SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a- l l(c) or 240.14a-12
Jenna Lane, Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-ll(c)(l)(ii), 14a-6(I)(1), 14a-6(i)(2) or Item
22(a)(2) of Schedule 14A
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14(a)-6(i)(4) 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-l (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: ......................................................
JENNA LANE, INC.
1407 Broadway, Suite 1801
New York, New York 10018
November 18, 1997
Dear Stockholder:
You are cordially invited to attend the Company's Annual Meeting of
Stockholders to be held on Monday, December 15, 1997, at 10:00 A.M., local time,
at the Company's offices at 2559 Route 130, Cranbury, New Jersey 08512.
As set forth in the formal Notice of Meeting and in the accompanying
Proxy Statement, we are asking you to elect directors and to ratify the
appointment of Edward Isaacs & Company, LLP as the independent auditors of the
Company.
The Board of Directors has approved the proposals and believes they are
in the best interests of all of the Company's stockholders. We urge you to read
the accompanying Proxy Statement carefully. At the meeting, management also will
report on the affairs of the Company, including its progress since its initial
public offering in March, 1997. After the formal part of the meeting we will
have a discussion period for questions and comments of general interest to
stockholders.
We look forward to greeting personally those stockholders who are able
to attend the meeting; however, whether or not you plan to attend the meeting,
it is important that your shares be represented. Accordingly, you are requested
to sign, date and mail the enclosed proxy, at your earliest convenience, in the
envelope provided.
Thank you for your cooperation.
Very truly yours,
Mitchell Dobies
President
JENNA LANE, INC.
1407 Broadway, Suite 1801
New York, New York 10018
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The Annual Meeting of Stockholders of Jenna Lane, Inc. (the "Company")
will be held at the Company's offices at 2559 Route 130, Cranbury, New Jersey
08512 on Monday, December 15, 1997, at 10:00 a.m., or at any adjournment of the
meeting, to consider and vote upon the following matters, as explained more
fully in the accompanying Proxy Statement:
1. To elect the Board of Directors.
2. To ratify the selection of Edward Isaacs & Company, LLP, independent
certified public accountants, as the Company's independent auditors for
the year ending March 31, 1998.
3. To transact any other business that properly comes before the meeting
or any adjournments or postponements of the meeting.
Only stockholders of record at the close of business on November 12,
1997 are entitled to notice of and to vote at the Annual Meeting. Stockholders
who are unable to attend the Annual Meeting are requested to complete, date and
return the enclosed form of proxy promptly in the envelope provided.
Stockholders who attend the annual meeting may revoke their proxy and
vote their shares in person.
Kathleen A. Dressel
Secretary
New York, New York, U.S.A.
November 18, 1997
JENNA LANE, INC.
1407 Broadway, Suite 1801
New York, New York, 10018
PROXY STATEMENT
GENERAL INFORMATION
Proxy Solicitation
This Proxy Statement is mailed to holders ("Stockholders") of shares of
Common Stock, par value $.01 per share ("Common Stock") of Jenna Lane, Inc., a
Delaware corporation (the "Company"), in connection with the solicitation of
proxies by the Board of Directors of the Company for use at the Annual Meeting
of Stockholders to be held on Monday, December 15, 1997, at 10:00 A.M., local
time, at the Company's offices at 2559 Route 130, Cranbury, New Jersey 08512,
and at any adjournments of the meeting (the "Annual Meeting").
At the Annual Meeting the Stockholders will vote upon: (1) the election
of five directors; and (2) the ratification of the selection of Edward Isaacs &
Company, LLP, independent certified public accountants, as the Company's
independent auditors for the year ending March 31, 1998. Management currently is
not aware of any other matters which will come before the Annual Meeting. If any
other matters properly come before the Annual Meeting, the persons designated as
proxies intend to vote in accordance with their judgment on such matters.
Proxies for use at the Annual Meeting are being solicited by the Board
of Directors of the Company. These proxy materials are first being mailed to
Stockholders on or about November 18, 1997. Proxies will be solicited primarily
by mail. Certain officers, directors, employees and agents of the Company, none
of whom will receive additional compensation for such efforts, may solicit
proxies by telephone, facsimile, electronic mail or other personal contact. The
Company will bear the cost of soliciting proxies, including postage, printing
and handling, and will reimburse the reasonable expenses of brokerage firms and
others for forwarding material to beneficial owners of shares of Common Stock.
Proposals of Stockholders intended to be presented at the Company's
1998 Annual Meeting must be received at the Company's offices at 1407 Broadway,
Suite 1801, New York, New York 10018, Attention: Kathleen A. Dressel, Corporate
Secretary, no later than June 1, 1998, to be considered for inclusion in the
proxy statement and form of proxy for that meeting.
Revocability and Voting of Proxy
A form of proxy for use at the Annual Meeting and a return envelope for
the proxy are
enclosed. Shares represented by duly executed proxies will be voted in
accordance with Stockholders' instructions. If you sign the proxy, but do
not fill in a vote, your shares will be voted in accordance with the
Directors' recommendations. Any proxy may be revoked by a stockholder prior
to its exercise upon written notice to the Secretary of the Company, or by
a Stockholder voting in person at the Annual Meeting.
Record Date and Voting Rights
Stockholders of record at the close of business on November 12, 1997
(the "Record Date") are entitled to notice of and to vote at the Annual Meeting
and any adjournment(s) thereof. On the Record Date, the Company had outstanding
and entitled to vote at the Annual Meeting 4,290,000 shares of Common Stock.
Stockholders as of the Record Date will be entitled to one vote for each share
held, with no shares having cumulative voting rights. The holders of a majority
of the outstanding shares of Common Stock, present in person or by proxy and
entitled to vote, will constitute a quorum at the Annual Meeting. Shares of
Common Stock are counted for quorum purposes if they are represented for any
purpose at the Annual Meeting other than solely to object to holding the Annual
Meeting or transacting business at the Annual Meeting. Assuming a quorum is
present, for the election of directors a plurality of the shares voting must
vote in the affirmative. The approval of any other matter coming before the
Annual Meeting requires that a majority of the shares voting must vote in the
affirmative. Abstentions and broker non-votes are neither counted for purposes
of determining the number of affirmative votes required for approval of
proposals nor voted for or against matters presented for Stockholder
consideration. Consequently, so long as a quorum is present, abstentions and
broker non-votes have no effect on the outcome of any vote.
