SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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[ ] 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 ss.240.14a-12
SEL-LEB MARKETING, INC.
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(Name of Registrant as Specified in Its Charter)
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S E L - L E B M A R K E T I N G, I N C.
495 RIVER STREET
PATERSON, NEW JERSEY 07524
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 30, 2002
To the Shareholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of the Shareholders of
Sel-Leb Marketing, Inc. (the "Company") will be held on May 30, 2002 at 10:00
a.m. (local time) at the Company's principal executive offices located at 495
River Street, Paterson, New Jersey 07524, for the following purposes:
1. To elect six members to the Board of Directors to serve until the next
annual meeting of shareholders and until their respective successors are duly
elected and qualified; and
2. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The Board of Directors has fixed April 12, 2002 as the record date for the
determination of the shareholders entitled to notice of and to vote at such
meeting or any adjournment thereof, and only shareholders of record at the close
of business on that date are entitled to notice of and to vote at such meeting.
A COPY OF THE COMPANY'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED DECEMBER
31, 2001 IS ENCLOSED HEREWITH.
You are cordially invited to attend the meeting. Whether or not you plan to
attend, you are urged to complete, date and sign the enclosed proxy and return
it promptly. If you receive more than one form of proxy, it is an indication
that your shares are registered in more than one account, and each such proxy
must be completed and returned if you wish to vote all of your shares eligible
to be voted at the meeting.
By Order of the Board of Directors,
Jorge Lazaro
SECRETARY
Dated: Paterson, New Jersey
April 30, 2002
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YOUR VOTE IS IMPORTANT.
THE ATTACHED PROXY STATEMENT SHOULD BE READ CAREFULLY. SHAREHOLDERS ARE URGED TO
SIGN, DATE AND MAIL THE ENCLOSED PROXY IN THE ENCLOSED POSTAGE PAID ENVELOPE. NO
ADDITIONAL POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES. YOU MAY REVOKE
YOUR PROXY AT ANY TIME BEFORE IT IS VOTED BY GIVING WRITTEN NOTICE TO THE
COMPANY. IF YOU ATTEND THE ANNUAL MEETING, YOU MAY VOTE IN PERSON THOUGH YOU
HAVE PREVIOUSLY SENT IN YOUR PROXY.
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S E L - L E B M A R K E T I N G, I N C.
495 RIVER STREET
PATERSON, NEW JERSEY 07524
P R O X Y S T A T E M E N T
The enclosed proxy is solicited on behalf of the Board of Directors of
Sel-Leb Marketing, Inc. (the "Company") pursuant to this proxy statement (to be
mailed on or about April 30, 2002) for use at the Annual Meeting of Shareholders
to be held at the time and place shown in the attached notice of annual meeting
and at any adjournment or postponement thereof (the "Annual Meeting"). Shares
represented by properly executed proxies, if returned in time, will be voted at
the Annual Meeting as specified or, if not otherwise specified, in favor of the
election as directors of the nominees named herein. Such proxies are revocable
at any time before they are exercised by written notice to the Secretary of the
Company or by your requesting the return of the proxy at the Annual Meeting. Any
later dated proxies will revoke proxies submitted earlier.
RECORD DATE
The record date for the determination of holders of common stock, par
value $0.01 per share, of the Company ("Common Stock") who are entitled to
notice of and to vote at the Annual Meeting is April 12, 2002 (the "Record
Date").
VOTING SECURITIES
As of the Record Date, 2,261,018 shares of Common Stock of the Company
were outstanding. Holders of record of Common Stock as of the Record Date will
be entitled to one vote for each share held. A majority of all shares of Common
Stock issued, outstanding and entitled to vote at the Annual Meeting, present in
person or represented by proxy, shall constitute a quorum. Abstentions and
broker non-votes are considered present for purposes of determining whether the
quorum requirement is met. A broker non-vote occurs when a nominee holds shares
for a beneficial owner but cannot vote on a proposal because the nominee does
not have discretionary voting power and has not received instructions from the
beneficial owner as to how to vote the shares.
With respect to the matters to come before the shareholders at the
Annual Meeting, the election of directors (Proposal No. 1) shall be determined
by a plurality of the voting power present in person or represented by proxy at
the Annual Meeting and entitled to vote. Only shares that are voted in favor of
a particular nominee will be counted towards such nominee's achievement of a
plurality. Shares present at the Annual Meeting that are not voted for a
particular nominee, shares present by proxy where the shareholder properly
withholds authority to vote for such nominee, and broker non-votes will not be
counted towards such nominee's achievement of a plurality.
