SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy [ ] Confidential, for Use of the
[X] Definitive Proxy Statement Commission Only (as permitted by
[ ] Definitive Additional Materials Rule 14a-6(e)(2))
[ ] Soliciting Material under ss.240.14a-12
ONE WORLD ONLINE.COM, INC.
(Name of Registrant as Specified In Its Charter)
---------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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previously. Identify the previous filing by registration statement number, or
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ONE WORLD ONLINE.COM, INC.
4778 North 300 West, Suite 200
Prove, Utah 84604
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
January 5, 2001
NOTICE is hereby given that the Annual Meeting of Stockholders of One
World Online.com, Inc. (the "Company") will be held at the Provo Marriott Hotel
101 West 100 North, Provo, Utah 84601, at 3:00 p.m. (local time) on January 5,
2001, for the following purposes:
1. To elect members of the board of directors.
2. To transact such other business as may properly come before such
meeting or any adjournments thereof.
The record date for the meeting is the close of business on November
21, 2000 and only the holders of Common Stock or Series A Convertible Preferred
Stock of the Company on that date will be entitled to vote at such meeting or
any adjournment thereof.
By order of the Board of Directors
/s/ Paul D. Korth
Secretary
December 21, 2000
Please Return Your Signed Proxy
PLEASE COMPLETE AND PROMPTLY RETURN YOUR PROXY IN THE ENCLOSED ENVELOPE. THIS
WILL NOT PREVENT YOU FROM VOTING IN PERSON AT THE MEETING. IT WILL, HOWEVER,
HELP ASSURE A QUORUM AND AVOID ADDED PROXY SOLICITATION COSTS.
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PROXY STATEMENT
--------------------
ONE WORLD ONLINE.COM, INC.
4778 North 300 West, Suite 200
Prove, Utah 84604
--------------------
ANNUAL MEETING OF STOCKHOLDERS
To Be Held January 5, 2001
--------------------
INTRODUCTION
This Proxy Statement is being furnished to holders of the One World
Online. com, Inc. (the "Company") common stock, par value $0.001 per share
("Common Stock"), and Series A Convertible Preferred Stock, par value $.001 per
share ("Preferred Stock") in connection with the solicitation of proxies by the
Company for use at the Annual Meeting of Common Stockholders of the Company (the
"Annual Meeting") to be held at the Provo Marriott Hotel 101 West 100 North,
Provo, Utah 84601, at 3:00 p.m. (local time) on January 5, 2001, and at any
adjournment(s) or postponement(s) thereof. This Proxy Statement, the enclosed
Notice and the enclosed form of proxy are being first mailed to stockholders of
the Company on or about December 21, 2000.
VOTING AT THE ANNUAL MEETING
The Board of Directors of the Company (the "Board") has fixed the close
of business on November 21, 2000, as the record date (the "Record Date") for the
determination of stockholders entitled to notice of and to vote at the Annual
Meeting. As of the Record Date, there were outstanding 16,076,334 shares of the
Company's Common Stock held by approximately 381 holders of record and 300,000
shares of the Company's Preferred Stock held by one holder of record. On the
Record Date there were no shares of the Company's Common Stock or Preferred
Stock held as treasury stock by the Company. Holders of record of the Company's
Common Stock on the Record Date are entitled to cast one vote per share and
holders of the Company's Preferred Stock on the Record Date are entitled to 100
votes per share. Votes may be cast in person or by properly executed proxy, with
respect to each matter to be considered by them at the Annual Meeting. The
presence, in person or by properly executed proxy, of the holders of one-third
of the outstanding shares of the Company's entitled to vote at the meeting is
necessary to constitute a quorum at the Annual Meeting.
Common Stock and Preferred Stock (individually and collectively, the
"Stock") will be voted in accordance with the instructions indicated in a
properly executed proxy. If no instructions are indicated, such Stock will be
voted as recommended by the Board. If any other matters are properly presented
to the Annual Meeting for action, the person(s) named in the enclosed form(s) of
proxy and acting thereunder will have discretion to vote on such matters in
accordance with their best judgment. Broker non-votes and abstentions are not
treated as votes cast for purposes of any of the matters to be voted on at the
meeting. A stockholder who has given a proxy may revoke it by voting in person
at the meeting, or by giving written notice of revocation or a later-dated proxy
to the Secretary of the Company at any time before the closing of the polls at
the meeting. Any written notice revoking a proxy should be sent to One World
Online.com, Inc, 4778 North 300 West, Suite 200, Prove, Utah 84604, Attention:
Mr. Paul D. Korth, Secretary.
The Company's Bylaws require the affirmative vote of a plurality of the
votes cast at the meeting for the election of directors. The Board recommends
that holders of the Company's Stock vote FOR the approval of election of the
directors proposed by the Board.
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MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING
1. Election of Directors
Board of Directors
The Company's Board is comprised of four members. The current members
of the Board, whose terms expire at this annual meeting of stockholders, are:
Kelly M. Thayer, David N. Nemelka, David Bradford and Craig Case. At this
meeting four directors have been nominated by the Board for election whose terms
expire at the next annual meeting. The persons nominated are Kelly M. Thayer,
David N. Nemelka, David Bradford and Craig Case, all of whom currently act as
directors of the Company.
Unless otherwise specified, proxy votes will be cast for the election
of all of the nominees as directors. If any such person should be unavailable
for election, the Board may either reduce the number of directors accordingly or
designate a substitute nominee. In the latter event, it is intended that proxy
votes will be cast for the election of such substitute nominee. Stockholder
nominations of persons for election as directors are subject to the notice
requirements described under the caption "Other Matters" appearing later in this
proxy statement. Election of the nominee directors requires the affirmative vote
of a majority of the shares voted.
The following pages contain information concerning the nominees. Unless
the context otherwise requires, all references in this Proxy to the "Company"
shall mean One World Online.com, Inc. and its wholly owned subsidiaries, One
World Online Incorporated dba One World Online Marketing, ("OWOL Marketing") and
I Ventures, Inc. dba One World Online Technologies ("OWOL Technologies"), on a
consolidated basis, unless the context clearly indicates otherwise.
THE BOARD RECOMMENDS A VOTE FOR THE ELECTION AS DIRECTORS OF THE NOMINEES NAMED
HEREIN.
Directors and Executive Officers of the Company.
