SCHEDULE 14 A 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 of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
RICA FOODS, INC.
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(Name Of Registrant As Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount previously paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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RICA FOODS, INC.
240 CRANDON BLVD.
SUITE 115
KEY BISCAYNE, FLORIDA, 33149
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 31, 2001
To the Shareholders of
Rica Foods, Inc.:
NOTICE IS HEREBY GIVEN that the 2001 Annual Meeting of Shareholders (the
"Annual Meeting") of Rica Foods, Inc., a Nevada corporation (the "Company") will
be held on August 31, 2001, at 10:00 a.m., local time, at the Sheraton Biscayne
Bay Hotel, 495 Brickell Avenue, Miami, Florida, 33131, for the following
purposes:
1. To elect nine members of the Company's Board of Directors to hold office
until the Annual Meeting of Shareholders of the Company's fiscal year
2002, or until their successors are duly elected and qualified;
2. To consider and vote upon a proposal to ratify the selection of Arthur
Andersen LLP as the Company's independent auditors for the fiscal year
ended September 30, 2001; and
3. To transact such other business as may properly come before the Annual
Meeting or any adjournments or postponements thereof.
All shareholders are cordially invited to attend; however, only
shareholders of record at the close of business on July 2, 2001 are
entitled to vote at the Annual Meeting or any adjournments thereof.
By Order of the Board of Directors,
MONICA CHAVES
SECRETARY
Coral Gables, Florida
July 18, 2001
THIS IS AN IMPORTANT MEETING AND ALL SHAREHOLDERS ARE INVITED TO ATTEND THE
MEETING IN PERSON. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON,
PLEASE COMPLETE, SIGN AND DATE THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN
THE ENCLOSED RETURN ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES. SHAREHOLDERS WHO EXECUTE A PROXY CARD MAY NEVERTHELESS ATTEND THE
MEETING, REVOKE THEIR PROXY AND VOTE THEIR SHARES IN PERSON.
2001 ANNUAL MEETING OF SHAREHOLDERS
OF
RICA FOODS, INC.
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PROXY STATEMENT
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August 31, 2001, 10:00 a.m. local time,
Sheraton Biscayne Bay Hotel, Miami, Florida 33131
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Rica Foods, Inc., a Nevada corporation (the
"Company"), of proxies from the holders of the Company's common stock, par value
$.001 per share (the "Common Stock"), for use at the 2001 Annual Meeting of
Shareholders of the Company to be held at the Sheraton Biscayne Bay Hotel, 495
Brickell Avenue, Miami, Florida 33131, on August 31, 2001, at 10:00 a.m. local
time, or at any adjournment(s) or postponement(s) thereof (the "Annual
Meeting"), pursuant to the foregoing Notice of Annual Meeting of Shareholders.
The approximate date that this Proxy Statement and the enclosed form of
proxy are first being sent to shareholders is July 18, 2001. Shareholders should
review the information provided herein in conjunction with the Company's 2000
Annual Report on Form 10-K, which accompanies this Proxy Statement. The complete
mailing address, including zip code, of the Company's principal executive
offices is 240 Crandon Blvd., Suite 115, Key Biscayne, Florida, 33149, and its
telephone number is (305) 365-9694.
INFORMATION CONCERNING PROXY
The enclosed proxy is solicited on behalf of the Company's Board of
Directors. The giving of a proxy does not preclude the right to vote in person
should any shareholder giving the proxy so desire. Shareholders have an
unconditional right to revoke their proxy at any time prior to the exercise
thereof, either in person at the Annual Meeting or by filing with the Company's
Secretary at the Company's headquarters a written revocation or duly executed
proxy bearing a later date; however, no such revocation shall be effective until
written notice of the revocation is received by the Company at or prior to the
Annual Meeting.
The cost of preparing, assembling and mailing this Proxy Statement, the
Notice of Annual Meeting of Shareholders and the enclosed proxy is to be borne
by the Company. In addition to the use of mail, employees of the Company may
solicit proxies personally and by telephone. The Company's employees will
receive no compensation for soliciting proxies other
than their regular salaries. The Company may request banks, brokers and other
custodians, nominees and fiduciaries to forward copies of the proxy material to
their principals and to request authority for the execution of proxies. The
Company may reimburse such persons for their expenses in so doing.
PURPOSES OF THE MEETING
At the Annual Meeting, the Company's shareholders will consider and vote
upon the following matters:
1. The election of nine members to the Company's Board of Directors to
serve until the Annual Meeting of Shareholders of the Company's fiscal
year 2001, or until their successors are duly elected and qualified;
2. To consider and vote upon a proposal to ratify the selection of Arthur
Andersen, LLP as the Company's independent auditors for the fiscal
year ending September 30, 2001;
3. Such other business as may properly come before the Annual Meeting,
including any adjournments or postponements thereof.