PRINCIPAL SHAREHOLDERS OF THE COMPANY
The following table sets forth, as of the Record Date, the beneficial
ownership of shares of Common Stock by (i) each person who is known by the
Company to own more than 5% of the outstanding shares of Common Stock, (ii) each
director of the Company, each nominee for election as a director of the Company
and each executive officer of the Company listed in the Summary Compensation
Table and (iii) all of the Company's officers and directors as a group:
AMOUNT AND NATURE OF
NAME AND ADDRESS OF BENEFICIAL OWNER(1) BENEFICIAL OWNERSHIP(2) PERCENT OWNED
--------------------------------------- ----------------------- -------------
Harold Markowitz 391,100(3) 13.5%
Paul Sharp 378,293(4) 13.1%
Jorge Lazaro 365,550(5) 12.6%
Estate of Jan Mirsky 248,186(6) 8.6%
Alan Gelband 174,900(7) 6.0%
Jack Koegel 154,500(8) 5.3%
George Fischer 31,063(9) 1.1%
Stanley R. Goodman 9,063(10) *
Edward C. Ross 4,063(11) *
All officers and directors
as a group (7 persons) 1,333,632(3-5, 8-11) 46.1%
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* Less than 1%
(1) The address for each such person is c/o Sel-Leb Marketing, Inc., 495
River Street, Paterson, New Jersey 07524.
(2) A person is deemed to be the beneficial owner of securities that can be
acquired by such person within 60 days from the date of this Proxy
Statement upon the exercise of options or warrants. Each beneficial
owner's percentage ownership is determined by assuming that options or
warrants that are held by such person (but not those held by any other
person) and which are exercisable within 60 days from the date of this
Proxy Statement have been exercised. Unless otherwise noted, the Company
believes that all persons named in the table have sole voting and
investment power with respect to all shares of Common Stock beneficially
owned by them.
(3) Includes 45,450 shares of Common Stock issuable upon exercise of options
granted to Mr. Markowitz under the Stock Option Plan. Does not include
3,875 shares of Common Stock issuable upon exercise of options granted to
Mr. Markowitz under the Stock Option Plan which are not exercisable within
60 days of the date of this Proxy Statement.
(4) Includes 45,450 shares of Common Stock issuable upon exercise of options
granted to Mr. Sharp under the Stock Option Plan. Does not include 3,875
shares of Common Stock issuable upon exercise of options granted to Mr.
Sharp under the Stock Option Plan which are not exercisable within 60 days
of the date of this Proxy Statement.
2
(5) Includes 45,450 shares of Common Stock issuable upon exercise of options
granted to Mr. Lazaro under the Stock Option Plan. Does not include 3,875
shares of Common Stock issuable upon exercise of options granted to Mr.
Lazaro under the Stock Option Plan which are not exercisable within 60
days of the date of this Proxy Statement.
(6) Includes (i) 86,622 shares of Common Stock issuable upon exercise of a
warrant granted by the Company to Mr. Mirsky, a director of the Company
since December 1994 who passed away during 2001 and (ii) 161,564 shares of
Common Stock issuable upon exercise of options granted to Mr. Mirsky under
the Stock Option Plan. The warrants granted to Mr. Mirsky expired on April
15, 2002.
(7) According to Amendment No. 1 dated January 16, 2002 to a Schedule 13G
dated June 28, 2001, filed with the Securities and Exchange Commission by
Alan Gelband, Mr. Gelband has sole power to vote and dispose of 171,900
shares and shares power to vote and dispose of 3,000 shares. According to
the Schedule 13G Amendment, certain of these shares are beneficially owned
(i) by Alan Gelband Company, Inc. Defined Contribution Pension Plan and
Trust, of which Mr. Gelband is a trustee, the sole beneficiary and has
sole dispositive and voting power with respect to its securities, (ii) as
custodian for his minor children, (iii) by his wife, and (iv) by a
foundation over which Mr. Gelband has sole dispositive and voting power
with respect to its securities. Mr. Gelband's address is 575 Madison
Avenue, 7th Floor, New York, New York 10022.
(8) Includes 154,500 shares of Common Stock issuable upon the exercise of
options granted to Mr. Koegel under the Stock Option Plan. Does not
include 45,500 shares of Common Stock issuable upon exercise of options
granted to Mr. Koegel under the Stock Option Plan which are not
exercisable within 60 days of the date of this Proxy Statement.
(9) Includes 31,063 shares of Common Stock issuable upon the exercise of
options granted to Mr. Fischer under the Stock Option Plan. Does not
include 16,437 shares of Common Stock issuable upon exercise of options
granted to Mr. Fischer under the Stock Option Plan which are not
exercisable within 60 days of the date of this Proxy Statement.
(10) Includes 9,063 shares of Common Stock issuable upon exercise of options
granted to Mr. Goodman under the Company's 1995 Nonemployee Directors'
Stock Option Plan (the "Nonemployee Directors' Plan"). Does not include
937 shares of Common Stock issuable upon exercise of options granted to
Mr. Goodman under the Nonemployee Directors' Stock Option Plan which are
not exercisable within 60 days of the date of this Proxy Statement.
