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 of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
CREATIVE TECHNOLOGIES CORP.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
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1 Set forth the amount on which the filing fee is calculated and state how
it was determined.
CREATIVE TECHNOLOGIES CORP.
170 53RD STREET
BROOKLYN, NEW YORK 11232
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 16, 2001
TO OUR SHAREHOLDERS:
The Annual Meeting of Shareholders of Creative Technologies Corp. (the
"Company") will be held at the offices of the Company, 170 53rd Street,
Brooklyn, New York on August 16, 2001 at 10:00 A.M. New York time, to consider
the following proposals:
1. To elect directors, each to serve for a term of one year or until his
respective successor is elected and qualifies;
2 To ratify the appointment of Goldstein Golub Kessler LLP as the
Company's independent accountants; and
3. To transact such other business as may properly come before the
meeting.
Shareholders of record on the books of the Company at the close of business on
July 5, 2001 will be entitled to vote at the meeting or any adjournment thereof.
A copy of the annual report containing the financial statements of the Company
for the year 2000 is enclosed.
All shareholders are cordially invited to attend the meeting. Whether or not you
expect to attend, you are requested to sign, date and return the enclosed proxy
promptly. Shareholders who execute proxies retain the right to revoke them at
any time prior to the voting thereof. A return envelope which requires no
postage if mailed in the United States is enclosed for your convenience.
By Order of the Board of Directors
David Selengut
Secretary
Dated: New York, New York
July 13, 2001
CREATIVE TECHNOLOGIES CORP.
170 53RD STREET
BROOKLYN, NEW YORK 11232
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
AUGUST 16, 2001
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of Creative Technologies Corp. (the "Company") of proxies in
the enclosed form for the Annual Meeting of Shareholders to be held at the
offices of the Company, 170 53rd Street, Brooklyn, New York on August 16, 2001,
at 10:00 A.M. New York time, and for any adjournment or adjournments thereof,
for the purposes set forth in the foregoing Notice of Annual Meeting of
Shareholders.
At the Annual Meeting, the Shareholders will vote to:
1. Elect the directors of the Company;
2. Ratify the selection of Goldstein Golub Kessler LLP as the Company's
independent auditors; and
3. Transact such other business as may properly come before the meeting.
The Company knows of no other matters to be presented at the Annual Meeting. If
any additional matters should be properly presented, proxies shall be voted in
accordance with the judgment of the proxy holders.
Each shareholder of the Company is requested to complete, sign, date and return
the enclosed proxy without delay in order to ensure that the shares owned by
such shareholder are voted at the Annual Meeting. Any shareholder may revoke a
proxy at any time before it is voted by: (i) delivering a written notice to the
Secretary of the Company, at the address of the Company set forth above, stating
that the proxy is revoked, or (ii) executing a subsequent proxy and delivering
it to the Secretary of the Company, or (iii) attending the Annual Meeting and
voting in person. Each properly executed proxy returned will be voted as
directed. In addition, if no directions are given or indicated, the persons
named in the accompanying proxy intend to vote proxies in favor of the foregoing
proposals.
The Company will bear the cost of soliciting proxies. Directors, officers and
employees of the Company may solicit proxies personally or by telephone,
telegram or mail. Such directors, officers and employees will not be
additionally compensated for such solicitation but may be reimbursed for
reasonable out-of-pocket expenses incurred in connection therewith. Arrangements
will also be made with brokerage houses and other custodians, nominees and
fiduciaries for the forwarding of proxy material to the beneficial owners of the
Common Stock held of record by such persons and the Company will, upon request,
reimburse such custodians, nominees and fiduciaries for reasonable out-of-pocket
expenses incurred in connection therewith.
1
The principal executive offices of the Company are located at 170 53rd Street,
Brooklyn, New York 11232. The approximate date on which this Proxy Statement and
the accompanying form of Proxy will first be sent or given to the Company's
shareholders is July 16, 2001.
