be entitled to one vote, in person or by proxy,
for each share of Common Stock standing in his or her name on the books of the
Company as of the Record Date on each matter submitted to the Shareholders.
Each proposal described herein, other than the election of directors,
requires the affirmative vote of a majority of the outstanding shares of Common
Stock present in person or represented by proxy and entitled to vote at the
Meeting. Accordingly, broker non-votes and abstentions from voting on any
matter, other than the election of directors, will have the effect of a vote
"AGAINST" such matter.
Of the shares of Common Stock outstanding on the Record Date,
2,103,084 shares of Common Stock (or approximately 61.8%) were owned by
officers and directors of the Company. Such persons have informed the Company
that they will vote (i) "FOR" the election of the Board of Directors' nominees
identified herein and (ii) "FOR" the ratification of the appointment of KPMG
Peat Marwick LLP as the Company's independent auditors for the fiscal year
ending December 31, 1997, all as described herein.
SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT
The following table sets forth certain information regarding the
shares of Common Stock beneficially owned as of the Record Date by (i) each
person known to the Company
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<PAGE> 7
to be the record or beneficial owner of more than five percent of the
outstanding Common Stock of the Company (other than depositories), (ii) certain
executive officers (the Named Executive Officers), each director and nominee
for director of the Company and (iii) all directors and executive officers as a
group.
<TABLE>
<CAPTION>
Amount and
Nature of
Name and Address of Beneficial Percent of
Beneficial Owner (1) Ownership (2) Class (3)
-------------------- ------------- ----------
<S> <C> <C>
Vinton W. Bacon . . . . . . . . . . . . . . . . 179,755(4) 5.3%
Larry Brahim . . . . . . . . . . . . . . . . . 780,762 22.9
Theodore B. Cooper . . . . . . . . . . . . . . 612,493 18.0
Allan E. Dalshaug . . . . . . . . . . . . . . . 10,100(5) *
Joseph S. Davis . . . . . . . . . . . . . . . . 10,000(6) *
Jeffrey L. Friedman . . . . . . . . . . . . . . 227,800(7) 6.1
I. Jay Goldfarb . . . . . . . . . . . . . . . . 11,000(8) *
Jan L. Grossman . . . . . . . . . . . . . . . . 286,305 8.4
Victor Nichols . . . . . . . . . . . . . . . . 10,000(9) *
William Soady . . . . . . . . . . . . . . . . . 10,000(10) *
All directors and executive officers as a
group (ten persons) . . . . . . . . . . . . 2,138,215(11) 62.8%
</TABLE>
____________________
*Less than one percent.
(1) The business address of each director and Named Executive Officer is
c/o Jalate, Ltd., 1675 South Alameda Street, Los Angeles, California
90021.
(2) Except as otherwise noted below, each person has sole voting and
investment power over the shares of Common Stock shown as beneficially
owned, subject to community property laws where applicable.
(3) Shares which the person (or group) has the right to purchase within 60
days after the Record Date are deemed to be outstanding in calculating
the percentage ownership of the person (or group), but are not deemed
to be outstanding in calculating the percentage ownership of any other
person (or group).
(4) Consists of shares which Mr. Bacon had the right to purchase as of the
Record Date upon the exercise of stock options granted pursuant to the
Stock Incentive Plan. Excludes 92,380 shares which Mr. Bacon will
have the right to purchase thereafter upon the exercise of stock
options granted pursuant to the Stock
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<PAGE> 8
Incentive Plan, which options will become exercisable in equal monthly
installments of 4,860 shares on the first day of each month commencing
on June 1, 1997.
(5) Consists of (i) 100 shares held by Mr. Dalshaug's son and (ii) 10,000
shares which Mr. Dalshaug had the right to purchase as of the Record
Date upon the exercise of stock options granted pursuant to the Stock
Incentive Plan.
(6) Consists of shares which Mr. Davis had the right to purchase as of the
Record Date upon the exercise of stock options granted pursuant to the
Stock Incentive Plan.
(7) Includes 38,130 shares which Mr. Friedman has the right to purchase as
of the Record Date upon the exercise of stock options granted in equal
parts by Messrs. Brahim, and Cooper.
(8) Includes 10,000 shares which Mr. Goldfarb had the right to purchase as
of the Record Date upon the exercise of stock options granted pursuant
to the Stock Incentive Plan.
(9) Consists of shares which Mr. Nichols had the right to purchase as of
the Record Date upon the exercise of stock options granted pursuant to
the Stock Incentive Plan.
(10) Consists of shares which Mr. Soady had the right to purchase as of the
Record Date upon the exercise of stock options granted pursuant to the
Stock Incentive Plan.
(11) Includes (i) 157,620 shares which certain directors and executive
officers had the right to purchase sixty days after the Record Date
upon the exercise of stock options granted pursuant to the Stock
Incentive Plan and (ii) 38,130 shares which Mr. Friedman had the right
to purchase as of the Record Date upon the exercise of stock options
granted in equal parts by Messrs. Brahim and Cooper. Excludes 107,629
shares which certain directors and executive officers will have the
right to purchase upon the exercise of stock options granted pursuant
to the Stock Incentive Plan, which options will become exercisable in
various installments commencing on June 1, 1997.
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<PAGE> 9
PROPOSAL 1
ELECTION OF DIRECTORS
DIRECTORS AND EXECUTIVE OFFICERS
The Bylaws of the Company currently provide that the number of
directors shall be not less than five nor more than nine until changed by an
amendment duly adopted by the vote or written consent of the Company's
shareholders. The Bylaws further provide that the exact number of directors
shall be fixed from time to time, within the foregoing range, by an amendment
of the Bylaws adopted by the vote or written consent of the Company's Board of
Directors. The number of directors currently is fixed at nine.
