UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14C INFORMATION
This document is being filed late due to a delay in the filing of an
amended 10K with audited financial statements.
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)
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[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-
11
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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:
August 23, 2002
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BRIDGE TECHNOLOGY, INC.
12601 Monarch Street
Garden Grove, California 92841
------------------------------
INFORMATION STATEMENT
relating to
ANNUAL MEETING OF STOCKHOLDERS
held on May 13, 2002
------------------------------
WE ARE NOT REQUESTING A PROXY AND
YOU WERE REQUESTED NOT 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 on May 13, 2002 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 22, 2002
as the record date of determination of the stockholders entitled to notice of
the meeting to vote at the Annual Meeting. As of the record date, there are
10,863,186 issued and outstanding shares of our common stock held by
approximately 2,800 holders of record. A majority of such shares shall
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 person 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 August 27, 2002
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 with these mailings.
PROPOSAL 1
ELECTION OF DIRECTORS
Information About Nominees
--------------------------
Of the nominations by our board the following nine persons have
accepted to serve as Directors until the next Annual Meeting of our
stockholders or until their respective successors are elected and
qualified:
Winston Gu, age 51, 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 55, has served as the President and Director
of Bridge Technology, Inc. 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 Simmsun, 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.
James Djen, age 48, 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.
John T. Gauthier, age 74, 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.
Thomas Davidson, age 68, is Managing Director of Southporter Management
Group in Greenwich, CT, a merchant bank providing investment and financial
advisory services to companies seeking expansion capital, acquistions,
merger partners or strategic alliances. Mr. Davidson brings to Bridge over
40 years of top financial management experience. He has held important
financial management positions with NBC, Ford Motor Company, White Morton
Corportation (NYSE) and Texas Gas Corporation (NYSE). He was Executive
Vice President, Director and Chief Financial Officer with Arrow Electronics,
Inc. (NYSE) from 1981 to 1989, a distributor of electronic components, when
the company grew from $250 million to $2 billion in revenues. Mr. Davidson
holds an MBA from Columbia University, NY and B.A. from Vanderbilt
University, TN.
Frank King, age 69, is retired Partner of Price Waterhouse where he
served as Partner in charge Northeastern United States, Mid Atlantic States
and Southeastern United States of their Valuation Services Group. Mr. King
has over twenty-five years of direct valuation, studies of businesses both
domestically and international. He directed eastern operations for Arthur
D. Little - Valuations, NJ, Valuation Researcg Corporation, WI, Marshall &
Stevens, NY and American Appraisal Associates, NY. Mr. King holds a MBA in
Finance and Marketing fromHofstra University, NY and BS in Civil Engineering
from the University of Houston, TX.
Hideki Watanabe, age 56, 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 73, 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 41, 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 59, 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.
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 Joseph Gatti and John T. Gauthier, met 4
times during fiscal 2001.
Our Board held 7 meetings during fiscal 2001 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 2001.
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. No warrants have been issued to date for the year
2001. 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 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 two additional qualified
members to join Mr. Gatti. 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, 2001 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 from BDO
Seidman, LLP required by Independence Standards Board Standard No. 1
(Independence Discussion with Audit Committees) and the audit committee has
discussed 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 amended Form 10 for
the fiscal year ended December 31, 2001 for filing with the SEC.
Audit Commitee
Joseph Gatti, Chairman
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 22, 2002, 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 2,238,334 20.6%
James Djen 700,420 6.4%
John T. Gauthier 99,540 0.9%
Joseph Gatti 0
Alan Hui-Tse Sheen 440,000 4.0%
Fusahiko Hasegawa 20,000 0.2%
R. Fox 33,000 *
Hideki Watanabe 185,000 1.7%
4-12-2 Nagatsuda, Midori-Ku
Yokohama-Shi, Kanagawa-Ken, Japan
All directors and officers as a group 3,683,294 33.9%
(8 persons)
EXECUTIVE COMPENSAITON
Summary Compensation Table
--------------------------
The following table sets forth the cash and non-cash compensation paid
or earned during fiscal 1998, 1999, 2000 and 2001 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 2001.
Annual Compensation
------------------------------
Name and Principal Other Annual All Other
Position Year Salary Bonus Compensation Compensation(2)
------------------ ---- ------- ------- ------------ ----------------
Winston Gu 2001 120,000 - - -
Chairman and 2000 120,000 - - 50,000 @ $1.875
Chief Executive 1999 75,000 200,000 - 25,000 @ $5.00
Officer 1998 60,000 200,000 - -
James Djen 2001 120,000 - - -
Managing 2000 120,000 - - 50,000 @ $1.875
Director 1999 120,000 - - 25,000 @ $5.00
1998 159,000 - - 45,000 @ $3.50
John J. Harwer 2001 120,000 - - -
President 2000 120,000 - - 50,000 @ $1.875
1999 120,000 - - 25,000 @ $5.00
1998 158,333 - - 100,000 @ $1.75
R. Fox 2001 120,000 - - -
General Manager 2000 120,000 - - 15,000 @ $1.875
PTI Enclosures 1999 125,000 - - 15,000 @ $5.00
1998 123,637 - - -
John T. Gauthier 2001 120,000 - - -
Chief Financial 2000 120,000 - - 50,000 @ $1.875
Officer 1999 60,000 - - 25,000 @ $5.00
1998 36,000 - - -
Warrant Grants and Exercises
----------------------------
No warrants were granted for the year 2001 nor were any warrants
exercised.
The following table summarizes warrant exercises and the value of
in-the-money options held at December 31, 2001 by our Chief Executive
Officer and each of the executive officers named in the Summary
Compensation Table above.
Aggregated Warrant Exercises In
Last Fiscal Year and Fiscal Year-End Option Values
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
December 31, 2001 December 31, 2001(2)
Shares ----------------- -----------------
Acquired on Value Exer- Unexer- Exer- Unexer-
Name Exercise(#) Realized($)(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 employment agreements with our
employees in the year 2001. 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 and an additional
$30,000 in 2001. This debt bears interest at a rate of 9.5% and is due
on demand. We repaid principal of $100,000 and $700,000 and interest of
$152,859 and $322,066 during 2000 and 2001. At December 31, 2000 and 2001
respectfully, there was an accrued interest payable of $88,919 and zero ($0)
and a total interest expense of $241,778 and $233,148.
Amount
Repaid in
Amount 2001 From Relationship
----------- ---------- --------------- ------------------------------------
$ 1,000,000 $700,000 Frontier Corporation controlled by Jeanie Gu,
Electronics 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.
-----------
$ 2,900,000
===========
PROPOSAL 2
RATIFICATION OF AUDITORS
Our Board of Directors has yet to appoint outside auditors for the
year ending December 31, 2002.
The outside audit committee of three independent directors are
expected to solicit proposals for interested public accounting
firms and to make their recommendations to the Board of Directors.
Audit Fees
----------
The fees for our 2001 annual audit and review of our
quarterly financial statements including domestic and international
were approximately $380,000.
Financial Systems Design and Implementation Fees
------------------------------------------------
None
All Other Fees
--------------
Income tax preparation and tax consulting: $30,000
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, 2001, 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, 2002 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, 2003. 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
James Djen
Chief Executive Officer
and Director
August 27, 2002
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.