VOTING SECURITIES
Only holders of shares of Common Stock, par value $.09 per share and the holders
of shares of 1997 Preferred Stock (the "1997 Preferred Stock"), of record as at
the close of business on July 5, 2001 are entitled to notice of and to vote at
the Annual Meeting or any adjournment thereof. On the record date there were
16,698,831 shares of Common Stock issued and outstanding and 3,500 shares of
1997 Preferred Stock issued and outstanding. Each outstanding share of Common
Stock is entitled to one vote upon all matters to be acted upon at the meeting
and each share of 1997 Preferred Stock is entitled to 1,000 votes. The holders
of the 1997 Preferred Stock along with the holders of the shares of Common Stock
vote as one group. The holders of a majority of the votes shall constitute a
quorum. The affirmative vote of the holders of the majority of votes present at
the Annual Meeting and voting is necessary for the election of directors.
The holders of shares of Common Stock are entitled to receive such dividends, if
any, as may be declared, from time to time, by the Board of Directors from funds
legally available therefor, subject to the dividend preferences of the Preferred
Stock. Upon liquidation or dissolution of the Company, the holders of shares of
Common Stock are entitled to share ratably in all assets available for
distribution after payment of liabilities and liquidation preferences of the
Preferred Stock. Holders of shares of Common Stock have no preemptive rights, no
cumulative voting rights and no rights to convert their shares of Common Stock
into any other securities.
2
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth, as of June 15, 2001, certain information as to
the stock ownership of each person known by the Company to own beneficially 5%
or more of the Company's outstanding Common Stock, by each director of the
Company who owns any shares, and by all officers and directors as a group. This
table includes the shares of 1997 Preferred Stock which have the right to cast
1000 votes per share of 1997 Preferred Stock.
Percentage of
Name of Beneficial Number of Shares of Class as of
Owner Common Stock Owned (1) June 15, 2001
- ------------------ ---------------------- -------------
Bonnie Septimus (2) 7,165,661 37.5%
72 Lord Avenue
Lawrence, NY
David Guttmann (3) 7,407,893 31.3%
170 53rd Street
Brooklyn, NY 11235
Rochelle Guttmann (4) 3,785,714 22.7%
170 53rd Street
Brooklyn, NY 11235
Abraham Guttmann 3,853,178 23.2%
170 53rd Street
Brooklyn, NY 11235
Richard Helfman(5) 622,777 2.9%
170 53rd Street
Brooklyn, NY 11235
Lala Bessler (6) 210,046 1%
170 53rd Street
Brooklyn, NY 11235
Alan Miller (7) 794,100 3.8%
Alan Berger (8) 57,555 *
Robert Bruckstein (9) 654,557 3.2%
All officers and
directors as a
group (7 persons)(10) 13,600,106 49.1%
* Represents less than 1%
(1) Except as otherwise indicated, all shares are beneficially owned and sole
voting and investment power is held by the persons named.
3
(2) A portion of the Common Stock is owned by Mrs. Septimus as nominee for
certain members of her family and shares owned by her husband, as to which
she disclaims beneficial interest of. Also includes 1,100,000 shares of
Common Stock issuable upon conversion of 1996-A Preferred Stock and 1,324.5
shares of 1997 Preferred Stock, which represents the right to 1,324,500
votes.
(3) A portion of the Common Stock is currently being held by Mr. Guttmann as
nominee for certain members of his immediate family. Also includes
4,500,000 shares of Common Stock issuable upon conversion of the 1996 and
1996-A Preferred Stock and the 1,357 shares of 1997 Preferred Stock, which
represents the right to 1,357,000 votes. Also includes 1,111,111 shares of
Common Stock issuable upon conversion of 200 shares of 2000 Preferred Stock
owned by a family partnership. This amount does not include shares owned by
his wife, Rochelle Guttmann, listed below, as to which he disclaims
beneficial interest of.