Set forth below is certain information concerning each of the directors
and executive officers of the Company as of December 11, 2000.
With the
Name Age Position Company Since
---- --- -------- -------------
One World
-------------
Kelly M. Thayer 43 Chairman of the Board 1999
David N. Nemelka (1) 36 Director, President and CEO 1999
Paul D. Korth 36 Secretary/Treasurer/Controller 1999
David Bradford (1) 49 Director 2000
Craig Case (1) 46 Director 2000
OWOL Marketing
-----------------
Wayne Holbrook 46 Director, President 1998
B. Ray Zoll 53 Executive Vice President and Corporate 1999
Counsel
David N. Nemelka 36 Director, Secretary and Treasurer 1999
OWOL Technologies
------------------
David N. Nemelka 36 Director and President 1996
Joseph M. Udall 35 Director, Vice President, Secretary, 1999
and Treasurer
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With the
Name Age Position Company Since
---- --- -------- -------------
Craig Davis 42 Chief Operating Officer 1999
Robert Wright 41 Chief Technical Officer 1998
---------------
(1) Member of Audit Committee.
Kelly M. Thayer. Mr. Thayer has been with One World since 1999. He is
the Chairman of the Board and co-founder of One World. He has eighteen years
experience in managing, marketing and consulting work involving public and
privately-held businesses. He was founder and CEO of Clear Image, Inc.
(1980-1997) a marketing company with over 100 employees in offices in both Los
Angeles and Utah. In his eighteen years with Clear Image he worked with over 200
companies and produced over 700 films and videos for companies such as Matol,
Delta Airlines, Herbalife International and Tupperware. In 1995 he began a
partnership with the company Net Profit as one of the first companies to market
and develop web sites on the Internet. Mr. Thayer holds no other directorships
in reporting companies.
David N. Nemelka. Mr. Nemelka has been with One World since 1999. He is
the CEO, Director and co-founder of One World, a Director of OWOL Technologies
and a Director, Secretary and Treasurer of OWOL Marketing. He brings six years
of marketing and finance experience with both private and public companies. He
was founder and President of McKinley Capital, a successful financial consulting
company from 1994 to the present. He worked in Brand Management for Proctor and
Gamble (1993-1994) where he developed the marketing plan for a budgeted $20
million new product launch. Other than his service as a director of Capital
Growth, a company with no operations, Mr. Nemelka holds no other directorships
in reporting companies. Mr. Nemelka received his B.S. in business finance from
Brigham Young University and his MBA from the Wharton Business School at the
University of Pennsylvania.
Paul D. Korth. Mr. Korth has been with One World since 1999. He is the
Secretary/Treasurer and Controller of One World. He is a CPA and has significant
public and private accounting experience. From March, 1998 until May, 1999 he
worked as an assistant controller at Komatsu Equipment Company where he was
responsible for all areas of financial reporting. Prior to working at Komatsu,
he worked in public accounting with a variety of companies, both public and
private. From January 1997 until March 1998 he was a Senior Accountant at
Deloitte & Touche, LLP and managed all phases of audits. From September 1994
until December 1996 he worked at Price Waterhouse LLP. Mr. Korth holds no other
directorships in reporting companies. Mr. Korth received his MBA, with an
accounting emphasis, from Arizona State University in May of 1994 where he was
on the Dean's list, and his BS, Business Management - Finance degree from
Brigham Young University in August of 1989.
Craig Davis. Mr. Davis has been with the Company since 1999. He is the
Chief Operating Officer for OWOL Technologies. He has over 12 years of executive
management experience in the communications and Internet industries. He worked
as Director of Support Services at Big Planet, Inc. from 1998 until joining the
Company, from 1996 until 1998 he acted as Vice President of Operations at Global
Communications and from 1995 to 1996 he acted as Director of Business Consultant
and System Integration Groups at 2021 Software. He has also worked independently
as an operations and management consultant. As a consultant, he worked with
several companies on enterprise system software implementations projects in
thirteen countries. He has also been a leader implementing communications
systems, and methods to improve customer service. Mr. Davis holds no
directorships in reporting companies.
David Bradford. Mr. Bradford has been with One World since 2000. He is
a director of the Company. He has over 20 years of operational and legal
experience. Mr. Bradford's principal occupation for the past 15 years was as
Senior Vice-President and General Counsel of Novell, Inc. Mr. Bradford sits on
the boards of directors of I-Link International and Pervasive Software. Mr.
Bradford holds no other directorships in reporting companies. Mr. Bradford has a
Juris Doctor Degree from Brigham Young University and an MBA from Pepperdine
University.
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Craig Case. Mr. Case has been with One World since 2000. He is a
director of the Company. He has over 20 years of technical and marketing
experience. Mr. Case is currently the Senior Vice President of BizStrata. From
1999-2000 Mr. Case was the Senior Vice President of Marketing and Strategic
Development at Cornerstone Nutritional Labs, in 1998 he was the Senior Vice
President of Sales of New Vision International and from 1988 to 1998 he acted as
Vice President of Network Marketing at Franklin Quest (now FranklinCovey). Mr.
Case holds no directorships in reporting companies. Mr. Case has a Bachelors of
Science in Educational Psychology and Organizational Communications from the
University of Utah.
Wayne Holbrook. Mr. Holbrook has been with the Company since 1998. He
is a Director and President of OWOL Marketing and has ten years experience in
marketing both in the field and as an executive in a public company. From 1996
to 1998 he served as executive vice president of Global Connections where he
managed the information systems, customer service, marketing and fulfillment.
While at Global Connections he helped launch the Golf Connections concept and he
was instrumental in the development of the corporate Internet strategy. From
1993-1995 he was a distributor for Quorum International where he became the top
producer in Europe with a sales organization of 47,000 distributors. From 1988
to 1993 he was a distributor at National Safety Associates where he built a
35,000 person organization and reached the highest level in the compensation
structure within seven months. Mr. Holbrook holds no directorships in reporting
companies.
B. Ray Zoll. Mr. Zoll has been with the Company since 1999. He is an
Executive Vice President and Corporate Counsel of OWOL Marketing. He has been a
practicing attorney for the past twenty years focusing on litigation, real
estate and business law. In 1997 he co-founded and served as Chairman of World
Connections a successful web development and e-commerce company which was sold
in 1999. He has also been involved in network marketing since 1989 and has built
a highly profitable network of over 15,000 distributors for NuSkin
International. Mr. Zoll holds no directorships in reporting companies.