(11) Includes 4,063 shares of Common Stock issuable upon exercise of options
granted to Mr. Ross under the Nonemployee Directors' Plan. Does not
include 937 shares of Common Stock issuable upon exercise of options
granted to Mr. Ross under the Nonemployee Directors' Stock Option Plan
which are not exercisable within 60 days of the date of this Proxy
Statement.
3
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Board of Directors has nominated the six individuals whose names are
set forth below for election to the Board of Directors, each to hold office
until the next Annual Meeting of Shareholders and until his successor is duly
elected and qualified. Unless otherwise specified, the enclosed proxy will be
voted in favor of the persons named below, all of whom are now directors of the
Company. In the event that any of such nominees for election at the Annual
Meeting should become unavailable for election for any reason not presently
known, it is intended that votes will be cast pursuant to the accompanying proxy
for such substitute nominees as the Board of Directors may designate unless the
Board of Directors reduces the number of directors. The directors are to be
elected by the affirmative vote of the holders of a plurality of the shares of
Common Stock entitled to vote and present in person or represented by proxy at
the Annual Meeting.
RECOMMENDATION OF BOARD OF DIRECTORS
The Board of Directors recommends a vote FOR election of the nominees
identified below as directors of the Company.
INFORMATION REGARDING NOMINEES
The information set forth below, furnished to the Board of Directors by
the respective individuals, shows as to each nominee for election as a director
of the Company (i) his name and age, (ii) his principal position with the
Company, (iii) his principal occupation or employment, if different, and (iv)
the month and year in which he began to serve as a director.
PRINCIPAL OCCUPATION
NAME AND AGE OR EMPLOYMENT DIRECTOR SINCE
------------ -------------------- --------------
Harold Markowitz (61) Chairman of the Board of the Company September 1993
Paul Sharp (52) President and Chief Executive Officer of December 1994
the Company
Jorge Lazaro (53) Executive Vice President and Secretary of September 1993
the Company
Jack Koegel (50) Vice Chairman of the Board and Chief December 1994
Operating Officer of the Company
Stanley R. Goodman (72) Partner, Goodman & Saperstein (law firm) December 1994
Edward C. Ross (58) Partner, Finkle, Ross & Rost (accounting December 1994
firm)
4
BIOGRAPHICAL INFORMATION REGARDING DIRECTORS
HAROLD MARKOWITZ, a co-founder of the Company, has been Chairman of the
Board of the Company since December 1994. Prior to such time, he served as
President and a director of the Company from its inception in September 1993 to
December 1994. Mr. Markowitz was also a co-founder of Linette Cosmetics, Inc.
("Linette Cosmetics") and served as a director of Linette Cosmetics from its
inception in 1985 until the May 1995 merger of Linette Cosmetics with and into
the Company (the "Linette Merger"). In 1986, Mr. Markowitz co-founded Beauty
Labs, Inc. ("Beauty Labs"), a publicly-held company which marketed cosmetics and
other accessories to mass merchandisers, and served as the Chairman of the Board
and a director of Beauty Labs from 1987 to 1991.
PAUL SHARP has served as Chief Executive Officer of the Company since
May 1995 and as President and a director of the Company since December 1994. Mr.
Sharp also served as Secretary and Treasurer and a director of Linette Cosmetics
from 1990 to December 1994. From 1987 to 1989, Mr. Sharp served as Corporate
Vice President of Zayre Corporation, a mass merchandising retailer, where he was
responsible for the fragrance, cosmetic and health and beauty product lines.
Prior to 1987, Mr. Sharp served in various other capacities at Zayre Corporation
and on the Retail Advisory Board of The Gillette Company, a manufacturer of
personal care products, and was engaged as a retail marketing consultant for
Smith-Kline Beecham Company, a manufacturer of health and beauty aids and
pharmaceuticals.
JORGE LAZARO, a co-founder of the Company, has been Executive Vice
President of the Company since May 1995 and the Secretary and a director of the
Company since its inception in September 1993. Mr. Lazaro also served as the
President of the Company from December 1994 to May 1995 and as Treasurer of the
Company from its inception to December 1994. Mr. Lazaro was also a co-founder of
Linette Cosmetics and served as President and a director of Linette Cosmetics
from its inception in 1985 until the Linette Merger, and has served as the
Secretary and Treasurer and as a director of Lea Cosmetics, Inc. ("Lea
Cosmetics") from its inception in October 1992 until the merger of Lea Cosmetics
with and into the Company in August 1995.