(4) Does not include shares held by her husband, David Guttmann, listed above,
as to which she disclaims beneficial interest of.
(5) Includes 600,000 shares issuable upon exercise of stock options.
(6) Includes 2,190 shares owned by her husband as to which she disclaims
beneficial interest of and includes 200,000 shares issuable upon exercise
of stock options.
(7) Includes 700,000 shares issuable upon exercise of a warrant and 25,000
shares issuable upon exercise of stock options.
(8) Includes 32,555 shares owned by his wife, as to which he disclaims
beneficial interest of and includes 25,000 shares issuable upon exercise of
stock options.
(9) Includes 300,000 shares issuable upon exercise of a warrant, 25,000 shares
issuable upon exercise of stock options and 200 shares of 1997 Preferred
Stock, which represents the right to 200,000 votes. Half of such Preferred
Stock is owned by Dr. Brukstein's wife as to which he disclaims beneficial
interest of.
(10) Includes the shares described in footnotes (3), (5), (6), (7), (8) and (9)
above.
DIRECTORS OF THE COMPANY
Name Age Title
---- --- -----
David Guttmann 53 Chairman of the Board
Richard Helfman 53 Director and President of the Company
and IHW
Lala Bessler 52 Director and President of Ace
Alan Miller 39 Director
Abraham Guttmann 51 Director
Alan Berger 33 Director
Robert Bruckstein 53 Director
David Guttmann has been a Director and Chief Executive Officer of the
Company since May 1994 and Chairman of the Board since May 1997. From June 1983
until May 1994, Mr. Guttmann was Chief Executive Officer of Applied Microbiology
Inc., and was its chairman until October 1995.
Richard Helfman has been a Director of the Company since April 1990 and
President since March 1990. He has also been President of IHW, Inc. since July,
1997. From May 1987 to June 1989, Mr. Helfman was a commercial lending officer
at The First New York Bank for Business, and from 1979 until May 1987, was a
commercial lending officer at Extebank.
4
Lala Bessler has been a Director of the Company since December 1998 and
President of Ace Surgical Supply Co., Inc. since 1986.
Alan Miller has been a Director of the Company since December 2000. He has
been President of Miller Consulting for more than the past five years. He is
also a director and member of the compensation committee of Encore Marketing
Incorporated.
Abraham Guttmann has been a Director of the Company since December 2000. He
has been Vice President in charge of operations since March 1993.
Alan Berger has been a Director of the Company since December 2000. He has
been the Chief Operating Officer of Pagetalk Inc. since August 1999 and Chief
Operating Officer of Bill's Internet Yellow Pages, Inc. from July 1996 until
August 1999.
Robert Bruckstein has been a Director of the Company since December 2000.
He has been a physician in private practice since 1975.
Each of the Company's Directors has been elected to serve until the next
annual meeting of the stockholders. The Company's executive officers are
appointed annually by the Company's Directors. Each of the Company's Directors
and Officers continues to serve until his successor has been elected and
qualified.
To the Company's knowledge, there were no delinquent 16(a) filers for
transactions in the Company's securities during the year ended December 31,
2000.
BOARD OF DIRECTORS AND COMMITTEES
During the year ended December 31, 2000, there were four (4) meetings of
the Board of Directors. All directors attended at least 75% of these meetings.
In December 2000, the Board of Directors has designated from among its
members an Audit Committee, which consists of Mr. Alan Miller, Mr. Alan Berger
and Mr. David Guttmann. Mr. Miller and Berger are independent members but Mr.
Guttmann is not independent since he is an executive officer and principle
shareholder of the Company. The Audit Committee, which reviews the Company's
financial and accounting practices and controls, held one meeting in February
2001. The responsibilities of the Audit Committee are outlined in a written
charter, which is included as Annex A of this Proxy Statement. The Company does
not have a nominating committee. The Company intends to establish a compensation
committee but has not done so to date.
