UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(C) of the Securities Exchange
Act of 1934 as amended
Check the appropriate box:
[ ] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only
[X] Definitive Information Statement
Bridge Technology, Inc.
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(Name of Registrant As Specified In Its Charter)
000-24767
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(Commission file number)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-
11
1) Title of each class of securities to which transaction applies:
N/A
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2) Aggregate number of securities to which transaction applies:
N/A
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
N/A
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4) Proposed maximum aggregate value of transaction:
N/A
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5) Total fee paid:
None
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[ ] Fee paid prviously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date of
its filing.
1) Amount Previously Paid:
None
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2) Form, Schedule or Registration Statement No.:
Schedule C
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3) Filing Party:
Bridge Technology, Inc.
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4) Date Filed:
April 24, 2001
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BRIDGE TECHNOLOGY, INC.
12601 Monarch Street
Garden Grove, California 92841
------------------------------
INFORMATION STATEMENT
relating to
ANNUAL MEETING OF STOCKHOLDERS
to be held on May 14, 2001
------------------------------
WE ARE NOT ASKING YOU FOR A PROXY AND
YOU ARE REQUESTED NO TO SEND US A PROXY.
This information statement is furnished by the Board of Directors of
Bridge Technology, Inc., a Nevada corporation, in connection with the Annual
Meeting of Stockholders to be held on May 14, 2001 at 10:00 a.m., local time,
at our principal executive offices located at 12601 Monarch Street, Monarch
Street, Garden Grove, California 92841 for the purposes set forth in the
accompanying Notice of Meeting.
The Board of Directors has fixed the close of business on April 20, 2001
as the record date of determination of the stockholders entitled to notice of
ant to vote at the Annual Meeting. As of the record date, there were
10,863,186 issued and outstanding shares of our common stock held by
approximately 2,800 holders of record. A majority of such shares will
constitute a quorum for the transaction of business at the Annual Meeting.
The holders of record on the record date of shares entitled to be voted at
the Annual Meeting are entitled to cast one vote per share on each matter
submitted to a vote at the Annual Meeting. The affirmative vote of a
majority of the shares of common stock present, in persion or by proxy, at
the Annual Meeting is required to approve each proposal. Votes will be
counted by our representatives at the Annual Meeting. (STOCKHOLDERS DO NOT
HAVE CUMULATIVE VOTING RIGHTS.)
This Information Statement is being mailed on or about April 24, 2001 to
holders of record of common stock at the close of business on the record
date. We will bear all costs and expenses relating to the preparation,
printing and mailing of this Information Statement and accompanying materials
to stockholders. Arrangements will be made with brokerage firms and other
custodians, nominees and fiduciaries for forwarding the Information Statement
to the beneficial owners of the shares of common stock held by such persons,
and we will reimburse them for reasonable out-of-pocket expenses incurred in
connection these mailings.
PROPOSAL 1
ELECTION OF DIRECTORS
Information About Nominees
--------------------------
Our board has nominated the following nine persons to serve as directors
until the next Annual Meeting of our stockholders or until their respective
successors are elected and qualified:
Winston Gu, age 50, has served as our Chairman and Chief Executive
Officer since December 1999 and has been a director since 1997. He is also a
member of our Executive Steering Committee, the Chief Executive Officer of
our subsidiary, Autec Power Systems, Inc. and the President of Frontier
Electronics Corporation for the past ten years.
John J. Harwer, age 54, has served as the President of our subsidiary,
Pacific Bridge Net, since 1997 and has been a director since 1997. Mr.
Harwer is also a member of our Executive Steering Committee. From January
1996 to May 1997, Mr. Harwer owned and managed a computer distribution
company, Allied Web, Inc. From May 1994 to April 1996, he was a majority
owner of Simpson, Inc., a supplier of computer memory and components to the
domestic and international market. From January 1990 to May 1994, he was
Vice President of Operations and New Product Development for CMS
Enhancements, a $200 million NYSE computer peripheral company. From 1971
through 1989, he held senior engineering, marketing and management positions
with several companies in the computer industry including Hewlett-Packard,
Raytheon, Gerber Scientific, Picker Nuclear, Genrad and Calcomp. Mr. Harwer
also served as technology consultant to Burroughs (now UNISYS), Sharp USA,
Graphtec, Houston Instruments, Amtec and others. He received his Master of
Computer Science degree from Charles University, Prague, Czech Republic in
1971. He has written, conducted and participated in numerous management and
technology seminars and conferences.