The persons named below, all of whom currently are members of the
Board of Directors of the Company, have been nominated for election by the
Board of Directors to serve until the next annual meeting of shareholders and
until their successors have been elected and qualified. All nominees have
indicated their willingness to serve and, unless otherwise instructed, the
Proxies will be voted in such a way as to elect as many of these nominees as
possible under applicable voting rules. In the event that any of the nominees
should be unable to serve as a director, the Proxyholders will vote for the
election of such substitute nominees, if any, as shall be designated by the
Board of Directors. The Board of Directors has no reason to believe that any
nominee will be unable to serve if elected.
The following table sets forth certain information as of the Record Date
concerning the directors and executive officers of the Company.
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<PAGE> 10
<TABLE>
<CAPTION>
Name Age Position
--------------------------------------- --- -------------------------------------
<S> <C> <C>
Vinton W. Bacon(1) . . . . . . . . . . 55 Chief Executive Officer, Chief
Operating Officer and Director
Larry Brahim . . . . . . . . . . . . . 52 Chairman of the Board, Executive Vice
President and Director
Theodore B. Cooper . . . . . . . . . . 50 Executive Vice President and Director
Jeffrey L. Friedman . . . . . . . . . . 42 Vice President - Marketing
Jan L. Grossman . . . . . . . . . . . . 42 Vice President - Merchandising,
Secretary and Director
Frederick A. Findley . . . . . . . . . 52 Vice President - Finance and Chief
Financial Officer
Allan E. Dalshaug (2)(3) . . . . . . . 64 Director
Joseph S. Davis (2)(1) . . . . . . . . 66 Director
I. Jay Goldfarb (3) . . . . . . . . . . 63 Director
Victor Nichols (3) . . . . . . . . . . 40 Director
William Soady (2)(1) . . . . . . . . . 53 Director
</TABLE>
__________________________________
(1) Member of the Nominating Committee
(2) Member of the Compensation Committee
(3) Member of the Audit Committee
VINTON W. BACON has served as the Chief Executive Officer, the Chief
Operating Officer and a director of the Company since December 1, 1995. From
January 1993 until joining the Company, Mr. Bacon was a principal of the Sonoma
Group, a management consulting firm specializing in corporate turnarounds.
From 1987 to 1993, Mr. Bacon served as Chairman and Chief Executive Officer of
Safeguard Business Systems, Inc. Prior to this, Mr. Bacon was an Executive
Vice President of Bank of America and held various other positions with
financial institutions and financial holding companies.
LARRY BRAHIM is a co-founder of the Company and served as Chief
Financial Officer, Secretary and a director from its formation in 1987 until
his election as Chairman of the Board, Chief Executive Officer and a director
in October 1993. On December 1, 1995, Mr. Brahim resigned as the Chief
Executive Officer and was elected as an Executive Vice President. From 1966
until founding the Company, Mr. Brahim held various positions with
manufacturers of moderately priced dresses and women's sportswear, including as
a principal from 1976 until 1987.
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<PAGE> 11
THEODORE B. COOPER is a co-founder of the Company and served as
President and a director from its formation in 1987 until his election as Chief
Operating Officer and a director in October 1993. On December 1, 1995, Mr.
Cooper resigned as the Chief Operating Officer and was elected as an Executive
Vice President. From 1967 until founding the Company, Mr. Cooper held various
positions with manufacturers and distributors of women's sportswear and men's
jeans, including as President of Dream Weaver from 1979 to 1987.
JEFFREY L. FRIEDMAN is a co-founder of the Company and has served as
Vice President - Marketing since its formation in 1987. From 1976 until
joining the Company, Mr. Friedman held various positions with manufacturers and
distributors of moderately priced women's sportswear, including as an
independent sales representative of Dream Weaver from 1979 to 1987.
JAN L. GROSSMAN is a co-founder of the Company and has served as Vice
President - Merchandising and a director since its formation in 1987. In
October 1993, Ms. Grossman was elected Secretary of the Company. From 1975
until founding the Company, Ms. Grossman held various positions with
manufacturers and distributors of women's sportswear, including Dream Weaver.
FREDERICK A. FINDLEY joined the Company in May 1996 as Vice President
- - Finance and Chief Financial Officer. Mr. Findley, before joining the
Company, served as Chief Financial Officer of Precision Specialty Metals since
1992. He also served in various senior financial management capacities with
other companies.
ALLAN E. DALSHAUG has served as a director of the Company since March
26, 1994. Mr. Dalshaug has been the Chairman of the Board and the Chief
Executive Officer of Sterling West Bancorp, a publicly-held bank holding
company, since 1982 and has been a director and member of the Audit Committee
of L.A. Gear, Inc., a publicly-held athletic footwear company listed on the New
York Stock Exchange, since 1986. From 1969 until 1979, Mr. Dalshaug was
employed in various capacities by Security Pacific Bank, including as Senior
Vice President - Strategic Planning from 1974 to 1979.
JOSEPH S. DAVIS has served as a director of the Company since June 20,
1994. From 1956 until his retirement in 1993, Mr. Davis held various positions
with various divisions of May Department Stores, including President and Chief
Executive Officer of May D & F, Denver, from 1983 to 1993.
I. JAY GOLDFARB has served as a director of the Company since August
17, 1995. Mr. Goldfarb is now a consultant. Prior to his retirement, he was
the managing partner of Goldfarb, Whitman & Cohen, the Company's former
independent certified public accountants, since December 1978 and has been a
director of Utopia Marketing, Inc. a publicly-held footwear company, since
1991.