Joseph M. Udall. Mr. Udall has been with the Company since 1999 as
Director, Secretary/Treasurer, and Vice President of Product Development of OWOL
Technologies. He brings significant experience working with technology
companies. As a practicing attorney for over six years he focused on corporate
and software licensing law. From May 1998 to May 1999 he worked with Udall,
Zachreson & Smith, P.L.C. specializing in general business law and software
licensing. From March 1995 to April 1998 he worked at Osborn Maledon, P.A. where
he was a partner representing various technology companies in the software and
Internet business. Prior to Osborn Maledon he was an associate at Meyer,
Hendricks, Victor, Osborn & Maledon, P.A. from September 1993 to April 1995. Mr.
Udall holds no directorships in reporting companies. Mr. Udall graduated
Valedictorian, summa cum laude, from the Arizona State University College of Law
in 1992 and B.A. magna cum laude in Economics from Brigham Young University in
1989.
Robert Wright. Mr. Wright has been with the Company since 1998. He is
the Chief Technical Officer for OWOL Technologies and has been involved with the
Internet since its inception. His background in electronic publishing and
e-commerce include projects for companies such as Novell, Corel, Word Perfect,
Meckler Media and other Fortune 500 companies. He was the founding Director of
New Media Development for Word Perfect's publishing division and has been a
featured speaker at Internet World. He also worked at Novell on the creation and
development of dynamic database publishing tools. He is the inventor of the IVY
Binder, an electronic publishing and content management tool. Mr. Wright worked
as a consultant in his own web site and CD-Rom development company, Wright
Electronic Publishing, from December 1996 to October 1998. He was the director
of New Media Development at WordPerfect/Novel/Corel/Ivy International from March
1993 to December 1996. Mr. Wright holds no directorships in reporting companies.
All directors are elected annually at the stockholders meeting.
Family Relationships
David N. Nemelka, a Director and the CEO and President of One World, a
Director and President of OWOL Technologies and a Director, Secretary and
Treasurer of OWOL Marketing is the brother-in-law of Joseph M. Udall, a Director
and the Secretary, Treasurer and Vice President of Product Development of OWOL
Technologies.
6
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Involvement in Certain Legal Proceedings
The executive officers and directors of the Company have not been
involved in any material legal proceedings which occurred within the last five
years of any type as described in Regulation S-B.
Audit Committee
The Board has an Audit Committee that was formed in September 2000. In
connection with the formation of the Audit Committee the Company adopted an
Audit Committee Charter. The Audit Committee is currently comprised of Messrs.
David N. Nemelka, David Bradford and Craig Case. Messrs. Bradford and Case are
both "independent directors" as that term is defined as that term is defined in
Rule 4200(a)(15) of the NASD's listing standards.
The Audit Committee provides assistance to the board of directors in
fulfilling their responsibility to the stockholders, potential stockholders, and
investment community relating to corporate accounting, reporting practices of
the Company and the quality and integrity of the financial reports of the
Company. It is the responsibility of the Audit Committee to maintain free and
open means of communication between the directors, the independent auditors and
Company management.
Due to the recent formation of the Audit Committee, the Audit Committee
(i) has not discussed with the independent auditors the matters required to be
discussed by SAS 61, (ii) has not received the written disclosures and the
letter from the independent accountants required by Independence Standards Board
Standard No. 1 and (iii) did not make a recommendation regarding the inclusion
of the audited financial statements in the Company's Annual Report on Form
10-KSB because the Audit Committee was not formed until approximately two months
after the end of the Company's fiscal year. However, the Audit Committee has
reviewed and discussed the audited financial statements with management.
Other Board Committees
The Company does not have a nominating or compensation committee.
Board Meetings and Directors' Attendance
The Board held 5 Board meetings and took action by unanimous consent on
at least 15 occasions during the fiscal year ending June 30, 2000. No incumbent
director who also acted as a director during any part of the fiscal year ended
June 30, 2000 attended fewer than 75 percent of the Board meetings held during
said year. The Company or fewer than 75 percent of the committee meetings held
by committees on which an incumbent director served.
Certain Relationships And Related Transactions
In August, 1998, the Company issued 1,000,000 shares of common stock at
$.025 per share in a private offering to five individuals for proceeds of
$25,000. Four of the individuals were unrelated to the Company. The fifth
individual, Brenda M. Hall, the Company's sole director and officer bought
250,000 shares of the private offering.
On October 1, 1998, the Company issued 100,000 common shares to an
attorney pursuant to a Consultant Compensation Agreement No. 1. The shares were
registered on Form S-8 with the Securities and Exchange Commission on October 2,
1998.
David N. Nemelka was the person primarily responsible for locating the
Company as a vehicle to be used in a merger or acquisition transaction and was
instrumental in negotiating a change of control of the Company in June 1999, and
causing Brenda M. Hall to become the sole officer, director and principal
stockholder of the Company.
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Mr. Nemelka was the person primarily responsible for negotiating the terms of
the June 1999 acquisition whereby OWOL Marketing and OWOL Technologies became
wholly owned subsidiaries of the Company (the "Acquisition"). Brenda M. Hall,
the Company's sole officer and director and a principal stockholder immediately
prior to the Acquisition, did not have an active role in locating OWOL Marketing
or OWOL Technologies or in negotiating the terms and conditions of the
Acquisition but has relied on the efforts of David N. Nemelka. In addition,
prior to the Acquisition Ms. Hall had also worked full-time for approximately
three years as an independent contractor for David N. Nemelka, providing
accounting, financial, clerical and related services through a company
controlled by her, Dassity, Inc. These terms could be deemed to have been
negotiated on behalf of the Company without arms-length bargaining and with
conflicts of interest because of Mr. Nemelka's role with the Company and as an
officer, director and stockholder of OWOL Marketing and OWOL Technologies.
In May 2000, the Company filed a Certificate of Designation with the
Nevada Secretary of State creating Series A Convertible Preferred Stock
("Preferred Stock") and designating 300,000 shares as Preferred Stock. On or
about May 22, 2000, the Company issued a total of 100,000 shares of Preferred
Stock each (300,000 shares total) to an entity controlled by David N. Nemelka,
President and Chief Executive Officer of the Company, an entity controlled by
Kelly M. Thayer, Chairman of the Company and an entity controlled by David R.