JACK KOEGEL has served as the Vice Chairman of the Company since
September 1995, as the Chief Operating Officer of the Company since June 1997
and as a director of the Company since December 1994. From 1993 until September
1995, Mr. Koegel served as President of Retail Concepts 2000, Inc., a retail
consulting company founded by him. Mr. Koegel served as President of Twin Valu
Stores (a division of Super Valu Inc.) from 1991 to 1993 and as Executive Vice
President of ShopKo Stores/Twin Valu Stores (a division of Super Valu Inc.) from
1989 to 1991.
STANLEY R. GOODMAN has served as Assistant Secretary of the Company
since May 1995 and as a director of the Company since December 1994. Since 1989,
Mr. Goodman has been a partner at Goodman & Saperstein, a law firm specializing
in statutory and regulatory issues concerning pharmaceuticals, cosmetics and
related consumer products. He also served as a director and General Counsel of
Beauty Labs from 1987 until the time of its merger with Robern Industries, Inc.
in 1992.
EDWARD C. ROSS has served as a director of the Company since December
1994. Mr. Ross has been a partner in the accounting firm of Finkle, Ross & Rost
since 1975. He has also been involved as a principal in various start-up
companies as well as established operating businesses, ranging from
manufacturing to real estate to financial consulting. Mr. Ross is a Certified
Public Accountant in New York and New Jersey, and is a member of the American
Institute of Certified Public Accountants.
ADDITIONAL BIOGRAPHICAL INFORMATION
GEORGE FISCHER has served as Chief Financial Officer of the Company
since October 2001 and as Controller of the Company from August 1997 until
October 2001. From 1996 until August 1997, Mr. Fischer was a financial
consultant providing services to public and private clients. From 1992 until
1996, Mr. Fischer was a registered representative with PaineWebber, Inc. Prior
to joining PaineWebber, Mr. Fischer served from 1983 to 1992 as the Chief
Financial Officer for Gund, Inc., a leading privately held international toy
company. Mr. Fischer is a Certified Public Accountant in New York.
5
MEETINGS AND COMMITTEES OF THE BOARD
The Board of Directors of the Company held two meetings during 2001.
All directors attended 75% or more of the total number of meetings of the Board
and of the committees of which they were members.
The Executive Committee, the Audit Committee, the Stock Option
Committee and the Compensation Committee are the only standing committees of the
Board. There is no formal nominating committee; the Board of Directors or the
Executive Committee performs this function.
The Executive Committee, which is currently composed of Mr. Markowitz,
its Chairman, and Messrs. Sharp, Lazaro and Koegel, has all the powers of the
Board of Directors in the management of the business and affairs of the Company,
except as such powers are limited by the New York Business Corporation Law.
During 2001, the Executive Committee held twelve meetings.
The Audit Committee, which is currently composed of Mr. Ross, its
Chairman, and Mr. Goodman, consults with the auditors of the Company and such
other persons as the members deem appropriate, reviews the preparations for and
scope of the audit of the Company's annual financial statements, reviews the
Company's quarterly financial statements, makes recommendations as to the
engagement and fees of the independent auditors, and performs such other duties
relating to the financial statements of the Company as the Board of Directors
may assign from time to time. The Audit Committee held two formal meetings
during 2001.
The Stock Option Committee, which is currently composed of Mr. Goodman,
its Chairman, and Mr. Ross, has all of the powers of the Board of Directors,
including the authority to issue stock or other securities of the Company, in
respect of any matters relating to the administration of the Company's stock
option plans (other than the grant of options under the Non-Employee Directors'
Plan). The Stock Option Committee held four meetings during 2001.
The Compensation Committee, which is currently composed of Mr.
Markowitz, its Chairman, and Messrs. Goodman and Ross, reviews with the Board of
Directors on a periodic basis existing and proposed compensation plans, programs
and arrangements for executive officers and other employees. All recommendations
regarding compensation arrangements for Mr. Markowitz are made solely by Messrs.
Goodman and Ross. The Compensation Committee held four meetings during 2001.
AUDIT COMMITTEE REPORT
The Board of Directors has adopted a charter for the Audit Committee
that sets forth the duties and responsibilities of its members.
The Audit Committee meets with management to review and discuss the
audited financial statements. The Audit Committee also conducts discussions with
its independent auditors, J.H. Cohn LLP, regarding the matters required by the
Statement on Auditing Standards No. 61. As required by Independence Standards
Board Standard No. 1, "Independence Discussion with Audit Committees," the Audit
Committee has discussed with and received the required written disclosures and
confirming letter from J.H. Cohn LLP regarding its independence and has
discussed with J.H. Cohn LLP its independence. Based upon the review and
discussions referred to above, the Audit Committee recommended to the Board of
Directors that the audited financial statements be included in the Company's
Annual Report on Form 10-KSB for the fiscal year ended December 31, 2001, for
filing with the Securities and Exchange Commission.
