SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy
Statement [ ]
Confidential; for use
[X] Definitive Proxy
Statement
of the Commission
Only
[ ] Definitive Additional
Materials
(as permitted by Rule
[ ] Soliciting Material
Pursuant to
14a-6(e)(2))
Rule 14a-11 or Rule 14a-12
INITIO, INC.
- -----------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- -----------------------------------------------------------------
(Name of Person(s) Filing Information Statement)
INITIO, INC.
2500 Arrowhead Drive
Carson City, Nevada 89706
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 26, 2001
To the Shareholders of
INITIO, INC.
NOTICE IS HEREBY GIVEN that the Annual Meeting of
Shareholders of INITIO, INC. (the "Company"), a Nevada
corporation, will be held at the Company's office at 10 Henry
Street, Teterboro, New Jersey 07608, on Thursday, April 26, 2001,
at 11:00 a.m., local time, for the following purposes:
1. To elect two directors to serve a term of three years
subject to the provisions of the By-laws, and until their
respective successors have been duly elected and qualified;
1. To consider and act upon a proposal to approve the selection
of Arthur Andersen LLP as the Company's independent auditors for
the fiscal year ending April 30, 2001; and
1. To transact such other business as may properly come before
the meeting or any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business
on March 12, 2001 as the record date for the meeting and only
holders of shares of record at that time will be entitled to
notice of and to vote at the Annual Meeting of Shareholders or
any adjournment or adjournments thereof.
By order of the Board of Directors.
/s/ Martin Fox
Martin Fox
President
Teterboro, New Jersey
March 21, 2001
IMPORTANT
IF YOU CANNOT PERSONALLY ATTEND THE MEETING, IT IS
REQUESTED THAT YOU INDICATE YOUR VOTE ON THE ISSUES
INCLUDED ON THE ENCLOSED PROXY AND DATE, SIGN AND MAIL
IT IN THE ENCLOSED SELF-ADDRESSED ENVELOPE WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES
INITIO, INC.
2500 Arrowhead Drive
Carson City, Nevada 89706
P R O X Y S T A T E M E N T
for
ANNUAL MEETING OF SHAREHOLDERS
to be held April 26, 2001
March 21, 2001
The enclosed proxy is solicited by the Board of
Directors of Initio, Inc., a Nevada corporation (the "Company")
in connection with the Annual Meeting of Shareholders to be held
at the Company's office at 10 Henry Street, Teterboro, New Jersey
07608 on Thursday, April 26, 2001, at 11:00 a.m., local time, and
any adjournments thereof, for the purposes set forth in the
accompanying Notice of Meeting. Unless instructed to the
contrary on the proxy, it is the intention of the persons named
in the proxy to vote the proxies in favor of (i) the election as
directors of the nominees listed below to serve for a term of
three years, and (ii) approval of the selection of Arthur
Andersen LLP as the Company's independent auditors for the fiscal
year ending April 30, 2001. The record date with respect to this
solicitation is the close of business on March 12, 2001 and only
shareholders of record at that time will be entitled to vote at
the meeting. The principal executive office of the Company is
2500 Arrowhead Drive, Carson City, Nevada 89706, and its
telephone number is (702) 883 - 2711. The shares represented by
all validly executed proxies received in time to be taken to the
meeting and not previously revoked will be voted at the meeting.
This proxy may be revoked by the shareholder at any time prior to
its being voted. This proxy statement and the accompanying proxy
were mailed to you on or about March 21, 2001.
OUTSTANDING SHARES
The number of outstanding shares entitled to vote at
the meeting is 4,646,004 common shares, par value $.01 per share.
Each common share is entitled to one vote. The presence in
person or by proxy at the Annual Meeting of the holders of a
majority of such shares shall constitute a quorum. There is no
cumulative voting. Assuming the presence of a quorum at the
Annual Meeting, the affirmative vote of a majority of the common
shares present at the meeting and entitled to vote on each matter
is required for the approval of the election as directors of the
nominees listed below and the approval of the Company's auditors,
Arthur Andersen LLP, as the Company's auditors for fiscal 2001.