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<PAGE> 12
VICTOR NICHOLS has served as a director of the Company since August 1,
1996. Mr. Nichols is President of Vicor, Inc. Prior to Vicor, Mr. Nichols
was Senior Vice President of Interstate Banking Integration with Bank of
America. From October 1989 to December 1992, Mr. Nichols served as President
of Safeguard Business Systems.
WILLIAM SOADY has served as director of the Company since August 1,
1996. On March 1, 1997, Mr. Soady became President of Polygram Filmed
Entertainment - Distribution. On March 3, 1994, Mr. Soady was named to the
post of President and Chief Executive Officer of Showscan Entertainment, Inc.
Prior to Showscan, Mr. Soady held executive positions with Tri-Star and
Universal Pictures.
All directors are elected annually and serve until the next annual
meeting of shareholders or until their successors have been elected and
qualified. Officers serve at the discretion of the Board of Directors.
The Company has agreed, for five years following the completion of its
initial public offering on March 23, 1994, to nominate and use its best efforts
to cause the election to its Board of Directors of a designee of the
underwriters of such offering reasonably acceptable to the Company. The
underwriters have not designated a nominee.
There are no family relationships among directors or executive
officers of the Company and, except as set forth above, as of the date hereof,
no directorships are held by any director in a company which has a class of
securities registered pursuant to Section 12 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), or subject to the requirements of
Section 15(d) of the Exchange Act or any company registered as an investment
company under the Investment Company Act of 1940. None of the directors,
nominees for director or executive officers were selected pursuant to any
arrangement or understanding, other than with the directors and executive
officers of the Company acting within their capacity as such.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has established an Audit Committee, a
Compensation Committee and a Nominating Committee, each of which consists of
two or more directors who serve at the pleasure of the Board of Directors.
The Audit Committee is chaired by Mr. Dalshaug, and its members are
Messrs. Dalshaug, Goldfarb and Nichols. The primary purpose of the Audit
Committee is (i) to review the scope of the audit and all non-audit services to
be performed by the Company's independent auditors and the fees incurred by the
Company in connection therewith, (ii) to review the results of such audit,
including financial statements and the independent auditors' report thereon and
letter of comment to management and management's response thereto, (iii) to
review with the Company's independent auditors the Company's internal
accounting systems, policies and practices and financial reporting, (iv) to
make recommendations regarding the selection of the Company's independent
auditors and
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(v) to review the Company's quarterly financial statements prior to public
issuance. The Audit Committee met four times during fiscal 1996.
The Compensation Committee is chaired by Mr. Davis, and its members
are Messrs. Davis, Dalshaug, and Soady. The purpose of the Compensation
Committee is (i) to review and recommend to the Board of Directors the
salaries, bonuses and perquisites of the Company's executive officers, (ii) to
determine the individuals to whom, and the terms upon which, awards under the
Company's stock incentive plan will be granted, (iii) to make periodic reports
to the Board of Directors as to the status of such plan, and (iv) to review and
recommend to the Board of Directors additional compensation plans. The
Compensation Committee met twice during fiscal 1996, and during the first
fiscal quarter of 1997, approved the implementation of the new Management
Incentive Plan for Company performance based awards.
The Nominating Committee is chaired by Mr. Soady, and its members are
Messrs. Bacon, Soady, and Davis. The purpose of the Nominating Committee is to
recommend to the Board of Directors candidates to serve as directors of the
Company, chairpersons of committees of the Board of Directors and executive
officers. The Nominating Committee met once during the first fiscal quarter of
1997.
PROCEDURES FOR SHAREHOLDER NOMINATIONS
The procedures for nominating directors, other than by the
Board of Directors itself, are set forth in the Bylaws. Nominations of
individuals for election to the Board of Directors at an annual meeting of
shareholders may be made by any shareholder of the Company entitled to vote for
the election of directors at that meeting who gives timely written notice to
the Company. Such notice must be received by the Chief Executive Officer of
the Company not more than 60 calendar days prior to any meeting of shareholders
called for the election of directors, and no more than ten days after the date
notice of such meeting is sent to shareholders; provided, that if only ten
calendar days' notice of the meeting is given to shareholders, such notice of
intention to nominate shall be received by the Chief Executive Officer of the
Company not later than the time fixed in the notice of the meeting for the
opening of the meeting.
A shareholder's notice of intention to nominate shall contain the
following information to the extent known to the notifying shareholder: (i) the
name and address of each proposed nominee, (ii) the principal occupation of
each proposed nominee, (iii) the number of shares of Common Stock of the
Company owned by each proposed nominee, (iv) the name and residence address of
the notifying shareholder and (v) the number of shares of Common Stock of the
Company owned by the notifying shareholder.
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Nominations not made in accordance with such provisions shall be disregarded by
the chairman of the meeting, and the inspectors of election shall then
disregard all votes cast for such nominee.
DIRECTOR COMPENSATION
The Company pays to each non-employee director $6,000 per year,
payable in equal quarterly installments of $1,500 and $500 for each meeting of
the Board of Directors or any committee of the Board of Directors attended
(other than telephonic meetings) and reimburses such person for all expenses
incurred by him in his capacity as a director of the Company. The Board of
Directors may modify such compensation in the future. In addition, each
non-employee director, upon joining the Board of Directors, receives an option
to purchase 10,000 shares of the Common Stock of the Company. Such options
have an exercise price equal to the market price of such shares on the date of
grant, are immediately exercisable and expire on the tenth anniversary of the
date of grant. Upon joining the Board of Directors, each of Messrs. Dalshaug,
Davis, and Goldfarb were granted options to purchase 10,000 shares of Common
Stock at an exercise price of $6.50 per share for Mr. Dalshaug, $9.50 per
share for Mr. Davis, and $5.00 per share for Mr. Goldfarb. On March 1, 1996,
such options were canceled and, in lieu thereof, options to purchase 10,000
shares were granted to each of Messrs. Dalshaug, Davis, and Goldfarb, which
replacement options have an exercise price of $2.75. The closing price of the
Common Stock on the date of grant was $2.625. Directors who are also employees
of the Company are not compensated for their service as directors. On August
1, 1996, Messrs. Soady and Nichols were granted options to purchase 10,000
shares each of Common Stock at an exercised price of $3.50.