Unless contrary instructions are indicated on the enclosed proxy, all
shares represented by valid proxies received pursuant to this solicitation (and
which have not been revoked in accordance with the procedures set forth above)
will be voted: (1) FOR the election of the nine nominees for director named
below; and (2) FOR the ratification of Arthur Andersen, LLP as the Company's
independent auditors for the fiscal year ending September 30, 2001.
In the event a shareholder specifies a different choice by means of the
enclosed proxy, his shares will be voted in accordance with the specification so
made. The Board does not know of any other matters that may be brought before
the Annual Meeting nor does it foresee or have reason to believe that proxy
holders will have to vote for substitute or alternate director nominees. In the
event that any other matter should come before the Annual Meeting or any
director nominee is not available for election, the persons named in the
enclosed proxy will have discretionary authority to vote all proxies not marked
to the contrary with respect to such matters, in accordance with their best
judgment.
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OUTSTANDING VOTING SECURITIES AND VOTING RIGHTS
The Board of Directors has set the close of business on July 2, 2001, as
the record date (the "Record Date") for determining shareholders of the Company
entitled to notice of and to vote at the Annual Meeting. As of the Record Date,
there were 12,864,321 shares of Common Stock issued and outstanding, all of
which are entitled to be voted at the Annual Meeting. Each share of Common Stock
is entitled to one vote on each matter submitted to shareholders for approval at
the Annual Meeting. Shareholders do not have the right to cumulate their votes
for directors.
The Company's Bylaws provide that the presence, in person or by proxy, of
the holders of record of one-third of the outstanding shares of Common Stock
entitled to vote at the Annual Meeting are necessary to constitute a quorum.
Pursuant to the Nevada General Corporation Law, directors (Proposal No. 1) will
be elected by a plurality of the votes cast by the shares of Common Stock
represented in person or by proxy at the Annual Meeting. Pursuant to the
Company's Bylaws, the affirmative vote of a majority of the outstanding shares
of Common Stock represented in person or by proxy at the Annual Meeting is
required to approve the ratification of auditors (Proposal No. 2). Abstentions
and broker non-votes are counted as present for purposes of determining the
presence of a quorum. Abstentions are not counted as votes cast "for" or
"against" the election of any director (Proposal No. 1). HOWEVER, ABSTENTIONS
ARE TREATED AS PRESENT AND ENTITLED TO VOTE AND THUS HAVE THE EFFECT OF A VOTE
AGAINST THE RATIFICATION OF AUDITORS (PROPOSAL NO. 2). A broker non-vote on a
matter is considered not entitled to vote on that matter and this is not counted
in determining whether a matter requiring approval of a majority of the shares
present and entitled to vote has been approved or whether a plurality of the
shares present and entitled to vote has been voted in favor of a proposal.
If less than one-third of the outstanding shares of Common Stock entitled
to vote are represented at the meeting, a majority of the shares so represented
may adjourn the meeting to another date, time or place, and notice need not be
given for the new date, time or place, if the new date, time or place is
announced at the meeting before an adjournment is taken. Prior to the Annual
Meeting, the Company will select one or more inspectors of election for the
meeting. Such inspectors shall determine the number of shares of Common Stock
represented at the meeting, the existence of a quorum and the validity and
effect of proxies and shall receive, count and tabulate ballots and votes and
determine the results thereof.
A list of shareholders entitled to vote at the Annual Meeting will be
available at the Company's offices, 240 Crandon Blvd. Suite 115, Key Biscayne,
Florida, 33149, for a period of ten days prior to the Annual Meeting and at the
Annual Meeting itself, for examination by any shareholder.
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DATE OF RECEIPT OF SHAREHOLDER PROPOSALS
Shareholder proposal for inclusion in the Proxy Statement for the Annual
Meeting of Shareholders to be held in the year 2002 must be received at the
principal executive offices of the Company on or before February 1, 2002.
Shareholders interested in submitting a proposal for inclusion in the proxy
materials for the Annual Meeting of Shareholders in 2002 may do so by following
the procedures prescribed in SEC Rule 14a-8.
ELECTION OF DIRECTORS
(Proposal No. 1)
The Company's Articles of Incorporation and Bylaws provide that the number
of directors shall consist of at least three members and not more than nine
members, as shall be designated by the Board of Directors from time to time. The
director nominees are: (1) Calixto Chaves; (2) Jorge M. Quesada; (3) Luis
Guinot, Jr.; (4) Pedro J. De Matteu; (5) Dr. Federico Vargas; (6) Alfred E.