Nemelka and Ingrid F. Nemelka, the parents of David N. Nemelka. The Preferred
Stock was issued in consideration for nine hundred thousand dollars ($900,000).
Three hundred thousand dollars ($300,000) of the subscription price was paid on
or before May 22, 2000. The remaining six hundred thousand dollars ($600,000) of
the subscription price is due on or about May 22, 2003, together with interest
at the rate of eight percent (8%) per annum.
All of the Series A Preferred Stock was contributed to the OWOL
Founders Voting Trust. The beneficiaries of the OWOL Founders Voting Trust are
David N. Nemelka, Kelly M. Thayer and David R. Nemelka. Except as otherwise
required by applicable law, all voting rights of the Company are vested in and
exercised by the holders of the common stock and Preferred Stock, voting as a
single group, with each share of common stock being entitled to one (1) vote and
each of the Preferred shares being entitled to one hundred (100) votes. As a
result, the OWOL Founders Voting Trust effectively has voting control of the
Company with respect to all matters submitted to the vote of the stockholders.
In August and September 2000, Mr. David N. Nemelka, President and Chief
Executive Officer of the Company and an affiliate of Mr. Nemelka, acquired
164,000 shares of the Company's common stock and Series A Warrants to acquire
164,000 shares of common stock for consideration of $574,000 pursuant to the
terms of a private placement offering by the Company.
In October 2000 the Company entered into a Revolving Loan and Security
Agreement with Tradeco Corp., a Utah corporation. Tradeco Corp. is an affiliate
of David N. Nemelka, the president and CEO of the Company. Under the terms of
the agreement, Tradeco Corp. agreed to make periodic loans to the Company in an
aggregate principal amount at any one time outstanding not to exceed $2,000,000
for a twelve month period. Tradeco Corp. obligation to lend funds is limited by
certain conditions set forth in the Revolving Loan and Security Agreement. All
amounts lent are evidenced by convertible promissory notes that bear interest at
the rate of ten percent (10%) per annum until the convertible note is paid in
full or converted ("Revolving Loan Notes"). Principal and accrued interest is
due and payable in a single balloon payment on January 15, 2002. As additional
consideration, Revolving Loan Note holder is entitled to warrants to acquire one
share of the Company's common stock for every two ($2) in funds (excluding
interest) lent to the Company under the Revolving Loan and Security Agreement.
Said warrants are exercisable at $5.50 per share for a period ending on the five
year anniversary of the date of grant. The Revolving Loan Notes are not subject
to any sinking fund. The Revolving Loan Note holder has a security interest in
the Company's assets, subject to the prior security interest of certain
preexisting lenders. As of December 11, 2000, the Company had drawn down
$700,000 of the funds available under the revolving loan arrangement.
Security Ownership of Management and Certain Beneficial Owners
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The following table sets forth certain information with respect to the
beneficial ownership of the common stock of the Company as of December 11, 2000,
for: (i) each person who is known by the Company to beneficially own more than
five percent of the Company's common stock, (ii) each of the Company's
directors, (iii) each of the Company's Named Executive Officers (defined below),
and (iv) all directors and executive officers as a group. As of December 11,
2000, the Company had 16,076,334 shares of common stock outstanding. Ownership
of the Series A Preferred Stock, which shares are held of record by a single
stockholder who has voting control of the Company, is discussed separately
below.
Shares
Name and Address Beneficially Percentage
of Beneficial Owner(1) Owned(2) of Total(2) Position
---------------------- -------- ------------ --------
Kelly M. Thayer (3) 1,842,667 11.5% Chairman of the Board
David N. Nemelka (4) 2,978,333 17.7% President, Director and
CEO
Wayne Holbrook (5) 289,000 1.8% President & director of
OWOL Marketing
B. Ray Zoll (6) 247,500 1.5% Executive Vice-president
& counsel of OWOL
Marketing
David Bradford (7) 20,000 * Director
Craig Case (8) 20,000 * Director
Directors and Executive 5,397,500 32.5%
Officers as a group (6
persons)
OWOCF (9) 1,500,000 9.3%
4692 N. 300 W., Suite 114
Provo, UT 84604
OWTYF (10) 1,525,000 9.5%
4692 N. 300 W., Suite 114
Provo, UT 84604
OWOL Marketing (11) 1,000,000 6.2%
* Less than 1%.
---------------
(1) Except where otherwise indicated, the address of the beneficial owner is
deemed to be the same address as the Company.
(2) Beneficial ownership is determined in accordance with SEC rules and
generally includes holding voting and investment power with respect to the
securities. Shares of common stock subject to options or warrants currently
exercisable, or exercisable within 60 days, are deemed outstanding for
computing the percentage of the total number of shares beneficially owned by
the designated person, but are not deemed outstanding for computing the
percentage for any other person.
(3) Includes 750,000 shares. Also includes 214,000 shares that are owned by Mr.
Thayer's wife, 6,000 shares and warrants exercisable for an additional 6,000
shares owned by an affiliate of Mr. Thayer, 16,667 shares owned by an
affiliate of Mr. Thayer that are issuable upon conversion of an outstanding
promissory note and 750,000 of the 1,500,000 shares that are owned by D.K.
Enterprises, LLC, a Utah limited liability company ("DKE") which is owned
one-half by Mr. Thayer and one-half by David N. Nemelka. The DKE shares are
subject to an agreement whereby 750,000 shares shall be distributed to Mr.
Thayer and 750,000 shares shall be distributed to David N. Nemelka on June
1, 2001, subject to them remaining as either an officer or director of the
Company. Also, includes 100,000 shares owned by CNBCR L.L.C. The children of
Mr. Thayer are the beneficiaries of the L.L.C. Mr. Thayer is the sole
manager of the LLC and is deemed to have sole voting and dispositive powers
with respect to these shares. Does not include any shares for which Mr.
Thayer disclaims beneficial ownership that are held by OWOCF, an entity that
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Mr. Thayer acts as a director. See note 9 below. Does not include any Series
A Preferred Stock held by the OWOL Voting Trust of which Mr. Thayer is a
beneficiary.