5
REPORT OF THE AUDIT COMMITTEE
To the Board of Directors of Creative Technologies Corp.
We are responsible for considering management's recommendation of
independent certified public accountants for each fiscal year, recommending the
appointment or discharge of independent accountants to the Board of Directors
and confirming the independence of the accountants. It is also our
responsibility for reviewing and approving the scope of the planned audit, the
results of the audit and the accountant's compensation for performing such
audit; reviewing the Company's audited financial statements; and reviewing the
Company's internal accounting controls and discussing such controls with the
independent accountants.
We were designated as members of the Audit Committee on December 21, 2000
and adopted a written charter at that time, a copy of which is attached to this
proxy statement as Annex A.
In connection with the audit of the Company's financial statements for the
year ended December 31, 2000, we met with representatives from Goldstein Golub
Kessler LLP, the Company's independent certified public accountants as required
by Statements on Auditing Standards 61. In addition, we have reviewed and
discussed with management the Company's audited financial statements for the
year ended December 31, 2000.
Specifically, we have discussed with the independent certified public
accountants the matters required to be discussed by Statements on Auditing
Standards No. 61, COMMUNICATION WITH AUDIT COMMITTEES, as amended, by the
Auditing Standards Board of the American Institute of Certified Public
Accountants. In connection with the Company's year ended 2000 financial
statements, there was one meeting with the independent certified public
accountants and management. All audit committee members attended at least 75% of
these meetings.
The Audit Committee has been informed that Goldstein Golub Kessler LLP has
a continuing relationship with American Express Tax and Business Services, Inc.
(TBS) from which it leases auditing staff who are full time, permanent employees
of TBS and through which its partners provide non-audit services. As a result of
this arrangement, Goldstein Golub Kessler LLP has no full time employees and
therefore, none of the audit services performed were provided by permanent
full-time employees of Goldstein Golub Kessler LLP. Goldstein Golub Kessler LLP
manages and supervises the audit and audit staff, and is exclusively responsible
for the opinion rendered in connection with its examination.
The independent certified public accountants' fees for audit services and
non-audit services for the year ended December 31, 2000 were $48,000 and
$18,000, respectively. We have received the written disclosures and the letter
from the independent certified public accountants required by Independence
Standard No. 1, INDEPENDENCE DISCUSSIONS WITH AUDIT COMMITTEES, as amended, by
the Independence Standards Board, and have discussed with the public accountants
the accountants' independence.
Based on the review and discussion referred to above, we recommend to the
Board of Directors that the financial statements referred to above be included
in the Company's Annual report on Form 10-KSB for the years ended December 31,
2000.
Alan Miller
Alan Berger
David Guttmann
6
EXECUTIVE COMPENSATION
The compensation paid to the Company's Chief Executive Officer and to each
of the other executive officers whose total compensation exceeded $100,000
during each of the proceeding three fiscal years are as follows:
SUMMARY COMPENSATION TABLE
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Annual Long-Term
Compensation Compensation
Other Annual Awards
Name and Principal Year Salary Compensation Options
Position ($) ($) (#)
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David Guttmann,
Chief Executive Officer 2000 $200,660
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1999 $143,160
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1998 $106,333
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Richard Helfman,
President 2000 $180,000
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1999 $180,000
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1998 $126,485
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Lala Bessler 2000 $128,065
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1999 $117,625
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1998 $116,406
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Abraham Guttmann 2000 $200,271
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OPTION GRANTS IN 2000
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Percent of Total
Options Options Granted to Exercise Expiration
Name Granted Employees in Fiscal Year Price Date
(a) (b) 2000 $
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NONE
AGGREGATED OPTION EXERCISES IN 2000 AND FOR YEAR-END OPTION VALUES
- --------------------------------------------------------------------------------
Number of Value of
Unexercised Unexercised
Options in-the-Money
at Fiscal Options
Year-End at Fiscal
(#) Year-End ($)
Shares Value
Acquired on Realized Exercisable/ Exercisable/
Name Exercise (#) ($) Unexercisable Unexercisable
(a) (b) (c) (d) (e)
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David Guttmann -0- -0- -0- -0-
- --------------------------------------------------------------------------------
Richard Helfman -0- -0- -0- -0-
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Lala Bessler -0- -0- -0- -0-
- --------------------------------------------------------------------------------
Abraham Guttmann -0- -0- -0- -0-
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7
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Barry Septimus and David Guttmann personally guaranteed certain
indebtedness of the Company in the amount of $2,639,000 as of December 31, 2000.