MEETINGS OF DIRECTORS
The Board of Directors met four times during fiscal 1996. All of the
persons who were directors of the Company during fiscal 1996 attended at least
75% of (i) the total number of meetings of the Board of Directors and (ii) the
total number of meetings held by all committees on which they served during
fiscal 1996.
EXECUTIVE COMPENSATION
The following table sets forth certain information concerning the
compensation paid or accrued by the Company for services rendered in all
capacities during fiscal 1996 to or on behalf of the Named Executive Officers.
-11-
<PAGE> 15
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term Compensation
----------------------
Annual Compensation Awards Payouts
-------------------- ------ ----------
Other Securities All
Annual Restricted Underlying Other
Compen- Stock Options/ LTIP Compen-
Name and Principal Position Year Salary($) Bonus($) sation)($)(1) Award(s)($) SARs(#) Payouts($) sation($)(2)
------------------------------- ----- --------- -------- ------------ ----------- -------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Vinton W. Bacon . . . . . . . . 1996 300,000 10,200 -- 200,000(4) -- 21,085
Chief Executive Officer 1995 23,077 -- -- 200,000(4) -- 150,080(3)
Larry Brahim . . . . . . . . . 1996 300,000 -- 9,000 -- -- -- 22,571
Executive Vice President (5) 1995 300,000 -- 9,000 -- -- -- 60,450(6)
1994 300,000 -- 9,000 -- -- -- 6,523
Theodore B. Cooper . . . . . . 1996 300,000 -- 9,000 -- -- -- 15,218
Executive Vice President (5) 1995 300,000 -- 9,000 -- -- -- 73,430(7)
1994 300,000 -- 9,000 -- -- -- 26,219
Jeffrey L. Friedman . . . . . . 1996 300,000 12,500 9,000 -- -- 3,373
Vice President-Marketing 1995 250,000 80,000 9,000 -- -- 4,171
1994 250,000 166,730 9,000 -- 38,130(8) -- 2,583
Jan L. Grossman . . . . . . . . 1996 275,000 -- 9,000 -- -- -- 5,990
Vice President, Merchandising 1995 200,000 -- 9,000 -- -- -- 8,710
1994 200,000 -- 9,000 -- -- -- 5,455
</TABLE>
_______________
(1) Consists of an $850 monthly automobile allowance for Mr. Bacon, an
average of $800 monthly automobile allowance for Ms. Grossman and $750
automobile monthly allowance for the other Named Executive Officers.
(2) Includes (i) reimbursement of medical and dental expenses not covered
by insurance plans provided by the Company to employees generally and
(ii) premiums paid for disability and life insurance, but excludes any
distribution to the Company's shareholder in connection with the
Company's former status as an S Corporation.
(3) Includes compensation received by Mr. Bacon as a consultant to the
Company from July 18, 1995 to his election as the Chief Executive
Officer and the Chief Operating Officer on December 1, 1995.
(4) Consists of shares Mr. Bacon had the right to purchase on December 31,
1995 upon the exercise of stock options granted pursuant to the Stock
Incentive Plan at an exercise price of $3.875 per share, which options
became exercisable with respect to 25,000 shares on December 1, 1995
and with respect to an additional 4,860 shares on the first day of
each month commencing January 1, 1996. On March 1, 1996, such options
were canceled and, in lieu thereof, options to purchase 200,000 shares
were granted to Mr. Bacon at an exercise price of $2.75, which options
were exercisable with respect to 39,580 shares on the date of grant
and will become exercisable with respect to an additional 4,860 shares
on the first day of each month commencing April 1, 1996.
(5) Messrs. Brahim and Cooper resigned as the Chief Executive Officer and
the Chief Operating Officer, respectively, and were elected as
Executive Vice Presidents of the Company on December 1, 1995.
(6) Includes $35,090 principal and accrued interest on indebtedness to the
Company forgiven in consideration of the continuation of Mr. Brahim's
employment upon expiration of his employment agreement on December 31,
1995.
(7) Includes $70,850 principal and accrued interests on indebtedness to
the Company forgiven in consideration of Mr. Cooper entering into an
employment agreement effective as of January 30, 1996.
-12-
<PAGE> 16
(8) Consists of shares which Mr. Friedman had the right to purchase on
December 31, 1995 upon the exercise of stock options granted in equal
parts by Messrs. Brahim and Cooper at an exercise price of $4.50 per
share which was repriced to $2.75 on March 1, 1997.
EMPLOYMENT AGREEMENTS
Effective January 30, 1996, the Company entered into a one-year
employment agreement with each of Messrs. Cooper and Friedman pursuant to which
such persons are entitled to (i) receive annual base salaries of $300,000 (ii)
receive annual bonuses in such amounts as may be determined by the Board of
Directors, (iii) participate in all plans sponsored by the Company for
employees in general including the 1993 Employee Stock Incentive Plan and the
1997 Management Incentive Bonus Plan, and (iv) receive a $750 monthly
automobile allowance. Each such employment agreement expired on December 31,
1996; however, such term of employment automatically renewed for a one year
term and automatically shall be renewed for additional successive one year term
unless written notice of termination is given by either the Company or the
employee not less than ninety (90) days prior to the end of the initial term
or any subsequent one (1) year term. In the event the Company terminates
employment before the end of the stated term without cause, the Company is
obligated to pay the salary through the stated term.