In addition, the Audit Committee periodically meets with management and
the independent auditors to discuss the quarterly financial statements contained
in the Company's Form 10-QSB filings.
This Audit Committee Report shall not be deemed incorporated by
reference in any document previously or subsequently filed with the Securities
and Exchange Commission that incorporates by reference all or any portion of
6
this proxy statement, except to the extent that the Company specifically
requests that the Report be specifically incorporated by reference.
Submitted by the Audit Committee of the Board of Directors: Edward C. Ross
and Stanley R. Goodman.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires officers and directors of the Company and holders of
more than 10% of the Common Stock (collectively, "Reporting Persons") to file
reports of ownership and changes in ownership of the Common Stock with the
Securities and Exchange Commission within certain time periods and to furnish
the Company with copies of all such reports. Based solely on its review of the
copies of such reports furnished to the Company by such Reporting Persons or on
the written representations of such Reporting Persons that no reports on Form 5
were required, the Company believes that during the year ended December 31,
2001, all of the Reporting Persons complied with their Section 16(a) filing
requirements.
DIRECTORS' COMPENSATION
Each director who is not an employee of the Company was paid $500 for
each meeting of the Board of Directors attended by such director during 2001.
The Company also reimbursed each such director for all reasonable expenses
incurred by him in attending meetings. In addition, non-employee directors of
the Company are eligible to participate in the Nonemployee Director's Plan,
pursuant to which an aggregate of 75,000 shares of Common Stock may be granted
to non-employee directors. Pursuant to such Plan, each non-employee director is
entitled to be automatically granted (i) upon becoming a director of the
Company, an option to purchase 1,250 shares of Common Stock and (ii) each year,
on the day of the Company's annual meeting of shareholders, an option to
purchase 1,250 shares of Common Stock. To date, the Company has granted to
Messrs. Goodman and Ross, pursuant to the Nonemployee Directors' Plan, options
to purchase 10,000 shares and 5,000 shares, respectively.
7
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information regarding the
compensation in each of the last three fiscal years of the person who served as
the Company's Chief Executive Officer during the fiscal year ended December 31,
2001, and the Company's four most highly compensated officers (other than the
Chief Executive Officer) who were serving as officers at December 31, 2001
(collectively, the "Named Executive Officers").
LONG TERM COMPENSATION
ANNUAL COMPENSATION --------------------------------
----------------------------- AWARDS PAYOUTS
OTHER --------------------- -------
ANNUAL RESTRICTED SECURITIES ALL OTHER
COMPEN- STOCK UNDERLYING LTIP COMPEN-
NAME AND PRINCIPAL BONUS SATION AWARD(S) OPTIONS/ PAYOUTS SATION
POSITION YEAR SALARY($) ($) ($) ($) SARS(#) ($) ($)
-------------------- ---- --------- ----- -------- ----- --------- --- ---
Paul Sharp 2001 125,000 8,750 22,734(1) -0- 4,500(2) -0- -0-
President and 2000 125,000 7,500 16,910(1) -0- -0- -0- -0-
Chief Executive 1999 127,404 -0- 17,665(1) -0- 27,000(2) -0- -0-
Officer
Harold Markowitz 2001 125,000 8,750 11,441(3) -0- 4,500(2) -0- -0-
Chairman of the 2000 125,000 7,500 13,234(3) -0- -0- -0- -0-
Board 1999 127,404 -0- 13,153(3) -0- 27,000(2) -0- -0-
Jorge Lazaro 2001 125,000 8,750 13,358(4) -0- 4,500(2) -0- -0-
Executive Vice 2000 125,000 7,500 11,358(4) -0- -0- -0- -0-
President and 1999 127,404 -0- 11,358(4) -0- 27,000(2) -0- -0-
Secretary
Jack Koegel 2001 100,000 7,000 14,400(5) -0- 60,000(6) -0- -0-
Vice Chairman of 2000 100,000 6,000 14,400(5) -0- -0- -0- -0-
the Board and Chief 1999 101,923 -0- 14,400(5) -0- 69,500(6) -0- -0-
Operating Officer
George Fischer 2001 95,289 8,050 9,000(7) -0- 21,250(8) -0- -0-
Chief Financial 2000 85,000 2,500 9,000(7) -0- -0- -0- -0-
Officer 1999 85,192 -0- 6,600(7) -0- 5,000(8) -0- -0-
(1) Includes (i) for 2001, 2000, and 1999, $9,920, $10,892, and $10,892,
respectively, paid by the Company with respect to an automobile for use
by Mr. Sharp in connection with his services to the Company, (ii) for
2001, 2000 and 1999, $6,814, $6,018, and $6,774, respectively, paid by
the Company to Mr. Sharp with respect to medical insurance purchased
directly by him, and (iii) for 2001, $6,000 paid by the Company with
respect to office rent.