Smith IV; (7) Luis Lauredo; (8) Jack Peeples; (9) Monica Chaves. Each such
nominee currently serves as a Director of the Company, except for Mr. Pedro De
Matteu and Mr. Luis Lauredo who are being nominated to fill vacancies left by
departing directors Jose Pablo Chaves and Trond Sigurd Jensen. Mr. Lauredo was a
Board member of the Company (from 1996 to 1999) until he was appointed by
President William J. Clinton as the U.S. Ambassador to the Organization of
American States. It will be Mr. Pedro De Matteu's first time as a Board member
of the Company.
The Board of Directors has no reason to believe that any nominee will
refuse or be unable to accept election; however, in the event that one or more
nominees are unable to accept election or if any other unforeseen contingencies
should arise, each proxy that does not direct otherwise will be voted for the
remaining nominees, if any, and for such other persons as may be designated by
the Board of Directors. Certain information regarding each nominee follows. Each
nominee has consented to being named in the Proxy Statement and to serve if
elected.
CALIXTO CHAVES. Mr. Chaves is Chairman of the Board, President and CEO of the
Company and has served as such since 1996. He is also the founder and President
of the Board of Corporacion Pipasa, S.A. from its inception in 1969 to the
present. He is currently on the Boards of Directors of Central American Oils and
Derivatives, S.A., and American Oleaginous Industry. From 1994 to 1996, he was a
board member of Cerveceria Americana, a private brewery. In 1994, he served as
an advisor to the President of Costa Rica and the Ministry of Economic Business
Affairs. From 1983 to 1985, he was a member of the Board of Directors of the
Sugar Cane Agricultural League. From 1982 to 1986, he served as Minister of the
Costa Rican Ministry of Industry, Energy and Mines and became Minister of
Natural Resources in 1986.
MR. JORGE M. QUESADA. Mr. Quesada has been a member of the Board of Directors of
the Company since August, 1996 and was the Company's CFO from August, 1996 to
September,
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1998. He is also a member of the Audit Committee of the Company. Mr. Quesada has
held numerous positions with Corporacion Pipasa, S.A. ("Pipasa") since 1985, and
was its Executive Vice President from 1990 to 1999. Mr. Quesada was appointed
Executive President of Pipasa and Corporacion As de Oros, S.A. ("As de Oros") on
March 1, 1999. He was a member of the Board of Directors of Banco de Fomento
Agricola (d/b/a Banco Cuscatlan) from 1991 to 1996. From 1987 to 1991, he was on
the Board of Directors of Financiera Belen, S.A. Mr. Quesada has conducted
numerous seminars regarding marketing topics. He obtained his Degree in Business
Administration, with emphasis on Public Accounting, from the University of Costa
Rica in 1984.
HONORABLE AMBASSADOR MR. LUIS GUINOT, JR. Luis Guinot, Jr. was born in San Juan,
Puerto Rico on April 8, 1935. He attended college in the United States, where he
graduated from the Catholic University of America School of Law in Washington,
D.C. After completing his undergraduate studies at New York University, he was
commissioned an Ensign in the U.S. Navy where he served in several
billets - both shore and afloat - including a tour of duty as gunnery officer of
the destroyer USS Gearing (DD710) and Senior Shore Patrol Officer of the U.S.
Sixth Fleet based in Naples, Italy. After completion of his military obligation,
Mr. Guinot entered the private practice of law in Washington, D.C. Mr. Guinot
has served as United States Ambassador to the Republic of Costa Rica, as the
Assistant General Counsel of the United States Department of Agriculture and as
Administrator of the Office of the Commonwealth of Puerto Rico in Washington,
D.C. Additionally, Mr. Guinot has also appeared as speaker and lecturer on
United States-Latin American Trade, North American Free Trade Agreement
("NAFTA"), and GATT related matters, and he is the author of several newspaper
articles on the same subjects. Mr. Guinot is a member of the Commonwealth of
Virginia and the District of Columbia Bar Associations and has been admitted to
practice before the bars of the U.S. Supreme Court, the 1st and the 11th Circuit
Court of Appeals, the Bars of the Southern District of New York, and the
Southern District of Florida, Eastern Districts of Virginia, and the Court of
Military Appeals. Mr. Guinot is also a fellow of the American Bar Foundation, a
former member of the U.S. Presidential Commission on Civil Disorders (Kerner
Commission) and former member of the Board of Directors of the Legal Services
Corporation. Mr. Guinot was awarded the Grand Order of Juan Mora (Silver Plaque)
by the Government of Costa Rica. He has been the featured speaker on Conferences
on the general subject of hemispheric free trade and has served as legal advisor
to U.S. corporations doing business in Latin America, as well as legal advisor
to ministries of Central and South American countries. In addition to serving as
a member of the Board of Directors of the Company, Mr. Guinot was recently
appointed to serve on the Board of Directors of TECO Energy, Inc. of Tampa,
Florida. He is currently a member of the U.S. law firm of Shapiro, Sher &
Guinot. He devotes such time as is necessary to fulfill his obligations as an
outside director of the Company.