Votes shall be counted by one or more persons who shall serve as
the inspectors of election. The inspectors of election will
canvas the shareholders present in person at the meeting, count
their votes and count the votes represented by proxies presented.
Abstentions and broker nonvotes are counted for purposes of
determining the number of shares represented at the meeting, but
are deemed not to have voted on the proposal. Broker nonvotes
occur when a broker nominee (which has voted on one or more
matters at the meeting) does not vote on one or more other
matters at the meeting because it has not received instructions
to so vote from the beneficial owner and does not have
discretionary authority to so vote.
ELECTION OF DIRECTORS
The two persons named below, who are currently members
of the Board of Directors, have been nominated for election to
serve for a term of three years and until their respective
successors have been elected and qualified. Unless specified to
be voted otherwise, each proxy will be voted for the nominees
named below. Both nominees have consented to serve as directors
if elected.
If at the time of the Annual Meeting, any nominee is
unable or declines to serve, the present Board of Directors shall
nominate another person to fill the vacancy and the proxies may
be voted for any other person nominated.
Number of
Shares Curr
Positions with Direc Beneficially ent Perce
Name and Age the tor Owned Term nt
Company as of Expi of
Since January 31, res Class
2001
James J. Director 1998 10,000 4/30
Holzinger, /01 *
61
Dr. Paul Director 1999 -- 4/30
Lerman, 61 /01 --
* Less than 1%
Meetings and Committees of the Board of Directors.
The Board of Directors of the Company met three times
during the fiscal year which ended on April 30, 2000. All of the
directors attended more than 75% of the total number of meetings
of the Board of Directors and committees on which he serves.
The Company has an Audit Committee which consists of
Mr. Robert Lerman, Dr. Paul Lerman and Mr. James Holzinger and
has the obligations specified in the Audit Committee Charter
(attached hereto as Appendix A).
Report of the Audit Committee
The following shall not be deemed to be soliciting
material or to be filed with the Commission nor shall such
information be incorporated by reference into any future filing
of the Company under the Securities Act of 1933 or the Securities
and Exchange Act of 1934.
With respect to the audit of the fiscal year ended April 30,
2000, the Audit Committee met once. to review the fiscal year
financial results and the Companys audited consolidated
financial statements.
In the course of this meeting, the Audit Committee discussed with
the Companys independent auditors those matters required to be
discussed by Statement on Accounting Standards No. 61, as
amended, Communication with Audit Committees, by the Auditing
Standards Board of the American Institute of Certified Public
Accountants.
We have received and reviewed the written disclosures and the
letter from the independent auditors required by Independence
Standard No. 1, as amended, Independence Discussions with Audit
Committee, by the Independence Standards Board and have
discussed with the auditors the auditors independence.
Based on the reviews and discussions referred to above, we
recommend to the Board of Directors that the consolidated
financial statements referred to above be included in the
Companys Annual Report on Form 10-KSB for the year ended April
30, 2000.
Audit Committee
Robert Lerman
Dr. Paul Lerman
James Holzinger
Fiscal 2000 Audit Firm Fee Summary
During fiscal year ended April 30, 2000, the Company retained its
principal auditor, Arthur Anderson, to provide services in the
following category and amount:
Audit Fees $35,000
The Company also has a Compensation Committee, the current
members of which are Messrs. DeStefano and Fox. Subject to
existing contractual obligations, the Compensation Committee is
responsible for setting and administering the policies which
govern annual and long-term compensation for the Company's
executives. The Compensation Committee is also empowered to
grant Stock Options pursuant to the Company's Stock Option Plans
and to administer such Plans. Although the Compensation
Committee did not formally meet during fiscal 2000, Messrs.
DeStefano and Fox informally discussed these matters during the
course of the fiscal year.
The Company does not have a nominating committee.
Directors and Executive Officers of the Company
The Company's Board of Directors is a classified board,
with one-third of the directors being elected each year for a
term of three years. The following table sets forth certain
information with respect to each director and executive officer
of the Company:
Current
Positions with Term Served As
Name and Age the Company Expires Director Since
Daniel A. DeStefano, Chairman of 2003 1969
68 the Board,
Director
Martin Fox, 65 President, 2003 1978
Secretary,
Director
James J. Holzinger, Director 2001 1998
61
Dr. Paul Lerman, 61 Director 2001 1999
Robert A. Lerman, 66 Director 2002 1998
Paul Lerman and Robert Lerman are cousins.