The Company's executive offices and warehouse at 170 53rd Street, Brooklyn,
NY are subleased on a month-to-month basis at a cost of $13,200 per month
inclusive of real estate taxes from a Company owned by the Company's principal
stockholders. Rent and expenses inclusive of real estate taxes for the Brooklyn
facility for 2000 was $158,000.
In December 1996, the Company obtained a line of credit from Century
Business Credit Corporation ("Century"). During 2000 Wells Fargo Credit
Corporation ("Wells") bought the division from Century. David Guttmann
guarantees up to $1,000,000 of the Company's obligations to Wells.
In November 2000, Diel Holding Co. L.P., a family partnership of David
Guttmann, purchased 200 shares of 2000 Preferred Stock for $1,000 per share.
In October 2000, Mr. Miller and Dr. Bruckstein purchased 700,000 and
300,000 warrants, respectively, each exercisable for ten years to purchase one
share of Common Stock for $0.18.
PROPOSAL 1
ELECTION OF DIRECTORS
At the Annual Meeting, seven Directors will be elected by the shareholders
to serve until the next annual meeting of the shareholders or until their
successors are elected and shall qualify. The accompanying form of Proxy will be
voted for the re-election as Directors of Lala Bessler, Richard Helfman, Abraham
Guttmann, Alan Miller, Alan Berger, Robert Bruckstein and David Guttmann, unless
the Proxy contains contrary instructions. See "Directors of the Company" for a
description of such nominees' business experience. Proxies cannot be voted for a
greater number of persons than the number of nominees named in the Proxy
Statement. Management has no reason to believe that any of the nominees will not
be a candidate or will be unable to serve. However, in the event that any of the
nominees should become unable or unwilling to serve as a Director, the Proxy
will be voted for the election of such person or persons as shall be designated
by the Directors.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE "FOR" THE ELECTION OF
THE ABOVE NAMED NOMINEES. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO
VOTED UNLESS SHAREHOLDERS SPECIFY IN THEIR PROXIES A CONTRARY CHOICE.
PROPOSAL 2
APPROVAL OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors intends to appoint Goldstein Golub Kessler LLP,
independent public accountants, to audit the accounts of the Company for the
fiscal year ending December 31, 2001. Goldstein Golub Kessler LLP was initially
appointed by the Board of Directors in 1997 in connection with the audit of the
Company's accounts for the fiscal year ended December 31, 1997 and was
subsequently reappointed to audit the Company's accounts for fiscal year ended
December 31, 1998
8
through 2000. Goldstein Golub Kessler LLP has advised the Company that neither
the firm nor any of its members or associates has any direct financial interest
in the Company other than as auditors. Although the selection and appointment of
independent auditors is not required to be submitted to a vote of shareholders,
the Directors deem it desirable to obtain the shareholders' ratification and
approval of this appointment.
Representatives of Goldstein Golub Kessler LLP are expected to be present
at the Annual Meeting with the opportunity to make a statement if they desire to
do so and are expected to be available to respond to appropriate questions.