BENEFICIAL OWNERSHIP OF COMMON STOCK BY
CERTAIN STOCKHOLDERS AND MANAGEMENT
The following table sets forth information as of October 1, 1997,
regarding the beneficial ownership of the Company's Common Stock of (i) each
person known by the Company to own beneficially more than 5% of the Company's
outstanding Common Stock, (ii) each director of the Company and each nominee for
director, and (iii) all directors and officers of the Company as a group. Except
as otherwise specified, the named beneficial owner has sole voting and
investment power.
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Name and Amount and
Address of Nature of
Beneficial Beneficial
Owner Ownership (1) Percent of Class
- ---------- ------------- ----------------
Mitchell Dobies (2) 752,381 17.54%
President, Co-Chief Executive Officer,
Director
Charles Sobel (2) 715,714 16.68%
Executive Vice President, Co-Chief
Executive Officer, Director
Jay M. Haft(4) - 0 - -
Chairman of the Board of Directors
Mitchell Herman, Director (5) - 0 - -
Gerald Cohen, Director (6) - 0 - -
Lawrence Kaplan (2)(3) 489,669 11.41%
Gerald L. Kanter, Nominee (7) - -
All current executive officers and
directors as a group (6 persons) 1,468,095 34.22%
<FN>
- ------------------
(1) Unless otherwise indicated herein and subject to applicable community
property laws, each stockholder has sole voting and investment power with
respect to all shares of Common Stock beneficially owned by such stockholder and
directly owns all such shares in such stockholder's sole name. Does not include
options to purchase Common Stock currently outstanding under the Option Plan.
See "Item 11 - Executive Compensation."
(2) Includes 222,857 Performance Shares (as hereinafter defined) for Mr. Dobies,
291,429 Performance Shares for Mr. Sobel and 57,143 Performance Shares for
Lawrence Kaplan. Does not include shares underlying options granted under the
Company's 1996 Incentive Stock Option Plan (the "Option Plan") and exercisable
within 60 days after October 1, 1997. Mailing address for Messrs. Dobies and
Sobel, is c/o Jenna Lane, Inc., 1407 Broadway, Suite 1801, New York, New York
10018.
(3) Mailing address for Mr. Kaplan is 150 Vanderbilt Motor Parkway, Suite 311,
Hauppauge,
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New York 11788. Includes an aggregate of 19,048 shares of Common
Stock owned by Helaine Kaplan as custodian for Michelle Kaplan and Robert
Kaplan. Also includes 95,238 shares of Common Stock owned jointly with Helaine
Kaplan. Helaine Kaplan is Lawrence Kaplan's wife. Also includes 95,238 shares of
Common Stock owned by G-V Capital Corp., of which Mr. Kaplan is sole
shareholder, officer and director. Also includes 9,524 shares of Common Stock
owned by OK Associates Pension Trust, of which Mr. Kaplan is a co-trustee. Does
not includes shares owned of a public company, a subsidiary of which owns 95,238
shares of Common Stock, and which indirectly controls Universal Partners, L.P.,
which owns 19,048 shares of Common Stock. Does not include shares of Common
Stock underlying 175,000 Redeemable Clan A Warrants of the Company owned by Mr.
Kaplan.
(4) Mr. Haft's address is 201 S. Biscayne Blvd., Miami, Florida 33131.
(5) Mr. Herman's address is c/o By Design, Ltd., 1411 Broadway, 29th Floor,
New York, NY 10018.
(6) Mr. Cohen's address is 453 Lakeview Drive, Fort Lauderdale,
Florida 33326.
(7) Mr. Kanter's address is 5570 Old Market Road, Shorewood, MN 55331.
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PROPOSAL NUMBER 1
ELECTION OF FIVE DIRECTORS
Five directors (constituting the entire Board of Directors) are to be
elected at the Annual Meeting. Unless otherwise specified, the enclosed proxy
will be voted in favor of the persons named below to serve until the next annual
meeting of stockholders and until their successors have been duly elected and
qualified. If any of these nominees becomes unavailable for any reason, or if a
vacancy should occur before the election, the shares represented by the proxy
will be voted for the person, if any, who is designated by the Board of
Directors to replace the nominee or to fill the vacancy on the Board. All
nominees have consented to be named and have indicated their intent to serve if
elected. The Board of Directors has no reason to believe that any of the
nominees will be unable to serve or that any vacancy on the Board of Directors
will occur.
The nominees, their ages, the year in which each became a director and
their positions with the Company are as follows:
Name Age Date Elected Position
- ---- --- ------------ --------
Mitchell Dobies 38 February 15, 1995
President, Treasurer,
Co-Chief Executive
Officer and Director
Charles Sobel 36 February 15, 1995
Co-Chief Executive
Officer, Executive Vice
President and Director
Mitchell Herman 45 March 19, 1997 Director
Gerald L. Kanter 62 Nominee
Gerald Cohen 64 March 19, 1997 Director
Directors of the Company are elected annually at the annual meeting of
stockholders and serve until the next annual meeting and until their successors
are elected and qualify. Under the Company's By-laws, the number of directors
constituting the entire Board of Directors shall be fixed, from time to time, by
the directors then in office or by the stockholders. The directors may, however,
decrease or increase the number of directors by majority action without
soliciting stockholder approval. If the number of directors is not fixed, the
number shall be four.
Walsh Manning Securities, LLC, the underwriter of the Company's initial
public offering ("Underwriter"), has the right to nominate one member of the
Board of Directors for a period of two years from the closing of the offering.
- 5 -
As a condition to listing the Company's securities on Nasdaq, the
Company was required to ensure that independent directors represent a majority
of the members of the Board of Directors, and for one such independent director
to serve as Chairman. Messrs. Herman, Cohen and Haft, each an independent
director, represent a majority of the Board of Directors, and Mr. Haft serves as
Chairman of the Board of Directors. After the election of directors contemplated
hereby, Messrs. Herman, Cohen and Kanter would each be an independent director.
The Board then shall elect a Chairman from among the independent directors.