Mr. DeStefano is a founder of the Company and has been
Chairman of the Board of the Company since 1969.
Mr. Fox joined the Company in 1972 and has been
President of the Company for more than five years. Mr. Fox is
also a Director of Globix Corporation, a provider of Internet
solutions to businesses.
Mr. Holzinger is, since 1996, retired. From 1993 -
1996 he was an Executive Vice President in the commercial lending
department of Summit Bank.
Dr. Lerman became a Director in April, 1999. Dr. Lerman
has been the Dean of the Samuel J. Silberman College of Business
Administration at Fairleigh Dickinson University since 1990 and a
Professor of Business Administration since 1970. Dr. Lerman is
also a Director of NeuroCorp., Ltd. a provider of contract
medical research and data analysis, and non-medical manager of
facilities treating memory disorders.
Mr. Lerman has been President and a Director of Pioneer
Ventures Corp., the manager of the general partner of Pioneer
Ventures Associates Limited Partnership, since 1997. Mr. Lerman
is also the President and a Director of Pioneer Capital Corp., an
investment banking company
Each officer's term expires at each annual meeting of
the Board of Directors of the Company, or when their successors
are elected and qualified to serve in their stead.
The Company pays directors, other than full time
employees, an annual retainer of $3,000 plus $500 and out-of-
pocket expenses for each Board meeting attended.
COMPENSATION OF DIRECTORS AND OFFICERS
The following table sets forth cash compensation
(consisting entirely of salary) paid (or accrued for) by the
Company to its President and Chairman of the Board. Except as
set forth in the following table, none of the executive officer's
aggregate remuneration exceeded $100,000 for the three fiscal
years ended April 30, 2000:
SUMMARY COMPENSATION
TABLE
Name and Year Annual
Principal Position Compensation
Martin Fox, 2000 $150,000
President 1999 1,500
1998 1,500
Daniel DeStefano, 2000 $150,000
Chairman of the 1999 1,500
Board 1998 1,500
On March 25, 1998, the Company granted 250,000 stock options
to each of Mr. Fox and Mr. DeStefano at an exercise price of
$1.95 pursuant to the Company's 1996 Employee Stock Option Plan.
These options are presently exercisable to the extent of 60%,
with an additional 20% exercisable on March 25, 2001 and March
25, 2002. Neither Mr. Fox nor Mr. DeStefano received awards
under long-term incentive plans that are stock based during the
three fiscal years referred to above.
The Company does not have employment agreements with
any of its executive officers.
PRINCIPAL SHAREHOLDERS
The following table sets forth, as of March 1, 2001,
certain information concerning stock ownership of the Company by
(i) each person who is known by the Company to own beneficially
more than 5% of the outstanding common shares of the Company,
(ii) each of the Company's directors and (iii) all current
directors and officers of the Company as a group. Except as
otherwise indicated, all such persons have both sole voting and
investment power over the shares shown as being beneficially
owned by them.
Name and Address of Amount and Nature Percent
Beneficial Owner of Beneficial Ownership of Class
Martin Fox 1,438,585 29.0%
2500 Arrowhead Drive
Carson City, Nevada 89706
Daniel A. DeStefano 850,010 20.0%
2500 Arrowhead Drive
Carson City, Nevada 89706
DeStefano Children Trust 530,546 11.4%
c/o John McConeghy
42 Sterling Lane
Wayne, New Jersey 07470
Melvyn I. Weiss 248,650 6.1%
One Pennsylvania Plaza
New York, New York 10119
Pioneer Ventures Associates 724,675 13.5%
Limited Partnership
651 Day Hill Road
Windsor, Connecticut 06095
Robert A. Lerman 740,130 13.8%
651 Day Hill Road
Windsor, Connecticut 06095
James J. Holzinger 10,000 *
7 Canterbury Way
Wayne, New Jersey 07470
Dr. Paul Lerman -- --
1000 River Road
Teaneck, New Jersey 07666
Vincent Molinari 276,265 5.9
40 Wall Street, 59th Floor
New York, New York 10005
Burlington Capital Markets, 276,265 5.9
Inc.