(4) Includes 914,000 shares, 500,000 shares that are owned by Mr. Nemelka's
wife, 2,000 shares that are held by an affiliate of Mr. Nemelka, 18,333
shares owned by Mr. Nemelka and an affiliate of Mr. Nemelka that are
issuable upon conversion of an outstanding promissory note, 80,000 shares
that are owned by an affiliate of Mr. Nemelka, warrants exercisable for
164,000 shares and 750,000 shares that are owned by DKE, as described in
note 3 above. Also includes 200,000 shares that are issuable upon conversion
of a convertible promissory note (the "Revolving Loan") and warrants
exercisable for 350,000 shares that are held by an affiliate of Mr. Nemelka.
The Revolving Loan note is convertible at the lesser of (i) $3.50 or (ii)
the average closing bid price of the Company's common stock during the 10
trading day preceding the conversion date, subject to a minimum conversion
price of $1. As a result, the actual number of shares received upon
conversion of the Revolving Loan note may be substantially different than
the 200,000 shares reported. Does not include any shares for which Mr.
Nemelka disclaims beneficial ownership that are held by Bateman Dynasty, LC.
Bateman Dynasty, LC, a private limited liability company owned by the
Bateman Dynasty Trust, of which Brenda M. Hall is the trustee. Lynn Bateman,
the father-in-law of David N. Nemelka, is the sole manager of the LLC which
is deemed to have sole voting and dispositive powers with respect to these
shares. The children of David N. Nemelka are the beneficiaries of the Trust.
Does not include any Series A Preferred Stock held by OWOL Voting Trust of
which Mr. Nemelka is a beneficiary.
(5) Includes 19,000 shares and stock options exercisable for 270,000 shares.
Does not include stock options to acquire 330,000 shares that first become
exercisable between April 2001 through September 2002.
(6) Includes stock options exercisable for 247,500 shares. Does not include
stock options to acquire 302,500 shares that first become exercisable
between May 2001 through September 2002.
(7) Includes stock options exercisable for 20,000 shares.
(8) Includes stock options exercisable for 20,000 shares.
(9) Includes 1,500,000 shares. The Board of Directors of OWOCF is comprised of
David R. Nemelka, Gregory Jackson, John Donelly, John Hewlett, Joseph M.
Udall, Kelly M. Thayer, William Davidson and Lisa Hawthorne.
(10)Includes 1,525,000 shares. The Board of Directors of OWTYF is comprised of
David R. Nemelka, Ingrid F. Nemelka, John Hewlett, Wade Mitchell and Laura
Lee Sorensen.
(11)These shares were held by One World Online Incorporated dba One World
Online Marketing, ("OWOL Marketing") in a fiduciary capacity for the benefit
of the shareholders of OWOL Marketing immediately prior to June 29, 1999
acquisition whereby One World Online.com, Inc. acquired OWOL Marketing and I
Ventures, Inc. dba One World Online Technologies through its acquisition of
all the issued and outstanding common stock of these two companies.
Series A Preferred Stock
In May 2000 the Company issued 100,000 shares of Series A Convertible
Preferred Stock each (300,000 shares total) to an entity controlled by David N.
Nemelka, President and Chief Executive Officer of the Company, an entity
controlled by Kelly M. Thayer, Chairman of the Company and an entity controlled
by David R. Nemelka and Ingrid F. Nemelka, the parents of David N. Nemelka. The
holders of the Series A Convertible Preferred Stock then contributed the stock
to the OWOL Founders Voting Trust which holds all outstanding Series A Preferred
Stock. David R. Nemelka, Kelly M. Thayer and David N. Nemelka are the
beneficiaries of the OWOL Founders Voting Trust. Except as otherwise required by
applicable law, all voting rights of the Company are vested in and exercised by
the holders of the common stock and Series A Convertible Preferred Stock, voting
as a single group, with each share of common stock being entitled to one (1)
vote and each of the Series A Convertible Preferred shares being entitled to one
hundred (100) votes. The Series A Preferred Stock holders have the ability to
cast 30,000,000 of the votes entitled to vote at a meeting or other action of
the stockholders. This does not take into consideration the additional shares of
common stock that are directly or beneficially owned by the Series A Preferred
Stock holders.
The Company is not aware of any arrangements, the operation of which
may, at a subsequent date, result in a change in control of the Company.
10
<PAGE>
Compliance with Section 16(a) of the Securities Exchange Act of 1934
The members of the Board, the executive officers of the Company and
persons who hold more than 10 percent of the Company's Common Stock were not
subject to reporting requirements of Section 16(a) of the Securities Exchange
Act of 1934 during the fiscal year ended June 30, 2000.
Executive Compensation
The tables below set forth certain information concerning compensation
paid by the Company to its Chief Executive Officer and all other executive
officers with annual compensation in excess of $100,000 (determined for the
period ended June 30, 2000) (the "Named Executive Officers"). The tables include
information related to stock options granted to the Named Executive Officers.
Summary Compensation Table. The following table provides certain
information regarding compensation paid by the Company to the Named Executive
Officers.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation Awards
------------------------ ------- ------------------------------------------- ------------------------------------ -------------
Securities
Restricted Underlying All Other
Name and Fiscal Other Annual Stock Options/ LTIP Compensation
Principal Position Year(1) Salary ($) Bonus ($) Compensation($) Awards ($) SARs (#) Payouts($) ($)
------------------ ------- ---------- --------- --------------- ---------- -------- ---------- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C>
David N. Nemelka (2) 1999 -- -- -- -- -- -- --
President, CEO & director 2000 15,483 144,000 -- -- -- -- --
Kelly M. Thayer 1999 -- -- -- -- -- -- --
Chairman of the Board 2000 144,000 -- -- -- -- -- --
Wayne Holbrook 1999 65,000(3) -- -- -- 600,000 -- --
President & director of 2000 121,000 1,000 -- -- -- -- --
OWOL Marketing
------------------------
B. Ray Zoll 1999 45,000(3) -- -- -- 550,000 -- --
Executive Vice-president 2000 109,000 -- -- -- -- -- --
& counsel of OWOL
Marketing
---------------
</TABLE>
(1) The Company's fiscal year ends on June 30. The information reported for 1999
is for the period beginning on November 12, 1998 (date of inception).
(2) The Company has accrued, but has not paid, Mr. Nemelka these salary and
bonus amounts.
(3) Mr. Holbrook joined the Company in December 1998 and Mr. Zoll joined the
Company in February 1999 as a consultant and later became an employee.