Effective December 1, 1995, the Company entered into a three-year
employment agreement with Mr. Bacon pursuant to which, as amended, he is
entitled to (i) receive an annual base salary of $300,000, (ii) receive an
annual bonus in such amount as may be determined by the Board of Directors,
(iii) participate in all plans sponsored by the Company for employees in
general, including (iv) receive an $850 monthly automobile allowance, and (v)
receive options to purchase from the Company up to 200,000 shares of Common
Stock at $3.875 per share. The stock options became exercisable with respect
to 25,000 shares on December 1, 1995 and with respect to an additional 4,860
shares on the first day of each month commencing January 1, 1996 and expired on
the tenth anniversary of the date of grant. On March 1, 1996, such options
were canceled and, in lieu thereof, options to purchase 200,000 shares were
granted to Mr. Bacon at an exercise price of $2.75, which options were
exercisable with respect to 39,580 shares on the date of grant and will become
exercisable with respect to an additional 4,860 shares on the first day of each
month commencing April 1, 1996. The employment agreement expires on December
31, 1998 and is terminable by the Company "at will", with or without cause. In
the event the Company terminates employment before the end of the stated term
without cause, the Company is obligated to pay the base salary through the
earlier of December 31, 1998, or the second anniversary of the effective date
of termination. In the event the Company terminates employment before the end
of the stated term with cause, the Company is obligated to pay the base salary
only through the date of termination.
LIMITATION ON LIABILITY AND INDEMNIFICATION
The Restated Articles of Incorporation of the Company limit the
liability of the Company's directors for monetary damages arising from a breach
of their fiduciary duties to the Company and its shareholders, except to the
extent otherwise required by the California General Corporation Law. Such
limitation of liability does not affect the availability of equitable remedies
such as injunctive relief or rescission.
-13-
<PAGE> 17
The Company's Bylaws provide that the Company shall indemnify its
directors and officers to the fullest extent permitted by California law,
including circumstances in which indemnification is otherwise discretionary.
The Company has entered into indemnification agreements with its officers and
directors containing provisions which are in some respects broader than the
specific indemnification provisions contained in the California General
Corporation Law. Such agreements may require the Company, among other things,
(i) to indemnify its officers and directors against certain liabilities that
may arise by reason of their status or service as directors or officers
provided such persons acted in good faith and in a manner reasonably believed
to be in the best interests of the Company and, with respect to any criminal
action, had no cause to believe their conduct was unlawful, (ii) to advance the
expenses actually and reasonably incurred by its officers and directors as a
result of any proceeding against them as to which they could be indemnified and
(iii) to obtain directors' and officers' insurance if available on reasonable
terms. There is no action or proceeding pending or, to the knowledge of the
Company, threatened which may result in a claim for indemnification by any
director, officer, employee or agent of the Company.
STOCK OPTION GRANTS
The following table sets forth certain information concerning grants of stock
options in connection with the repricing of stock options of certain Named
Executive Officers during the fiscal year ended December 31, 1996. Other than
the information set forth below relating the repricing of certain stock
options, no Named Executive Officers received option grants during the fiscal
year ended December 31, 1996.
OPTION/SAR GRANTS IN FISCAL YEAR 1996
<TABLE>
<CAPTION>
Individual Grants Potential Realizable
------------------ Value at Assumed
Percent of Annual Rates Of
Number of Total Stock Price
Securities Options/SARs Appreciation For
Underlying Granted to Exercise of Option Term (1)
Options/SARs Employees in Base Price ---------------------
Name Granted (#) FY 1996 (S/SH) Expiration Date 5% ($) 10% ($)
---- ------------ ------------- ----------- --------------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Vinton W. 200,000 100% 2.75 12/01/05 468,750 1,068,750
Bacon
</TABLE>
(1) The Potential Realizable Value is the product of (a) the difference
between (i) the product of the closing sale price per share at the date of
grant and the sum of (A) 1 plus (B)
-14-
<PAGE> 18
the assumed rate of appreciation of the Common Stock compounded annually over
the term of the option and (ii) the per share exercise price of the option and
(b) the number of shares of Common Stock underlying the option at December 31,
1996 These amounts represent certain assumed rates of appreciation only.
Actual grains, if any, on stock option exercise are dependent on a variety of
factors, including market conditions and the price performance of the Common
Stock. There can be no assurance that the rate of appreciation presented in
this table can be achieved.
(2) Consists of shares Mr. Bacon had the right to purchase on December 31,
1996 upon the exercise of stock options granted pursuant to the Stock Incentive
Plan at an exercise price of $3.875 per share, which options became exercisable
with respect to 25,000 shares on December 1, 1995 and with respect to an
additional 4,860 shares on the first day of each month commencing January 1,
1996. On March 1, 1996, such options were canceled and, in lieu thereof,
options to purchase 200,000 shares were granted to Mr. Bacon at an exercise
price of $2.75, which options were exercisable with respect to 39,580 shares on
the date of grant and will become exercisable with respect to an additional
4,860 shares on the first day of each month commencing April 1, 1996.
OPTION EXERCISES AND HOLDINGS
The following table sets forth certain information with respect to the
Named Executives concerning the exercise of options during the fiscal year
ended December 31, 1996 and unexercised options held by The Named Executives as
of December 31, 1996.