Each nominee's business experience during the past five years is described
below:
Mitchell Dobies. Mr. Dobies is President, Co-Chief Executive Officer,
Treasurer, and a director of the Company. Prior to founding Jenna Lane, Inc.,
Mr. Dobies had extensive experience in apparel manufacturing and operation with
both major organizations and entrepreneurial operations. From 1986 until 1995
Mr. Dobies was President and Chief Executive Officer of CR & ME, Ltd. ("CR &
ME"), a vertically integrated domestic manufacturer of cut and sewn knit
sportswear. Upon information and belief, that company has filed for liquidation
under Chapter 7 of the United States Code (i.e. the bankruptcy code). From 1984
to 1986 he was Director of Operations of the Mens Division of Izod LaCoste, a
division of General Mills. From 1982 to 1984 he was a stockholder and general
manager of Necessary Objects, a moderate priced domestic manufacturer of women's
apparel, of which he was the founder. From 1979 to 1981 he was a buyer for a
retail chain specializing in junior apparel. See also, "Certain Legal Issues
Concerning Management," below.
Charles Sobel. Charles Sobel is Co-Chief Executive Officer, Executive
Vice President and a director of the Company, and is in charge of all aspects of
sales and merchandising. Mr. Sobel, a founder of the Company, has more than 13
years of experience in selling women's apparel and maintains an extensive
network of relationships with the senior management of most retail chains. From
January, 1994 until February, 1995 Mr. Sobel was Executive Vice President of CR
& ME. Upon information and belief, that company has filed for liquidation under
Chapter 7 of the United States Code (i.e. the bankruptcy code). From September,
1992 until joining CR & ME he was the Vice President and Sales Manager for the
Women's Wear Division of Gitano Corporation. From 1982 to 1992 he was a
Principal and Sales Manager of Style Up of California, a manufacturer of women's
apparel and a division of Breton Industries.
Mitchell Herman. Mr. Herman became a director in March 1997. Since
1995, he has been Sales Manager of By Design, an apparel manufacturer. From
1990-1995, he was Sales Manager of E.S. Sutton, a manufacturer of knitwear.
He also has previously been associated with Bradlees Department Stores,
Jefferson Ward Stores and J.W. Mays.
Gerald Cohen. Mr. Cohen became a director in March 1997. He is a
certified public accountant and attorney who for the past five years has
acted primarily as a financial consultant advising businesses in business
combinations and formations and general advisory work. He has previously
served on the boards of directors of more than 12 public companies and
several private
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companies. Mr. Cohen formerly served as personal accountant to Charles Sobel.
Gerald L. Kanter. Mr. Kanter is presently a private consultant in
Retailing, after spending the last three years as Managing Director of KPMG Peat
Marwick LLP's Retail Corporate Transactions Practice. From 1975 until 1983, Mr.
Kanter was Executive Vice President of Merchandising and Marketing of Target
Stores. Mr. Kanter was employed by Ames Department Stores as President and Chief
Operating Officer from 1983 until 1985. From 1985 through 1987 Mr. Kanter served
as a consultant for Kohlberg & Co., Chicago Holdings. In 1987 he became
President and Chief Operating Officer of Marshalls, and remained there until
1989, when he returned to Ames Department Stores, Inc. as Executive Vice
President of Merchandising and remained until 1991. From 1992 until 1994 Mr.
Kanter served as President and Chief Operating Officer of Retail Holding Group,
Inc., where he was responsible for 127 chain apparel stores operating in Chapter
11. Mr. Kanter has a Bachelor of Science degree in Retailing from the University
of Bridgeport and participated in Executive Development at Harvard College.
Certain Legal Issues Concerning Management
In 1991, Mr. Dobies was convicted by a state court in Essex County,
New Jersey, of theft in the third degree (a low-grade felony) of certain
materials from a contractor of CR & ME, his former employer. Mr. Dobies agreed
to a plea bargain, after which he received probation and community service. Mr.
Dobies maintains that the only items he removed from the supplier's location
were those owned by CR & ME, but did not believe it was in his or CR & ME's best
interest to pursue a trial in the matter.
As a condition to listing the Company's securities on Nasdaq, the
Company is required to ensure that (i) independent directors represent a
majority of the members of the Board of Directors, and for one such independent
director to serve as Chairman and (ii) Messrs. Dobies and Sobel agree not to
sell or otherwise dispose of any securities of the Company beneficially owned by
them (other than certain shares sold by them in the Company's initial public
offering) for a period of two years from the effective date of the initial
public offering. There can be no assurance that Nasdaq will not request further
restrictions in the future, or that any other securities exchange on which the
Company desires to list its securities will not request similar or more onerous
restrictions.
Restrictions Contained in Agreements With Former Employer
Mr. Dobies has entered into an agreement with the shareholders of CR &
ME, and Mr. Sobel has entered into an agreement with CR & ME, both of which
agreements were in connection with their termination of employment with CR & ME
in early 1995 and certain other matters. Since Messrs. Dobies and Sobel's
departure from CR & ME, upon information and belief, that company has filed for
liquidation under Chapter 7 of the United States Code (i.e. the bankruptcy
code). Mr. Sobel's agreement (pursuant to which his employment was terminated)
provides that he must "refrain from actively seeking other employment" during
the eight week period which ended on March 3, 1995 and that during that period
he may not attend interviews with competing employers.
- 7 -
Management believes that Mr. Sobel neither attended an interview with the
Company nor did he actively seek employment with the Company during this
period. An action brought by Mr. Sobel against CR & ME and its principals,
which included certain counterclaims by the principals, was settled with
prejudice. CR & ME had commenced adversary proceedings (akin to litigation
within a bankruptcy proceeding) against Messrs. Dobies and Sobel alleging,
among other things, that certain payments made to them by CR & ME were
improper "insider" payments that must be returned. The Company is not named
in these proceedings. These actions were settled with prejudice and upon
information and belief CR & ME has liquidated.
Compliance With Section 16(a) of the Exchange Act
The Company believes that all required Forms 3 and 4 were furnished to
the registrant during the fiscal year ended March 31, 1997.
Board of Directors Meetings
During the fiscal year ended March 31, 1997, there were no meetings of
the Company's Board of Directors.