Compensation of Directors
No cash fees or other consideration were paid to employee directors of
the Company by the Company for service on the Board during the year ended June
30, 2000 and no such compensation is anticipated to be paid in the current
fiscal year. The Company did not have any non-executive directors during fiscal
2000. The Company has granted each non-executive Company director stock options
to acquire 20,000 shares of the Company's common stock at exercise prices in
excess of $5 per share that are exercisable for a five year period as
compensation for services during fiscal 2001. The Company has made no other
agreements regarding compensation of non-employee directors. All directors are
entitled to reimbursement for reasonable expenses incurred in the performance of
their duties as Board members.
11
<PAGE>
Employment Agreements
Executive officers of the Company are elected by the Board on an annual
basis and serve at the discretion of the Board. On or about May 22, 2000, the
Company entered into employment agreements with Mr. David N. Nemelka, the
Company's President and CEO, and Mr. Kelly M. Thayer, the Company's Chairman,
(collectively, the "Senior Executives"). In general terms these agreements
provide that (i) the Senior Executives are employed on an "at will" basis; (ii)
the Senior Executives each receive a salary of $144,000 per year; (iii) Mr.
Nemelka is to receive a $144,000 signing bonus in cash or stock at his
discretion; (iv) the Senior Executives are each entitled to a quarterly bonus
equal to (a) One and One-Half percent (1.5%) of Shared Revenue as that term is
defined in the Company's IMC Compensation Plan, plus (b) Two Percent (2%) of all
funds received by the Company as payment for community account membership
renewal fees which bonuses, if any, shall be (y) reduced by the amount of the
base salary to which the Senior Executive was entitled during the quarterly
period in question and (z) payable only to the extent that during the quarterly
period in question the Company has positive cash flow from operating activities
both before and after the payment of the bonus; (v) the Senior Executives shall
be included to the extent eligible thereunder in any and all plans pursuant to
which the Company may provide general benefits for the Company's employees; (vi)
the Senior Executives will be reimbursed for all reasonable and necessary
out-of-pocket expenses incurred by the Senior Executive in the performance of
his Company duties; (vii) the Senior Executives receive severance pay in the
event of termination that is not "for cause," as set forth in the employment
agreements (including payments for life in the event of termination as a result
of a disability); and (viii) that the Senior Executives are subject to various
provisions restricting use of confidential information, vesting, ownership
rights to certain proprietary information in the Company, and restricting
competition with the Company or solicitation of Company customers or employees.
The Company has entered into a Consulting Agreement with David R.
Nemelka that is substantially similar to the employment arrangements with the
Senior Executives, except that he did not receive a signing bonus on execution
of the consulting agreement. Mr. David R. Nemelka has represented to the Company
that it is his intention to assign the economic benefits of the consulting
agreement to one or more charitable organizations.
The Company has also entered into employment agreements with Wayne
Holbrook, the president of OWOL Marketing, B. Ray Zoll, the Executive Vice
President and Corporate Counsel to OWOL Marketing and Joseph M. Udall, a Vice
President of OWOL Technologies (collectively, the "Executives"). In general
terms these agreements provide that (i) the Executives are employed on an "at
will" basis; (ii) Messrs. Holbrook, Zoll and Udall receive annual base salaries
of $132,000, $120,000 and $102,000, respectively; (iii) Mr. Holbrook is entitled
to a profitability bonus; (iv) the Executives will be reimbursed for all
reasonable and necessary out-of-pocket expenses incurred by the Executive in the
performance of his Company duties; (v) the Executives receive fifty-two weeks of
severance pay in the event of termination that is not "for cause;" (vi) at his
election, in lieu of his stock options, Mr. Holbrook is entitled to a
Multi-Level Marketing Position in the event of resignation or involuntary
termination; (vii) Messrs. Holbrook, Zoll and Udall received stock options to
acquire up to 600,000, 550,000 and 250,000 shares of the Company's common stock,
respectively, pursuant to a three year vesting schedule; and (viii) the
Executives are subject to various provisions restricting use of confidential
information, vesting, ownership rights to certain proprietary information in the
Company, and restricting competition with the Company or solicitation of Company
customers or employees.
Management Bonus Plan
The Company has adopted a management bonus plan. Executives of the
Company and its subsidiaries are eligible to participate in the plan. The plan
provides for a bonus pool of up to two percent of shared revenues for
distribution to executives on a quarterly basis. No bonus is payable under the
plan during any quarterly period where the Company does not have pre-tax profits
from operating activities before payment of the bonus. A determination of which
executives are eligible to participate in the plan and the their respective
percentages of the bonus pool is determined on a quarterly basis.
12
<PAGE>
Indemnification for Securities Act Liabilities
The General Corporation Law of Nevada limits the liability of officers
and directors for breach of fiduciary duty except in certain specified
circumstances, and also empowers the Company to indemnify officers, directors,
employees and others from liability in certain circumstances such as where the
person successfully defended himself on the merits or acted in good faith in a
manner reasonably believed to be in the best interests of the corporation.
The Company's Articles of Incorporation limit the liability of its
Officers and Directors and provide for indemnification by the Company of its
Officers and Directors to the full extent permitted by Nevada General
Corporation. The Company's Articles of Incorporation generally provide that its
directors and officers shall have no personal liability to the Company or its
stockholders for monetary damages for breaches of their fiduciary duties as
directors to the full extent authorized by applicable law.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers, and controlling persons of the
Company pursuant to the foregoing provisions or otherwise, the Company has been
advised that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable.
Stock Options
In June 1999, the Company adopted its Stock Option Plan (the "Plan").
The Plan allows for the Board to grant options to purchase up to 4,000,000
shares of common stock to the Company's key employees, officers, directors,
consultants, and other agents and advisors. Awards under the Plan will consist
of stock options (both non-qualified options and options intended to qualify as
"Incentive Stock Options" under Section 422 of the Internal Revenue Code of
1986, as amended). As of September 30, 2000, the Company had granted stock
options under the Plan to acquire 3,175,525 shares of the Company's common stock
at exercise prices of between $1 and $5.50 per share.
The Plan is administered by the Board which will determine the persons
to whom awards will be granted, the number of awards to be granted and the
specific terms of each grant, including the vesting thereof, subject to the
provisions of the Plan.