40 Wall Street, 59th Floor
New York, New York 10005
Eximus Holdings LLC 276,265 5.9
40 Wall Street, 59th Floor
New York, New York 10005
All Executive Officers and 3,038,725 55.2%
Directors as a Group (5
persons)
* Less than 1%.
The amount shown for Mr. Fox includes 101,984 Shares owned
by trusts for the benefit of Mr. Fox's children of which Mr.
Fox is a trustee and of which Mr. Fox disclaims beneficial
ownership. Mr. Fox has shared voting and investment power
over the Shares owned by such trusts. This amount also
includes 101,796 Shares owned by the Martin Fox Retirement
Trust. This amount does not include 53,433 Shares owned by
a trust for the benefit of unrelated persons of which Mr.
Fox is a trustee and of which Mr. Fox disclaims beneficial
ownership. This amount also includes 200,000 shares which
Mr. Fox has the right to acquire pursuant to a currently
exercisable stock option.
The amount shown for Mr. DeStefano includes 72,638 Shares
owned by the Daniel DeStefano Retirement Trust. This amount
also includes 200,000 shares which Mr. DeStefano has the
right to acquire pursuant to a currently exercisable stock
option.
The shares shown for the DeStefano Children Trust are owned
by the trust for the benefit of Mr. DeStefano's adult
children, of which the trustees are Messrs. John McConeghy
and Fred DeStefano (Mr. Daniel A. DeStefano's brother).
The amount shown for Mr. Weiss also includes 101,984 Shares
owned by trusts for the benefit of Mr. Fox's adult children
of which Mr. Weiss is a trustee and of which Mr. Weiss
disclaims beneficial ownership. Mr. Weiss has shared voting
and investment power over the Shares owned by such trusts.
Pioneer Ventures Associates Limited Partnership is the owner
of (i) a $1,000,000 convertible subordinated debenture which
is convertible into a maximum of 400,000 shares of the
Company's common stock and (ii) a $500,000 convertible
subordinated debenture which is convertible into a maximum
of 324,675 shares of the Company's common stock.
The amount shown for Mr. Lerman includes (i) 400,000 shares
which may be acquired by Pioneer Ventures Associates Limited
Partnership upon conversion of the Convertible Subordinated
Debenture due May 1, 2003, (ii) 324,675 shares which may be
acquired by Pioneer Ventures Associates Limited Partnership
upon conversion of the Convertible Subordinated Debenture
due December 23, 2003, (iii) 4,400 shares held by Robert and
Ellen Lerman, (iv) 1,960 and 3,500 shares held by Texas
Enterprises, Inc. and Pioneer Capital Corp., respectively,
of which Mr. Lerman is the owner of 50% of the issued shares
of such corporations, (v) 5,495 shares held by the Robert A.
Lerman Money Pension Plan & Trust, and (vi) 100 shares held
by Ellen Lerman, his wife. See "Certain Relationships and
Related Transactions."
The amounts shown for Mr. Molinari, Burlington Capital
Markets, Inc. and Eximus Holdings LLC are based upon a
Schedule 13D filed on February 23, 2001by Mr. Molinari,
Burlington and Eximus. Each of Mr. Molinari, Burlington
and Eximus may be deemed to beneficially own the number of
shares shown and each of Mr. Molinari, Burlington and Eximus
may be deemed to individually hold the power to vote and/or
dispose of the shares.
Certain Relationships and Related Transactions
On February 25, 1998, the Company entered into the
Debenture Commitment Agreement (the "Debenture Commitment
Agreement") with Pioneer Ventures Associates Limited Partnership
("PVALP") pursuant to which PVALP agreed to make certain loans to
the Company to be repaid by the Company in accordance with the
terms of convertible subordinated debentures (the "Debentures").
PVALP initially loaned $3,000,000 to the Company and the Company
issued the First Subordinated Debenture due May 1, 2003 (the
"First Debenture").