MR. PEDRO J. DE MATTEU. Mr. De Matteu was born in Santa Ana, El Salvador. He
attended college at the University of Arizona where he obtained his Bachelor's
degree in Agriculture Science in 1964, and his Master's degree in Science,
focused on Animal Nutrition, in 1966. After completing his studies at the
University of Arizona, Mr. De Matteu became Hoffman Taff Western's (of Ontorio,
California) Technical Service Representative. He also served as a Technical
Director and Assistant to the President, as well as Consultant of the biggest
feed mill in California and Arizona. He introduced the Feed Formulation Least
Cost Linear Programming method, and developed antibiotic, vitamin and mineral
pre-mix formulas. He also coordinated the technical staff activities such as
sales and feed mill. Mr. De Matteu was also Manager of the
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Animal Health Division, at Pfizer, A.S. for Central America and Panama, where he
developed, among other activities: a small business in Central America which
rose quickly to become number one in the field; established a Marketing and
Sales Department; Coordinated the development and implementation of Marketing
plans, including launching of new products that are still leaders in the field;
worked as a poultry advisor for Central American poultry integrations; created
Animal Health symposiums for the Central American and the Caribbean area, and
participated as orator in National and International Congresses about Animal
Health and Agriculture. In 1999, Mr. De Matteu became Director of the Animal
Health Group in NOLA (Mexico, Central America and Venezuela), where he
established the basis for a new stage of Animal Health Group. Currently he
manages a family business in El Salvador.
DR. FEDERICO VARGAS. Dr. Vargas has been a member of the Board of Directors
since August, 1996 and he is also a member and Chairman of the Audit Committee.
He is also on the Board of Directors of Corporacion Pipasa S.A. and Financiera
Belen, S.A., and was a Board Member of Restaurantes As de Oros, a subsidiary of
As de Oros. He has served as a Professor of Economics and Social Sciences at the
University of Costa Rica from 1963 to the present. Dr. Vargas has been
extensively involved in political activities since 1974. From 1990 to 1994, he
served as a Deputy in the Costa Rican Assembly. From 1993 to 1994, he was
Chairman of the Legislative Section of the Partido Liberacion Nacional of Costa
Rica. Prior to 1990, Dr. Vargas held a number of political offices including
Minister of Finance on two occasions, Ambassador of Costa Rica to the United
States, Ambassador of Costa Rica to the Organization of American States,
Counselor to the President of Costa Rica in Finance and External Debt, with the
rank of Minister of Economics, and Advisor to the President of Costa Rica. Dr.
Vargas serves on the Boards of Directors and advisory bodies of numerous
charitable and educational organizations and is the author of a number of
publications in economic and educational matters. He obtained his Bachelor's
degree in Business Administration from Nichols College in Massachusetts in 1954
and his Ph.D. from the University of Colorado in 1967. He has also attended the
Wharton School of Finance and Commerce at the University of Pennsylvania. Dr.
Vargas graduated from the University of Costa Rica with a degree in Business
Administration. He devotes such time as may be necessary to fulfill his
obligations as an outside director of the Company.
MR. ALFRED E. SMITH, IV. Mr. Smith has been a member of the Board of Directors
of the Company since June 1, 1994. Mr. Smith is the Managing Director of the
Wall Street firm of Hunter Specialists, LLC, New York, since January 1997. From
1979 to 1996, he was with CMJ Partners, a New York Stock Exchange member firm.
Mr. Smith is the Chairman of the Government Relations Committee of the New York
Stock Exchange, Director and Secretary of the Alfred Emanuel Smith Memorial
Foundation, Chairman of the Cardinal's Committee for the Laity-Wall Street
Division since 1985, Founder and Chairman of Hackers for Hope since 1989,
Director of the Center for Hope since 1989, a Director at the Catholic Youth
Organization until 1997, member of the President's Council of Memorial Sloan
Kettering Hospital since 1986, and a member of the New York City Advisory Board
of the Enterprise Foundation. Mr. Smith is also a member of the Board of
Trustees of St. Vincent's Hospital and Medical Center, since 1986, and the
Cavalry Hospital since 1998, and was a member of the Board of Trustees of Iona
Prep School, Saint Agnes Hospital, and Our Lady of Mercy Medical Center. Mr.
Smith is a member of the Association of the Sovereign Military Order of Malta.
He has received numerous awards for his charity humanitarian work, including
"Wall Street 50" Honoree Humanitarian
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Award, Terence Cardinal Cooke Center in 1999; Man of the Year Award at Iona Prep
in 1986, Club of Champions Gold Medal Award of the Catholic Youth Organization,
Ellis Island Medal of Honor, the National Brotherhood Award of the National
Conference of Christians and Jews, the Graymoor Community Service Award by the
Franciscan Friars of the Atonement, the American Cancer Society's Gold Sword of
Hope Award, and the Terence Cardinal Cooke Humanitarian Award by Our Lady of
Mercy Medical Center. Mr. Smith was educated at Villanova University. He devotes
such time as may be necessary to fulfill his obligations as an outside director
of the Company.