Approval of the proposal requires the affirmative vote of the holders of a
majority of the Common Stock and the 1997 Preferred Stock, voting as a group,
with respect thereto. In the event the proposal is not approved, the Board will
consider the negative vote as a mandate to appoint other independent auditors of
the Company for the next fiscal year.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" RATIFICATION OF THE
APPOINTMENT OF THE AUDITORS
The Company will provide without charge to each person being solicited by this
Proxy Statement, on written request of any such person, a copy of the Annual
Report of the Company on Form 10-KSB for the year ended December 31, 2000 (as
filed with the Securities and Exchange Commission), including financial
statements. All such requests should be directed to Henry Lam at Creative
Technologies Corp., 170 53rd Street, Brooklyn, New York 11232.
All proposals of shareholders intended to be included in the proxy statement to
be presented in the 2002 Annual Meeting materials must be received by the
Company's executive offices in Brooklyn, New York, no later than March 22, 2001.
By Order of the Board of Directors
David Selengut
Secretary
Dated: July 13, 2001
APPENDIX A
CHARTER AND POWERS OF THE AUDIT COMMITTEE
RESOLVED, that the membership of the Audit Committee shall consist of at least
two members of the board of directors, a majority of whom (i.e.: two
independent, if Committee consists of two or three members) shall be independent
directors (subject to the Company's remaining a small business filer under SEC
rules), who shall serve at the pleasure of the board of directors.
An "independent director" means a person other than an officer or employee
of the Company or its subsidiaries or any other individual having a relationship
which, in the opinion of the Company's board of directors, would interfere with
the exercise of independent judgment in carrying out the responsibilities of a
director. The following persons shall not be considered independent:
(1) a director who is employed by the Company or any of its affiliates for
the current year or any of the past three years;
(2) a director who accepts any compensation from the Company or any of its
affiliates in excess of $60,000 during the previous fiscal year, other than
compensation for board service, benefits under a tax-qualified retirement
plan, or non-discretionary compensation;
(3) a director who is a member of the immediate family of an individual who
is, or has been in any of the past three years, employed by the Company or
any of its affiliates as an executive officer. Immediate family includes a
person's spouse, parents, children, siblings, mother-in-law, father-in-law,
brother-in-law, sister-in-law, son-in-law, daughter-in-law, and anyone who
resides in such person's home;
(4) a director who is a partner in, or a controlling shareholder or an
executive officer of, any for-profit business organization to which the
company made, or from which the Company received, payments (other than
those arising solely from investments in the Company's securities) that
exceed 5% of the Company's or business organization's consolidated gross
revenues for that year, or $200,000, whichever is more, in any of the past
three years;
(5) a director who is employed as an executive of another entity where any
of the company's executives serve on that entity's compensation committee.
RESOLVED, THAT THE CHARTER AND POWERS OF THE AUDIT COMMITTEE OF THE BOARD OF
DIRECTORS (THE "AUDIT COMMITTEE") SHALL BE:
(1) Assisting the Board of Directors in the oversight of the maintenance by
management of the reliability and integrity of the accounting policies and
financial reporting and disclosure practices of the Company.
(2) Assisting the Board of Directors in the oversight of the establishment
and maintenance by management of processes to assure that an adequate
system of internal control is functioning within the Company.
(3) Assisting the Board of Directors in the oversight of the establishment
and maintenance by management of process to assure compliance by the
Company with all applicable laws, regulations and Company policy.