(2) Reflects (i) the January 6, 1999 grant by the Company to Messrs. Sharp,
Markowitz and Lazaro of 10,000 options, each with an exercise price of
$1.25, (ii) the April 1, 1999 grant by the Company to Messrs. Sharp,
8
Markowitz and Lazaro of 15,000 options, each with an exercise price of
$2.375, (iii) the August 2, 1999 grant by the Company to Messrs. Sharp,
Markowitz and Lazaro of 2,000 options, each with an exercise price of
$2.50, and (iv) the October 16, 2001 grant by the Company to Messrs.
Sharp, Markowitz and Lazaro of 4,500 options, each with an exercise
price of $1.10.
(3) Includes for 2001, 2000, and 1999 (i) $11,019, $11,069, and $10,988,
respectively, paid by the Company with respect to an automobile for use
by Mr. Markowitz in connection with his services to the Company and
(ii) $422, $2,165, and $2,165, respectively, for certain membership
fees paid by the Company on behalf of Mr. Markowitz.
(4) Represents amounts paid by the Company with respect to an automobile
for use by Mr. Lazaro in connection with his services to the Company.
(5) Includes for 2001, 2000, and 1999 (i) $4,800, $4,800, and $4,800,
respectively, paid by the Company to Mr. Koegel with respect to medical
insurance purchased directly by him and (ii) $9,600, $9,600, and
$9,600, respectively, paid by the Company with respect to an automobile
for use by Mr. Koegel in connection with his services to the Company.
(6) Reflects (i) the January 6, 1999 grant by the Company to Mr. Koegel of
10,000 options, with an exercise price of $1.25, (ii) the April 1,
1999 grant by the Company to Mr. Koegel of 15,000 options, each with
an exercise price of $2.375, (iii) the August 2, 1999 grant by the
Company to Mr. Koegel of 2,000 options, each with an exercise price of
$2.50, (iv) the March 2, 1999 and August 2, 1999 adjustments of the
exercise price of an aggregate of 42,500 options held by Mr. Koegel,
in connection with which, in each case, the Company cancelled the
outstanding options and granted a corresponding number of new options,
and (v) the October 16, 2001 grant by the Company to Mr. Koegel of
60,000 options, each with an exercise price of $1.10.
(7) Includes for 2001, 2000, and 1999 (i) $4,800, $4,800, and $2,400,
respectively, paid by the Company to Mr. Fischer with respect to
medical insurance purchased directly by him and (ii) $4,200, $4,200,
and $4,200, respectively, paid by the Company with respect to an
automobile for use by Mr. Fischer in connection with his services to
the Company.
(8) Reflects (i) the October 16, 2001 grant by the Company to Mr. Fischer
of 21,250 options, with an exercise price of $1.10, (ii) the April 1,
1999 grant by the Company of 3,000 options, with an exercise price of
$2.375, and (iii) the August 2, 1999 grant by the Company of 2,000
options, with an exercise price of $2.50.
9
OPTION/SAR GRANTS DURING FISCAL 2001
The following table provides information related to options granted to
the Named Executive Officers during fiscal 2001. No stock appreciation rights
were issued by the Company during fiscal 2001.
INDIVIDUAL GRANTS
------------------------------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO EXERCISE OR BASE
OPTIONS/SARS EMPLOYEES IN PRICE
NAME GRANTED (#) FISCAL YEAR ($/SHARE) EXPIRATION DATE(S)
--------------- ------------ ------------ ----------------- -------------------
Paul Sharp 4,500 4.3 1.10 10-16-11
Harold Markowitz 4,500 4.3 1.10 10-16-11
Jorge Lazaro 4,500 4.3 1.10 10-16-11
Jack Koegel 60,000 57.6 1.10 10-16-11
George Fischer 21,250 20.4 1.10 10-16-11
AGGREGATED OPTION/SAR EXERCISES DURING FISCAL 2001 AND YEAR END OPTION/SAR
VALUES
The following table provides information related to options exercised
by the Named Executive Officers during fiscal 2001 and the number and value of
options and stock appreciation rights held at fiscal year end which are
currently exercisable. No stock appreciation rights were exercised during fiscal
2001.
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS/SARS
SHARES OPTION/SARS AT FY-END AT FY-END($)(1)
ACQUIRED ON VALUE ------------------------------ ------------------------------
NAME EXERCISE (#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
--------------- ------------ -------- ------------ ------------- ----------- -------------
Paul Sharp -0- -0- 39,783 9,542 $30,333 $ 3,206
Harold Markowitz -0- -0- 39,783 9,542 $30,333 $ 3,206
Jorge Lazaro -0- -0- 39,783 9,542 $30,333 $ 3,206
Jack Koegel -0- -0- 148,250 51,750 $38,522 $30,976
George Fischer -0- -0- 30,313 17,187 $19,716 $10,519
---------------
(1) The values of Unexercised In-the-Money Options/SARs represents the
aggregate amount of the excess of $1.76, the closing sales price for a
share of Common Stock on December 31, 2001, over the relevant exercise
price of all "in-the-money" options.