Honorable Ambassador Luis Lauredo. On January 7, 2000, Mr. Lauredo was appointed
United States Ambassador to the Organization of American States, and resigned
from the Board of Directors of the Company. Mr. Lauredo served as Ambassador
until June 2001. Mr. Lauredo has recently joined the law firm of Hunton &
Williams and will be working out of its Miami and Washington, D.C. offices,
focusing on international trade and governmental affairs. From 1995 to 1999, Mr.
Lauredo was President of Greenberg Traurig Consulting, Inc., an affiliate of the
international law firm, Greenberg Traurig Hoffman, Kipoff, Quentel & Rosen, of
Miami, Washington, and New York. From 1994 to 1995, he was Executive Director of
the Summit of the Americas. From 1992 to 1994, he was a Commissioner on the
Florida Public Service Commission, as well as Chairman of the International
Relations Committee of the National Association of Regulatory Utility
Commissioners. In his career, Mr. Lauredo has held a number of positions in the
banking industry, including Senior Vice President of the Export-Import Bank of
the United States of America. He has represented the President of the United
States as special U.S. Ambassador to the inaugurations of the Presidents of
Columbia, Venezuela, Brazil, and Costa Rica. He also served as a founding
Director of the Hispanic Council on Foreign Affairs (Washington, D.C.). Mr.
Lauredo received his B.A. from Columbia University in New York City and has
attended the University of Madrid in Spain and Georgetown University Law Center
in Washington, D.C.
Monica Chaves. Ms. Chaves is Secretary of the Company and is also member of the
Board of Directors of Corporacion Pipasa. Ms. Chaves joined Corporacion Pipasa
as assistant manager in the company's Finance Division in 1991 where she was in
charge of Pipasa's Special Investment Department. In 1996, when the Company went
public, Ms. Chaves assumed the Company's Investor Relations Department. Ms.
Chaves was appointed the Vice President of Administration of Pipasa and As de
Oros on March 1, 1999. Ms. Chaves received a Bachelor's degree in Business
Administration from Saint Michaels College, Vermont. Ms. Chaves is the daughter
of Mr. Calixto Chaves.
Jack Peeples. Mr. Peeples is a member of the Audit Committee. He served in the
Korean War as an Airborne Infantry Officer and Rifle Company Commander. He was
awarded Combat Infantryman Badge, Bronze Star for Valor and Purple Heart. He
graduated from the University of Florida College of Law in 1957, joined the law
firm of former Governor Leroy Collins in Tallahassee, Florida. Mr. Peeples was
appointed as Legislative Counsel to Governor Collins in 1958 and appointed to
the Governor's Cabinet as State Beverage Director in 1959. Mr. Peeples returned
to the private practice of law in 1961, specializing in legislative and
administrative practice in Tallahassee, Florida; founding partner in Peeples,
Earl & Blank in 1970 specializing in environmental law, and Senior Trial Counsel
in numerous landmark environmental and
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regulatory cases. Retired from Peeples, Earl & Blank in 1994 and joined White &
Case as Of Counsel. Served as Campaign Chairman and Chairman of Transition Team
for Governor Lawton Chiles and Legislative and Senior Counsel to the Governor.
Vice-Chairman of Governor's Commission on Governance, Vice-Chairman of
Governor's Commission on the Homeless, Chairman of Florida Aviation Commission,
Co-Chairman of the Dade County Homeless Trust, Board Member of the Florida
Independent College Fund, Member of the Board of Overseers, University of
Florida Medical School, and representative of the Governor and Cabinet on the
Downtown Development Authority. He has also served as General Counsel and member
of the Board of Directors of Deltona Corporation, a NYSE company, as a member of
the Board of Directors and Chairman of the Audit Committee of United Petroleum
Group, a Hunt family company, as Senior Counsel and member of the Board of
Directors of Senior Networks, Inc.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE COMPANY'S
SHAREHOLDERS VOTE "FOR"
THE ELECTION OF THE NINE DIRECTOR NOMINEES
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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MANAGEMENT
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
During the fiscal year ended September 30, 2000, the Company's Board of
Directors held three regularly scheduled meetings, and did not take action by
unanimous written consent. Each Director of the Company attended at least 75% of
the aggregate of (i) the number of the meetings of the Board which were held
during the period that such person served on the Board of Directors and (ii) the
number of meetings of committees of the Board of Directors held during the
period that such person served on such committee.