In connection with qualified stock options, the exercise price of each
option may not be less than 100% of the fair market value of the common stock on
the date of grant (or 110% of the fair market value in the case of a grantee
holding more than 10% of the outstanding stock of the Company). The aggregate
fair market value of shares for which qualified stock options are exercisable
for the first time by such employee (10% stockholder) during any calendar year
may not exceed $100,000. Non-qualified stock options granted under the Plan may
be granted at a price determined by the Board, not to be less than the fair
market value of the common stock on the date of grant.
The Plan may also contain certain change in control provisions which
could cause options and other awards to become immediately exercisable and
restrictions and deferral limitations applicable to other awards to lapse in the
event any "person," as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, including a "group" as defined in Section
13(d), but excluding certain stockholders of the Company, that become the
beneficial owners of more than 25% of the Company's outstanding shares of common
stock.
In addition to the options that may be granted under the Plan, the
Board has authorized the grant of stock options to acquire 2,000,000 shares of
the Company's common stock by key employees, officers, directors, consultants
and other agents and advisors. As of September 30, 2000, the Company had granted
non-Plan options to acquire 1,601,181 shares of Company's common stock at
exercise prices of between $1 and $5.38 per share.
13
<PAGE>
Compensation Committee Interlocks and Insider Participation
The Company does not have a Compensation Committee. Decision regarding
compensation are made by the Company's Board of Directors. David N. Nemelka, the
Company's President and CEO and Kelly M. Thayer, the Company's Chairman who also
acts as an employee of the Company, are members of the Board of Directors who,
as Board members, made compensation and compensation related decisions. No
executive officers of the Company serve on the Compensation Committee (or in a
like capacity) any other entity.
Change in Control
On May 19, 2000, the Company filed a Certificate of Designation with
the Nevada Secretary of State creating Series A Convertible Preferred Stock (the
"Preferred Stock") and designating 300,000 shares as Preferred Stock. On or
about May 22, 2000, the Company issued a total of 100,000 shares of Preferred
Stock each (300,000 shares total) to an entity controlled by David N. Nemelka,
President and Chief Executive Officer of the Company, an entity controlled by
Kelly M. Thayer, Chairman of the Company and an entity controlled by David R.
Nemelka and Ingrid F. Nemelka, the parents of David N. Nemelka. The Preferred
Stock was issued in consideration for nine hundred thousand dollars ($900,000).
Three hundred thousand dollars ($300,000) of the subscription price was paid on
or before May 22, 2000. The remaining six hundred thousand dollars ($600,000) of
the subscription price is due on or about May 22, 2003, together with interest
at the rate of eight percent (8%) per annum. The funds used by the purchasers to
acquire the Preferred Stock are anticipated to come from personal funds of the
purchasers. The issuance of the Preferred Stock was approved by written consent
of a majority of the outstanding shares of the Company's common stock on May 10,
2000.
All of the Preferred Stock has been be contributed to the OWOL Founders
Voting Trust. The beneficiaries of the OWOL Founders Voting Trust are David N.
Nemelka, Kelly M. Thayer and David R. Nemelka. Except as otherwise required by
applicable law, all voting rights of the Company are vested in and exercised by
the holders of the common stock and Preferred Stock, voting as a single group,
with each share of common stock being entitled to one (1) vote and each of the
Preferred shares being entitled to one hundred (100) votes. See "Security
Ownership of Management and Certain Beneficial Owners" for a description of the
securities beneficially owned by the OWOL Founders Voting Trust and its
beneficiaries.
As a result, the OWOL Founders Voting Trust effectively has voting
control of the Company with respect to all matters submitted to the vote of the
stockholders. The concentration of voting control may also have the effect of
impeding a non-negotiated change in control which result may or may not benefit
stockholders. In addition, stockholders may be disadvantaged in the event
matters are put to the stockholders for approval and the interests of the
holder(s) of the Preferred Stock are not similar to the interests of the
stockholders generally.
The Registrant is not aware of any arrangements, the operation of which
may, at a subsequent date, result in a change in control of the Registrant.
2. Other Matters
Discretionary Authority
At the time of mailing of this proxy statement, the Board was not aware
of any other matters which might be presented at the meeting. If any matter not
described in this Proxy Statement should properly be presented, the persons
named in the accompanying proxy form will vote such proxy in accordance with
their judgment.
14
<PAGE>
Notice Requirements
Any stockholder who desires to have a proposal included in the
Company's proxy soliciting material relating to the Company's next annual
meeting of stockholders should send to the Secretary of the Company a signed
notice of intent. This notice, including the text of the proposal, must be
received no later than June 30, 2001. For those shareholder proposals which are
not submitted in accordance with Rule 14a-8, the appointed proxies may exercise
their discretionary voting authority for any proposal received later than
fifteen days prior to the meeting, without any discussion of the proposal in the
Company's proxy statement.
Selection of Independent Accountants
The Board of Directors has elected to retain Tanner + Co. as its
independent auditor for the 2001 fiscal year. Tanner + Co. has acted as the
Company's independent auditor for the two most recent fiscal years. The Company
expects representatives of Tanner + Co. to be present at the Company's 2000
Annual Meeting of Stockholders, have an opportunity to make a statement if they
desire to do so and be available to respond to appropriate questions.
Annual Report
This Proxy Statement has been preceded or accompanied by an Annual
Report for the fiscal year ended June 30, 2000. Stockholders are referred to
such report for financial and other information about the activities of the
Company, but such report is not to be deemed a part of the proxy soliciting
material.
Expenses and Methods of Solicitation
The expenses of soliciting proxies will be paid by the Company. In
addition to the use of the mails, proxies may be solicited personally, or by
telephone or other means of communications, by directors, officers and employees
of the Company and its subsidiaries, who will not receive additional
compensation therefor. Arrangements will also be made with brokerage firms and
other custodians, nominees and fiduciaries for the forwarding of proxy
solicitation material to certain beneficial owners of the Company's common
stock, and the Company will reimburse such forwarding parties for reasonable
expenses incurred by them.
By order of the Board of Directors,
By /s/ Paul D. Korth
------------------------
Paul D. Korth, Secretary
15
<PAGE>
APPENDIX A
PROXY CARD
for
ANNUAL MEETING OF STOCKHOLDERS
of
ONE WORLD ONLINE.COM, INC.
This Proxy is Solicited on Behalf of the Board Of Directors. The undersigned
hereby appoints David N. Nemelka as Proxy, with the power to appoint his
substitute and hereby authorize them to represent and to vote, as designated
below, all the shares of stock of One World Online.com, Inc. held on record by
the undersigned on November 21, 2000 at the annual meeting of stockholders to be
held on January 5, 2001, or any adjournment thereof.
1. Election of Nominee Directors
FOR Kelly M. Thayer WITHHOLD AUTHORITY to vote for Kelly M. Thayer
FOR David N. Nemelka WITHHOLD AUTHORITY to vote for David N. Nemelka
FOR David Bradford WITHHOLD AUTHORITY to vote for David Bradford
FOR Craig Case WITHHOLD AUTHORITY to vote for Craig Case
2. In their discretion, the Proxy is authorized to vote upon such other business
as may properly come before the meeting.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder(s). If no directions are made,
this proxy will be voted for the above Proposals.
Please sign below. When shares are held by joint tenants, both should
sign. When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such. If a corporation, please sign in full
corporation name by President or other authorized officer. If a partnership,
please sign in partnership name by authorized person.
Dated: ________________________ ____________________________________
(signature)
____________________________________
(signature if held jointly)
Please mark, sign, date and return the
proxy card promptly using the enclosed
envelope or proxy cards may be sent by
facsimile to One World Online.com, Inc.
at (801) 852-3553. ___________________________________
(print name of stockholder(s))
A-1
<PAGE>
APPENDIX B
September 5, 2000
---------------
AUDIT COMMITTEE CHARTER
ORGANIZATION
There shall be a committee of the board of directors of One World Online.com,
Inc. (the "Company") to be known as the Audit Committee. The Audit Committee
shall be composed of directors who are independent of the management of the
Company and are free of any relationship that, in the opinion of the board of
directors, would interfere with their exercise of independent judgment as a
committee member.
STATEMENT OF POLICY
The Audit Committee shall provide assistance to the board of directors in
fulfilling their responsibility to the stockholders, potential stockholders, and
investment community relating to corporate accounting, reporting practices of
the Company and the quality and integrity of the financial reports of the
Company. In so doing, it is the responsibility of the Audit Committee to
maintain free and open means of communication between the directors, the
independent auditors and Company management.
COMPOSITION
The Audit Committee shall be comprised of three or more directors as determined
by the Board, who shall be independent directors. All members of the Audit
Committee shall have a working familiarity with basic finance and accounting
practices, and at least one member of the Audit Committee shall have accounting
or related financial management expertise.
The members of the Audit Committee shall be appointed by the Board at the annual
organizational meeting of the Board or until their successors shall be duly
qualified and appointed. Unless a chair is appointed by the full Board, the
members of the Audit Committee may designate a chair by majority vote of the
full Audit Committee membership.
MEETINGS
The Audit Committee shall meet at least two times annually, or more frequently
as circumstances dictate. As part of its responsibility to foster open
communication, the Audit Committee or its members are expected to meet for
discussions with Company management frequently, and will have at least two
formal meetings with Company management in the presence of the independent
auditors in separate executive sessions to discuss any matters that the Audit
Committee believes should be discussed privately.
RESPONSIBILITIES
In carrying out its responsibilities, the Audit Committee's policies and
procedures will remain flexible, in order to best react to changing conditions
and to ensure that the corporate accounting and reporting practices of the
Company are in accordance with all requirements and are of the highest quality.
In carrying out these responsibilities, the Audit Committee will:
B-1
<PAGE>
1. Consider updating this charter at least annually or as business developments
may dictate.
2. Influence the overall Company "tone" for quality financial reporting, sound
business risk controls, and ethical behavior.
3. Review and recommend to the directors the Audit Committee's choice of
independent auditors and their level of fees for audits of the financial
statements of the Company. Recommend dismissal when necessary. Maintain an
active dialog with the independent auditors to identify and disclose any
relationship or services that may impact the objectivity and independence of
the auditors.
4. Meet with the independent auditors and financial management of the Company
to review the scope of the proposed audit for the current year and the audit
procedures to be utilized, and at the conclusion thereof review the results
of such audit, including any comments or recommendations of the independent
auditors.
5. Emphasize the adequacy of internal controls to identify any payments,
transactions, or procedures that might be deemed illegal or otherwise
improper. Review the Company's policy statements to enforce adherence to its
code of conduct.
6. Monitor the integrity and quality of annual and interim financial reporting
to shareholders with management and the independent auditors to determine
that the independent auditors are satisfied with the disclosure and content
of the financial statements to be presented to the shareholders. Review
changes in accounting principles and concur as to their appropriateness.
The Audit Committee on a regular basis should also monitor the integrity and
quality of internal financial and operating information used by management
in its decision making processes.
7. Provide sufficient opportunity for the independent auditors to meet with the
members of the Audit Committee without members of management present. Among
the items to be discussed in these meetings are the independent auditors'
evaluation of the Company's financial and accounting personnel, and the
cooperation that the independent auditors received during the course of the
audit.
8. Consider and review with the independent auditors:
(a) Any significant findings in the independent auditors SAS 71 interim
financial statement review prior to the Company's filing of its form
10-Q.
(b) The adequacy of the Company's internal controls including computerized
information system controls and security.
(c) Any significant findings and recommendations of the independent auditors
together with management's responses thereto.
9. Monitor compliance with the Company code of conduct and regulatory
requirements, and review and assess conflicts of interest and related-party
transactions.
10. Evaluate and make recommendations regarding management initiatives affecting
the financing of the Company and related matters.
11. Assess independent auditor performance.
12. Assess Audit Committee performance.
13. Review and approve any required stock exchange certifications, if any, and
proxy statement disclosure.
B-2
<PAGE>
14. Provide a report of the audit committee's findings that result from its
financial reporting oversight responsibilities including representation that
the audit committee has:
a. discussed with the independent auditors the matters required to be
discussed by Statement on Auditing Standards No. 61, Communication with
Audit Committees, as amended,
b. received and reviewed the written disclosures and the letter from the
independent auditors required by Independence Discussions with Audit
Committees, as amended, by the Independence Standards Board, and
c. discussed with the auditors the auditors' independence.
15. Conduct an annual quality discussion with the independent auditors wherein
the independent auditors discuss their judgment about the quality, not just
the acceptability, of the Company's accounting principles as applied in it
financial reporting.
16. Ensure that the independent auditors review interim financial statements and
conduct a quality discussion with the independent auditors before the
Company files its Form 10-Q.
B-3