DESCRIPTION OF STOCK OPTION PLAN
Pursuant to the Stock Option Plan, as amended, stock options covering
an aggregate of 801,948 shares of the Company's Common Stock may be granted to
employees (including officers), directors, consultants and other persons who
perform substantial services for or on behalf of the Company. The Stock Option
Plan is administered by the Stock Option Committee (the "Committee"), which is
vested with complete authority to administer and
10
interpret the Stock Option Plan, to determine the terms upon which options may
be granted, to prescribe, amend and rescind such interpretations and
determinations and to grant options. Under the Stock Option Plan, "incentive
stock options" ("Incentive Options") within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), may be granted to
employees (including officers), and non-incentive stock options ("Non-incentive
Options") may be granted to employees and to other persons (including directors)
who perform substantial services for or on behalf of the Company. Incentive
Options and Non-incentive Options are collectively referred to herein as
"Options."
The price at which shares covered by an Option granted under the Stock
Option Plan may be purchased pursuant thereto shall be determined by the
Committee, but shall be no less than the par value of such shares and no less
than the Fair Market Value (as hereinafter defined) of such shares on the date
of grant; provided, however, that in the case of Incentive Options, if the
optionee directly or indirectly beneficially owns more than 10% of the total
combined voting power of all of the outstanding voting stock of the Company (a
"10% Holder"), the purchase price shall not be less than 110% of the Fair Market
Value on the date of grant. As used herein, the term "Fair Market Value" means
the last sale price of a share of Common Stock as reported by the principal
quotation service on which the Common Stock is listed for the date of grant, if
available, or, if the last sale prices are not reported, the mean of the high
bid and low asked prices of a share of Common Stock as reported by such
principal quotation service for the date of grant; provided, however, that if no
such report is available for the date of grant, the Fair Market Value shall be
the last sale price or the mean of the high bid and low asked prices, as the
case may be, on the day next preceding such day for which there was a report;
and provided further, however, that if no such representative quotes are
available, the Fair Market Value shall mean the amount determined by the
Committee to be the fair market value pursuant to any reasonable method in
accordance with applicable regulations of the Internal Revenue Service.
The purchase price of shares issuable upon exercise of an Option
granted under the Stock Option Plan may be paid in cash or by delivery of shares
of Common Stock having an aggregate Fair Market Value on the date of exercise
equal to the exercise price of the option. The Company may also loan the
purchase price to the optionee, or guarantee third-party loans to the optionee,
on terms and conditions acceptable to the Committee.
Under the Stock Option Plan, the total number of shares of Common Stock
for which options may be granted to any one person in any given calendar year
may not exceed 60,000. The Stock Option Plan also provides that the aggregate
fair market value of the stock with respect to which Incentive Options are first
exercisable by any employee during any calendar year under the Stock Option Plan
and all other stock option plans of the Company shall not exceed $100,000. To
the extent that the Fair Market Value of the stock with respect to which
Incentive Options are first exercisable by any employee during any calendar year
(under all plans of the Company) exceeds $100,000, such Options shall be treated
as Options which are not Incentive Options. The number of shares covered by an
Option is subject to adjustment for stock dividends, stock splits, mergers,
consolidations, combinations of shares, reorganizations and recapitalizations.
The Stock Option Plan provides that Options may be exercised within a
period not exceeding ten years after the date of grant, except that the term of
any Incentive Options granted to a 10% Holder may not exceed five years from the
date of grant. Options are generally non-transferable except by will or by the
laws of descent and distribution, and during a participant's lifetime are
exercisable only by him or her. In addition, pursuant to the Stock Option Plan,
various limitations may apply to the exercise of Options by optionees whose
employment is terminated on retirement, disability or otherwise.
As of April 25, 2002, of the 801,948 shares of Common Stock available
for issuance under the Stock Option Plan, 650,008 of such shares are reserved
for issuance upon exercise of currently outstanding options. Accordingly, only
151,940 shares of Common Stock are available for future awards under the Stock
Option Plan.
11
CERTAIN TRANSACTIONS
From time-to-time, the Company transacts business with parties related
to the minority stockholders of Ales Signature, Ltd., a New York corporation,
80% of the stock of which is owned by the Company. During 2001 and 2000, the
Company purchased inventories at a total cost of approximately $428,000 and
$1,440,000, respectively, from companies affiliated with the minority
stockholders. At December 31, 2001, accounts payable included a total of
approximately $43,000 that arose primarily from such purchases. In addition,
during 2001 and 2000, the Company made sales of merchandise to companies
affiliated with minority stockholders aggregating approximately $102,000 and
$606,000, respectively. At December 31, 2001, accounts receivable included a
total of approximately $39,000 that arose primarily from such sales.