AGGREGATED OPTIONS/SAR EXERCISES IN FISCAL YEAR 1996
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised In-
Options the-Money Options at
at 12/31/96(#) 12/31/96($)(1)
Shares ----------------------- ---------------------
Acquired on Value Unexer-
Name Exercise (#) Realized Exercisable Unexercisable Exercisable cisable
---- ------------ -------- ----------- ------------- ----------- -------
($)
---
<S> <C> <C> <C> <C> <C> <C>
Vinton W. Bacon -- -- 107,620(2) 92,380(2) $40,358 $34,643
Larry Brahim -- -- -- -- -- --
Theodore B. Cooper -- -- -- -- -- --
Jeffrey L. Friedman -- -- 38,130(3) -- -- --
Jan L. Grossman -- -- -- -- -- --
</TABLE>
(1) The value of unexercised "in-the-money" options is the difference
between the closing sale price of the Common Stock on December 31,
1996 ($3.125 per share) and the exercise price of the option,
multiplied by the number of shares subject to the option.
-15-
<PAGE> 19
(2) Consists of shares Mr. Bacon had the right to purchase on December 31,
1996 upon the exercise of stock options granted pursuant to the Stock
Incentive Plan at an exercise price of $3.875 per share, which options
became exercisable with respect to 25,000 shares on December 1, 1995
and with respect to an additional 4,860 shares on the first day of
each month commencing January 1, 1996. On March 1, 1996, such options
were canceled and, in lieu thereof, options to purchase 200,000 shares
were granted to Mr. Bacon at an exercise price of $2.75, which options
were exercisable with respect to 39,580 shares on the date of grant
and will become exercisable with respect to an additional 4,860 shares
on the first day of each month commencing April 1, 1996.
(3) Consists of shares which Mr. Friedman had the right to purchase on
December 31, 1995 upon the exercise of stock options granted in equal
parts by Messrs. Brahim and Cooper at an exercise price of $4.50 per
share which was repriced to $2.75 on March 1, 1997.
REPRICING
On March 1, 1996, the Company canceled options to purchase 200,000
shares held by Mr. Bacon, the Chief Executive Officer, the Chief Operating
Officer and a director of the Company. Each such replacement option had an
original exercise price of $3.875 and has a new exercise price of $2.75, and
becomes exercisable in the same installments and is of the same duration as the
option which it replaces. The closing price of the Common Stock on the date of
the grant was $2.625. The Board of Directors approved the repricing to provide
further incentive to Mr. Bacon.
The following table sets forth certain information relating to the
repricing of certain options of certain executive officers for the previous ten
years.
TEN-YEAR OPTION/SAR REPRICINGS
<TABLE>
<CAPTION>
Number of Market Price Exercise Length of
Securities at Time of Price at Original Option
Underlying Stock at Time of New Term
Options/ Time of Repricing or Exercise Remaining at
Repriced or Repricing or Amendment Price Date of
Amended Amendment Original Now Repricing or
Name Date (#) ($) ($) ($) Amendment
---- ---- ----------- ------------ ------------ -------- --------------
<S> <C> <C> <C> <C> <C> <C>
Vinton W. Bacon 3/1/96 200,000 2.625 3.175 2.75 117 months
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee consists of Messrs. Davis, Dalshaug and
Soady. Mr. Dalshaug is the Chairman of the Board and the Chief Executive
Officer of Sterling Bank. From time to time during fiscal 1996, the Company
and certain of its directors and
-16-
<PAGE> 20
executive officers have been customers of Sterling Bank in the ordinary course
of its business. To the best knowledge of the Company, all such relationships
were made on substantially the same terms as those prevailing at the time for
comparable transactions with persons of similar creditworthiness.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
Set forth below is a report of the Compensation Committee of the Board
of Directors addressing the Company's compensation policies for 1996 applicable
to the Company's executive officers, including the Named Executives.
The Report of the Compensation Committee of the Board of Directors on
Executive Compensation shall not be deemed incorporated by reference by any
general statement incorporating by reference this Proxy Statement into any
filing under the Securities Act of 1933 (the "Securities Act") or under the
Securities Exchange Act of 1934 (the "Exchange Act"), except to the extent that
the Company specifically incorporates this information by reference, and shall
not otherwise be deemed filed under such Acts.
REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
Since its inception, the Company has maintained the philosophy that
executive compensation should be competitive with that provided to others in
the women and kids apparel industry to assist the Company in attracting and
retaining qualified executives critical to the Company's long-term success.
Prior to the Company's initial public offering and the establishment
of this Committee, the Board of Directors approved employment agreements with
certain executive officers in order to be assured of their continued services
and their experience, knowledge and abilities which had been largely
responsible for the Company's success to date. Such employment agreements
terminated on December 31, 1995, and on January 30, 1996, new employment
agreements were granted by this Committee, subject to the approval of the Board
of Directors, for terms expiring on December 31, 1996. In addition, on
December 1, 1995 this Committee, subject to the approval of the Board of
Directors, approved the employment of, and the terms of a three-year employment
agreement with, Vinton W. Bacon as the Chief Executive Officer and the Chief
Operating Officer of the Company, and on May 6, 1996, this Committee, subject
to the approval of the Board of Directors, approved the employment of, and the
terms of an employment agreement with Frederick A. Findley as the Vice
President of Finance and Chief Financial Officer.
In determining the salaries and the perquisites provided in such
agreements, this Committee considered, among other things, (i) the net sales
and net income history of the Company, both before and after the employment of
these individuals, (ii) the estimated near and intermediate term results of
operations of the Company, (iii) the position of the Company in its industry,
(iv) the expertise of these individuals, (v) the current sales, net income,
growth and capital structure of the Company and comparable companies and (vi)
salaries and perquisites of executives of comparable companies. In the case of
each of these individuals, this Committee was particularly influenced by the
effect on the
-17-
<PAGE> 21
Company's performance in 1996 and prospects of (i) the continuing weak consumer
demand for apparel generally, (ii) the continuing consolidation among apparel
retailers and (iii) the demonstrated expertise of such individuals in the
women's apparel industry. In the case of Mr. Bacon, this Committee was
particularly influenced by his expertise in operations and finance.
The Named Executive Officers are also permitted to participate in the
benefit plans provided to employees generally. The incremental cost to the
Company of the benefits provided to Messrs. Bacon, Brahim, Cooper, Friedman and
Ms. Grossman under these plans averaged approximately 4.8% of their base
salaries in fiscal 1996.
In addition, the Company believes that stock ownership by key
employees, including executive officers, provides valuable incentives for such
persons, who will benefit as the Common Stock price increases, and that
stock-based performance compensation arrangements are beneficial in aligning
employees' and shareholders' interests by creating common incentives related to
the possession by management of an economic interest in the appreciation of the
Company's Common Stock. In support of these objectives, the Company granted
stock options to key employees through the 1993 Employee Stock Incentive Plan.
In addition, on January 30, 1996 this Committee approved, subject to the
approval of the Board of Directors, the cancellation of existing options
heretofore granted to certain employees, consultants, and directors and, in
lieu thereof, the grant of options at the current fair market value of this
Common Stock of this Company. The repricing was intended to provide additional
incentives to certain employees.
Dated: April 5, 1997 THE COMPENSATION COMMITTEE
Joseph S. Davis
William Soady
Allan Dalshaug
PERFORMANCE GRAPH
The following graph compares the yearly percentage change in the
Company's cumulative total shareholder return on Common Stock with (i) the
cumulative total return of the American Stock Exchange market index and (ii)
the cumulative total return of companies with the standard industrial
classification (SIC) code 2331 over the period from March 16, 1994, the closing
date of the Company's initial public offering, through December 31, 1996. The
component entities of SIC Code 2331 were generated by Media General Financial
Service, Inc. All the entities in SIC Code 2331 were incorporated into the
peer group. The graph assumes an initial investment of $100 on March 16, 1994
and reinvestment of dividends. The graph is not necessarily indicative of
future price performance.
The graph shall not be deemed incorporated by reference by any general
statement incorporating by reference this Proxy Statement into any filing under
the Securities Act or under the Exchange Act, except to the extent that the
Company specifically incorporates this information by reference, and shall not
otherwise be deemed filed under such acts.
-18-
<PAGE> 22
COMPARE CUMULATIVE TOTAL RETURN
AMONG JALATE, LTD.,
AMEX MARKET INDEX AND SIC CODE INDEX
[LINE GRAPH]
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company and certain of its directors and executive officers
maintain banking relationships with Sterling Bank, of which Mr. Dalshaug, a
director of the Company, is the Chairman of the Board the and Chief Executive
Officer. Such relationships are on substantially the same terms as those
prevailing for comparable transactions with persons of similar
creditworthiness.
In January 1996, Mr. Cooper, a Director and Executive Vice President
of the Company, owed the Company $73,430, which the Company forgave in
consideration for Mr. Cooper agreeing to enter into the employment agreement
described under the heading "Employment Agreements". The debt arose as a
result of advances made by the Company to Mr. Cooper.
Except for the above arrangements and agreements, none of the
directors or executive officers of the Company, or any associate or affiliate
of such person, had any other material interest, direct or indirect, in any
transaction during the past year or any proposed transaction with the Company.
-19-
<PAGE> 23
SECTION 16 (A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under Section 16 (a) of the Exchange Act, the Company's directors,
executive officers and any person holding ten percent or more of the Common
Stock are required to report their ownership of Common Stock and any changes in
that ownership to the Securities and Exchange Commission (the "SEC") and to
furnish the Company with copies of such reports. Specific due dates for these
reports have been established, and the Company is required to report in this
Proxy Statement any failure to file on a timely basis by such persons. Based
solely upon a review of copies of reports filed with the SEC prior to the
Record Date, all persons subject to the reporting requirements of Section 16(a)
have filed all required reports on a timely basis except for Mr. Nichols and
Mr. Soady, both of whom became directors of the Company in August 1996, and who
have not filed their initial reports with the SEC, and Mr. Brahim, Mr. Cooper,
Mr. Friedman and Ms. Grossman, who each have not filed one report with the SEC
relating to certain sales of stock.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION
OF THE BOARD OF DIRECTORS' NOMINEES.
PROPOSAL 2
RATIFICATION OF THE APPOINTMENT OF
INDEPENDENT AUDITORS
The Board of Directors has appointed KPMG Peat Marwick LLP as the
Company's independent auditors for the fiscal year ending December 31, 1997.
KPMG Peat Marwick LLP, the Company's auditors for the fiscal year ended
December 31, 1996, performed audit services for fiscal 1996 to which included
the examination of the financial statements of the Company and services
relating to filings with the Securities and Exchange Commission.
Representatives of KPMG Peat Marwick LLP will be invited to be present at the
Meeting, will have the opportunity to make a statement if they desire to do so
and will be available to respond to appropriate questions from shareholders.
Shareholders will be asked at the Meeting to consider and act upon a
proposal to ratify the appointment of KPMG Peat Marwick LLP as the Company's
independent auditors for the fiscal year ending December 31, 1997.
Ratification of the proposal requires the affirmative vote of a majority of the
shares of Common Stock represented and voting at the Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE
APPOINTMENT OF KPMG PEAT MARWICK LLP AS THE INDEPENDENT AUDITORS OF THE COMPANY
FOR THE FISCAL YEAR ENDING DECEMBER 31, 1997.
-20-
<PAGE> 24
PROPOSALS OF SHAREHOLDERS
Under certain circumstances, shareholders are entitled to present
proposals at shareholder meetings. Any shareholder proposal to be included in
the proxy statement for the Company's 1998 annual meeting of shareholders must
be received by the Secretary of the Company, 1675 South Alameda Street, Los
Angeles, California 90021, on or before January 24, 1998, in a form that
complies with applicable regulations.
ANNUAL REPORT
The Company's Annual Report of the fiscal year ended December 31, 1996
accompanies or has preceded this Proxy Statement. The Annual Report contains
financial statements of the Company and the report thereon of KPMG Peat Marwick
LLP, the Company's independent auditors.
SHAREHOLDERS MAY OBTAIN WITHOUT CHARGE A COPY OF THE COMPANY'S ANNUAL
REPORT ON FORM 10-K, INCLUDING FINANCIAL STATEMENTS REQUIRED TO BE FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO THE SECURITIES EXCHANGE ACT
OF 1934, AS AMENDED, FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996 BY WRITING TO
THE COMPANY AT 1675 SOUTH ALAMEDA STREET, LOS ANGELES, CALIFORNIA 90021,
ATTENTION: FREDERICK A. FINDLEY.
OTHER BUSINESS
Management knows of no business which will be presented for
consideration at the Meeting other than as stated in the Notice of Meeting.
If, however, other matters are properly brought before the Meeting, and it is
the intention of the Proxyholders to vote the shares represented by the Proxies
on such matters in accordance with the recommendation of the Board of
Directors, authority to do so is included in the Proxies.
By Order of the Board of Directors,
Larry Brahim,
Chairman of the Board
Dated: APRIL 28, 1997
/s/ LARRY BRAHIM
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<PAGE> 25
REVOCABLE PROXY JALATE, LTD. REVOCABLE PROXY
ANNUAL MEETING OF SHAREHOLDERS -- MAY 12, 1997
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned shareholder(s) of Jalate, Ltd. (the "Company") hereby
nominates, constitutes and appoints Larry Brahim and Frederick Findley, and each
of them, the attorney, agent and proxy of the undersigned, with full power of
substitution, to vote all stock of the Company which the undersigned is entitled
to vote at the Annual Meeting of Shareholders of the Company (the "Meeting") to
be held at the Marriott Hotel, Los Angeles Airport, 5855 W. Century Blvd., Los
Angeles, CA 90045, on Monday, May 12, 1997, at 11:00 a.m., and any adjournments
thereof, as fully and with the same force and effect as the undersigned might or
could do if personally thereat, as follows:
1. ELECTION OF DIRECTORS.
<TABLE>
<S> <C>
FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to the contrary below) [ ] to vote for all nominees listed below [ ]
</TABLE>
<TABLE>
<S> <C> <C>
Vinton W. Bacon Allan E. Dalahaug Jan L. Grossman
Larry Brahim Joseph S. Davis Victor Nichols
Theodore B. Cooper I. Jay Goldfarb William Soady
</TABLE>
(Instructions: To withhold authority to vote for any one or more nominees
whose name appears above, write that nominee's or nominees' name(s) in the
space provided below)
--------------------------------------------------------------------------
2. RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITORS. To ratify the
appointment of KPMG Peat Marwick LLP as the Company's independent
auditors for the year ending December 31, 1997.
For [ ] Against [ ] Abstain [ ]
3. OTHER BUSINESS. In their discretion, the proxyholders are authorized to
transact such other business as may properly come before the Meeting and
any adjournment or adjournments thereof.
For [ ] Against [ ] Abstain [ ]
PLEASE SIGN AND DATE ON REVERSE SIDE
<PAGE> 26
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF EACH OF THE
NOMINEES LISTED ABOVE AND "FOR" RATIFICATION OF KPMG PEAT MARWICK LLP AS THE
COMPANY'S INDEPENDENT AUDITORS. IF ANY OTHER BUSINESS IS PRESENTED AT THE
MEETING, THIS PROXY SHALL BE VOTED BY THE PROXYHOLDERS IN ACCORDANCE WITH THE
RECOMMENDATIONS OF A MAJORITY OF THE BOARD OF DIRECTORS.
The undersigned hereby ratifies and confirms all that said attorneys and
proxyholders, or either of them, or their substitutes, shall lawfully do or
cause to be done by virtue hereof, and hereby revokes any and all proxies
heretofore given by the undersigned to vote at the Meeting. The undersigned
hereby acknowledges receipt of the Notice of Annual Meeting and the Proxy
Statement accompanying said notice.
Date:__________________ _________________________
(Number of Shares)
-------------------------
(Name of Shareholder,
Printed)
-------------------------
(Signature of
Shareholder)
-------------------------
(Name of Shareholder,
Printed)
-------------------------
(Signature of
Shareholder)
(Please date this Proxy
and sign your name as it
appears on your stock
certificate(s).
Executors,
administrators, trustees,
etc., should give their
full titles. All joint
owners should sign.)
I (We) do [ ] do not [ ]
expect to attend the
Meeting.
This Proxy will be voted "FOR" the election of all nominees whose names appear
above unless authority to do so is withheld. Unless "AGAINST" or "ABSTAIN" is
indicated on the reverse hereof, this Proxy will be voted "FOR" ratification of
the appointment of KPMG Peat Marwick LLP as the Company's independent auditors.
PLEASE SIGN, DATE AND RETURN THIS PROXY AS PROMPTLY AS POSSIBLE IN THE POSTAGE
PREPAID ENVELOPE PROVIDED.