RESOLVED, THAT THE AUDIT COMMITTEE SHALL HAVE THE FOLLOWING SPECIFIC POWERS AND
DUTIES:
(1) Holding such regular meetings as may be necessary and such special
meetings as may be called by the Chairman of the Audit Committee or at the
request of the independent accountants;
A-1
(2) Reviewing the performance of the independent accountants and making
recommendations to the Board of Directors regarding the appointment or
termination of the independent accountants;
(3) Ensuring its receipt from the independent accountants of a formal
written statement delineating all relationships between the independent
accountants and the Company consistent with Independence Standards Board
Standard;
(4) Actively engaging in a dialogue with the independent accountants with
respect to any disclosed relationships or services that may impact the
objectivity and independence of the independent accountants and for taking
or recommending that the Board of Directors take appropriate action to
oversee the independence of the outside auditor;
(5) Selecting, evaluating and, where appropriate, replacing the independent
auditors (or nominating independent auditors to be proposed for shareholder
approval in any proxy statement), which independent auditors shall
ultimately be accountable to the Board of Directors and the Audit
Committee, as representatives of the shareholders;
(6) Conferring with the independent accountants concerning the scope of
their examinations of the books and records of the Company and its
subsidiaries: reviewing and approving the independent accountants' annual
engagement letter: reviewing and approving the Company's internal annual
audit plans and procedures: and authorizing the auditors to perform such
supplemental reviews or audits as the Committee may deem desirable;
(7) Reviewing with management, the independent accountants significant
risks and exposures, audit activities and significant audit findings;
(8) Reviewing the range and cost of audit and non-audit services performed
by the independent accountants;
(9) Reviewing the Company's audited annual financial statements and the
independent accountants opinion rendered with respect to such financial
statements, including reviewing the nature and extent of any significant
changes in accounting principles or the application thereof;
(10) Reviewing the adequacy of the Company's systems of internal control;
(11) Obtaining from the independent accountants their recommendations
regarding internal controls and other matters relating to the accounting
procedures and the books and records of the Company and its subsidiaries
and reviewing the correction of controls deemed to be deficient;
(12) Providing an independent, direct communication between the Board of
Directors, and independent accountants;
A-2
(13) Reviewing the adequacy of internal controls and procedures related to
executive travel and entertainment;
(14) Reviewing the programs and policies of the Company designed to ensure
compliance with applicable laws and regulations and monitoring the results
of these compliance efforts;
(15) Reporting through its Chairman to the Board of Directors following the
meetings of the Audit Committee;
(16) Reviewing the powers of the Committee annually and reporting and
making recommendations to the Board of Directors on these responsibilities;
(17) Conducting or authorizing investigations into any matters within the
Audit Committee's scope of responsibilities; and
(18) Considering such other matters in relation to the financial affairs of
the Company and its accounts, and in relation to the internal and external
audit of the Company as the Audit Committee may, in its discretion,
determine to be advisable.
A-3
PROXY
-----
THIS PROXY IS SOLICITED
ON BEHALF OF THE BOARD OF DIRECTORS
CREATIVE TECHNOLOGIES CORP.
170 53RD STREET
BROOKLYN, NEW YORK 11232
The undersigned hereby appoints David Selengut and Henry Lam as Proxies, each
with the power to appoint his substitute, and hereby authorizes them to
represent and to vote, as designated below, all the Shares of Creative
Technologies Corp. held of record by the undersigned on July 5, 2001 at the
Annual Meeting of Shareholders to be held on August 16, 2001 or any adjournment
thereof.
1. Election of Directors
FOR ALL NOMINEES LISTED BELOW
(except as marked to the contrary below)
WITHHOLD AUTHORITY
to vote for all nominees below
(INSTRUCTION: To withhold authority to vote
for any individual nominee strike a line
through the nominee's name in the list below)
Lala Bessler, Richard Helfman, Abraham Guttmann, Alan Miller, Alan Berger,
Robert Bruckstein and David Guttmann
2. To ratify the appointment of Goldstein Golub Kessler LLP as the independent
auditors for the Company for the fiscal year ending December 31, 2001.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made, this proxy
will be voted FOR Proposals 1 and 2.
Please sign exactly as name appears below. When Shares are held by joint
tenants, both must sign.
Dated: , 2001
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Signature
Signature if held jointly
When signing as attorney, executor, administrator, trustee or guardian, please
give full title as such. If a corporation, please sign in full corporate name by
president or other authorized officer. If a partnership, please sign in
partnership name by authorized person.