Committees of the Board of Directors
The Board of Directors includes an Audit Committee currently consisting
of Messrs. Dobies, Cohen and Jay M. Haft. The Audit Committee reviews (i) the
Company's audit functions, (ii) with management, the finances, financial
condition and interim financial statements of the Company, (iii) with the
Company's independent auditors, the year end financial statements of the Company
and (iv) the implementation of any action recommended by the independent
auditors.
The Board of Directors does not have standing nominating or
compensation committees. The Board of Directors as a whole determines the
compensation of the Company's executive officers.
Executive Compensation
The following tables set forth a profile of the Company's executive
compensation and show, among other things, salaries and bonuses paid during the
last three years, and certain options granted for the Chief Executive Officer
and the other most highly compensated executive officers of the Company whose
compensation exceeded $100,00 (the "Named Officers"). These are the tables
specified by the requirements of the Securities and Exchange Commission (the
"SEC").
Although the SEC generally requires the proxy materials to contain a
performance graph comparing the year-to-year return on a company's
publicly-traded securities to certain market indices, the Company has not
provided such graph herein, since its Common Stock did not become publicly
traded until just eleven days before the end of its fiscal year ended March 31,
1997. The Company believes, therefore, that the information which would be
included in such graph would not
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be helpful to Stockholders and indeed, could be misleading. The Company,
therefore, has chosen not to include the performance graph.
ANNUAL COMPENSATION LONG TERM COMPENSATION
------------------------------------------ ----------------------
Other Restr. Securities
Annual Stock Underlying
Name, Principal Position Year Salary Bonus Comp. Awards Options
- ------------------------ ---- ------ ----- ------- ------ ----------
Mitchell Dobies 1997 $216,346 $15,000(2) $50,074(4) -- (5)
President and Co-Chief 1996 $200,000 $15,000(2) $36,760(4) -- --
Executive Officer 1995 $ 7,692 -0- -0- (1) --
Charles Sobel 1997 $225,000 $57,000(2) $50,074(4) (3) (5)
Executive Vice President 1996 $200,000 $15,000(2) $36,760(4) -- --
and Co-Chief Executive 1995 $ 7,692 -0- -0- (1) --
Officer
Eric Holtz 1997 $150,000 $11,000(2) $7,080(6) -- (6)
Director of Import 1996 $28,846 -0- $1,689(6) -- --
Sales Group 1995(6)
<FN>
- --------------------
(1) Messrs. Dobies and Sobel each received 222,857 Performance Shares (as
hereinafter defined) in March 1995. There was no ascertainable closing
market price of the Company's unrestricted stock on the date of grant.
See "Employment Agreements," below.
(2) Includes cash bonuses accrued during the fiscal year in question but
not paid until shortly after the end of the fiscal year in question.
(3) Mr. Sobel received 68,571 Performance Shares in June 1996. There was no
ascertainable closing market price of the Company's unrestricted stock
on the date of grant. See "Employment Agreements," below.
(4) Includes the following: (i) health insurance to these individuals and
their families and (ii) an expense/auto allowance and expense
reimbursement to Messrs. Dobies and Sobel of $2,500 per month each
during the fiscal year ended March 31, 1996 and $3,500 per month each
during the fiscal year ended March 31, 1997.
(5) On August 16, 1996, Messrs. Dobies and Sobel each were granted 25,000
options under the Option Plan which are exercisable at $3.00 per share
and which have fully vested. On February 1, 1997, Messrs. Dobies and
Sobel each were granted 25,000 options under the Option Plan which are
exercisable at $5.00 per share and which vest ratably over a three-year
period.
(6) Mr. Holtz was not employed by the Company during the fiscal year ended
March 31, 1995. His employment with the Company commenced in January
1996. On August 16, 1996, Mr. Holtz was granted 50,000 options under
the Option Plan which are exercisable at $3.00 per share and which have
fully vested. On February 1, 1997, Mr. Holtz was granted 50,000 options
under the Option Plan which are exercisable at $5.00 per share and
which vest ratably over a three-year period. Other annual compensation
includes health insurance for Mr. Holtz and his family.
- 9 -
OPTION GRANTS IN LAST FISCAL YEAR
Percent of Total
Options Granted Exercise
Number Securities to Employees in or Base Expiration Grant Date
Name Underlying Option(#) Fiscal Year Price Date Value (3)
- ---- -------------------- ---------------- -------- ---------- ----------
Mitchell
Dobies 25,000(1) 8.8% $3.00 8/15/2006 $2.70
25,000(2) 8.8% $5.00 3/19/2007 $4.50
Charles
Sobel 25,000(1) 8.8% $3.00 8/15/2006 $2.70
25,000(2) 8.8% $5.00 3/19/2007 $4.50
Eric
Holtz 50,000(1) 17.65% $3.00 8/15/2006 $2.70
50,000(2) 17.65% $5.00 3/19/2007 $4.50
<FN>
- --------------------
(1) Represents options granted under the Option Plan on August 16, 1996.
(2) Represents options granted under the Option Plan on February 1, 1997 and effective March 19, 1997.
(3) Figures represent estimates made by the Company. There was no public market for the Company's
securities on the date of grant.
No options were exercised during the fiscal year ended March 31, 1997.
Employment Agreements
Mitchell Dobies and Charles Sobel
Mr. Dobies and Mr. Sobel each has executed an Amended and Restated
Employment Agreement, dated as of February 1, 1997, with the Company (the
"Dobies/Sobel Agreements"), which provides for (i) a three-year term ending
January 31, 2000 (automatically renewable thereafter from year to year if
not terminated); (ii) a base salary of $225,000 (plus expense allowance of
$3,500 monthly) through March 31, 1997, $250,000 (plus expense allowance of
$3,500 monthly) during the 1998 Fiscal Year, $275,000 (plus expense
allowance of $3,834 monthly) during the 1999 Fiscal Year and $300,000 (plus
expense allowance of $4,167 monthly) for the period from April 1, 1999
through March 31, 2000; (iii) health insurance coverage for each such
individual and his family (or reimbursement for reasonable personal expense
therefor); (iv) the right to receive such portion of the Management Profit
Participation (as defined below) as is determined by the Board of
Directors; (v) 222,857 Performance Shares for Mr. Dobies; (vi) 291,429
Performance Shares for Mr. Sobel and (vii) minimum bonuses of $15,000 for
Mr. Dobies and for Mr. Sobel. Mr. Sobel also received an additional minimum
bonus, solely for the year ended March 31, 1997, equal to $32,000. The
Dobies/Sobel Agreements also include non-competition, confidentiality and
non-solicitation provisions.