John T. Gauthier, age 73, has served as our Chief Financial Officer,
Secretary and Treasury since 1997. He has been a director since 1997 and is
also a member of our Executive Steering Committee. He was the prior Chairman
of the Company's Board of Directors from March 1997 to April 1998. He is
also the Secretary-Treasurer, Chief Financial Officer, and a Director of the
Exell Corporation since June 1995. For twelve years Mr. Gauthier was
President and Chairman of the Board of Datronic Engineers Inc., a small
capitalization public company engaged in the design, furnishing and
installation of long-range telecommunications systems internationally. For
six years he was Director of Finance and Administration for Northrop
Corporation's subsidiary, Page Communications Engineers, a leading
international telecommunications company. He was a former management
consultant to the Executive Director of the International Monetary Fund of
the World Bank. He was also a Founder, Director along with the former
Comptroller of the U.S. Treasury, James Saxton of the Free State Bank and
Trust Company in Potomac, Maryland. Mr. Gauthier received a Bachelor of
Science Degree in Finance from Fordham University in 1953 and completed the
MBA program at the Graduate School of Business, George Washington University
in 1957. Mr. Gauthier also completed two years of legal training at the
Georgetown University Law Center in 1959.
James Djen, age 47, has served in various capacities from President of
PTI Enclosures, a Bridge subsidiary, to President of Bridge Technology, Inc.
to currently Managing Director with responsibilities of overseeing the Asia-
Pacific unit of the Corporation. He also serves as a member of our Executive
Steering Committee and as a director since November 1998. He has also served
as President and Chairman of the Board of PTI Enclosures, Inc. since 1993.
From June 1985 to 1994 he was a director and Executive Vice President of CMS
Enhancement, a New York, Stock Exchange firm. Mr. Djen was granted a
Bachelor of Science Degree in Electrical Engineering from National Taiwan
University in 1977 and a Master of Science Degree in Electrical Engineering
from Connecticut's Bridgeport University in 1978 and a Master of Science
Degree in Electrical Engineering in 1981 from California State University.
Peter Liu, age 50, has served as a director since 1997. He is the
founder of the W.I. Harper Group, a San Francisco based venture capital and
investment-banking firm, with offices in San Francisco, Taipei, Hong Kong,
and Beijing where he has been the Chairman and Chief Executive Officer since
1995. W.I. Harper Group provides cross-border, financial and management
services to companies in the international market.
Hideki Watanabe, age 55, has been a director and a member of our
Executive Steering Committee since April 1998. Mr. Watanabe has also served
as the President of Newcorp Technology Limited, our electronics technology R
& D subsidiary based in Tokyo, Japan. He graduated from Nihon Physical
Education College in 1972. From 1972 until 1982, he worked for Wakou-Shoji.
From 1983 until 1984, he was the President of Seiei Corporation. In 1995, he
co-founded Newcorp Technology Limited, where he is responsible for
international sales and marketing of high technology products.
Joseph Gatti, Jr., age 72, has been employed as Managing Director of
Corporate Finance for Spencer Trask Securities in New York since 1995. He
has over 40 years experience in the securities industry, primarily in the
funding of high technical organizations. He was a former Electronic
Countermeasures Officer with the U.S. Air Force. He received a Bachelor of
Science degree from New York State Maritime College in 1949.
Alan Hui-Tse Sheen, age 40, has served as a director since 1998. He has
been the Chairman and Chief Executive Officer of American Computer and
Digital Components, Inc., a privately held computer memory module company
since 1992. Mr. Sheen has been actively involved in the computer memory
module business since graduation from the University of Southern California
in 1983 with a BS in Business Administration.
Fusahiko Hasegawa, age 58, has served as a director since 1998. He has
been the President and Chief Executive Officer of Advanced Technology and
Systems Co., Ltd., ADTX, an IBM Japan joint venture since 1994. Mr. Hasegawa
has over 40 years of senior technical and management experience with IBM.
OUR BOARD RECOMMENDS A VOTE FOR THE ELECTION OF THE ABOVE NOMINEES FOR
DIRECTOR.
Additional Information About our Board and its Committees
---------------------------------------------------------
Our Board of Directors has established an audit committee, but has not
established a compensation committee or a standing nominating committee.