STOCKHOLDER PROPOSALS
Shareholder proposals intended to be presented at the next annual
meeting of shareholders, to be held in 2003, must be received by the Company at
495 River Street, Paterson, New Jersey 07524, Attention: Secretary by December
31, 2002 to be included in the proxy statement and form of proxy relating to
that meeting.
AUDITORS
Representatives of J.H. Cohn LLP are expected to attend the Annual
Meeting and, while they are not expected to make a statement, they will have an
opportunity to do so if they desire. They will also be available to respond to
appropriate questions.
AUDIT FEES. The aggregate fees billed by J.H. Cohn LLP for professional
services rendered for the audit of the Company's annual financial statements for
the 2001 fiscal year and the reviews of the financial statements included in the
Company's Form 10-QSBs for the 2001 fiscal year totaled $118,870.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES. The
aggregate fees billed for professional services to financial information systems
design and implementation by J.H. Cohn LLP for the 2001 fiscal year totaled
$30,305.
ALL OTHER FEES. The aggregate fees billed for services rendered by J.H.
Cohn LLP for the 2001 fiscal year other than the fees reflected above totaled
$8,020, for tax related services.
The Audit Committee has considered whether the provision of services
covered in the preceding three paragraphs is compatible with maintaining J.H.
Cohn LLP's independence.
OTHER INFORMATION
The cost of soliciting proxies will be borne by the Company. Following
the original mailing of proxy soliciting material, regular employees of the
Company may solicit proxies by mail, telephone, telegraph and personal
interview. Arrangements have been made with brokerage houses and other
custodians, nominees and fiduciaries which are record holders of the Company's
stock to forward proxy soliciting material and annual reports to the beneficial
owners of such stock, and the Company will reimburse such record holders for
their reasonable expenses incurred in providing such services. As of the date of
this Proxy Statement, the Company has not retained the services of a proxy
solicitor to assist in the solicitation of proxies.
A COPY OF THE COMPANY'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED
DECEMBER 31, 2001 IS ENCLOSED.
12
OTHER MATTERS
The Board of Directors is aware of no other matters that are to be
presented to shareholders for formal action at the Annual Meeting. If, however,
any other matters properly come before the Annual Meeting or any adjournment
thereof, it is the intention of the persons named in the enclosed form of proxy
to vote such proxy in accordance with their judgment on such matters.
By Order of the Board of Directors,
Jorge Lazaro
SECRETARY
Dated: Paterson, New Jersey
April 30, 2002
13
[FRONT]
PROXY
SEL-LEB MARKETING, INC.
PROXY SOLICITED BY
THE BOARD OF DIRECTORS OF SEL-LEB MARKETING, INC.
FOR THE ANNUAL MEETING OF SHAREHOLDERS -- MAY 30, 2002
The undersigned hereby appoints HAROLD MARKOWITZ, JORGE LAZARO and
GEORGE FISCHER, and each of them, as Proxies, each with full power of
substitution and resubstitution, to represent and to vote, as designated below,
all shares of Common Stock of Sel-Leb Marketing, Inc. (the "Company") which the
undersigned would be entitled to vote if personally present at the Annual
Meeting of Shareholders of the Company to be held at the Company's offices
located at 495 River Street, Paterson, New Jersey at 10:00 a.m. (local time) on
May 30, 2002, and at any adjournment or postponement thereof.
1. Election of Directors
[ ] FOR all nominees listed below [ ] WITHHOLD
(except as marked to APPROVAL to vote
the contrary below) for all nominees
listed below
Harold Markowitz, Paul Sharp, Jorge Lazaro, Jack Koegel, Stanley R. Goodman and
Edward C. Ross
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below)
2. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the annual meeting or any adjournment
or postponement thereof.
If no direction is given, this proxy will be voted FOR the election of the
nominees set forth in Proposal No. 1.
THE BOARD OF DIRECTORS RECOMMENDS A
VOTE FOR THE ELECTION OF THE NOMINEES SET FORTH IN
PROPOSAL NO. 1
TO BE VALID, THIS PROXY MUST BE SIGNED AND DATED ON THE REVERSE SIDE.
[BACK]
Please sign exactly as name appears at left. When shares
are held by joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee or guardian,
please give your full title as such. If a corporation,
please sign in full corporate name by president or other
authorized officer. If a partnership, please sign in
partnership name by authorized person.
Dated:
--------------------------------------
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Signature
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Signature
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS.