<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
HOSOI GARDEN MORTUARY, INC.
________________________________________________
(Name of Registrant as Specified In its Charter)
HOSOI GARDEN MORTUARY, INC.
__________________________________________
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
or 14a-6(i)(3).
[ ] $500 per each party to the controversy pursuant to
Exchange Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction
applies:
_____________________________________________________________
2) Aggregate number of securities to which transaction applies:
_____________________________________________________________
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:
_____________________________________________________________
4) Proposed maximum aggregate value of transaction:
_____________________________________________________________
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify
the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
_____________________________________________
2) Form, Schedule or Registration Statement No.:
_____________________________________________
3) Filing Party:
_____________________________________________
4) Date Filed:
_____________________________________________
Page ___ of ___
NO EXHIBIT INDEX
<PAGE> 2
HOSOI GARDEN MORTUARY, INC.
To Our Shareholders and Friends:
Best wishes for this New Year.
It is time again for the annual meeting of the shareholders of Hosoi
Garden Mortuary, Inc. which will be held on Sunday, January 21, 1996, at 30
North Kukui Street (corner of Nuuanu Avenue and Kukui Street), Honolulu,
Hawaii, at 11:00 a.m. Lunch will be served after the business meeting.
Your faith and trust in us in the years past have been most helpful.
We look to your continued support and encouragement in our effort to reach the
objectives of the Company.
Enclosed please find the following:
1. Letter to the Shareholders from Mrs. Sadako Hosoi
2. Notice of Annual Meeting of Shareholders
3. Proxy card and return envelope
4. Proxy statement
5. Annual Report
Please note that your dividend check for the fiscal year ended May 31,
1995 is being sent to you in a mailing separate from these proxy materials.
Sincerely,
/s/ CLIFFORD HOSOI
_____________________________________
Clifford Hosoi
President and Chief Executive Officer
Honolulu, Hawaii
December 30, 1995
<PAGE> 3
HOSOI GARDEN MORTUARY, INC.
Dear Shareholders:
Thought I'd write a short note to kindly remind you that it is time
again for our annual meeting. I hope that this will find you all in the best
of health.
Most importantly is that I wish to thank you all very much for the
support and confidence you've given us through all the years. I'm certainly
thankful and would like to express my appreciation to you all.
Briefly, we look forward to serving the community with continued care
and quality and to continually commit our efforts toward maintaining and
improving the excellence of our operations as well as to achieve our future
objectives.
Again, thank you for your continued support.
Sincerely,
/s/ SADAKO HOSOI
________________________________
Sadako Hosoi
Director and
Chairperson of the Board Emeritus
Honolulu, Hawaii
December 30, 1995
<PAGE> 4
HOSOI GARDEN MORTUARY, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Shareholders of HOSOI GARDEN MORTUARY, INC.:
Notice is hereby given that the Annual Meeting of Shareholders of
Hosoi Garden Mortuary, Inc. (the "Company") will be held on Sunday, January 21,
1996, at 11:00 A.M. at 30 North Kukui Street, corner of Nuuanu Avenue and Kukui
Street, Honolulu, Hawaii, for the following purposes:
(1) To elect three (3) directors to serve until the 1999 annual
meeting of shareholders and until their successors are
elected;
(2) To elect an auditor; and
(3) To vote upon other business properly before the meeting or any
adjournment thereof.
Only shareholders of record at the close of business on November
30,1995 will be entitled to notice of and to vote at the Annual Meeting. All
shareholders are cordially invited to attend the meeting.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ ELAINE NAKAMURA
______________________________
Elaine Nakamura
Secretary
Honolulu, Hawaii
December 30, 1995
<PAGE> 5
HOSOI GARDEN MORTUARY, INC.
30 North Kukui Street
(Corner of Nuuanu Avenue and Kukui Street)
Honolulu, Hawaii 96817
December 30, 1995
PROXY STATEMENT
GENERAL INFORMATION
The accompanying proxy is solicited on behalf of the Board of
Directors of Hosoi Garden Mortuary, Inc. (the "Company") to be used at the
Annual Meeting of Shareholders of the Company to be held at 11:00 A.M. on
Sunday, January 21, 1996, at 30 North Kukui Street (corner of Nuuanu Avenue and
Kukui Street), Honolulu, Hawaii 96817, and any adjournments thereof.
Attached to this proxy statement is your proxy. The Board of
Directors will vote all proxies it receives which are properly signed and
received in time. If you send the Board of Directors your proxy, it will be
voted according to how you fill out the proxy. However, if you send your proxy
to the Board, but do not tell the Board how to vote by filling out the proxy,
the Board will vote your proxy according to its recommendations explained in
this proxy statement.
The Board is seeking to have the proxy, proxy statement,
annual report and other materials sent to the shareholders between December 28
and 30, 1995.
REVOCABILITY OF PROXY
You may revoke your proxy any time before the proxy is voted.
You can revoke your proxy only if you inform the secretary of the Company in
writing, as provided in the Company's by-laws. You can also change your proxy
by sending another proxy of later date to the Board.
Your attendance at the Annual Meeting in person will not
revoke the proxy you give to the Board. But if you attend the Annual Meeting
in person, you still may revoke any proxy you have given and you may vote your
shares in person.
<PAGE> 6
SHAREHOLDERS WHO MAY VOTE
Only shareholders of record at the close of business on
November 30, 1995, may vote at the Annual Meeting. On November 30, 1995 there
were 1,834,310 shares outstanding, with each share entitled to one vote. A
quorum consists of the holders of a majority of the outstanding shares, present
either in person or by proxy. There are 223,785 shares in the treasury which
are not included in calculating such number and shall not be voted.
CUMULATIVE VOTING
Cumulative voting is governed by Hawaii Revised Statutes
Section 415-33. If a request for cumulative voting is delivered in writing to
an officer of the Company not less than forty-eight (48) hours prior to the
time set for the Annual Meeting of Shareholders, cumulative voting will be used
for the election of directors. If cumulative voting is used, each shareholder
shall be entitled to as many votes as shall equal the number of his shares
multiplied by the number of directors to be elected. He may cast all of such
votes for a single director or may distribute them among any two or more of the
number to be elected as he may see fit. If no request for cumulative voting is
received, each shareholder will be entitled to one vote per share for each
position on the Board of Directors.
PERSONS MAKING THE SOLICITATION AND COST
The accompanying proxy is solicited by mail on behalf of the
Board of Directors of the Company. The Company will pay the cost of
solicitation of proxies. Following the mailing of proxy soliciting material,
officers, employees and directors of the Company may, without additional
expense, solicit proxies by appropriate means, including by mail, telephone,
fax or personal interview.
SECURITIES MARKET AND DIVIDENDS
The common shares of the Company are neither traded nor listed
on an exchange and has no established public trading market. One stockbroker
in Honolulu quotes the common shares, but the Company is not aware of the
prices at which sales have been made. The records of the Company indicate that
very few shares are transferred. During the fiscal year ended May 31, 1995,
the Company acquired 3,265 shares at $3.50 per share and 13,715 shares at $4.00
per share, some of which were acquired as payment for funeral expenses incurred
by the shareholders.
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<PAGE> 7
There were 1,738 record holders of common shares as of
November 30, 1995.
A cash dividend has been declared and paid once a year since
1969. The dividend declared in October, 1995 was $.045 per share and in
October, 1994 was $.05 per share.
UPON REQUEST THE COMPANY WILL SEND TO YOU AT NO CHARGE A COPY OF FORM
10-KSB, THE ANNUAL REPORT INCLUDING THE FINANCIAL STATEMENTS AND THE FINANCIAL
STATEMENTS SCHEDULES FILED WITH THE SECURITIES AND EXCHANGE COMMISSION FOR THE
MOST RECENT FISCAL YEAR. TO REQUEST A COPY, YOU MUST WRITE TO:
MS. ELAINE NAKAMURA, SECRETARY
HOSOI GARDEN MORTUARY, INC.
30 NORTH KUKUI STREET
HONOLULU, HAWAII 96817
SOLICITED PROXIES WILL BE VOTED ON THE FOLLOWING MATTERS
The Board of Directors intends to vote solicited proxies on
the following matters:
I. To elect three (3) directors to serve until the 1999
annual meeting of shareholders and until their
successors are elected;
II. To elect an auditor; and
III. To vote upon other business properly before the
meeting or any adjournment thereof.
I. To elect three (3) directors to serve until the 1999 annual
meeting of shareholders and until their successors are
elected.
The Company has a total of nine (9) directors constituting the
entire Board of Directors, divided into three (3) classes of three (3)
directors each. The Company's Articles of Association provide for each class
of directors to be elected for three-year terms on a staggered basis. At the
1996 annual meeting of the shareholders, three directors will be elected to
serve until the 1999 annual meeting of the shareholders and until their
respective successors are elected.
-3-
<PAGE> 8
The Board of Directors' three nominees for directors are
Sadako Hosoi, Roy T. Shimonishi and Berton T. Kato. Sadako Hosoi and Roy T.
Shimonishi are currently directors of the Company. Each nominee has consented
to serve as a director, if elected.
Proxies in the accompanying form will (unless a contrary
direction is indicated therein) be voted to elect the foregoing nominees (who
have been nominated by the present Board of Directors) as directors to serve,
subject to the Articles of Association and By-Laws of the Company. If any of
the nominees listed is not available for election at the Annual Meeting (a
contingency which the management of the Company does not now foresee), it is
the intention of the Board of Directors to recommend the election of such other
persons as may be necessary to fill such vacancies. Proxies in the
accompanying form will be voted for the election of such other persons unless
authority to vote such proxies in the election of directors has been withheld.
II. To elect an auditor.
The Board of Directors recommends the election of Endo &
Company, a firm of certified public accountants, as auditor for the year
commencing June 1, 1995. Endo & Company was elected as auditor for the year
commencing June 1, 1994 at the Annual Meeting held on January 22, 1995. A
representative of Endo & Company will be present at the Annual Meeting, will
make a statement if the shareholders desire and will respond to any appropriate
questions raised at the meeting.
With respect to the election of the Auditor, each shareholder
is entitled to one vote for each share.
III. To vote upon other business properly before the meeting.
Management does not intend to bring any matters before the
meeting other than the election of directors, election of auditor, and
presentation of President's Report with the financial statements for the fiscal
year ended May 31, 1995. Management does not have any information that other
matters will be brought before the meeting, or any adjournment or adjournments
thereof. If other matters are introduced, it is the intention of the persons
named in the enclosed form of proxy to vote said proxy in accordance with their
judgment.
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<PAGE> 9
INFORMATION ON STOCK OWNERSHIP OF PRINCIPAL SHAREHOLDERS, DIRECTORS AND
EXECUTIVE OFFICERS
A. Principal Shareholders
The Herman S. Hosoi Trust, whose trustees are Sadako Hosoi and
Julie S. Shimonishi, and the Hosoi Family Limited Partnership, whose general
partner is the Hosoi Family Voting Trust, by its trustee Julie S. Shimonishi,
are the only persons who own of record or are known to the Company to own
beneficially more than five per cent of the common shares of the Company as of
November 30, 1995. Certain information about the holders is set forth in the
table below.
<TABLE>
<CAPTION>
Title of Name and Address of Nature of Beneficial No. of Percent of
Class Beneficial Owner Ownership Shares Class
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Julie S. Shimonishi Shared as co-trustee of 158,250 8.62%
30 North Kukui Street the Herman S. Hosoi Trust
Honolulu, Hawaii 96817
Trustee of the Hosoi
Family Voting Trust, 160,250 8.74%
General Partner of the
Hosoi Family Limited
Partnership
Custodian for Chad
Shimonishi and Lane 8,000 0.44%
Shimonishi under HUGMA
Direct 52,534 2.86%
------- ------
Total 379,034 20.66%
Common Sadako Hosoi Shared as co-trustee of 158,250 8.62%
30 North Kukui Street the Herman S. Hosoi Trust
Honolulu, Hawaii 96817
Settlor of the Hosoi
Family Voting Trust and 160,250 8.74%
limited partner of the
Hosoi Family Limited
Partnership
------- ------
Total 318,500 17.36%
</TABLE>
-5-
<PAGE> 10
<TABLE>
<CAPTION>
Title of Name and Address of Nature of No. of Percent of
Class Beneficial Owner Beneficial Ownership Shares Class
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Herman S. Hosoi Trust Direct 158,250 8.62%
Sadako Hosoi and
Julie S. Shimonishi, Trustees
30 North Kukui Street
Honolulu, Hawaii 96817
Common Hosoi Family Limited Direct 160,250 8.74%
Partnership *
30 North Kukui Street
Honolulu, Hawaii 96817
</TABLE>
*The Sadako Hosoi Trust, by its trustees Sadako Hosoi and Julie S.
Shimonishi, transferred 160,250 shares of the Company to the Hosoi
Family Limited Partnership, whose general partner is the Hosoi Family
Voting Trust, with Julie S. Shimonishi as trustee, and whose limited
partner is Sadako Hosoi. Julie S. Shimonishi, as trustee, exercises
voting and investment powers over those shares pursuant to the Hosoi
Family Voting Trust Agreement dated December 30, 1994 between Sadako
Hosoi, as settlor, and Julie S. Shimonishi, as trustee.
B. Directors and Executive Officers
Certain information with respect to the holdings of common
shares of the directors and executive officers of the Company as of November
30, 1995 is set forth in the table below.
<TABLE>
<CAPTION>
Title of Name of Amount and Nature of Percent of
Class Beneficial Owner (1) Beneficial Ownership (2) Class
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Julie S. Shimonishi 379,034 (6) 20.66%
Common Sadako Hosoi 318,500 (4) 17.36%
Common Clifford Hosoi 52,532 (3) 2.86%
Common Anne T. Tamori 56,534 (7) 3.08%
Common Elaine Nakamura 8,350 (5) 0.45%
Common William Koyanagi 5,700 (5) 0.31%
All directors and officers as a 502,150 27.37%
group (14 persons) (2)
</TABLE>
-6-
<PAGE> 11
(1) The address of each person is 30 North Kukui Street, Honolulu, Hawaii
96817.
(2) Richard Sakuma, whose term as a director expired in 1995, Rene Mansho,
Charles McLemore, Roy T. Shimonishi, Andre' S. Tatibouet, Ricky C.
Manayan and Robert K. Kuwahara, who are currently serving as
directors, and David Fujishige and Keith Numazu, who are currently
serving as officers, do not own any shares of the Company.
(3) Voting and investment powers exercised solely.
(4) Voting and investment powers over 158,250 shares of the Company are
shared by Sadako Hosoi and Julie S. Shimonishi, as Trustees of the
Herman S. Hosoi Trust, which owns 158,250 shares of the Company.
Voting and investment powers over 160,250 shares of the Company are
exercised by Julie S. Shimonishi, as trustee under the Hosoi Family
Voting Trust which was created by Sadako Hosoi. See the preceding
table for more information about the Hosoi Family Limited Partnership
and the Hosoi Family Voting Trust.
(5) Voting and investment powers are shared with spouses.
(6) Includes:
<TABLE>
<S> <C>
52,534 shares (2.86%) as to which Ms. Shimonishi exercises sole voting and
investment powers;
8,000 shares (0.44%) as to which Ms. Shimonishi exercises sole voting and
investment powers as Custodian for Chad Shimonishi and Lane
Shimonishi under HUGMA;
158,250 shares (8.62%) as to which Ms. Shimonishi and Sadako Hosoi share voting and
investment powers as trustees of the Herman S. Hosoi Trust;
and
160,250 shares (8.74%) as to which Ms. Shimonishi, as trustee of the Hosoi Family
Voting Trust, has voting and investment powers over the shares
owned by the Hosoi Family Limited Partnership.
</TABLE>
-7-
<PAGE> 12
(7) Includes:
<TABLE>
<S> <C>
52,534 shares (2.86%) as to which Ms. Tamori exercises sole voting and investment
powers; and
4,000 shares (0.22%) as to which Ms. Tamori exercises sole voting and investment
powers as custodian for Ryan Tamori under HUGMA.
</TABLE>
INFORMATION ON DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
The Board of Directors is comprised of nine members who serve
staggered three-year terms. One-third of the directors will be elected each
year for a three-year term. Directors hold office for the duration of their
terms and thereafter until their successors are elected. The executive
officers serve at the pleasure of the Board of Directors.
The Board of Directors of the Company has no audit or
compensation committees or committees performing similar functions.
A. The following table sets forth the directors' and
executive officers' names, ages, position and year of appointment or election,
relationship, and business experience.
-8-
<PAGE> 13
<TABLE>
<CAPTION>
Name Age Office Business Experience and Family Relationship
---- --- ---------- -------------------------------------------------------------------
<S> <C> <C> <C>
NOMINEES FOR ELECTION AS DIRECTORS - TERMS TO EXPIRE IN 1999
Sadako Hosoi 78 Director Widow of Herman Hosoi, founder of the Company; in the past, served
(since 1957) as Treasurer and Chairperson of the Board of the Company; Director
and President of Garden Life Plan, Ltd.; mother of Julie Shimonishi,
Director, Clifford Hosoi, Director, President and Chief Executive
Officer, and Anne Tamori, Vice President
Berton T. Kato 46 Director Attorney (admitted to the Bar of the State of Hawaii in 1973);
(nominee) President, Hale Niu Sportswear, Inc. (since 1990)
Roy T. Shimonishi 55 Director Co-owner, Hungry Lion Coffee Shop, Honolulu; Director of Hawaii
(since 1979) Restaurant Association, Catholic Services for the Elderly, and
Hungry Lion Charities; Area Coordinator for Excel
Telecommunications; Brother-in-law of Julie Shimonishi, Director
DIRECTORS WHOSE TERMS EXPIRE IN 1997
Robert K. Kuwahara 47 Director (since Certified Public Accountant since 1975; member of American Institute
October 1995) of Certified Public Accountants, Hawaii Society of Certified Public
Accountants, National Society of Public Accountants; member of
Board of Managers, Young Men's Christian Association, Nuuanu Branch
Julie S. Shimonishi 49 Director School teacher, Department of Education, State of Hawaii since
(since 1979) 1970; daughter of Sadako Hosoi, Director, sister-in-law of
Roy Shimonishi, Director, sister of Clifford Hosoi, Director,
President and Chief Executive Officer, and Anne Tamori, Vice
President
Andre' S. Tatibouet 54 Director Chairman, Chief Executive Officer, Aston Hotels and Resorts (since
(since 1994) 1969); Served as director or officer of Council of Hawaii Hotels,
Hawaii Convention Park Council, Hawaii Hotel Association, Hawaii
Pacific University Travel Industry Management Advisory Council,
Hawaii Visitors Bureau, HOTELPAC, Waikiki Oahu Visitors Association,
First Interstate Bank
</TABLE>
-9-
<PAGE> 14
<TABLE>
<CAPTION>
Name Age Office Business Experience and Family Relationship
---- --- ---------- --------------------------------------------------------------------
<S> <C> <C> <C>
DIRECTORS WHOSE TERMS EXPIRE IN 1998
Clifford Hosoi 47 Director Licensed embalmer since 1979; Funeral Director since 1985;
(since 1992) Vice President of the Company from 1989-1994; Director of Garden
President and Life Plan, Ltd.; son of Sadako Hosoi, Director, brother of Julie
Chief Executive Shimonishi, Director, and Anne Tamori, Vice President
Officer
(since 1994)
Rene Mansho 46 Director City Councilmember, City and County of Honolulu, Hawaii
(since 1993); (since 1988); School teacher, Vice-Principal and Administrator,
Chairperson of Department of Education, State of Hawaii (1971-1988); served as
the Board a director or officer of Mililani Hongwanji Church, Mililani Teen
(since 1994) Support Organization, Mililani YMCA, Kahuku Hospital Service
Corporation, Goodwill Industries, Friends of Waipahu Cultural
Garden Park, Hawaii State Teachers Association, Honolulu Japanese
Chamber of Commerce
Ricky C. Manayan 36 Director (since President/General Manager KISS-AM Radio Station, Inc. Developer/
1994) General Partner, Ricky C. Manayan, Inc., Ricky Manayan Associates,
Transpacific Empire, Inc.; Authorized Exclusive Distributor, RAM
Telecommunications; Publisher, KISS Magazine; Realtor Associate
and Salesperson, H & K Associates, Inc.
OFFICERS
Anne Tamori 48 Vice President Employed by the Company as an associate secretary (since 1978);
(since 1994) daughter of Sadako Hosoi; sister of Clifford Hosoi and Julie
Shimonishi
David Fujishige 47 Vice President Employed by the Company since 1989; Funeral Director since 1991;
(since 1994) Food Production Supervisor, Rehabilitation Hospital of the Pacific
(1980-1991)
Keith Numazu 33 Treasurer Employed by the Company as assistant bookkeeper and programmer
(since 1994) since 1992; SYSTEMS OPERATOR/ANALYST, Consolidated Amusement, Inc.
(1991-1992) Senior Systems Analyst/Programmer Holmes and Narver Inc.
and Raytheon Services Nevada (1987-1991)
Elaine Nakamura 57 Secretary Employed by the Company since 1963
(since 1972)
</TABLE>
William Koyanagi resigned as a Director effective September 1, 1995.
The Board of Directors elected Robert K. Kuwahara to serve Mr.
Koyanagi's remaining term as a director.
None of the directors of the Company is a director of an investment
company or another company registered under the Securities Exchange
Act of 1934.
-10-
<PAGE> 15
B. Shareholders, Board, Committees, Number of Meetings -
fiscal year ended May 31, 1995.
The shareholders of the Company last met on January 22, 1995.
1,296,616 shares representing 67.9% of shares issued and outstanding were
present in person or by proxy. All members of the Board of Directors were
elected by holders of at least 63.42% of the shares outstanding.
The Board of Directors met 13 times during the last fiscal
year. All directors attended at least 75% percent of the board meetings.
A nominating committee was formed with Sadako Hosoi, Julie
Shimonishi and Roy Shimonishi as members at the October 19, 1995 Board meeting
to designate nominees for election at the annual meeting. Shareholders may
suggest nominees by contacting Sadako Hosoi, Julie Shimonishi or Roy Shimonishi
at the Company's address. No specific format or information is required to
nominate a person as a director. Nominations must be received by the close of
nominations during the course of the Annual Meeting on January 21, 1996 to be
acted upon at that Annual Meeting.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
The following sets forth the information, on an accrual basis,
with respect to the compensation of the chief executive officer of the Company
for the three fiscal years ended May 31, 1995.
<TABLE>
<CAPTION>
Year
Name and Ended Annual Other
Position May 31 Compensation Compensation
-------- ------ ------------ ------------
<S> <C> <C> <C>
Richard Sakuma, 1993 $72,140 $7,672 (1)
President/Chief 1994 $43,912 $2,090 (2)
Executive Officer *
Clifford Hosoi, 1994 $51,301 $1,625 (3)
President/Chief 1995 $48,254 $7,240 (4)
Executive Officer **
</TABLE>
______________________________________________________________________________
* Mr. Sakuma retired as president/chief executive officer as of December 31,
1993.
** Mr. Hosoi assumed the position of president/chief executive officer as of
January 1, 1994.
-11-
<PAGE> 16
(1) $4,065 was accrued pursuant to the profit-sharing plan described below
and $3,607 was paid pursuant to the money purchase pension plan
described below.
(2) $3,059 was accrued pursuant to the profit-sharing plan described below
and $2,273 was paid pursuant to the money purchase pension plan
described below.
(3) $3,433 was accrued pursuant to the profit-sharing plan described below
and $2,551 was paid pursuant to the money purchase pension plan
described below.
(4) $4,897 was accrued pursuant to the profit-sharing plan described below
and $2,343 was paid pursuant to the money purchase pension plan
described below.
The total annual salary and bonus for any other executive
officer does not exceed $100,000.
The standard fees paid to directors are $100 for each Board of
Directors meeting attended and $25 for each committee meeting attended.
COMPENSATION PURSUANT TO PLANS.
(a) Profit-Sharing Plan. The Company has established a
profit-sharing plan for the Company's employees. Every employee who has
completed one year of service with the Company becomes eligible to participate
in the profit-sharing plan. An employee who has completed 1,000 hours of
service commencing from the date of employment or an anniversary date is
considered to have one year of service. The Company's contribution to the
profit-sharing plan is discretionary and may be up to 15% of the participant's
eligible compensation. The Company's total contributions shall not exceed the
amount allowable by income tax regulations.
The Company's allocation of contributions among eligible
members is based on their respective compensation and is allocated
proportionately.
The investment decision for the profit-sharing plan is
formulated by a registered investment advisor through Hawaiian Trust Company,
Ltd.
(b) Money Purchase Pension Plan. The Company has established a
money purchase pension plan, which became effective as of June 1, 1990, for the
Company's employees. Every employee who has completed one year of service with
the Company becomes eligible to participate in the money purchase plan. An
employee who has completed 1,000 hours of service commencing from the date of
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<PAGE> 17
employment or an anniversary date is considered to have one year of service.
The Company is required to contribute 5% of each participant's eligible
compensation to the money purchase plan. The Company's total contributions
cannot exceed the amount allowable by income tax regulations.
The investment decision for the money purchase plan is
formulated by a registered investment advisor through Smith Barney Shearson,
Inc.
TRANSACTION WITH DIRECTORS AND OFFICERS
The Company operates its business at 30 North Kukui Street,
Honolulu, Hawaii 96817 on the northwest corner of Nuuanu Avenue and Kukui
Street in Honolulu, Hawaii. The business site consists of 92,773 square feet,
of which the Company owns a 78/104th interest. The Herman S. Hosoi Trust owns
a 13.65/104th interest and the Hosoi-Tamori-Shimonishi Trust owns the remaining
12.35/104th interest. The trustees and beneficiaries of both trusts include
directors, officers and principal shareholders of the Company. See: Footnote
13 of Notes to Financial Statements for more information about the lease
between the Company and the trusts.
The portion owned by the Company is owned in fee simple. The
Company leases the portion owned by the Herman S. Hosoi Trust and
Hosoi-Tamori-Shimonishi Trust under a five-year lease that expired on May 31,
l994 subject to an option to renew for an additional five-year period. The
option to renew was exercised for the five-year period following May 31, 1994.
The lease rent for the additional five-year period is currently being
negotiated. The base lease rents (including Hawaii general excise taxes) for
each 12-month period beginning on June 1 and ending on May 31 of each of the
following years are as follows:
<TABLE>
<CAPTION>
Period up to: Amount:
------------ ------
<S> <C>
May 31, 1995 $231,936
Thereafter To be negotiated (Pending negotiations, the
Company will continue to pay an annual base
lease rent of $231,936)
</TABLE>
The total rental expense, including the base lease rent,
general excise taxes and real property taxes, for the past three years ending
on May 31 were as follows:
<TABLE>
<S> <C>
1995 $275,511
1994 $271,560
1993 $248,018
</TABLE>
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<PAGE> 18
SECTION 16(A) REPORTS
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and officers, and persons who own more than 10% of a
registered class of the Company's equity securities, to file, on forms 3, 4,
and 5, reports of ownership and changes in ownership of such securities with
the Securities and Exchange Commission. Sadako Hosoi and Julie S. Shimonishi,
who are directors of the Company, were late in filing a form 4 to report the
transfer of 160,250 shares of stock from the trustees of the Sadako Hosoi Trust
to the Hosoi Family Limited Partnership.
ACTION WITH RESPECT TO REPORTS
Minutes of the last annual meeting of the shareholders held on
January 22, 1995 will be read and the shareholders will be requested to approve
or disapprove the minutes. Approval or disapproval of the minutes will not
constitute approval or disapproval of the matters referred to in such reports
or minutes.
The President will give a report at the meeting. All records
of the Company, including the minutes of the meetings of the Board of Directors
and the shareholders held during the preceding year are available for review by
the shareholders at the office of the Company.
VOTE REQUIRED FOR APPROVAL
A majority vote of shareholders present, in person or by
proxy, shall be required in matters other than the election of directors.
ANNUAL REPORT TO SHAREHOLDERS
The annual report to shareholders, consisting of the
President's and Chief Executive Officer's letter and the comparative financial
statements for the years ended May 31, 1995 and May 31, 1994, is included with
this Proxy Statement.
-14-
<PAGE> 19
RETURN OF PROXY
If you do not plan to attend the Annual Meeting in person, we
urge you to execute the proxy and return it promptly in the enclosed business
reply envelope.
SHAREHOLDER PROPOSALS FOR 1996
Proposals of shareholders intended to be presented at the
annual meeting of the Company in January or February 1997 must be received by
the Company on or before September 15, 1996.
BY ORDER OF THE BOARD OF DIRECTORS
By /s/ ELAINE NAKAMURA
--------------------------
Elaine Nakamura, Secretary
December 30, 1995
WHETHER YOU PLAN TO ATTEND OR NOT, YOU ARE URGED TO MARK, DATE, SIGN AND RETURN
THE ENCLOSED PROXY. A PROMPT RESPONSE IS HELPFUL, AND YOUR COOPERATION WILL BE
APPRECIATED.
-15-
<PAGE> 20
ANNUAL REPORT
HOSOI GARDEN MORTUARY, INC.
DESCRIPTION OF BUSINESS
Hosoi Garden Mortuary, Inc. (the "Company") was incorporated
in 1957 under the laws of the State of Hawaii as the successor to a business
founded in 1900. Professional funeral services are the principal services
rendered by the Company. The Company is engaged in the funeral and mortuary
business, including the sale of pre-need funeral service contracts. During the
last two fiscal years, funeral services accounted for 70.6% of revenues.
The Company owns 50% of Garden Life Plan, Ltd. ("Garden Life")
which sells pre-need funeral service contracts for which the Company acts as
the sole servicing mortuary.
The Company operates a mortuary business in Honolulu, Hawaii.
Although established to offer funeral services to all persons in Hawaii, the
Company serves principally persons of Japanese ancestry who follow a particular
and special order of worship in accordance with their religious beliefs. In
addition to handling funeral services for residents of Honolulu, the Company
conducts services for residents of other counties in Hawaii and prepares
remains for shipment to or receives them from other counties in Hawaii, other
states in the United States and foreign countries.
Twenty-nine (29) persons were employed by the Company for the
fiscal year ended May 31, 1995. Eleven (11) persons were employed full-time
and eighteen (18) persons were employed part-time.
DIRECTORS AND EXECUTIVE OFFICERS
The Company has a total of nine (9) directors constituting the
entire Board of Directors, divided into three (3) classes of three (3)
directors each. The Company's Articles of Association provide for each class
of directors to be elected for three-year terms on a staggered basis.
Directors hold office for the duration of their terms and
thereafter until their successors are elected. The executive officers serve at
the pleasure of the Board of Directors.
<PAGE> 21
The names, ages, positions and offices, term of office, and
business experience of the directors and executive officers of the Company
during the past five years are set forth below.
Directors Whose Terms Expire in 1998
Clifford Hosoi has been a director of the Company since 1992.
He was a vice president from 1989 until his appointment as president and chief
executive officer of the Company as of January 1, 1994. He has been a
licensed embalmer since 1979. He has been a Funeral Director for the Company
since 1985. He serves as a director of Garden Life Plan, Ltd.
Rene Mansho is an elected member of the City Council of the
City and County of Honolulu and has served on the City Council since 1988. She
has been a director since 1993. She presently serves as chairperson of the
Board of Directors and was elected to that position in 1994. She has been a
school teacher, Vice-Principal and Administrator with the Department of
Education of the State of Hawaii between 1971 through 1988. Other
organizations with which she is involved include the Hawaii State Association
of Counties, the Mililani Hongwanji, Mililani YMCA, Honolulu Japanese Chamber
of Commerce, Goodwill Industries, Friends of Waipahu Cultural Garden Park and
Hawaii State Teachers Association.
Ricky C. Manayan is president/general manager of KISS-AM Radio
Station, Inc. At the January 22, 1995 annual meeting, he was elected to serve
a three-year term which will expire in 1998. His other business interests or
affiliations include Ricky C. Manayan, Inc., Ricky Manayan Associates and
Transpacific Empire, Inc. He is an Authorized Exclusive Distributor for RAM
Telecommunications, the publisher of KISS Magazine and a Realtor Associate and
Salesperson with H & K Associates, Inc.
Directors Whose Terms Expire in 1997
Robert K. Kuwahara is a Certified Public Accountant licensed
to practice in the State of Hawaii since 1975. He was elected as a director of
the Company to serve the remaining term of William Koyanagi who resigned
effective September 1, 1995. He is a member of the American Institute of
Certified Public Accountants, Hawaii Society of Certified Public Accountants,
and National Society of Public Accountants. He is also on the Board of
Managers of the Nuuanu YMCA.
Julie S. Shimonishi is a school teacher and has been employed
by the Department of Education, State of Hawaii since l970. She has been a
director since 1979.
-2-
<PAGE> 22
Andre' S. Tatibouet has been the Chairperson and Chief
Executive Officer of Aston Hotels and Resorts since 1969. He was elected as a
director of the Company to serve the remaining term of Thomas Nitta, who
resigned effective October 18, 1994. Mr. Tatibouet has served as a director or
officer of the Council of Hawaii Hotels, Hawaii Convention Park Council, Hawaii
Hotel Association, Hawaii Pacific University Travel Industry Management
Advisory Council, Hawaii Visitors Bureau, HOTELPAC, Waikiki Oahu Visitors
Association and First Interstate Bank.
Directors Whose Terms Expire in 1996
Sadako Hosoi is the widow of Herman S. Hosoi, founder of the
Company. She has been a director of the Company since l957. In the past, she
has served as chairperson of the board and treasurer. She serves as a director
and president of Garden Life Plan, Ltd.
Charles McLemore is the owner and president of Creative Fund
Raising Associates, Inc. He has been a director since 1992. From 1985 through
1990, he was the Development Director of the American Cancer Society, Hawaii
Pacific Division. From 1975 through 1985, he was Vice President for
Development for Hawaii Baptist Academy. From 1953 through 1975, he served as
an officer in the United States Air Force.
Roy T. Shimonishi is co-owner of Hungry Lion Coffee Shop in
Honolulu, Hawaii. He has been a director since 1979. He serves on the Board
of Directors of the Hawaii Restaurant Association, Catholic Services for the
Elderly and Hungry Lion Charities. He is also an area coordinator for Excel
Telecommunications.
Other Executive Officers
Anne T. Tamori has been employed by the Company since 1978.
She has been a vice president of the Company since 1994. She has served as an
associate secretary of the Company.
David Fujishige has been employed by the Company since 1989.
He has been a funeral director since 1991. He has been a vice president of the
Company since 1994. Prior to joining the Company, he was a food production
supervisor at Rehabilitation Hospital of the Pacific.
Keith Numazu has been employed by the Company since 1992. He
has been treasurer of the Company since 1994. He has been an assistant
bookkeeper and programmer since 1992. Prior to joining the Company, he was a
systems operator/analyst for Consolidated Amusement, Inc. and a senior systems
analyst/programmer for Holmes and Narver, Inc. and Raytheon Services Nevada.
-3-
<PAGE> 23
Elaine Nakamura has been employed by the Company since l963.
She is the secretary of the Company.
MARKET FOR THE COMPANY'S COMMON SHARES
AND RELATED SHAREHOLDER MATTERS
The common shares of the Company are neither traded nor listed
on an exchange and have no established public trading market. One stockbroker
in Honolulu, Hawaii quotes the common shares, but the Company does not know the
prices at which trades are made. During the fiscal year ended May 31, 1995,
the Company redeemed 16,980 shares as follows:
<TABLE>
<CAPTION>
No. of Shares Redemption Price
------------- ----------------
<S> <C>
13,715 shares $4.00 per share
3,265 shares $3.50 per share
</TABLE>
There were 1,752 record holders of common shares as of May 31,
1995.
A cash dividend has been declared and paid once a year since
l969. The dividend for the year ended May 31, 1995, which was declared on
October 19, 1995 was $.045 per share. Dividends for the year ended May 31,
1995 are payable to shareholders on January 2, 1996. The dividend for the year
ended May 31, 1994, which was declared on October 8, 1994, was $.05 per share.
MANAGEMENT'S DISCUSSIONS AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
The following discussion relating to specific years is based
on fiscal years ended May 31, 1995 and 1994.
In January, 1994, Clifford Hosoi, the grandson of the founder
of the Company, was appointed President and Chief Executive Officer. During
the latter part of the 1994 fiscal year, Mr. Hosoi started the implementation
of strategies to increase revenues and control costs.
In 1994, the Company reversed its operating losses of the
previous three years with operating income of $44,000 in 1994. Operating
income increased to $52,800 in 1995, a 20% increase over 1994. It is expected
that
-4-
<PAGE> 24
operating income will continue to improve as the implementation of strategies
to increase revenues and control costs and expenses continue.
Results of Operations
Net Revenues
The Company's revenues decreased by $19,200 in 1995 from 1994.
The decrease of 0.8% from 1994 is attributable to a decrease in the number of
services performed from 1,211 in 1994 to 1,091 in 1995, a decrease of 9.9%.
The decrease is partially attributable to a reduction in the number of total
deaths on the island of Oahu from 5,689 in 1994 to 5,588 in 1955.
Cost of Sales and Services
Cost of sales and services as a percentage of total revenues
increased from 70.5% in 1994 to 72.2% in 1995. The increase was attributable
to increases in cremation cost, insurance and repairs and maintenance which was
offset by an increase in margins on merchandise sales.
Gross Profit
Gross profit decreased $49,000 in 1995 from 1994. Gross
profit as a percentage of sales decreased from 29.5% in 1994 to 27.8% in 1995.
The decrease in the gross margin was the result of the
increase in cost of sales and services discussed above.
Selling, General and Administrative Expenses
Selling, general and administrative expenses decreased from
$708,300 in 1994 to $650,500 in 1995. As a percentage of revenues, these
expenses were 25.7% and 27.7% in 1995 and 1994, respectively. The decrease in
selling, general and administrative expenses as a percentage of revenues in
1995 compared to 1994 resulted from decreases in salaries and wages and
educational expenses which was offset by an increase in bad debt expense. The
increase in bad debt expense resulted from an increase in accounts receivables
which are more than one year past due. That resulted in an increase in the bad
debt reserve allowance of 100% of the accounts receivables over one year old.
Other Income
Other income decreased from $418,000 in 1994 to $157,400 in
1995. The decrease of $260,600 from 1994 resulted principally from capital
gains in 1994 of $284,000 on the sale of marketable securities consisting of
common
-5-
<PAGE> 25
stock in several publicly-traded companies and a publicly-traded mutual fund.
The securities were sold in 1994 to consolidate the Company's investments into
pooled managed investments.
The Company expects that Other Income will stabilize in 1996
provided that interest rates remain at levels experienced in 1995.
Earnings from Garden Life Plan
Revenues from Trust funds of the Company's subsidiary, Garden
Life Plan, Ltd. ("GLP"), whose earnings are accounted for on the equity method
of accounting are included in the amount reflected as Equity in earnings of
Garden Life Plan, Ltd. of $292,290 and $200,178 for 1995 and 1994,
respectively. Earnings from Trust fund of GLP are not directly affected by
decisions of the management of the Company. Investment decisions are generally
made by the money manager of GLP's Trust funds. Fluctuations in GLP's Trust
fund income, which amounted to $601,851 and $470,991 for the year ended May
31, 1995 and the eleven-month period ended May 31, 1994, respectively, are the
result of fluctuations in interest rates and the mix of investment of the trust
fund.
Equity earnings of GLP accounted for 66.8% and 45.6% of the
Company's net income in 1995 and 1994, respectively.
Income Taxes
The Company's effective income tax rate was 18.6% of pre-tax
income in 1995 and 21.1% in 1994. The decrease in 1995 from 1994 is due to a
decrease in taxable income before income taxes in 1995 from 1994 and therefore
proportionally less of the 1995 income was subject to the higher surtax rates.
Liquidity and Capital Resources
During 1995, working capital decreased by $51,000 from 1994.
The decrease in total working capital is primarily a result of reclassification
of securities as securities held to maturity from the category of current to
non-current assets. Working capital ratio, however, increased to 5.2:1 in 1995
from 4.9:1 in 1994.
At the end of 1995, the Company did not have any long-term
debt. The Company expects that cash flows from operations, its cash reserves
and short-term investments will be adequate to meet the Company's cash
requirements in the foreseeable future.
In 1986, the Company initiated plans for major renovations to
its premises. The development plans included a major redevelopment of existing
facilities and additions to increase the Company's capacity to provide mortuary
-6-
<PAGE> 26
services. Architectural drawings had been drafted and preliminary estimates of
construction costs had been obtained. The Company is reassessing its plans for
this major redevelopment. The alternatives being considered are construction
of new facilities within a major redevelopment on the existing premises or
relocation to another location. No decision has been made as to these
alternatives or the method of funding the redevelopment. A major redevelopment
on the existing premises, whether or not the Company relocates, would be
undertaken with financing from a financial institution or in a joint venture
with a real estate developer.
Dividends declared for fiscal years ended 1994 and 1993,
respectively, were $0.05 and $0.035 per share which amounted to $95,500 and
$66,800, respectively, and were paid to shareholders in January 1995 and 1994,
respectively.
Cash outflow for the reacquisition of the Company's shares was
$66,300 in 1995 and $192,600 in 1994. The decrease of $126,300 in 1995 from
1994 is primarily attributable to a reacquisition of shares in 1994 from the
former president of the Company for a total of $146,000. The Company does
expect that future reacquisitions will be in the rate of $50,000 to $70,000 per
year.
-7-
<PAGE> 27
[LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
HOSOI GARDEN MORTUARY, INC.
We have audited the balance sheets of
HOSOI GARDEN MORTUARY, INC.
as of May 31, 1995 and 1994, and the related statements of income and retained
earnings and cash flows for the years then ended. The financial statements are
the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits. We did
not audit the financial statements of Garden Life Plan, Ltd. (50 percent owned
subsidiary accounted for by the equity method) for its year ended May 31, 1995
and the eleven months ended May 31, 1994, which accounts for 20.6% and 15.6% of
total assets and 68.8% and 45.6% of net income in 1995 and 1994, respectively.
Those statements were audited by other auditors whose reports have been
furnished to us, and our opinion, insofar as it relates to the amounts included
in the Company's equity in the underlying net assets and its share of earnings
of the subsidiary is based solely upon the report of the other auditors.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits and the reports of other
auditors provide a reasonable basis for our opinion.
In our opinion, based upon our audits and the reports of other auditors, the
financial statements referred to above present fairly, in all material
respects, the financial position of Hosoi Garden Mortuary, Inc. as of May 31,
1995 and 1994, and the results of its operations and its cash flows for the
years then ended in conformity with generally accepted accounting principles.
F-1
<PAGE> 28
As discussed in Note 6 to the financial statements, effective June 1, 1994, the
Company changed its method of accounting and reporting for investments in
equity securities in accordance with Statement of Financial Accounting
Standards No. 115.
[signature]
Honolulu, Hawaii
July 31, 1995
F-2
<PAGE> 29
HOSOI GARDEN MORTUARY, INC.
BALANCE SHEETS
----------------------------------
May 31, 1995 and 1994
<TABLE>
<CAPTION>
1995 1994
------------ ------------
<S> <C> <C>
A S S E T S
-----------
CURRENT ASSETS
Cash and cash equivalents (Notes 1 and 3) $ 938,707 $ 606,114
Securities available for sale, at market (Notes 1 and 4) 741,409 785,335
Accounts receivable, less allowance for doubtful accounts
of $44,487 and $115,323 307,549 270,668
Dividend receivable (Note 2) - 500,000
Income taxes receivable 54,246 -
Inventories (Note 1) 111,307 77,416
Prepaid expenses and others 68,843 59,314
Deferred income taxes (Note 5) 45,635 67,665
------------ -------------
TOTAL CURRENT ASSETS 2,267,696 2,366,512
------------ ------------
INVESTMENTS
Garden Life Plan, Ltd. (Notes 1 and 2) 1,047,596 755,306
Cemetery plots 1,350 1,350
Securities held to maturity, at cost (Notes 1 and 4) 105,749 -
------------ ------------
1,154,695 756,656
------------ ------------
PROPERTY AND EQUIPMENT, at cost, less accumulated
depreciation (Notes 1 and 7) 1,554,503 1,621,787
------------ ------------
OTHER ASSETS (Note 6) 103,985 99,346
------------ ------------
TOTAL ASSETS $ 5,080,879 $ 4,844,301
============ ============
L I A B I L I T I E S
---------------------
CURRENT LIABILITIES
Accounts payable (Note 8) $ 300,391 $ 236,803
Accrued liabilities (Note 9) 131,394 121,169
Income taxes payable (Note 10) - 122,308
Note payable 685 -
------------ ------------
TOTAL CURRENT LIABILITIES 432,470 480,280
------------ ------------
DEFERRED INCOME TAXES (Note 5) 44,844 59,833
------------ ------------
S T O C K H O L D E R S ' E Q U I T Y
--------------------------------------
CAPITAL CONTRIBUTED (Note 11)
Common stock, par value $.20 per share; authorized 3,625,000
shares, issued 2,187,140 shares 437,428 437,428
Less 123,945 and 106,965 reacquired shares (25,059) (21,663)
------------ ------------
TOTAL CAPITAL CONTRIBUTED 412,369 415,765
------------ ------------
NET UNREALIZED GAIN ON SECURITIES AVAILABLE FOR
SALE (Note 4) 32,101 -
------------ ------------
RETAINED EARNINGS 4,240,377 3,969,705
------------ ------------
TREASURY STOCK, 223,785 shares, at cost (Note 11) (81,282) (81,282)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY 4,603,565 4,304,188
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 5,080,879 $ 4,844,301
============ ============
</TABLE>
The accompanying Notes to Financial Statements are an integral part of these
statements.
F-3
<PAGE> 30
HOSOI GARDEN MORTUARY, INC.
STATEMENTS OF INCOME AND RETAINED EARNINGS
------------------------------------------
Years Ended May 31, 1995 and 1994
<TABLE>
<CAPTION>
1995 1994
----------- -----------
<S> <C> <C>
NET SALES AND SERVICES $ 2,533,529 $ 2,552,697
COST OF SALES AND SERVICES 1,830,213 1,800,354
----------- -----------
GROSS PROFIT 703,316 752,343
OPERATING EXPENSES 650,525 708,319
----------- -----------
OPERATING INCOME 52,791 44,024
----------- -----------
OTHER INCOME (EXPENSE)
Parking, interest and others (Note 14) 157,442 119,160
Interest expense and others (1,673) (39,069)
(Loss) gain on sale of securities (Note 4) (20,628) 298,871
----------- -----------
TOTAL OTHER INCOME (EXPENSE) 135,141 378,962
----------- -----------
INCOME BEFORE INCOME TAXES AND EQUITY
IN EARNINGS OF GARDEN LIFE PLAN, LTD. 187,932 422,986
INCOME TAXES (BENEFIT) (Note 10)
Current 42,258 185,255
Deferred (Note 5) 23,641 (29,869)
------------ ------------
TOTAL INCOME TAXES 65,899 155,386
------------ ------------
INCOME BEFORE EQUITY IN EARNINGS
OF GARDEN LIFE PLAN, LTD. 122,033 267,600
EQUITY IN EARNINGS OF GARDEN LIFE PLAN, LTD., net
of income taxes (credit) of $23,360 and ($23,962) (Notes 1 and 2) 268,930 224,140
------------- ------------
NET INCOME - Per share $.21 and $.26 in 1995 and 1994 (Note 1) 390,963 491,740
RETAINED EARNINGS, BEGINNING OF YEAR 3,969,705 3,727,399
CUMULATIVE EFFECT OF ADOPTION OF FASB NO. 115 (Note 4) 38,076 -
COMMON STOCK REACQUIRED IN EXCESS OF PAR VALUE (62,892) (182,634)
DIVIDENDS, $.05 and $.035 per share in 1995 and 1994, respectively (95,475) (66,800)
----------- -----------
RETAINED EARNINGS, END OF YEAR $ 4,240,377 $ 3,969,705
=========== ===========
</TABLE>
The accompanying Notes to Financial Statements are an integral part of these
statements.
F-4
<PAGE> 31
HOSOI GARDEN MORTUARY, INC.
STATEMENTS OF CASH FLOWS
------------------------------------------
Years Ended May 31, 1995 and 1994
<TABLE>
<CAPTION>
1995 1994
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 390,963 $ 491,740
Adjustments to reconcile net income to net cash and cash
equivalents provided by operations
Depreciation 77,578 77,344
Loss on write-off of assets 28 -
Realized loss (gain) on sale of investments 20,628 (284,069)
Unrealized gain on investments 70,177 -
Provision for losses on accounts receivable (70,836) 21,134
Undistributed earnings of Garden Life Plan, Ltd. (292,290) (200,178)
Dividend from Garden Life Plan, Ltd. - 550,000
Deferred income taxes 7,041 (53,831)
(Increase) decrease in certain assets
Accounts receivable 33,955 (29,271)
Marketable securities - (84,564)
Inventories (33,891) 26,001
Prepaid expenses and others (9,529) (14,233)
Dividend receivable 500,000 (500,000)
Income taxes receivable (54,246) 12,646
Cash value of life insurance policies (1,802) (3,952)
Other assets (27) 139
(Decrease) increase in certain liabilities
Accounts payable 63,588 21,071
Note payable 685 -
Accrued liabilities 10,225 22,741
Income taxes payable (122,308) 122,308
--------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES 589,939 175,026
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (10,322) (82,886)
Proceeds from sale of investments 738,454 915,192
Increase in investments (820,905) (705,537)
Payment of premiums on life insurance policies (2,810) (8,492)
--------- ---------
NET CASH PROVIDED BY (USED IN)
INVESTING ACTIVITIES (95,583) 118,277
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of reacquired stocks (66,288) (192,634)
Cash dividends paid (95,475) (66,800)
--------- ---------
NET CASH USED IN FINANCING ACTIVITIES (161,763) (259,434)
--------- ---------
NET INCREASE 332,593 33,869
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 606,114 572,245
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 938,707 $ 606,114
========== =========
</TABLE>
The accompanying Notes to Financial Statements are an integral part of these
statements.
F-5
<PAGE> 32
HOSOI GARDEN MORTUARY, INC.
NOTES TO FINANCIAL STATEMENTS
------------------------------------------
Years Ended May 31, 1995 and 1994
(1) Summary of significant accounting policies
The significant accounting policies followed by the Company are
summarized below.
Line of business - The Company is engaged in one line of business that
consists principally of providing mortuary services in the State of
Hawaii on the island of Oahu.
Cash and cash equivalents - The Company considers all unrestricted
cash, demand deposits, certificates of deposit and money market
accounts as cash and unrestricted investments with a maturity of three
months or less at the date of purchase to be cash equivalents.
Investment securities - Management determines the appropriate
classification of securities at the time of purchase. Those
investments are classified in three categories and accounted for as
follows:
o Debt securities that the company has the intent and ability to
hold to maturity are classified as securities held to maturity
and reported at cost.
o Debt and equity securities that are purchased and held for the
purpose of selling them in the near term are classified as
trading securities and reported at fair value, with unrealized
gains and losses included in income.
o Debt and equity securities not classified as securities held
to maturity or trading securities are classified as securities
available for sale and reported at fair value, with unrealized
gains and losses reported as a separate component of
stockholders' equity. Securities available for sale will be
used as part of the Company's asset management strategy and
may be sold in response to changes in interest rates or the
need for capital.
F-6
<PAGE> 33
HOSOI GARDEN MORTUARY, INC.
NOTES TO FINANCIAL STATEMENTS
------------------------------------------
Years Ended May 31, 1995 and 1994
(1) Summary of significant accounting policies (continued)
Investment in Garden Life Plan, Ltd. - The Company accounts for its
investment in Garden Life Plan, Ltd. (50% owned Company) by the equity
method. The equity in earnings of Garden Life Plan, Ltd. reflected on
the statements of income includes the pro rata share of Hosoi Garden
Mortuary, Inc. in the earnings of Garden Life Plan, Ltd. net of income
taxes applicable to such earnings for the year ended June 30, 1995 and
the eleven months ended May 31, 1994.
Inventories - Inventories of caskets, urns and supplies are stated at
the lower of cost or market. Cost is determined substantially by the
first-in, first-out method and market is based on replacement cost or
realizable value.
Property and equipment - Land, buildings, and equipment are carried at
cost. Depreciation is computed using the declining-balance and
straight-line method. Maintenance and repairs are charged to income
as incurred. Major renewals and betterments are capitalized. Upon
sale or other disposition of assets, the cost and related accumulated
depreciation are removed from the accounts, the proceeds applied
thereto, and any resulting gain or loss is reflected in income.
Compensated absences - Full time employees of the Company are entitled
to paid vacation and sick days. Unused vacation and sick leave are
reflected in accrued liabilities.
Earnings per common share - Earnings per common share has been
computed by dividing net income by the weighted average number of
common shares outstanding.
Revenue and cost recognition - Revenue from at-need funeral services
and pre-need funeral plan services are recognized upon the completion
of the final funeral ceremony. Revenues from at-need funeral services
include professional service revenues that are included in Funeral
services and merchandise sales of caskets, urns and other items
included in Sale of Urns and other items. Revenues from pre-need
services, which accounted for approximately 23% and 21% of funeral
service revenues in 1995 and 1994, respectively, are accounted for in
Funeral services since these plans are sold inclusive of the
merchandise selected.
F-7
<PAGE> 34
HOSOI GARDEN MORTUARY, INC.
NOTES TO FINANCIAL STATEMENTS
------------------------------------------
Years Ended May 31, 1995 and 1994
(1) Summary of significant accounting policies (continued)
Cost of sales and services includes all direct cost, including
merchandise, labor and other related cost and indirect cost such as
insurance, depreciation, supplies and indirect labor costs, related to
the performance and completion of at-need and pre-need funeral
services.
Income taxes - Income tax expense is based on reported earnings before
income taxes. Deferred income taxes reflect the impact of temporary
differences between assets and liabilities recognized for financial
reporting purposes and such amounts recognized for tax purposes. In
accordance with Statement of Financial Accounting Standards (SFAS)
109, Accounting for Income Taxes, these deferred taxes are measured by
applying currently enacted tax laws.
(2) Garden Life Plan, Ltd.
Investment in Garden Life Plan, Ltd. represents the Company's 50%
share in the underlying equity in the net assets, accounted for under
the equity method of accounting for investments in common stock, of
Garden Life Plan, Ltd. (GLP), a Hawaii corporation engaged in the
sales of pre-need funeral plans serviced solely by Hosoi Garden
Mortuary, Inc. The fiscal year end of GLP was changed to May 31 (from
June 30) effective for its year ended May 31, 1994. The Company's
1994 earnings reflects GLP's earnings for an eleven month period.
All payments received from the sale of pre-need funeral plans up to an
amount equal to 30% of the total price plus any sales tax or other
charges are retained by GLP as its compensation. The balance is
deposited with Hawaiian Trust Company, Limited to be held in trust.
GLP is entitled to all earnings from funds held in trust which
earnings amounted to $601,851 for the year ended May 31, 1995 and
$470,991 for the eleven months ended May 31, 1994. Trust assets are
not included in the financial statements of Hosoi Garden Mortuary,
Inc. nor GLP.
Dividend receivable of $500,000 in 1994 represents dividends declared
in 1993 which was received by the Company in 1995.
F-8
<PAGE> 35
HOSOI GARDEN MORTUARY, INC.
NOTES TO FINANCIAL STATEMENTS
------------------------------------------
Years Ended May 31, 1995 and 1994
(2) Garden Life Plan, Ltd. (continued)
Audited financial statements of this subsidiary as of May 31, 1995 and
1994 reflected the following summarized financial position and results
of operations.
<TABLE>
<CAPTION>
1995 1994
----------- ----------
<S> <C> <C>
Total assets $ 2,529,777 $ 2,803,348
Total liabilities 434,592 1,292,742
----------- -----------
Total stockholders' equity $ 2,095,185 $ 1,510,606
=========== ===========
Total revenues $ 1,176,848 $ 827,450
=========== ===========
Operating income $ 170,728 $ 33,781
=========== ===========
Net income $ 584,579 $ 400,355
=========== ===========
</TABLE>
(3) Cash
Cash consist of the following:
<TABLE>
<CAPTION>
1995 1994
----------- ----------
<S> <C> <C>
Cash on hand $ 500 $ 500
Checking accounts 22,356 69,409
Savings accounts 645,767 536,205
Certificate of deposit 200,000 -
Short-term investments 70,084 -
----------- ----------
Total cash $ 938,707 $ 606,114
=========== ==========
</TABLE>
F-9
<PAGE> 36
HOSOI GARDEN MORTUARY, INC.
NOTES TO FINANCIAL STATEMENTS
------------------------------------------
Years Ended May 31, 1995 and 1994
(4) Investments securities
Effective June 1, 1994, the Company adopted Statement of Financial
Accounting Standards No. 115 (SFAS 115), Accounting for Certain
Investments in Debt and Equity Securities. The statement addresses
the accounting and reporting of investments in equity securities that
have readily determinable fair values and for all investments in debt
securities. SFAS 115, does not allow for retroactive restatement and
therefore, the marketable securities held at May 31, 1994 was carried
at the lower of cost or market.
As of May 31, 1995, the Company's investments available for sale had a
cost of $709,308 and market value of $741,409. The balance of the
Company's securities were classified as investments held to maturity.
The classification resulted in the following additions to the accounts
below:
<TABLE>
<S> <C>
Investment available for sale $ 32,101
Deferred income taxes ( - )
-------------
Unrealized holding gain $ 32,101
=============
</TABLE>
At May 31, 1995 the Company held investments in the following type of
securities:
<TABLE>
<CAPTION>
Available Held to
For Sale Maturity
--------- ---------
<S> <C> <C>
Amortized Cost:
---------------
Equity Securities $ 52,895 $ -
U.S. Treasury Notes - 105,749
Mutual Funds 656,413 -
--------- ---------
$ 709,308 $ 105,749
========= =========
Market Value:
-------------
Equity Securities $ 61,992 $ -
U.S. Treasury Notes - 99,839
Mutual Funds 679,417 -
--------- ---------
$ 741,409 $ 99,839
========= =========
</TABLE>
F-10
<PAGE> 37
HOSOI GARDEN MORTUARY, INC.
NOTES TO FINANCIAL STATEMENTS
------------------------------------------
Years Ended May 31, 1995 and 1994
(4) Investments securities (continued)
<TABLE>
<CAPTION>
Available Held to
For Sale Maturity
---------- ----------
<S> <C> <C>
Unrealized Gain:
----------------
Equity Securities $ 11,781 $ -
U.S. Treasury Notes - -
Mutual Funds 23,004 -
---------- ----------
$ 34,785 $ -
========== ==========
Unrealized Loss:
----------------
Equity Securities $ 2,684 $ -
U.S. Treasury Notes - 5,910
Mutual Funds - -
---------- ----------
$ 2,684 $ 5,910
=========== ==========
</TABLE>
The maturities for all debt securities held at May 31, 1995 were:
<TABLE>
<CAPTION>
Available for Sale Held to Maturity
-------------------------- -------------------------
Amortized Market Amortized Market
Cost Value Cost Value
--------- --------- ----------- --------
<S> <C> <C> <C> <C>
Within 1 year $ - $ - $ - $ -
After 1 year
through 5 years - - 105,749 99,839
After 5 years - - - -
--------- --------- --------- --------
$ - $ - $ 105,749 $ 99,839
========= ========= ========= ========
</TABLE>
During the year ended May 31, 1995, the Company sold securities
available for sale for $717,826. The gross realized gain of $4,203
and gross realized loss of $24,831 are reflected in earnings. The
cost of the securities sold was based on cost of all the shares of
each such security held at the time of sale.
F-11
<PAGE> 38
HOSOI GARDEN MORTUARY, INC.
NOTES TO FINANCIAL STATEMENTS
------------------------------------------
Years Ended May 31, 1995 and 1994
(4) Investments securities (continued)
Included in stockholders' equity at May 31, 1995 is $32,101 of net
unrealized gains on investments available for sale.
(5) Deferred income taxes
Deferred taxes are recognized for differences between the basis of
assets and liabilities for financial statement and income tax
purposes. The deferred assets and liabilities represent the future
tax consequences of those differences, which will be either taxable or
deductible when the assets and liabilities are recovered or settled.
Differences in the basis of assets and liabilities result from the use
of the reserve method in accounting for uncollectible accounts
receivable in the financial statements and the use of the direct
write-off method for income tax purposes, the recognition of
unrealized gains and losses on securities for financial statements
purposes and the recognition of gain or losses when securities are
sold for income tax purposes, and from the use of the equity method
of accounting for the investment in subsidiary as explained under
Garden Life Plan, Ltd. above. Under the equity method, the Company's
share of earnings of the subsidiary is reported for tax purposes only
when distribution of earnings are received as dividends.
At May 31, 1995 the Company's retained earnings included approximately
$1,047,100 of undistributed earnings of Garden Life Plan, Ltd.
(6) Life insurance cash value
The Company maintains keyman life insurance policies on its former
president and CEO. The cash surrender value of these policies were
$101,662 and $97,051 at May 31, 1995 and 1994, respectively, and is
included in other assets in the accompanying balance sheet.
F-12
<PAGE> 39
HOSOI GARDEN MORTUARY, INC.
NOTES TO FINANCIAL STATEMENTS
------------------------------------------
Years Ended May 31, 1995 and 1994
(7) Property and equipment
Property and equipment consist of the following:
<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
Land $ 517,040 $ 517,040
Buildings 1,214,215 1,214,215
Land improvements 94,710 94,710
Equipment and vehicles 380,334 370,429
---------- ----------
Total cost 2,206,299 2,196,394
Accumulated depreciation 651,796 574,607
---------- ----------
Net property and equipment $1,554,503 $1,621,787
========== ==========
</TABLE>
Aggregate depreciation charged to operations and included in cost of
sales and services and operating expenses are as follows:
<TABLE>
<CAPTION>
1995 1994
------- -------
<S> <C> <C>
Cost of sales and services $58,824 $56,616
Operating expenses 18,754 20,728
------- -------
$77,578 $77,344
======= =======
</TABLE>
(8) Funeral service deposits
Included in accounts payable is $32,032 of deposits made by eighteen
individuals that the Company has been collecting from since 1969 for
future services or purchase of merchandise. The payable of $32,032
includes interest of $29,616 accrued to May 31, 1995.
F-13
<PAGE> 40
HOSOI GARDEN MORTUARY, INC.
NOTES TO FINANCIAL STATEMENTS
------------------------------------------
Years Ended May 31, 1995 and 1994
(8) Funeral service deposits (continued)
In an agreement with the Professional and Vocational Licensing
Division of the State of Hawaii's Department of Commerce and Consumer
Affairs (DCCA), the Company consented to a plan to either convert
these funeral service deposits to a Garden Life Plan, Ltd.'s (GLP)
pre-need funeral plan identical to the services and/or merchandise
that the depositor originally contracted for or refund the deposit
plus accumulated interest. The agreement with the DCCA provides that
the Company will provide the funds for the difference between the cost
of a comparable GLP's pre-need plan and the amount deposited with the
Company.