The audit committee provides assistance to our Board in satisfying its
fiduciary responsibilities relating to accounting, auditing, operating and
reporting practices and reviews the annual financial statements, the
selection and work of our independent auditors and the adequacy of internal
controls for compliance with corporate policies and directives. The audit
committee, comprised of Peter Liu, Joseph Gatti and John T. Gauthier, met 4
times during fiscal 2000.
Our Board held 6 meetings during fiscal 2000 and each of the directors
attended, either in person or by telephonic conference, 75% or more of the
meetings of our Board and all such committees on which such director served
during fiscal 2000.
Director Compensation
---------------------
Directors who are employees receive no separate compensation for their
service as directors. Our non-employee directors do not receive cash fees,
however they receive 25,000 warrants annually to purchase common stock at a
price set by the Board. The warrant price last year was at $1.875 per share.
In addition, directors are reimbursed for travel expenses for attending
meetings of the board and any board or advisory committees.
Audit Committee Report
----------------------
The audit committee consists of Peter Liu, Joseph Gatti, and John T.
Gauthier, each of whom is a member of our Board of Directors, and qualifies
as "independent" as defined under the National Associations of Securities
Dealers' listing standards except for John T. Gauthier, the Company's CFO,
who is an interim member until the Board selects a qualified member to
replace him. The audit committee operates under a written charter adopted by
our Board of Directors which is included in this Information Statement as
Appendix A.
The primary function of the audit committee is to provide advice with
respect to our financial matters and to assist our Board of Directors in
fulfilling its oversight responsibilities regarding finance, accounting and
tax compliance. The audit committee's primary duties and responsibilities
are to:
- serve as an independent and objective party to monitor our financial
reporting process and internal control systems;
- review and appraise the audit efforts of our independent accountants
and internal audit department;
- evaluate our quarterly financial performance;
- oversee management's establishment and enforcement of financial
policies and business practices; and
- provide an open avenue of communication among the independent
accountants, financial and senior management, counsel, the internal
audit department and our Board of Directors.
The audit committee has reviewed and discussed our audited financial
statements for the fiscal year ended December 31, 2000 with our management.
The audit committee has discussed with BDO Seidman, LLP, our independent
public accountants, the matters required to be discussed by Statement on
Auditing Standards No. 61 (Communication with Audit Committees). The audit
committee has also received the written disclosures and the letter form BDO
Seidman, LLP required by Independence Standards Board Standard No. 1
(Independence Discussion with Audit Committees) and the audit committee has
discudded the independence of BDO Seidman, LLP with them.
Based on the audit committee's review and discussions noted above, the
audit committee recommended to our Board of Directors that our audited
financial statements be included in our Annual Report on Form 10-KSB for the
fiscal year ended December 31, 2000 for filing with the SEC.
Audit Committee
Peter Liu
Joseph Gatti
John T. Gauthier
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding the beneficial
ownership of our common stock by (a) each stockholder who is known by us to
own beneficially more than 5% of the outstanding common stock, (b) each
director and each nominee, (c) each executive officer named in the Summary
Compensation Table on page 9 under the heading "Executive Compensation", and
(d) all our executive offciers and directors as a group. This ownership
information is as of April 20, 2001, unless otherwise indicated in the
footnotes.
Unless otherwise noted, each of the stockholders listed in the table
possesses sole voting and investment power with respect to the shares
indicated. Shares not outstanding but deemed beneficially owned by virtue of
the right of a person or member of a group to acquire them within 60 days are
treated as outstanding only when determining the amount and percent owned by
such person or group. As of April 20, 2001, there were 10,863,186 shares of
common stock outstanding.
Shares of Common Stock
Beneficially Owned
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Name of Beneficial Owner Amount Percent of Class
------------------------ ----------- ----------------
Winston Gu 2,773,334 25.5%
James Djen 687,642 6.3%
John T. Gauthier 33,334 *
John J. Harwer 200,000 1.8%
Peter Liu 60,000 *
Joseph Gatti 0
Alan Hui-Tse Sheen 240,000 2.2%
Fusahiko Hasegawa 20,000 *
R. Fox 33,000 *
Cayman Computer Alliance Corporation 373,206 3.4%
12601 Monarch Street
Garden Grove, California 92841
Hideki Watanabe 300,000 2.8%
4-12-2 Nagatsuda, Midori-Ku
Yokohama-Shi, Kanagawa-Ken, Japan
All directors and officers as a group 4,214,310 38.8%
(8 persons)
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* Less than 1%
EXECUTIVE COMPENSAITON
Summary Compensation Table
--------------------------
The following table sets forth the cash and non-cash compensation paid
or earned during fiscal 1998, 1999 and 2000 by our Chief Executive Officer
and our four other executive officers, all of whom received or earned cash
and non-cash salary and bonus of more than $100,000 for fiscal 2000.