In December 1998, pursuant to the terms of the
Debenture Commitment Agreement, PVALP loaned an additional
$500,000 to the Company and the Company issued to PVALP the
Second Subordinated Debenture due December 23, 2003 (the "Second
Debenture").
The terms of the Debenture Commitment Agreement include
the condition that the principal stockholders of the Company (the
"Principal Stockholders"), which include Messrs. DeStefano and
Fox, enter into the Voting Agreement.
The Voting Agreement provides that so long as there is
any unpaid principal amount or interest outstanding under the
Debentures or so long as the conversion shares are held by PVALP,
the Principal Stockholders will vote all of their Common Stock
for the election of PVALP's designee as a director of the
Company. Mr. Robert Lerman, a director of the Company is PVALP's
nominee, and the President of Pioneer Ventures Corp., the
managing member of the general partner of PVALP. In addition, in
the event of a default under the Debenture Commitment Agreement,
the Principal Shareholders agree to elect that number of nominees
to the Board of Directors designated by PVALP such that the Board
of Directors becomes comprised of a majority of nominees of
PVALP. The Principal Shareholders also agree to vote in favor of
the PVALP nominees so long as any interest or principal remains
unpaid.
The Voting Agreement also provides that the Principal
Shareholders may not transfer any Common Stock to any affiliate
without PVALP's prior written consent. "Affiliate" is defined in
the Voting Agreement as (a) any spouse, parent, parent-in-law,
grandparent, grandchild, sibling, uncle, aunt, niece, nephew or
first cousin of the transferor or (b) any person which the
transferor directly or indirectly controls or (c) any transfer to
a person if the transferor remains a beneficial owner, as that
term is used in Section 13(d) of the Securities Exchange Act of
1934, as amended, of the transferred shares.
In May 1999, the Company completed the sale of certain
operating assets of Deerskin Trading Post, Inc. to Advanced
Medical Sciences, Inc. ("AMDS"). The purchase price included the
issuance of a $2,000,000 debenture by AMDS to PVALP and the
concurrent cancellation of $2,000,000 principal amount of the
First Subordinated Debenture. Additionally, as a result of this
transaction, the conversion price on the remaining principal
amount of the First Subordinated Debenture was adjusted to $2.50
per share.
On July 20, 2000, the Company, entered into an
Agreement and Plan of Merger and Reorganization ("Merger
Agreement") with the Inculab, Inc., a 10% shareholder of
Burlington Capital Markets Inc. In March 2001, the mutually
agreed to terminate the Merger Agreement and the Company received
a termination payment of $350,000.00.
SELECTION OF AUDITORS
The Company's financial statements for the past two
fiscal years were examined by Arthur Andersen LLP, independent
certified public accountants. The Board of Directors recommends
the selection of Arthur Andersen LLP as independent auditors to
examine its financial statements for the fiscal year ending
April 30, 2001.
OTHER MATTERS
The Board of Directors does not know of any matters
other than those mentioned above to be presented to the meeting.
SHAREHOLDER PROPOSALS
Proposals by any shareholders intended to be presented
at the 2002 Annual Meeting of Shareholders must be received by
the Corporation for inclusion in material relating to such
meeting not later than July 15, 2001.
By Order of the Board of Directors,
/s/ Martin Fox
Martin Fox
President
APPENDIX A
INITIO, INC.
Audit Committee of the Board of Directors
CHARTER
__________________________
I. PURPOSE
The primary function of the Audit Committee is to
assist the Board of Directors in fulfilling its oversight
responsibilities by reviewing: the financial reports and other
financial information provided by Initio, Inc. (the
"Corporation") to any governmental body or the public; the
Corporation's systems of internal controls regarding finance,
accounting, legal compliance and ethics that management and the
Board have established; and the Corporation's auditing,
accounting and financial reporting process generally. Consistent
with this function, the Audit Committee should encourage
continuous improvement of and foster adherence to, the
Corporation's policies, procedures and practices at all levels.
The Audit Committee's primary duties and responsibilities are to:
1. Serve as an independent and objective party
to monitor the Corporation's financial reporting
process and internal control system.