The Company has two committees: the Audit Committee and the Compensation
Committee. The Company does not a have a Nominating Committee.
The Audit Committee is currently composed of three directors: Dr. Federico
Vargas, as Chairman, Mr. Jack Peeples, and Mr. Jorge Quesada. The Audit
Committee's functions include reviewing reports and audits with the Company's
independent public accountants, and reporting their findings to the full Board.
The Audit Committee met two times during the fiscal year ended September 30,
2000. The Audit Committee has adopted an Audit Committee Charter, a copy of
which is attached hereto as Appendix "A" and is hereby incorporated by
reference. In order to comply with the Independent Director requirements of
Section 121(A) of the American Stock Exchange Listing Standards, Policies and
Requirements, the Company intends to appoint Mr. Luis Lauredo, if successfully
elected to the Board of Directors, as a member of the Audit Committee. Upon such
appointment, Mr. Jorge Quesda, currently the Executive President of the
Company's subsidiaries, As de Oros and Pipasa, will simultaneously step down
from his appointment on the Audit Committee. The Compensation Committee is
currently comprised of Mr. Calixto Chaves, Mr. Jorge Quesada and Mr. Luis
Guinot, Jr. The Compensation Committee's functions consist of recommending,
reviewing and approving the salary and fringe benefit policies of the Company,
including compensation of the Executive Officer of the Company. The Compensation
Committee met one time during the fiscal year ended September 30, 2000.
REPORT OF THE AUDIT COMMITTEE
The Audit Committee reviewed with the Company's Chief Financial Officer
and the independent auditors overall audit scopes and plans, the results of
internal and external audit examinations, evaluations by the auditors of the
Company's internal controls and the quality of the Company's financial
reporting. The Audit Committee also discussed with the independent auditors
other matters required to be discussed under Statement on Auditing Standards No.
61 (Communication With Audit Committees). The Committee received from the
auditors their annual written report on their independence from the Company and
its management, which is made under Independence Standards Board Standard No. 1
(Independence Discussions With Audit Committees). The Audit Committee did not
engage in substantive discussions with the auditors regarding their independence
from the Company.
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In performing all of these functions, the Audit Committee acts only in an
oversight capacity, and, in its oversight role, the Audit Committee relies on
the work and assurances of the Company's management, which has the primary
responsibility for financial statements and reports, and of the independent
auditors, who, in their report, express an opinion on the conformity of the
Company's annual financial statements to generally accepted accounting
principles.
In reliance on these reviews and discussions and on the report of the
independent auditors, the Audit Committee has recommended to the Board of
Directors, and the Board has approved, that the audited financial statements be
included in the Company's Annual Report on Form 10-K for the year ended
September 30, 2000, for filing with the Securities and Exchange Commission. The
Audit Committee and the Board also have recommended, subject to shareholder
approval, the selection of the Company's independent auditors.
Dr. Federico Vargas (Chair)
Mr. Jorge Quesada
Mr. Jack Peeples
AUDIT FEES
Arthur Andersen LLP served as the auditors for the Company for the fiscal
year ended September 30, 2000. In addition to performing the audit of the
Company's consolidated financial statements, Arthur Andersen provided various
other services during fiscal 2000. The aggregate fees billed for professional
services rendered for the audit of the Company's annual financial statements for
the fiscal year ended September 30, 2000, and for the reviews of the financial
statements included in the Company's Quarterly Reports on Form 10-Q were as
follows:
Audit and quarterly reviews $166,500
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
Arthur Andersen did not provide any services related to financial
information systems design and implementation for the fiscal year ended
September 30, 2000.
ALL OTHER FEES
The aggregate fees billed by Arthur Andersen LLP for services rendered to
the Company, other than the services described above under "Audit Fees", for the
fiscal year ended September 20, 2000, were as follows:
All Other Fees $55,120
These fees are related to services rendered in connection with tax planning, the
preparation of the Company's tax returns and preparation of the Company's
current reports filed with the United States Securities and Exchange Commission
on Form 8-K in connection with its acquisition of the remaining outstanding
minority interests in its subsidiaries As de Oros and Pipasa, respectively.
-10-
ADDITIONAL INFORMATION CONCERNING DIRECTORS
The Company reimburses all members of the Board of Directors for their
expenses in connection with their activities as Directors of the Company.
Directors of the Company receive additional compensation for their services as
Directors at a rate of $200 for each Board Meeting that they attend.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT 1934
Section 16(a) of the Securities Exchange Act 1934, as amended (the "1934
Act"), requires the Company's directors and executive officers, and persons who
own more than ten percent (10%) of the Company's outstanding Common Stock, to
file with the Securities and Exchange Commission (the "SEC") initial reports of
ownership and report changes in ownership of Common Stock. Such persons are
required by SEC regulations to furnish the Company with copies of all such
reports they file.