The Company has agreed to set aside 12-1/2% of the Company's pre-tax
profit, with a minimum of $100,000 in the aggregate (if pre-tax profit exceeds
one million dollars), to the extent
- 10 -
above one million dollars, each fiscal year for payment to members of
management ("Management Profit Participation"), to be divided among such
members of management as the Board of Directors shall determine.
The Company also has issued the number of shares of Common Stock
("Performance Shares") to Messrs. Dobies and Sobel as indicated above, (a)
one-half of these shares ("One Half") shall be repurchased by the Company for
the par value thereof in the event that the Company does not achieve net income
before taxes ("Net Income") of at least $2.0 million during the fiscal year
ended March 31, 1998 ("1998 Fiscal Year"), provided that (i) only one-half of
such One Half shall be repurchased by the Company in the event that the Company
achieves Net Income for the 1998 Fiscal Year of at least $1.5 million but less
than $1.75 million, and (ii) only one-quarter of such One Half shall be
repurchased by the Company in the event that the Company achieves Net Income for
the 1998 Fiscal Year of at least $1.75 million but less than $2.0 million, and
(b) One Half shall be repurchased by the Company for the par value thereof in
the event that the Company does not achieve Net Income of at least $2.5 million
during the fiscal year ended March 31, 1999 ("1999 Fiscal Year"), provided that
(x) only one-half of such One Half shall be repurchased by the Company in the
event that the Company achieves Net Income for the 1999 Fiscal Year of at least
$2 million but less than $2.25 million and (y) only one-quarter of such One Half
shall be repurchased by the Company in the event that the Company achieves Net
Income for the 1999 Fiscal Year of at least $2.25 million but less than $2.5
million. Net Income, for purposes of the foregoing calculations, will exclude
any tax deduction obtained by the Company solely on account of the issuance of
the Performance Shares and all similar Performance Shares issued to directors
and members of management of the Company.
In addition, the retention of the Performance Shares by Messrs. Dobies
and Sobel is subject to vesting, as follows: all of the Performance Shares shall
be repurchased by the Company for the par value thereof upon termination of such
person's employment with the Company in the event that his employment shall
terminate after March 31, 1998, if such termination is by the Company for Cause
or by Mr. Dobies or Sobel for Good Reason (each as defined below); and one-half
of which Performance Shares shall be repurchased by the Company for the par
value thereof upon termination of such person's employment with the Company in
the event that his employment shall terminate after March 31, 1998 and prior to
March 31, 1999, if such termination is by the Company for Cause or by Mr. Dobies
or Mr. Sobel for Good Reason (each as defined below). These vesting restrictions
do not apply to the Performance Shares issued to Lawrence Kaplan, a former
director of the Company, who has retained his Performance Shares even though he
has resigned as a director of the Company.
The Dobies/Sobel Agreements also contain provisions for termination by
the Company upon the death or disability of Mr. Dobies or Mr. Sobel,
respectively, or for Cause, which is defined as a nonappealable judicial
determination of his malfeasance or dishonesty with respect to actions related
to the Company, or conviction or plea of guilty or no contest of any felony or
any crime against the Company or certain failures to act upon express lawful
direction of the Board of Directors. Mr. Dobies or Mr. Sobel also may terminate
their respective Dobies/Sobel Agreement
- 11 -
for Good Reason, defined as (i) after 30 days' written notice and
opportunity to cure, any breach of the terms of the applicable Dobies/Sobel
Agreement by the Company or (ii) a Change in Control. The Dobies/Sobel
Agreements define Change in Control as (i) the acquisition by a person of
20% or more of the combined voting power of the Company, unless more than
80% of the Board of Directors decides that no change in control has
occurred (provided, however, if a person has acquired one-third of the
voting power of the company a Change in Control shall be deemed to have
occurred), (ii) if there be a change in the majority membership of the
Board of Directors pursuant to a sale of at least 10% of the equity of the
company to a third party, and at least 80% of all the members of the Board
of Directors prior to such change approve such change in membership or
(iii) certain changes in control as defined under the Securities Exchange
Act of 1934, as amended, unless three-quarters of the Board prior to such
change determine that no change in control has occurred. The Dobies/Sobel
Agreements provide for certain severance payments upon termination by Mr.
Dobies or Mr. Sobel for Good Reason, or by the Company for any reason other
than Cause.
Eric Holtz
Eric Holtz, Director of the Company's Import Sales Group, executed an
employment agreement with the Company on May 21, 1997 (the "Holtz Agreement").
The Holtz Agreement provides for (i) a one-year term (subject to renewal on a
year to year basis if not terminated), provided, that either party may terminate
the Holtz Agreement upon 90 days' written notice (or no notice in the event of
Cause (as defined below); (ii) commissions which commence at 1% of sales made by
him and increase to 7% or more depending upon Gross Profit (defined as the
difference between the sales price of a particular piece of goods sold and the
cost per piece of such goods, divided by the sales price of such piece) earned
on such sales; (iii) a 1% override on other import sales not generated by him
individually; (iv) a $150,000 per year draw against commissions and overrides,
provided, that (a) after the first year of the term, the draw shall not be less
than 80% of his aggregate compensation (excluding any expense allowance) in the
previous year of the term of the Holtz Agreement, (b) if the draw is to be
reduced, in no event shall such adjustment be to an amount less than 100% of his
aggregate commission and override earned during the previous year of the term of
the Holtz Agreement, and (c) if his employment is terminated for Cause or Mr.
Holtz terminates his employment at any time after January 31, 1998, if the
amount of draw since the beginning of the most recent year of the term of the
Holtz Agreement exceeds the sum of his entitlements to commission and override,
such excess shall be returned to the Company; (v) a $2,000 per month expense
allowance, plus reimbursement of business expenses incurred on behalf of the
Company; (vi) participation in the Management Profit Participation; (vii) a
minimum bonus of $7,500 during the first year of the term, and thereafter an
amount equal to one-half of the bonus paid to the President; and (viii)
perquisites comparable to Messrs. Dobies and Sobel, including health insurance
for him and his family.
