<PAGE> 1
SCHEDULE 14A
(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
(AMENDMENT NO. ___)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
[X] Definitive Proxy Statement Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
</TABLE>
JALATE, LTD.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
N/A
- --------------------------------------------------------------------------------
(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)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(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):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[ ] 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:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE> 2
JALATE, LTD.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 12, 1998
-------------------
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 Renaissance Los
Angeles Hotel-Airport, 9620 Airport Boulevard, Los Angeles, California 90045, on
Tuesday, May 12, 1998, at 10:00 a.m. for the purpose of considering and voting
upon the following matters.
ELECTION OF DIRECTORS. To elect seven 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
Allan E. Dalshaug Victor K. Nichols
William S. 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, 1998.
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 APRIL 13, 1998 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 20, 1998.
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,
/s/ LARRY BRAHIM
------------------------------
Larry Brahim,
Chairman of the Board
Dated: April 20, 1998
<PAGE> 3
JALATE, LTD.
1675 South Alameda Street
Los Angeles, California 90021
(213) 765-5000
-----------------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
May 12, 1998
-----------------------
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 Tuesday, May 12, 1998, at the
Renaissance Los Angeles Hotel-Airport; 9620 Airport Boulevard, Los Angeles,
California 90045, at 10:00 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 April 13, 1998 (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 20, 1998.
MATTERS TO BE CONSIDERED
The matters to be considered and voted upon at the Meeting will be:
ELECTION OF DIRECTORS. To elect seven 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
Allan E. Dalshaug Victor K. Nichols
William S. 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, 1998.
OTHER BUSINESS. To transact such other business as properly may come
before the Meeting or any adjournment thereof.
All propositions 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.
<PAGE> 4
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, 1998.
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, 1998.
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 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 was
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.
<PAGE> 5
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, 1,222,475
shares of Common Stock (or approximately 35.9%) were owned by officers and
directors of the Company. These 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, 1998, all as described herein.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS 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 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),
(iii) each director and nominee for director of the Company and (iv) 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 262,962(4) 7.4
Larry Brahim 712,762 20.9
Theodore B. Cooper (16) - *
Allan E. Dalshaug 10,000(5) *
Joseph S. Davis 10,000(6) *
William M. DeArman 381,893(7) 11.2
Frederick A. Findley 65,000(8) 1.9
Jeffrey L. Friedman 197,800(9) 5.7
I. Jay Goldfarb 11,000(10) *
Jan L. Grossman (15) 231,908 6.8
Victor K. Nichols 10,000(11) *
Don A. Sanders 356,500(12) 10.5
William S. Soady 10,000(13) *
All directors and executive officers
as a group (eleven persons) 1,521,432 (14) 41.1
</TABLE>
<PAGE> 6
- --------------------
* Less than one percent.
(1) The business address of each person listed is c/o Jalate, Ltd., 1675 South
Alameda Street, Los Angeles, California 90021, except as otherwise noted.
(2) Except as otherwise noted, 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. Included in the number of
shares beneficially owned are any shares which the person has the right to
purchase within 60 days after the Record Date.
(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) Includes 170,827 shares which Mr. Bacon had the right to purchase as of
the Record Date and within 60 days after the Record Date upon the exercise
of stock options granted pursuant to the Stock Inventive Plan. Excludes
29,173 shares which Mr. Bacon will have the right to purchase thereafter
upon the exercise of stock options granted pursuant to the Stock Incentive
Plan, which options will become exercisable in equal monthly installments
of 4,861 shares on the first day of each month commencing on July 1, 1998.
(5) Consists of 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 4,200 shares in which the voting and dispositive powers are
shared. Excludes 17,500 shares held by or for the benefit of Mr. DeArman's
children for which Mr. DeArman disclaims beneficial ownership. Mr.
DeArman's address is 5420 Huckleberry Lane, Houston, TX 77056.
(8) Includes 40,000 shares which Mr. Findley had the right to purchase as of
the Record Date and within 60 days after the Record Date upon the exercise
of stock options granted pursuant to the Stock Incentive Plan. Excludes
20,000 shares which Mr. Findley will have the right to purchase on May 6,
1999 upon the exercise of stock options granted pursuant to the Stock
Incentive Plan.
(9) 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. Mr. Friedman's address is 1407 Broadway,
Suite 316, New York, NY 10018.
(10) 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.
(11) 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.
(12) Includes 13,500 shares held by family members of Mr. Sanders. Mr. Sanders'
address is 600 Travis, Suite 3100, Houston, TX 77002.
(13) 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.