Annual Compensation
------------------------------
Name and Principal Other Annual All Other
Position Year Salary Bonus Compensation Compensation(2)
------------------ ---- ------- ------- ------------ ----------------
Winston Gu 2000 120,000 - - 50,000 @ $1.875
Chairman and 1999 75,000 200,000 - 25,000 @ $5.00
Chief Executive 1998 60,000 200,000 - -
Officer
James Djen 2000 120,000 - - 50,000 @ $1.875
Managing 1999 120,000 - - 25,000 @ $5.00
Director 1998 159,000 - - 45,000 @ $3.50
John J. Harwer 2000 120,000 - - 50,000 @ $1.875
President 1999 120,000 - - 25,000 @ $5.00
1998 158,333 - - 100,000 @ $1.75
R. Fox 2000 120,000 - - 15,000 @ $1.875
General Manager 1999 125,000 - - 15,000 @ $5.00
PTI Enclosures 1998 123,637 - - -
John T. Gauthier 2000 120,000 - - 50,000 @ $1.875
Chief Financial 1999 60,000 - - 25,000 @ $5.00
Officer 1998 36,000 - - -
Option Grants and Exercises
---------------------------
The following table summarizes option grants during the fiscal year ended
December 31, 2000 to each of the executive officers named in the Summary
Compensation Table above, and the potential realizable value of the options
held by such persons as December 31, 2000.
Potential
Individual Grants(1) Realizable Value
-------------------------------------------------- at Assumed Annual
Number of Percent of Rates of Stock
Securities Total Options Price Appreciation
Underlying Granted to Exercise or for Option Term(3)
Options Employees in Base Price Expiration ------------------
Name Granted (#) Fiscal Year ($/Sh)(2) Date 5%($) 10%($)
---------------- ----------- ------------- ----------- ---------- ------------------
Winston Gu 50,000 8.3% 1.875 _________ ______ _____
James Djen 50,000 8.3% 1.875 _________ ______ _____
John J. Harwer 50,000 8.3% 1.875 _________ ______ _____
R. FOx 15,000 2.5% 1.875 _________ ______ _____
John T. Gauthier 50,000 8.3% 1.875 _________ ______ _____
---------------
(1) All options reported in this table consist of non-plan warrants, all of which
are immediately exercisable.
(2) The per share exercise price of each option granted in 2000 is equal to the
market value of a share of our common stock on the grant date.
(3) These amounts represent assumed rates of appreciation only. Actual gains, if
any, on stock option exercises are dependent on the future performance of our
common stock. The amounts represented in this table may not necessarily be
achieved.
The following table summarizes option exercises and the value of in-the-money
optins held at December 31, 2000 by our Chief Executive Officer and each of the
executive officers named in the Summary Compensation Table above.
Aggregated Option Exercises In
Last Fiscal Year and Fiscal Year-End Option Values
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
December 31, 2000 December 31, 2000(2)
Shares ----------------- -----------------
Acquired on Value Exer- Unexer- Exer- Unexer-
Name Exercise(#) Realized($)(1) cisable cisable cisable cisable
---------------- ----------- ------------- -------- ------- ------- -------
Winston Gu ___________ _____________ ________ _______ _______ _______
James Djen ___________ _____________ ________ _______ _______ _______
John J. Harwer ___________ _____________ ________ _______ _______ _______
R. Fox ___________ _____________ ________ _______ _______ _______
John T. Gauthier ___________ _____________ ________ _______ _______ _______
---------
(1) The value realized is calculated based ont he closing price of our common
stock as reported by the Nasdaq Small Cap Market on the date of exercise
minus the exercise price of the option, and does not necessarily indicate
that the optionee sold such stock.
(2) The value of unexercised in-the-money options is based on the difference
between the fair market value of the shares of common stock underlying
the options at December 31, 2000, and the exercise price of such options.
Options are in-the-money if the market price of the shares exceeds the
option exercise price.
Agreements with Employees
-------------------------
The Corporation did not have written employmnet agreements with our
employees in the year 2000. The Directors are expected to appoint a
compensation committee at the Annual Meeting of Directors and to formalize
employment contracts with executive employees.
Report On Executive Compensation
--------------------------------
Executive Compensation for the Company is presently being studied by the
Executive Committee for recommendation to the Board of Directors. The Board
at their Annual Meeting is expected to appoint a Compensation Committee.
Certain Transactions
--------------------
On January 3, 2000, in connection with our initial acquisition of 60% of
the outstanding capital stock of CMS Technology Limited (CMS), our Hong Kong
subsidiary, Alan Sheen, a director and principal stockholder of Bridge
Technology, acquired 10% of the outstanding capital stock of CMS for a
purchase price of $1,000,000. We purchased the remaining 30% of the capital
stock of CMS in May 2000 for a purchase price of $3,000,000.
We lease our facility located in Garden Grove, California from PTI
Enclosures, LLC, a corporation controlled by James Djen, an officer, Director
and principal stockholder of the Company. The lease provides for monthly
payments of $23,288 and a term of 20 years expiring in December 2017. In
addition, we entered into a sublease agreement with Exell Corporation, a
corporation controlled by Anita Gauthier, the wife of the Company's CFO John
T. Gauthier, for a portion of the building for a monthly payment of $1,380,
through October 2003.
Our subsidiary, Autec Power Systems, Inc., leases facilities under an
operating lease with K.G. Cockran Properties, a company owned by Winston Gu,
one of our principal stockholders. The lease calls for monthly lease
payments of $19,672, subject to cost of living adjustment, through 2007.
Autec entered into a sublease agreement with Frontier Electronics, a
corporation owned by Jeanie Gu, the wife of the Company's CEO Winston Gu, for
a portion of the facility for a monthly payment of $4,372. The term of
sublease is for 10 years.
During 1999, we loaned $250,000 to Photo King International, an entity
of which James Djen, one of our principal stockholders, is an officer.
During 2000, $25,000 of this loan was repaid, leaving an unpaid principal
balance of $225,000.
During 2000, in connection with our acquisition of CMS Technology, Ltd.,
we borrowed $2.9 million from a related party group as follows. This debt
bears interest at a rate of 9.5% and is due on demand. We repaid principal
of $100,000 and interest of $152,859 during 2000. At December 31, 2000,
there was an accrued interest payable of $88,919 and a total interest expense
of $241,778.
Amount From Relationship
----------- -------------------- ------------------------------------
$ 1,000,000 Frontier Electronics Corporation controlled by Jeanie Gu,
wife of the Company's CEO
1,000,000 CKI Corporation controlled by James Djen,
an officer, Director and major
stockholder of the Company.
400,000 Winston Gu CEO, Director and major stockholder
of the Company
200,000 Edwin Cheng Brother of James Djen, an officer,
Director and major stockholder of the
Company
100,000 James Djen Officer, Director and major
stockholder of the Company
100,000 Karen Chiu Controller of the Company
100,000 Exell Corporation Corporation controlled by Anita
Gauthier, wife of the Company's CFO.
Loan since repaid.
-----------
$ 2,900,000
===========
PROPOSAL 2
RATIFICATION OF AUDITORS
Our Board of Directors has appointed BDO Seidman, LLP, independent
certified public accountants, as our auditors for the year ending December
31, 2001.
Representatives of BDO Seidman, LLP will be present at the Annual
Meeting, will have an opportunity to make a statement if they so desire and
will be available to respond to appropriate questions.
Audit Fees
----------
The fees paid to $169,447.00 for our 2000 annual audit and review of our
quarterly financial statements were $27,326.23.
Financial Systems Design and Implementation Fees
------------------------------------------------
None
All Other Fees
--------------
Income tax preparation: $27,326.23
OUR BOARD RECOMMENDS A VOTE FOR THE RATIFICATION OF BDO SEIDMAN, LLP AS OUR
INDEPENDENT AUDITORS FOR THE 2001 FISCAL YEAR.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
-------------------------------------------------------
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires our directors, executive officers, and stockholders holding more
than 10% of our outstanding common stock, to file with the Securities and
Exchange Commission initial reports of ownership and reports of changes in
beneficial ownership of our common stock. Executive officers, directors and
greater-than-10% stockholders are required by SEC regulations to furnish us
with copies of all Section 16(a) reports they file. To our knowledge, based
solely on review of the copies of such reports furnished to us for the period
ended December 31, 2000, all Section 16(a) reports required to be filed by
our executive officers, directors and greater-than-10% stockholders were
filed on a timely basis.
PROPOSALS FOR THE NEXT ANNUAL MEETING
-------------------------------------
Stockholder proposals intended to be presented in the proxy materials or
information statement relating to the next Annual Meeting of Stockholders
must be received by us on or before December 31, 2001 and must satisfy the
requirements of the proxy rules promulgated by the Securities and Exchange
Commission.
A stockholder who wishes to make a proposal at the next Annual Meeting
without including the proposal in our proxy statement or information
statement must notify us by January 31, 2002. If a stockholder fails to give
notice by this date, then the persons named as proxies in the proxies
solicited by us for the next Annual Meeting, if any, will have discretionary
authority to vote on the proposal.
OTHER BUSINESS
--------------
We know of no business that will be presented for consideration at the Annual
Meeting other than that described in this Information Statement.
BY ORDER OF THE BOARD OF DIRECTORS
Winston Gu
Chairman of the Board and
Chief Executive Officer
April 24, 2001
Garden Grove, California
Appendix A
BRIDGE TECHNOLOGY, INC.
AUDIT COMMITTEE
CHARTER REQUIREMENTS
The Board of Directors has authorized the formation of the Audit
Committee under the following Charter Requirements.
1. The Audit Committee shall consist of three independent members.
2. The members shall be appointed to serve for one year until the
annual Directors meeting at which time the audit committee members
will be elected to serve the new year.
3. Each member of the Audit Committee shall be truly independent and
must not
a. have been employed by the corporation or its affiliates in the
current or past three years.
b. have accepted any compensation from the corporation or its
affiliates in excess of $60,000 during the previous fiscal year
(except for board service, retirement plan benefits, or non-
discretionary compensation).
c. be an immediate family member who is, or has been in the past
three years, employed by the corporation or its affiliates as an
executive officer.
d. have been a partner, controlling shareholder or an executive
officer of any for-profit business to which the corporation made,
or from which it received, payments (other than those which arise
solely from investments in the corporation's securities) that
exceed five percent of the organization's consolidated gross
revenues for that year, or $200,000, whichever is more, in any of
the past three years.
e. has been employed as an executive of another entity where any of
the company's executive serve on that entity's compensation
committee.
4. a. The purpose of the Audit Committee is to comply with good
business standards and all regulatory procedures in conducting
the business of the corporation.
b. oversee that the corporation's outside auditors comply with their
responsibility to perform independent audit of the books and
record of the corporation and to conduct an annual review of the
corporations internal control procedures and provide the Audit
Committee their recommendations for improvement and compliance
with good business practices.
5. The Audit Committee will meet quarterly as follows:
a. between May 1-15 annually
b. between August 1-15 annually
c. between November 1-15 annually
d. between February 1-15 annually
e. at any time that an issue has been brought to the attention of
the committee
6. The members of the committee are expected to review the company's
Form 10K annual reports and the Quarterly Reports on Form 10Q and
all 8K Reports before filing to the regulatory agencies for
compliance.
7. The Audit Committee is expected to review the outside auditors
report on internal control practices and their recommendations for
improvement and request written confirmation that all deficiencies
have been corrected.
8. The Audit Committee will submit an annual compliance letter report
to the Board of Directors confirming the committee review of the
outside auditors financial statements and internal control review
and noting any discrepancies or irregularities for the Board of
Directors consideration.
9. The initial Audit Committee, while the corporation is a small
business filer with the Securities and Exchange Commission, shall
consist of one non independent member who concurrently also serves
as the Chief Financial Officer of the Corporation.
10.When the Corporation ceases to be a small business filer, the Chief
Financial Officer of the Corporation will be replaced on the Audit
Committee by an independent director of the Corporation who is able
to read and understand fundamental financial statements, including a
company's balance sheet, income statement, and cash flow statement.
In addition this Director must have a working knowledge of the need
for internal control procedures and the necessity of the independent
auditors review of the company's internal control procedures in
practice and the formal report of their findings. The Director must
have past employment experience in finance or accounting, requisite
professional certification in accounting, or other comparable
experience or background, including a current or past position as a
chief executive or financial officer or other senior officer with
financial oversight responsibilities.
11.Except while the Corporation is a small business filer under SEC
rules, the Corporation will have all independent directors on the
Audit Committee.