The Holtz Agreement also includes non-competition, confidentiality and
non-solicitation provisions. It also provides that he will be entitled to
receive commissions and override on sales completed within six months after his
departure, so long as sales efforts had been substantially undertaken prior to
his departure. Cause is defined in a substantively similar manner to those
- 12 -
contained in the Dobies/Sobel Agreements.
The Holtz Agreement also contemplates the issuance of certain stock
options to Mr. Holtz, including 50,000 options which were granted on August 16,
1996 and exercisable at $3.00 per share, 50,000 options which were granted on
February 1, 1997, became effective on March 19, 1997 and are exercisable at
$5.00 per share, and 70,000 options (the "1998 Options"), which the Company
agreed to use its best efforts (subject to applicable tax and other legal
requirements) to cause the Board of Directors to grant to him on April 1, 1998,
at 100% of the then market value of the Common Stock (the "Market Value"). If,
for any reason, the Board of Directors does not grant the 1998 Options other
than as a result of Mr. Holtz's termination of employment, the Company will, to
the extent permitted by applicable law, issue to Mr. Holtz nonqualified stock
options, outside of the Option Plan, to purchase such shares at the Market
Value.
The Holtz Agreement provides for certain severance and other payments
upon termination of his employment, death or disability.
Incentive Stock Option Plan
In August 1996, the Company adopted the Option Plan by written consent
of all the directors and a majority of the stockholders of the Company. The
Option Plan is administered by the Board of Directors (or by a committee of the
Board of Directors, if one is appointed for this purpose), provided that members
of the Board of Directors who are either eligible for Awards (as defined below)
or have been granted Awards may not vote on any matters affecting the
administration of the Plan or the grant of any Award pursuant to the Plan to the
extent required in accordance with Rule 16b-3 promulgated under the Exchange Act
and Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"). In the event any employee granted an Award under the Option Plan is, at
the time of such grant, a member of the Board of Directors of the Company, the
grant of such Award shall, in the event the Board of Directors at the time such
award is granted is not deemed to satisfy the requirement of Rule l6b-3(c)(2)
promulgated under the Exchange Act, be subject to the approval of an auxiliary
committee consisting of not less than two persons all of whom qualify as
"disinterested persons" within the meaning of Rule l6b-3(c)(2) promulgated under
the Exchange Act. In the event the Board of Directors deems it impractical to
form a committee of disinterested persons, the Board of Directors is authorized
to approve any Award under the Option Plan. The Option Plan shall remain in
effect for a term of ten (10) years from August 16, 1996, its date of adoption,
unless sooner terminated under the terms of the Option Plan.
The Option Plan provides for the granting of incentive stock options
(within the meaning of Section 422 of the Code) and nonqualified stock options
(individually, an "Award" or collectively, "Awards"), to those officers or other
key employees, or consultants, with potential to contribute to the future
success of the Company or its subsidiaries, provided, that only employees may be
granted incentive stock options. The Board of Directors has discretion to select
the persons to whom Awards will be granted (from among those eligible), to
determine the type, size and terms and conditions applicable to each Award and
the authority to interpret, construe and implement the provisions of
- 13 -
the Option Plan. Notwithstanding the foregoing, with respect to incentive
stock options, the aggregate fair market value (determined at the time such
Award is granted) of the shares of Common Stock with respect to which
incentive stock options are exercisable for the first time by such employee
during any calendar year shall not exceed $100,000 under all plans of the
employer corporation or its parent or subsidiaries. The Board of Directors'
decisions are binding on the Company and persons eligible to participate in
the Option Plan and all other persons having any interest in the Option
Plan.
The total number of shares of Common Stock that may be subject to
Awards under the Option Plan is 600,000, subject to adjustment in accordance
with the terms of the Option Plan. The Company has agreed with the Underwriter
that, commencing on April 1, 1997, no more than 150,000 shares of Common Stock
subject to Awards may be granted during any single fiscal year of the Company
under the Option Plan, provided, that the Underwriter has consented to the
granting of 147,492 Options under the Plan and outside the Plan which were
otherwise to be granted during the fiscal year ended April 30, 1998. Common
Stock issued under the Option Plan may be either authorized but unissued shares,
treasury shares or any combination thereof. To the fullest extent permitted
under Rule 16b-3 under the Exchange Act and Sections 162(m) and 422 of the Code,
any shares of Common Stock subject to an Award which lapses, expires or is
otherwise terminated prior to the issuance of such shares may become available
for new Awards.
The Company granted, on August 16, 1996, an aggregate of 100,000 Awards
as follows: 25,000 Awards to Mitchell Dobies, 25,000 Awards to Charles Sobel and
50,000 Awards to Eric Holtz. All options which are the subject of such Awards
have fully vested and are currently exercisable at $3.00 per share. The Company
granted, on February 1, 1997, an aggregate of 100,000 Awards as follows: 25,000
Awards to Mitchell Dobies, 25,000 Awards to Charles Sobel and 50,000 Awards to
Eric Holtz. All options which are the subject of such Awards vest one-third each
on April 1, 1998, April 1, 1999 and April 1, 2000 (the "Vesting Dates") and will
be exercisable at $5.00 per share. On March 12, 1997, the Company granted an
aggregate of 83,326 Awards to 25 employees (excluding Messrs. Dobies, Sobel and
Holtz). All options which are the subject of such Awards vest one-third each on
each of the Vesting Dates and will be exercisable at $5.00 per share. On March
12, 1997, the Company also granted an aggregate of 14,166 stock options outside
of the Option Plan to the three independent members of the Board of Directors
(2,500 each), to the Company's outside securities counsel (1,666) and to an
individual who has provided assistance in the Company's production efforts
(5,000). None of these individuals was eligible to participate in the Option
Plan. These non-Plan options vest one-third each on each of the Vesting Dates
and will be exercisable at $5.00 per share. None of the options described in
this paragraph has been exercised since the date of their grant.