(14) Includes (i) 260,827 shares which certain directors and executive officers
had the
<PAGE> 7
right to purchase within 60 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 (i) 49,173 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 July 1, 1998 and (ii) 738,393 shares listed above for Messrs. DeArman
and Sanders, neither of whom is a director or executive officer.
(15) Ms. Grossman resigned effective January 1, 1998. Ms. Grossman's address is
860 Los Angeles Street, Suite 912, Los Angeles, CA 90014.
(16) Mr. Cooper resigned effective October 31, 1997.
- --------------------------------------------------------------------------------
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 seven.
The persons named below and identified as current members of the Board of
Directors of the Company have been nominated for reelection 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.
<TABLE>
<CAPTION>
Name Age Position
------------------------- --- --------------------------
<S> <C> <C>
Vinton W. Bacon (1) 56 Chief Executive Officer,
President, Chief Operating
Officer and Director
Larry Brahim 53 Chairman of the Board,
Executive Vice President
and Director
Frederick A. Findley 53 Vice President-Finance,
Chief Financial Officer
and Secretary
</TABLE>
<PAGE> 8
<TABLE>
<S> <C> <C>
Jeffrey L. Friedman 43 Vice President-Marketing
Allan E. Dalshaug (2) (3) 67 Director
Joseph S. Davis (2) (1) 68 Director
I. Jay Goldfarb (3) 65 Director
Victor K. Nichols (3) 41 Director
William S. Soady (2) (1) 54 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
President, 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.
FREDERICK A. FINDLEY joined the Company on May 6, 1996 as Vice President
- - Finance and Chief Financial Officer. On February 25, 1998, Mr. Findley was
elected Secretary of the Company. Before joining the Company, Mr. Findley served
as Chief Financial Officer of Precision Specialty Metals since 1992. He also
served in various senior financial management capacities with other companies.
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.
ALLAN E. DALSHAUG has served as a director of the Company since March
26, 1994. Since 1982, Mr. Dalshaug has been the Chairman of the Board, the
President and the Chief Executive Officer of Sterling West Bancorp, a
publicly-held bank holding company and the Chairman of the Board and the Chief
Executive Officer of its subsidiary, Sterling Bank. 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
<PAGE> 9
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.
VICTOR K. 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 S. 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 (v) to review the Company's quarterly financial statements prior to public
issuance. The Audit Committee met four times during fiscal 1997 and once during
the first quarter of fiscal 1998.
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
once during fiscal 1997 and once during the first quarter of fiscal 1998
<PAGE> 10
when it approved the Management Incentive Plan for Company performance based
awards during fiscal 1998.
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 fiscal 1997 and once during
the first quarter of fiscal 1998.
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.
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 plus $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 and 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
ad, 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 exercise price of $3.50.
MEETINGS OF DIRECTORS
The Board of Directors met four times during fiscal 1997. All of the
persons who were directors of the Company during fiscal 1997 attended at least
75% of (i) the total number
<PAGE> 11
of meetings of the Board of Directors and (ii) the total number of meetings held
by all committees on which they served during fiscal 1997.
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 years 1997, 1996 and 1995 to or on behalf of the Named Executive
Officers.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term Compensation
---------------------------------
Annual Compensation Awards Payouts
-------------------------------- ---------------------- -------
Other Securities All
Annual Restricted Underlying Other
Name and Principal Compen- Stock Options/ LTIP Compen-
Position Year Salary Bonus sation(1) Award(s) SARs(#) Payouts sation(2)
- ------------------ ---- ------ ----- --------- ---------- ---------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Vinton W. Bacon 1997 $275,000 - $ 10,200 - - - $ 29,768
Chief Executive 1996 300,000 - 10,200 - 200,000(4) - 21,085
Officer, President 1995 23,077 - - - 200,000(4) - 150,080(3)
and Chief Operating
Officer
Larry Brahim 1997 275,000 - 9,000 - - - 24,825
Executive Vice 1996 300,000 - 9,000 - - - 22,571
President 1995 300,000 - 9,000 - - - 60,450(6)
Frederick A. Findley 1997 140,000 - 9,000 - - - 1,990
Vice President- 1996 91,538 - 6,000 - - - 663
Finance, Chief 1995 - - - - - - -
Financial Officer
and Secretary(8)
Jeffrey L. Friedman 1997 275,000 - 9,000 - - - 900
Vice President- 1996 300,000 $12,500 9,000 - - - 3,373
Marketing 1995 250,000 80,000 9,000 - - - 4,171
Theodore B. Cooper 1997 233,333 - 7,500 - - - 155,507(5)
Executive Vice 1996 300,000 - 9,000 - - - 15,218
President 1995 300,000 - 9,000 - - - 73,430(7)
Jan L. Grossman 1997 212,500 - 10,200 - - - 3,808
Vice President- 1996 225,000 - 9,600 - - - 5,990
Merchandising(9) 1995 200,000 - 9,000 - - - 8,710
</TABLE>
- ------------------
(1) Consists of an $850 monthly automobile allowance for both Mr. Bacon and
Ms. Grossman and a $750 automobile monthly allowance for each of 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.
(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 200,000 shares Mr. Bacon had the right to purchase upon the
exercise of stock options granted pursuant to the Stock Incentive Plan at
an exercise price of
<PAGE> 12
$3.875 per share, which options became exercisable with respect to 25,000
shares on December 1, 1995 and with respect to an additional 4,861 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 4,861
shares on the first day of each month commencing April 1, 1996.
(5) Mr. Cooper resigned effective October 31, 1997. Other compensation
includes $132,500 paid to Mr. Cooper in severance benefits.
(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. The debt arose as a
result of advances made by the Company to Mr. Cooper.
(8) Mr. Findley joined the Company on May 6, 1996 as Vice President, Finance
and Chief Financial Officer. On February 25, 1998, Mr. Findley was elected
Secretary.
(9) Ms. Grossman resigned effective January 1, 1998. Severance benefits of
$200,000 were accrued in 1997 and are to be paid during 1998.
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. Both of these employment agreements expired on December 31, 1996;
however, the terms of employment automatically renewed for a one year term and
automatically shall be renewed for additional successive one year terms 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. The annual base salaries were reduced to
$250,000 effective July 1, 1997. Mr. Cooper resigned as employee, officer and
director effective October 31, 1997. Mr. Cooper received $132,500 in severance
benefits.
Effective December 1, 1995, the Company entered into a thirty-seven
month employment agreement with Mr. Bacon pursuant to which, as amended, he is
entitled to (i) receive an annual base salary of $300,000 (later reduced to
$250,000 effective July 1, 1997), (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 the 1993 Employee
Stock Incentive Plan and the 1997 Management Incentive Bonus Plan, (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 expire 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
<PAGE> 13
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.
Effective May 6, 1996, the Company entered into an employment agreement
with Mr. Findley pursuant to which he is entitled to (i) receive an annual base
salary of $140,000, subject to periodic increases at the sole discretion of the
Board of Directors, (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 executive officers in general, including the 1993 Employee
Stock Incentive Plan and the 1997 Management Incentive Bonus Plan, (iv) receive
a $750 monthly automobile allowance and (v) receive options to purchase from the
Company up to 60,000 shares of Common Stock at $2.25 per share. The stock
options became exercisable with respect to 20,000 shares on May 6, 1997 and
become exercisable with respect to an additional 20,000 shares on both May 6,
1998 and May 6, 1999. All these options expire on the tenth anniversary of the
date of grant. The employment agreement expired on December 31, 1997; however,
the term of employment automatically renewed for a one year term and
automatically shall be renewed for additional successive one year terms 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. The employment agreement is terminable by the
Company or the employee "at will", with or without cause. In the event either
(a) the Company terminates employment without cause or (b) a "change in control"
of the Company occurs, the Company is obligated to continue the employee's
compensation for a period of six months after the effective date of termination.
Mr. Findley's annual base salary was increased to $150,000 effective April 1,
1998, and was reduced to $135,000 effective July 1, 1998.
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.
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/SAR GRANTS
No Named Executive Officer received option grants or Stock Appreciation
Rights grants during the fiscal year ended December 31, 1997.
<PAGE> 14
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, 1997 and unexercised options held by the Named Executives as of
December 31, 1997. The Company has not issued any Stock Appreciation Rights.
AGGREGATED OPTION/SAR EXERCISES IN FISCAL YEAR 1997
AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
Number of Shares Value of
Underlying Unexercised In-
Unexercised Options the-Money Options at
Shares at 12/31/97 12/31/97 (1)
Acquired on Value -------------------------- -------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Vinton W. Bacon - $ - 141,661(2) 58,339(2) $ - $ -
Larry Brahim - - - - - -
Theodore B. Cooper - - - - - -
Frederick A. Findley - - 20,000(3) 40,000(3) - -
Jeffrey L. Friedman - - 38,130(4) - - -
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, 1997 ($1.8125
per share) and the exercise price of the option, multiplied by the number
of shares subject to the option.
(2) Consists of shares which Mr. Bacon had the right to purchase on December
31, 1997 upon the exercise of stock options granted pursuant to the Stock
Incentive Plan. On March 1, 1996, options to purchase 200,000 shares were
granted to Mr. Bacon at an exercise price of $2.75 per share, which
options were exercisable with respect to 39,580 shares on the date of
grant and which become exercisable with respect to an additional 4,861
shares on the first day of each month commencing April 1, 1996.
(3) Consists of shares which Mr. Findley had the right to purchase on December
31, 1997 upon the exercise of stock options granted pursuant to the Stock
Incentive Plan. On May 6, 1996, options to purchase 60,000 shares were
granted to Mr. Findley at an exercise price of $3.25 per share, which
options become exercisable with respect to 20,000 shares annually
commencing May 6, 1997.
(4) Consists of shares which Mr. Friedman had the right to purchase on
December 31, 1997 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 per share on March 1, 1996.
<PAGE> 15
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 1997, the Company and certain
of its directors and 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 1997 applicable
to the Company's executive officers, including the Named Executive Officers.
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
Company's performance in 1996 and 1997 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.
Due to the losses experienced by the Company in 1997, the annual base
salary for each of the executive officers was reduced by up to $50,000 effective
July 1, 1997. As part of the Company's cost reduction program instituted during
1997, Mr. Cooper resigned effective
<PAGE> 16
October 31, 1997, and Ms. Grossman resigned effective January 1, 1998. The
duties formerly performed by Mr. Cooper and Ms. Grossman have been assumed by
other employees; the Company presently is not seeking to replace either of these
persons.
During the first quarter of 1998, the Committee approved the Management
Incentive Plan for Company performance based awards during fiscal 1998.
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 and Friedman under
these plans averaged approximately 5% of their base salaries in fiscal 1997.
Dated: April 7, 1998 THE COMPENSATION COMMITTEE
Joseph S. Davis, Chair
Allan E. Dalshaug
William S. Soady
PERFORMANCE GRAPH
The following graph compares the quarterly 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 Value 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, 1997. 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.
COMPARISON OF CUMULATIVE TOTAL RETURN
AMONG JALATE, LTD.,
AMEX MARKET VALUE INDEX AND SIC CODE INDEX
<TABLE>
<CAPTION>
Date Jalate, Ltd. AMEX Market Index SIC Code Index
- -------- ------------ ----------------- --------------
<S> <C> <C> <C>
3/16/94 (Base) 100.00 100.00 100.00
3/31/94 94.92 100.00 100.00
6/30/94 132.20 93.32 85.67
9/30/94 140.68 103.04 85.64
12/30/94 101.69 97.85 70.14
3/31/95 94.92 104.56 61.23
6/30/95 77.97 112.92 72.06
9/29/95 72.03 122.64 85.78
12/29/95 42.37 123.10 93.36
3/29/96 49.15 128.56 116.24
6/28/96 52.54 130.01 118.31
9/30/96 61.02 128.14 127.19
12/31/96 42.37 130.14 132.40
3/31/97 38.98 129.78 149.63
6/30/97 33.90 142.54 161.25
9/30/97 26.27 160.63 180.39
12/31/97 24.58 157.85 156.70
</TABLE>
<PAGE> 17
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.
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 in any proposed transaction with the Company.
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, 1998.
KPMG Peat Marwick LLP, the Company's auditors for the fiscal year ended December
31, 1997, performed audit services for fiscal 1997 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 have been invited and are expected to be present at the
Meeting, will have the opportunity to make a statement if they desire to do so
and are expected to 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, 1998. 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, 1998.
- --------------------------------------------------------------------------------
PROPOSALS OF SHAREHOLDERS
Under certain circumstances, shareholders are entitled to present
proposals at shareholder meetings. No shareholder proposals had been submitted
to the Company for consideration at the 1998 Annual Meeting as of April 20,
1998.
Any shareholder proposal to be included in the proxy statement for the
Company's 1999 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 20, 1999, in a form that complies with applicable regulations.
ANNUAL REPORT
The Company's Annual Report of the fiscal year ended December 31, 1997
accompanies or has preceded this Proxy Statement. The Annual Report contains
financial statements of the
<PAGE> 18
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 AND FINANCIAL STATEMENT
SCHEDULES 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, 1997 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,
/s/ LARRY BRAHIM
--------------------------------------
Larry Brahim, Chairman of the Board
Dated: April 20, 1998
<PAGE> 19
REVOCABLE PROXY JALATE, LTD. REVOCABLE PROXY
Annual Meeting of Shareholders -- May 12, 1998
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 A. 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 Renaissance Los Angeles Hotel-Airport; 9620 Airport
Boulevard; Los Angeles, CA 90045, on Tuesday, May 12, 1998, at 10:00 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
FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to the to vote for all nominees
contrary below) [ ] listed below [ ]
Vinton W. Bacon Joseph S. Davis Victor K. Nichols
Larry Brahim I. Jay Goldfarb William S. Soady
Allan E. Dalshaug
(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, 1998.
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> 20
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.