2. Review and appraise the audit efforts of the
Corporation's independent accountants.
3. Provide an open avenue of communication among
the independent accountants, financial and senior
management and the Board of Directors.
The Audit Committee will primarily fulfill these
responsibilities by carrying out the activities enumerated in
Section IV of this Charter.
II. COMPOSITION
The Audit Committee shall be comprised of three or more
directors as determined by the Board, each of whom shall be
independent directors, and free from any relationship that, in
the opinion of the Board, would interfere with the exercise of
his or her independent judgment as a member of the Committee. A
director is precluded from Committee membership if, among other
things, he or she has:
been employed by the Corporation or its affiliates
in the current or past three years;
accepted any compensation from the Corporation or
its affiliates in excess of $60,000 during the previous fiscal
year (except for board service, retirement plan benefits, or
non-discretionary compensation);
an immediate family member who is, or has been in
the past three years, employed by the Corporation or its
affiliates as an executive officer;
been a partner, controlling shareholder or an
executive officer of any for-profit business to which the
Corporation made, or from which it received, payments (other than
those which arise solely from investments in the corporations
securities) that exceed five percent of the organizations
consolidated gross revenues for that year, or $200,000,
whichever is more, in any of the past three years; or
been employed as an executive of another entity
where any of the Corporation's executives serve on that entitys
compensation committee.
All members of the Committee shall have a working familiarity
with basic finance and accounting practices, and at least one
member of the Committee shall have accounting or related
financial management expertise.
The members of the Committee shall be elected by the
Board at the annual meeting of the Board to serve until the next
annual meeting of the Board or until their successors shall be
duly elected and qualified. Unless a Chair is elected by the
full Board, the members of the Committee may designate a Chair by
majority vote of the full Committee membership.
III. MEETINGS
1. The Committee shall meet at least four times
annually, or more frequently as circumstances
dictate. As part of its job to foster open
communication, the Committee should meet at least
annually with management and the independent
accountants in separate executive sessions to
discuss any matters that the Committee or each of
these groups believe should be discussed
privately. In addition, the Committee or at least
its Chair should meet with the independent
accountants and management quarterly to review the
Corporation's financials consistent with Section
IV.3 below.
2. A majority of the entire Committee membership
shall constitute a quorum for the transaction of
business and the vote of a majority of the
Committee members present at the taking of the
vote, if a quorum is then present, shall be the
act of the Committee. Committee members may
neither be present nor vote by proxy.
3. Any action by the Committee may be taken
without a meeting if all Committee members consent
in writing to the adoption of a resolution
authorizing the action. The resolution and consent
shall be filed with the Committee minutes.
4. Any one or more Committee members may
participate in a Committee meeting by means of a
conference telephone or similar communications
equipment allowing all persons participating to
hear each other at the same time. Participation by
such means shall constitute presence in person at
a meeting.
IV. RESPONSIBILITIES
To fulfill its responsibilities and duties the Audit
Committee shall:
Documents/Reports Review
1. Review and assess the adequacy of this
Charter periodically, at least annually, and
update it as conditions dictate. Ensure that
eligibility to serve on this Committee remains
consistent with any rulemaking promulgated by the
Securities and Exchange Commission or Nasdaq, as
appropriate.
2. Review the Corporation's annual audited
financial statements and any reports or other
financial information submitted to any
governmental body, or the public, including any
audit or review opinion, certification or report
rendered by the independent accountants.
3. Review with financial management and the
independent accountants the 10-Q prior to its
filing or prior to the release of earnings. The
Chair of the Committee may represent the entire
Committee for purposes of this review.
Independent Accountants
4. Recommend to the Board of Directors the
selection of the independent accountants,
considering independence and effectiveness.
5. Review the performance of the independent
accountants and approve any proposed reappointment
or discharge of the independent accountants when
circumstances warrant.
6. Review types of services rendered to the
Corporation by the independent accountants and
approve the fees and other compensation to be paid
to the independent accountants.
7. On an annual basis, the Committee should
review and discuss with the independent
accountants the scope of the annual audit and
quarterly reviews and all significant
relationships the independent accountants have
with the Corporation to ensure their independence.
The Committee is responsible for assuring the
accountants' independence.
8. Periodically consult with the independent
accountants out of the presence of management
about internal controls and the adequacy and
accuracy of the Corporation's financial statements
and disclosures.
Financial Reporting Process
9. In consultation with the independent
accountants, review the integrity of the
Corporation's financial reporting process, both
internal and external.
10. Consider the independent accountant's
judgments about the quality and appropriateness of
the Corporation's accounting principles as applied
to its financial reporting.
11. Consider and approve, if appropriate, major
changes to the Corporation's accounting principles
and practice as suggested by the independent
accountants or management.
Process Improvement
12. Establish regular and separate systems of
reporting to the Audit Committee by each of
management and the independent accountants
regarding any significant judgments made in
management's preparation of the financial
statements and the view of each as to the
appropriateness of such judgments.
13. Following completion of the annual audit,
review separately with each of management and the
independent accountants any significant
difficulties encountered during the course of the
audit, including any restrictions on the scope of
work or access to required information.
14. Review any significant disagreement among
management and the independent accountants in
connection with the preparation of the financial
statements.
15. Review with the independent accountants and
management the extent to which changes or
improvements in financial or accounting practices,
as approved by the Audit Committee, have been
implemented.
Ethical and Legal Compliance
16. Establish, review and update periodically a
Code of Ethical Conduct and ensure that management
has established a system to disseminate and
enforce this Ethical Code.
17. Review managements' monitoring of the
Corporation's compliance with the Ethical Code,
and ensure that management has the proper review
system in place to ensure that the Corporation's
financial statements, reports and other financial
information disseminated to governmental
organizations, and the public satisfy legal
requirements.
18. Review, with the Corporation's counsel, legal
compliance matters including corporate securities
trading policies.
19. Review with the Corporation's counsel, any
legal matter that could have a significant impact
on the Corporation's financial statements.
Other
20. Perform any other activities consistent with
this Charter, the Corporation's By-laws and
governing law, as the Committee or Board deems
necessary or appropriate.
INITIO, INC.
PROXY
Annual Meeting of Shareholders - Thursday, April 26, 2001
The undersigned shareholder of Initio, Inc. (the
"Company") hereby appoints Martin Fox and Daniel DeStefano, and
each of them, the attorneys and proxies of the undersigned, with
full power of substitution, to vote, as indicated herein, all the
common shares of the Company standing in the name of the
undersigned at the close of business on March 12, 2001 at the
Annual Meeting of Shareholders of the Company to be held at the
office of Initio, Inc., 10 Henry Street, Teterboro, New Jersey
07608, at 11:00 a.m., local time, on Thursday, April 26, 2001,
and at any and all adjournments thereof, with all the powers the
undersigned would possess if then and there personally present
and especially (but without limiting the general authorization
and power hereby given) to vote as indicated on the proposals, as
more fully described in the Proxy Statement for the meeting.
(Please fill in the reverse side and return promptly in the
enclosed envelope.)
Please mark boxes / / or /x/ in blue or black ink.
1. Election of Directors.
FOR all nominees / /
WITHHOLD authority only for those nominees whose name(s) I
have written below / /
WITHHOLD authority for ALL nominees / /
Nominees for Director are: James J. Holzinger and Dr. Paul
Lerman.
2. Proposal to approve the selection of Arthur Andersen LLP as
the Company's independent auditors for the fiscal year ending
April 30, 2001.
For / / Against / / Abstain / /
3. In their discretion, the Proxies are authorized to vote upon
such other business as may properly come before the meeting or
any adjournment or adjournments thereof.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS AND WILL BE
VOTED FOR THE ELECTION OF THE PROPOSED DIRECTORS AND FOR THE
ABOVE PROPOSAL UNLESS OTHERWISE INDICATED.
SIGNATURE(S) should be exactly
as name or names appear on this
[Sign, Date and Return proxy. If stock is held jointly,
the Proxy Card Promptly each holder should sign. If
Using the Enclosed signing is by attorney, executor,
Envelope.] administrator, trustee or guardian,
please give full title.
Dated
Signature
Signature