As of May 31, 1995, twenty-six plans have been converted to GLP's
pre-need plan. The difference between the cost of plans which have
been converted in 1995 and the amount of the available deposit is
reflected as a charge to operations. There was one conversion to a
GLP plan and two depositors used their accumulated deposits for
funeral services during 1995. Twelve plans remain to be converted.
No provision has been made for the cost of conversion of the remaining
twelve plans because of the uncertainty of whether the holders of the
deposits will elect to convert to a GLP pre-need plan or elect to
receive a refund.
(9) Accrued liabilities
Accrued liabilities consist of the following:
<TABLE>
<CAPTION>
1995 1994
----------- -----------
<S> <C> <C>
Salaries and wages $ 14,991 $ 13,960
Payroll and general excise taxes 9,438 21,394
Profit sharing and money-purchase
pension plan contributions 63,377 61,023
Vacation and sick leave 43,588 24,792
----------- -----------
Total accrued liabilities $ 131,394 $ 121,169
=========== ===========
</TABLE>
F-14
<PAGE> 41
HOSOI GARDEN MORTUARY, INC.
NOTES TO FINANCIAL STATEMENTS
------------------------------------------
Years Ended May 31, 1995 and 1994
(10) Income taxes
The provisions for income taxes consist of the following:
<TABLE>
<CAPTION>
1995 1994
--------- ---------
<S> <C> <C>
Federal:
Current $ 35,805 $ 162,559
Deferred 20,004 (25,134)
State:
Current 6,453 22,696
Deferred 3,637 (4,735)
--------- ---------
Total $ 65,899 $ 155,386
========= =========
</TABLE>
A reconciliation of income taxes at the United States statutory rate,
as a percentage of pre-tax income, to the effective tax rate is as
follows:
<TABLE>
<CAPTION>
1995 1994
------ ------
<S> <C> <C>
Federal income tax statutory rate 34.0% 34.0%
Benefit of graduated tax rates (2.4) (1.9)
State income tax, net of income tax benefit .3 2.3
Tax effect on dividend exclusion on equity in
earnings of subsidiary, net of dividend
distribution (15.2) (14.2)
Others, net 1.9 .9
----- -----
Effective tax rate 18.6% 21.1%
===== =====
</TABLE>
F-15
<PAGE> 42
HOSOI GARDEN MORTUARY, INC.
NOTES TO FINANCIAL STATEMENTS
------------------------------------------
Years Ended May 31, 1995 and 1994
(11) Reacquired shares
Capital contributed has been reduced for shares reacquired after June
30, 1987. Payments for shares in excess of the par value of each
share acquired has been charged to additional paid-in capital.
Purchase of 16,980 and 50,000 shares reacquired in 1995 and 1994,
respectively, exceeded the balance of additional paid-in capital and a
charge of $62,892 and $182,634 for the years ended May 31, 1995 and
1994, respectively, were made to Retained Earnings for the cost in
excess of their par value.
The 223,785 shares reflected as Treasury Stock as of May 31, 1995
reflects the shares acquired before July 1, 1987.
(12) Retirement plans
The Company provides benefits to substantially all full-time employees
with a defined contribution profit sharing plan and a money-purchase
pension plan. Both are non-contributory plans.
The money-purchase pension plan was adopted on June 1, 1990 and
provides benefits to employees after one year of service and upon
completion of 1,000 hours of service each year. The required
contribution under this plan is five-percent of compensation for all
employees who qualify.
Contribution to the defined contribution profit sharing plan is
discretionary up to a maximum of fifteen-percent of compensation of
qualified employees after one year of service and upon completion of
1,000 hours of service each year.
Amounts charged against income for the retirement benefit plans are as
follows:
<TABLE>
<CAPTION>
1995 1994
--------- ---------
<S> <C> <C>
Profit sharing $ 43,000 $ 35,000
Money-purchase 20,377 26,023
--------- ---------
$ 63,377 $ 61,023
========= =========
</TABLE>
F-16
<PAGE> 43
HOSOI GARDEN MORTUARY, INC.
NOTES TO FINANCIAL STATEMENTS
------------------------------------------
Years Ended May 31, 1995 and 1994
(13) Leases
The Company leases the land on which the mortuary is situated from the
Herman S. Hosoi and Hosoi-Tamori-Shimonishi Trusts which respectively
owns a 13% and 12% interest on the land. The lease which was for a
term of five years expired on May 31, 1994. As a group, members of
the Hosoi family owns approximately 27% of the outstanding shares of
the Company. The leases provided monthly lease rent of $18,555 plus
general excise tax and real property taxes. The Company exercised its
option to renew the lease for additional five year period. While
negotiation for the terms of the additional five year period are in
progress, the Company continues to pay monthly rental of $18,555 plus
general excise tax. Future minimum lease payment under the lease at
May 31, 1995 are:
<TABLE>
<CAPTION>
To Amount
------------ ----------------
<S> <C>
May 31, 1996 $ 271,560
May 31, 1997 271,560
May 31, 1998 271,560
May 31, 1999 271,560
----------------
May 31, 2000 To be negotiated
Total minimum lease payments $ 1,086,240
================
</TABLE>
Rental expense for the two years ended May 31 were as follows:
<TABLE>
<S> <C>
1995 $275,511
1994 $271,560
</TABLE>
F-17
<PAGE> 44
HOSOI GARDEN MORTUARY, INC.
NOTES TO FINANCIAL STATEMENTS
------------------------------------------
Years Ended May 31, 1995 and 1994
(13) Leases (continued)
On April 1992, the Company entered into an operating lease for a
hearse. The term of the lease is 60 months and will expire on August
21, 1997. The noncancellable operating lease requires monthly rental
payments of $1,151. The lease agreement generally requires that the
Company pay all costs of operating the vehicle. Lease rental expense
for the hearse was $13,812 and $13,725 in 1995 and 1994, respectively.
The expected minimum lease payments required under the operating lease
are as follows:
<TABLE>
<S> <C>
May 31, 1996 $ 13,812
May 31, 1997 13,812
May 31, 1998 2,302
--------
Total minimum lease payments $ 29,926
========
</TABLE>
(14) Other income
Other income consist of the following:
<TABLE>
<CAPTION>
1995 1994
--------- ---------
<S> <C> <C>
Interest $ 59,979 $ 48,548
Others 97,463 70,612
--------- --------
Total other income $ 157,442 $119,160
========= ========
</TABLE>
F-18
<PAGE> 45
HOSOI GARDEN MORTUARY, INC.
NOTES TO FINANCIAL STATEMENTS
------------------------------------------
Years Ended May 31, 1995 and 1994
(15) Cash flow supplementary disclosure
Cash paid for interest and income taxes were as follows:
<TABLE>
<CAPTION>
1995 1994
------------ ----------
<S> <C> <C>
Interest $ 331 $ 993
============ ==========
Income taxes $ 258,772 $ 50,301
============ ==========
</TABLE>
(16) Concentration of credit risk of financial instruments
The Company's cash and cash equivalents and short-term investments are
deposited with five local financial institutions. At May 31, 1995 the
Company had deposits in two financial institutions in excess of the
deposit insurance of $100,000.
F-19
<PAGE> 46
PROXY THIS IS YOUR PROXY CARD
HOSOI GARDEN MORTUARY, INC.
30 NORTH KUKUI STREET, HONOLULU, HAWAII 96817
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Clifford Hosoi, Anne Tamori, David
Fujishige, Keith Numazu and Elaine Nakamura as Proxies, each with the power to
appoint his or her substitute, and hereby authorizes them to represent and to
vote, as designated on the reverse side, all the shares of common stock of
Hosoi Garden Mortuary, Inc. held by the undersigned at the annual meeting of
shareholders to be held on January 21, 1996 or any adjournment thereof.
(Continued on reverse side)
- ------------------------------------------------------------------------------
FOLD AND DETACH HERE
This proxy when properly executed will be voted in the I plan to attend
manner directed herein by the undersigned stockholder. the meeting.
If no direction is made, this proxy will be voted for / /
Proposals 1 and 2.
1. ELECTION OF THREE DIRECTORS (TO SERVE UNTIL 1999):
FOR all nominees WITHHOLD NOMINEES FOR DIRECTORS ARE:
listed at right as AUTHORITY Sadako Hosoi, Roy T. Shimonishi
a group (except as to vote for all and Berton T. Kato
marked to the nominees listed at
contrary at right) right as a group (INSTRUCTION: To withhold authority
to vote for any individual nominee,
/ / / / write that nominee's name on the
space provided below.)
-----------------------------------
2. APPOINT ENDO & COMPANY AS AUDITOR: 3. In their discretion, the Proxies
are authorized to vote upon other
business as may properly come
before the meeting.
FOR AGAINST ABSTAIN
/ / / / / /
Dated:
-----------------------------
-----------------------------------
Signature
-----------------------------------
Signature if held jointly
"PLEASE MARK INSIDE BLUE BOXES SO THAT DATA
PROCESSING EQUIPMENT WILL RECORD YOUR VOTES"
- -------------------------------------------------------------------------------
FOLD AND DETACH HERE