Options to purchase Common Stock granted as Awards ("Options"), which
may be nonqualified or incentive stock options, may be granted under the Option
Plan at an exercise price (the "Option Price") determined by the Board of
Directors in its discretion, provided, that the Option Price of incentive stock
options may be no less than the fair market value of the underlying Common Stock
on the date of grant (110% of fair market value in the case of an incentive
stock option granted
- 14 -
to a ten percent stockholder).
Options will expire not later than ten years after the date on which
they are granted. Options become exercisable at such times and in such
installments as determined by the Board of Directors. Notwithstanding the
foregoing, however, each Option shall, except as otherwise provided in the stock
option agreement between the Company and an optionee, become exercisable in full
for the aggregate number of shares covered thereby unconditionally on the first
day following the occurrence of any of the following: (a) the approval by the
stockholders of the Company of an Approved Transaction; (b) a Control Purchase;
or (c) a Board Change (each as defined below).
For purposes of the Option Plan, (i) an "Approved Transaction" shall
mean (A) any consolidation or merger of the Company in which the Company is not
the continuing or surviving corporation or pursuant to which shares of Common
Stock would be converted into cash, securities or other property, other than a
merger of the Company in which the holders of Common Stock immediately prior to
the merger have the same proportionate ownership of common stock of the
surviving corporation immediately after the merger, or (B) any sale, lease,
exchange, or other transfer (in one transaction or a series of related
transactions) of all, or substantially all, of the assets of the Company, or (C)
the adoption of any plan or proposal for the liquidation or dissolution of the
Company; (ii) a "Control Purchase" shall mean circumstances in which any person
(as such term is defined in Sections l3(d)(3) and l4(d)(2) of the Exchange Act,
corporation or other entity (other than the Company or any employee benefit plan
sponsored by the Company or any Subsidiary) (x) shall purchase any Common Stock
of the Company (or securities convertible into the Company's Common Stock) for
cash, securities or any other consideration pursuant to a tender offer or
exchange offer, without the prior consent of the Board of Directors, or (y)
shall become the "beneficial owner" (as such term is defined in Rule l3d-3 under
the Exchange Act), directly or indirectly, of securities of the Company
representing twenty-five percent (25%) or more of the combined voting power of
the then outstanding securities of the Company ordinarily (and apart from rights
accruing under special circumstances) having the right to vote in the election
of directors (calculated as provided in paragraph (d) of such Rule l3d-3 in the
case of rights to acquire the Company's securities), and (iii) A "Board Change"
shall mean circumstances in which, during any period of two consecutive years or
less, individuals who at the beginning of such period constitute the entire
Board shall cease for any reason to constitute a majority thereof unless the
election, or the nomination for election by the Company's stockholders, of each
new director was approved by a vote of at least a majority of the directors then
still in office.
In the event that dividends are payable in Common Stock or in the event
there are splits, subdivisions or combinations of shares of Common Stock, the
number of shares available under the Option Plan shall be increased or decreased
proportionately, as the case may be, and the number of shares delivered upon the
exercise thereafter of any Option theretofore granted or issued shall be
increased or decreased proportionately, as the case may be, without change in
the aggregate purchase price.
In the event that an Option holder ceases to be an employee for any
reason other than
- 15 -
permanent disability (as determined by the Board of Directors) and death,
any Option, including any unexercised portion thereof, which was otherwise
exercisable on the date of termination, shall expire unless exercised
within a period of three months from the date on which the Option holder
ceased to be so employed, but in no event after the expiration of the
exercise period. In the event of the death of an Option holder during this
three month period, the Option shall be exercisable by his or her personal
representatives, heirs or legatees to the same extent that the Option
holder could have exercised the Option if he or she had not died, for the
three months from the date of death, but in no event after the expiration
of the exercise period. In the event of the permanent disability of an
Option holder while an employee, any Option granted to such employee shall
be exercisable for twelve (l2) months after the date of permanent
disability, but in no event after the expiration of the exercise period. In
the event of the death of an Option holder while an employee, or during the
twelve (l2) month period after the date of permanent disability of the
Option holder, that portion of the Option which had become exercisable on
the date of death shall be exercisable by his or her personal
representatives, heirs or legatees at any time prior to the expiration of
one (l) year from the date of the death of the Option holder, but in no
event after the expiration of the exercise period. Except as the Board of
Directors shall provide otherwise, in the event an Option holder ceases to
be an employee for any reason, including death, prior to the lapse of the
waiting period, his or her Option shall terminate and be null and void.
The Board of Directors may at any time alter, amend, suspend or
discontinue the Option Plan, but no amendment, alteration, suspension or
discontinuation shall be made which would impair the rights of any recipient of
an Option under any agreement theretofore entered into under the Option Plan,
without his consent, or which, without the requisite vote of the stockholders of
the Company approving such action, would:
(a) except as is provided in the Option Plan, increase the total
number of shares of stock reserved for the purposes of the Option Plan; or
(b) extend the duration of the Option Plan; or
(c) materially increase the benefits accruing to participants under
the Option Plan; or
(d) change the category of persons who can be eligible participants
under the Option Plan. Without limiting the foregoing, the Board of Directors
may, any time or from time to time, authorize the Company, without the consent
of the respective recipients, to issue new Options in exchange for the surrender
and cancellation of any or all outstanding Options.
401(k) Savings Plan
Effective August 1, 1996, the Company established the Jenna Lane, Inc.
401(k) Plan (the "401(k) Plan") under Section 401(k) of the Code. Under the
401(k) Plan, employees may contribute up to 25% of their compensation per year
subject to elective limits as defined by the guidelines of the Internal Revenue
Service, and the Company may make profit sharing contributions to the Plan
- 16 -
in such amount, if any, that it shall determine, provided, that the Company has
agreed with the Underwriter that, for the first two years of operation of the
401(k) Plan, the Company shall not make a contribution in excess of an amount
equal to five percent (5%) of the amount of earnings before interest and taxes
of the Company in excess of $1 million. Any contributions by the Company will be
allocated as an equal percentage of each eligible participant's compensation for
the applicable year during the 401(k) Plan. The Company has made no
contributions to the 401(k) Plan since its inception.
Limitation of Liability
The General Corporation Law of the State of Delaware permits a
corporation through its Certificate of Incorporation to eliminate the personal
liability of its directors to the corporation or its stockholders for monetary
damages for breach of fiduciary duty with certain exceptions. The exceptions
include a breach of fiduciary duty of loyalty, acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law,
improper declarations of dividends, and transactions from which the directors
derived an improper personal benefit. The Company's Certificate of Incorporation
exonerates its directors from monetary liability to the fullest extent permitted
by this statutory provision but does not restrict the availability of
non-monetary and other equitable relief.
The Company believes that it is the position of the Securities and
Exchange Commission that insofar as the foregoing provision may be invoked to
disclaim liabilities arising under the Securities Act of 1933, as amended, the
provision is against public policy as expressed in the Securities Act and is
therefore unenforceable. Such limitation of liability also does not affect the
availability of injunctive relief or rescission.
The Company intends to enter into Indemnification Agreements with each
of its directors and executive officers. Each such Indemnification Agreement is
expected to provide that the Company will indemnify the indemnitee against
expenses, including reasonable attorney's fees, judgments, penalties, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with any civil or criminal action or administrative proceeding arising out of
the performance of his duties as an officer, director, employee or agent of the
Company. Indemnification will be available if the acts of the indemnitee were in
good faith, if the indemnitee acted in a manner he reasonably believed to be in
or not opposed to the best interests of the Company and, with respect to any
criminal proceeding, the indemnitee had no reasonable cause to believe his
conduct was unlawful.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT YOU VOTE "FOR"
THE ELECTION OF ALL FIVE NOMINEES FOR DIRECTOR.
- 17 -
PROPOSAL NUMBER 2
ELECTION OF AUDITORS
The Stockholders will be asked to ratify the appointment of the firm of
Edward Isaacs & Company, LLP, independent certified public accountants, as
auditors of the Company for the fiscal year ended March 31, 1998. A
representative of Edward Isaacs & Company, LLP will be present at the Annual
Meeting, have an opportunity to make a statement if he so desires, and be
available to respond to appropriate questions from Stockholders.
THE BOARD OF DIRECTORS OF THE COMPANY DEEMS PROPOSAL NUMBER 2 TO BE IN
THE BEST INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS A VOTE
"FOR" ITS APPROVAL.
The Board of Directors is not aware that any matters other than those
set forth herein will come before the Annual Meeting. Should any matters
requiring the vote of the Stockholders arise, it is intended that shares
represented by proxies will be voted in respect thereof in accordance with the
discretion of the person or persons holding the proxy.
Submission of Proposals of Stockholders
Proposals of Stockholders intended to be presented at the Company's
1998 Annual Meeting of Stockholders must be received at the Company's offices at
1407 Broadway, Suite 1801, New York, New York, 10018, Attention: Kathleen A.
Dressel, Corporate Secretary, no later than June 1, 1998, to be considered for
inclusion in the proxy statement and form of proxy for that meeting.
Annual Report
The Annual Report of the Company for the fiscal year ended March 31,
1997, including audited financial statements, is enclosed with this proxy
statement, but is not a part of the proxy solicitation material. The exhibits to
the Form 10-K of the Company for the fiscal year ended March 31, 1997, which the
Annual Report includes, are not included with this proxy statement; however, the
Company is willing to supply copies of such exhibits upon written request to the
Company.
- 18 -
JENNA LANE, INC.
1407 Broadway, Suite 1801
New York, New York, 10018
---------
PROXY
---------
THIS PROXY IS SOLICITED ON BEHALF OF JENNA LANE, INC.'S BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD DECEMBER 15, 1997 FOR
STOCKHOLDERS OF RECORD ON NOVEMBER 12, 1997.
The undersigned, being a holder of shares of Common Stock, par value $.01 per
share, of Jenna Lane, Inc., a Delaware corporation (the "Company"), hereby
designates Mitchell Dobies and Charles Sobel his proxy, with full power of
substitution in the premises, to vote at an annual meeting of stockholders of
the Company to be held at the Company's offices at 2559 Route 130, Cranbury,
New Jersey 08512 on December 15, 1997, at 10:00 a.m., or at any adjournment
thereof, as follows:
(Continued and to be signed on the reverse side)
Please date, sign and mail your
proxy card back as soon as poosible!
Annual Meeting of Stockholders
JENNA LANE, INC.
December 15, 1997
Please Detach and Mail in the Envelope Provided
/X/ Please mark your
votes as in this
example.
VOTE FOR VOTE
all nominees listed at WITHHELD
right (except as marked from all
to the contrary below) nominees listed
1. ELECTION OF DIRECTORS: / / / /
Nominees: Mitchell Dobies
Charles Sobel
Mitchell Herman
Gerald L. Kanter
Gerald Cohen
(Instruction: To withhold a vote for an individual
nominee, write the name of such nominee in the
space provided below.)
-------------------------------------------------
FOR AGAINST ABSTAIN
2. RATIFY THE APPOINTMENT OF EDWARD ISAACS & / / / / / /
COMPANY, LLP AS THE COMPANY'S INDEPENDENT
AUDITORS FOR THE FISCAL YEAR ENDED
MARCH 31, 1998.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER(S). THE FAILURE TO FILL
IN THE CHOICES INDICATED ABOVE WILL AUTHORIZE THE PROXIES TO VOTE FOR
THE PROPOSALS TO BE BROUGHT BEFORE THE MEETING.
NUMBER OF SHARES _____________________________________________________
PLEASE ENTER YOUR SOCIAL SECURITY NUMBER OR FEDERAL EMPLOYER
IDENTIFICATION NUMBER HERE:
SOCIAL SECURITY OR FEI NO. ___________________________________________
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE
ENCLOSED ENVELOPE.
______________________________________________________________________
SIGNATURE OF STOCKHOLDER
______________________________________________________________________
SIGNATURE IF HELD JOINTLY
DATED: _________________________________________________________, 1997
NOTE: Please sign exactly as name appears above. When shares are held by joint
tenants, both should sign. When signing as attorney, administrator, trustee or
guardian, please give full title as such. If a corporation, please sign full
corporate name by president or other authorized officer. If a partnership
or other entity, please sign in entity name by authorized person. It is
understood that this proxy may be revoked at any time insofar as it has not
been exercised and that the shares may be voted in person if the undersigned
attends the meeting.