To the Company's knowledge, during the fiscal year ended September 30,
2000, Mr. Calixto Chaves, (Chairman and Chief Executive Officer), Mr. Jorge
Quesada, (Director of the Company), Mr. Antonio Echeverria, (Chairman and
President of Comercial Angui S.A., a Costa Rican corporation ("Angui") who owns
more than ten percent (10%) of the Company's outstanding Common Stock), and Mr.
Jose Zamora, (Board Member of Corporacion Pipasa, S.A., one of the Company's
subsidiaries), engaged in trading of the Company's Common Stock. Accordingly,
all filings under Section 16(a) of the 1934 Act have been made by such persons.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of the latest practicable date, July 2,
2001, the number of shares of Common Stock of the Company which were owned
beneficially by (i) each person who is known by the Company to own beneficially
more than 5% of its Common Stock, (ii) each director and nominee for director,
(iii) certain executive officers of the Company, and (iv) all directors and
officers as a group.
Name and Address of Beneficial Owner Amount and Nature of Beneficial Percentage of Shares Owned (2)
Ownership (2) (3)
- ---------------------------------------------------------------------------------------------------------
Calixto Chaves 5,548,433 (5)(4) 44.44%
Comercial Angui S.A. 2,318,130 (6) 19.46%
Jorge M. Quesada 45,795 (7) *
Monica Chaves 133,334 (8) *
Alfred E. Smith IV 33,334 *
Jose Pablo Chaves 279,324 (9) *
Jose A. Zamora 47,295 (10) *
Luis Guinot, Jr. - ---
Federico Vargas - ---
- --------------------
* Indicates less than 1% of outstanding shares owned.
-11-
(1) Unless otherwise indicated, the address of each beneficial owner is Rica
Foods, Inc., 240 Crandon Blvd. Suite 115, Key Biscayne, Florida 33149.
(2) A person is deemed to be the beneficial owner of securities that can be
acquired by such person within 60 days from the date hereof upon exercise
of options, warrants and convertible securities. Each beneficial owner's
percentage ownership is determined by assuming that options, warrants and
convertible securities that are held by such person (but not those held by
any other person) and that are exercisable within 60 days from the date
hereof have been exercised.
(3) Unless otherwise notes, the Company believes that all persons named in the
table have sole voting and investment power with respect to all shares of
Common Stock beneficially owned by them.
(4) Includes 861,315 shares of Common Stock owned of record by Atisbos de
Belen, S.A., a Costa Rican corporation wholly-owned by Mr. Calixto Chaves
and his wife, 704,857 shares of Common Stock owned of record by
Inversiones Leytor, S.A., a Costa Rican company wholly-owned by Mr.
Chaves, and 298,667 shares of Common Stock owned of record by OCC, S.A., a
Costa Rican company wholly-owned by Mr. Chaves and his wife. Does not
include 133,334 shares and 279,324 shares owned by his adult daughter and
adult son, respectively.
(5) Includes 3,683,595 shares of Common Stock acquired by Inversiones La
Ribera, a Costa Rican corporation owned by Mr. Chaves and his wife.
(6) Includes 1,670,921 shares of common Stock acquired by Comercial Angui
S.A., a Costa Rican Corporation owned by Mr. Echeverria and his wife.
(7) Includes 45,795 shares owned by Jorque, S.A., a closely-held Costa Rican
company whose principal shareholders are the wife and sons of Mr. Jorge
Quesada.
(8) Owned of record by Moninternacional, S.A., a Costa Rican corporation owned
by Monica Chaves, the adult daughter of Mr. Chaves. Mr. Chaves disclaims
any beneficial ownership of these shares.
(9) Owned of record by RTROSPTVA S.A., a Costa Rican Corporation wholly owned
by Jose Pablo Chaves, the son of Calixto Chaves. Mr. Calixto Chaves
disclaims any beneficial ownership of these shares.
(10) Owned by Inversiones Zamora y Aguilar S.A., a Costa Rican corporation
wholly-owned by Mr. Jose A. Zamora and wife.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth, for the fiscal years ended September 30,
1998, 1999 and 2000, the cash and certain other compensation paid or accrued by
the Company's subsidiary, Pipasa, to Calixto Chaves, the Company's Chief
Executive Officer. No other Executive Officer had an annual salary and bonus in
excess of $100,000 during fiscal years ended September 30, 1998, 1999 and 2000.
-12-
Salary Other
Name and Main Position Years Compensation (1) Compensation (2)
- ---------------------- ----- ---------------- ----------------
Calixto Chaves - Chief Executive Officer 2000 $136,764 $5,633
Calixto Chaves - Chief Executive Officer 1999 $128,262 $1,953
Calixto Chaves - Chief Executive Officer 1998 $126,780 $1,993
(1) All compensation in the table above was paid in Costa Rican colones by the
Company's subsidiary, Pipasa. All compensation in the table above has been
converted to United States dollars at the then current exchange rate for
Costa Rican colones.
(2) Represents directors fees payable for acting as a director of Pipasa.
OPTION GRANTS
The Company adopted a Stock Option Plan on May 29, 1998, pursuant to which
76 employees from the Company's Subsidiaries have exercised warrants for 7600
shares.
EMPLOYMENT AGREEMENTS AND CHANGE IN CONTROL AGREEMENTS
The Company has no employment agreements and no change in control
agreements with any executive officer.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company has a Compensation Committee consisting of Mr. Luis Guinot,
Jr., as Chairman, Mr. Calixto Chaves, and Mr. Jorge Quesada,. Both Mr. Chaves
and Mr. Quesada are currently serving as officers of the Company. Mr. Chaves is
the Chief Executive Officer and Mr. Quesada is the Treasurer. This Committee
makes the determinations for stock issuances pursuant to the Company's
compensation plans. The Company has no retirement, pension or profit sharing
plans covering its officers and directors, but has contemplated the
implementation of such a plan in the future through Pipasa and As de Oros.
PERFORMANCE GRAPH
The following graph sets forth the cumulative total shareholder return on the
Company's Common Stock over the last six fiscal years, as compared to the total
returns of the NASDAQ Stock Market Index and a group of peer companies (the
"Peer Group"). The graph assumes $100 was invested on October 1, 1995, dividend
reinvested in the Company's Common Stock, the NASDAQ Stock Market Index and the
Peer Group.
The Peer Group includes the Company, Cagle's, Inc; Industrias Bachoco S.A.;
Pilgrim's Pride Corporation (CLA and CLB); Sanderson Farms, Inc.; Seaboard
Corporation, Tyson Foods, Inc; and WLR Food, Inc. The Peer Group consists of
companies that are engaged in the poultry slaughtering and processing business.
Companies included in the Peer Group were weighted by market capitalization from
the beginning of each period for which a return is indicated.
-13-
1995 1996 1997 1998 1999 2000
---- ---- ---- ---- ---- ----
RICA FOODS, INC. 100.00 857.14 342.86 385.19 876.14 1257.14
SIC CODE INDEX 100.00 99.48 134.67 121.07 96.63 71.42
NASDAQ MARKET INDEX-U.S. COS. 100.00 123.04 150.57 212.57 354.77 354.77
-14-
APPOINTMENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
(Proposal No. 2)
As recommended by the Audit Committee, the Board of Directors designated,
subject to ratification by the shareholders, the firm of Arthur Andersen, LLP as
independent auditors to audit and report on the Company's financial statements
for the fiscal year ending September 30, 2001. Action by shareholders is not
required by law in the appointment of independent auditors, but their
appointment is submitted by the Board in order to give shareholders the final
choice in the designation of independent auditors.
Arthur Anderson, LLP has no direct or indirect financial interest in the
Company or in any of its subsidiaries, nor has it had any connection with the
Company or any of its subsidiaries in the capacity of promoter, underwriter,
voting trustee director, officer or employee. Representatives of Arthur
Andersen, LLP will be present at the meeting of shareholders and will be
afforded an opportunity to make a statement, if they desire to do so. It is also
expected that they will be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE COMPANY'S
SHAREHOLDERS VOTE "FOR" THE RATIFICATION
OF ARTHUR ANDERSEN, LLP AS INDEPENDENT AUDITORS.
REPORT ON FORM 10-K
The Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 2000, as filed with the United States Securities and Exchange
Commission, is available to shareholders, without charge, upon written request
directed to Monica Chaves, Secretary, Rica Foods, Inc. Crandon Blvd., Suite 115,
Key Biscayne, Florida 33149.
OTHER MATTERS
Management knows of no other business to be presented for action at the
Annual Meeting, but if any other business should properly come before the
meeting, it is intended that the proxies will be voted in accordance with the
best judgment of the persons acting thereunder, in their discretion.
By Order of the Board of Directors
Monica Chaves
July 18, 2001 Corporate Secretary
-15-
PLEASE SIGN, DATE AND MAIL
YOUR PROXY CARD BACK AS SOON AS POSSIBLE:
ANNUAL MEETING OF STOCKHOLDERS
RICA FOODS, INC.
AUGUST 31, 2001
Please Detach and Mail in the Envelope Provided
-----------------------------------------------
[X] PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE
The Board of Directors unanimously recommends a vote FOR Proposals 1 and 2.
PROPOSAL NO. 1
VOTE FOR all nominees
listed below, except vote VOTE WITHHELD
withheld from the following FROM
nominee (if any): ALL NOMINEES
[ ] [ ]
(1) To elect nine (9)
directors to the
Board of Directors
of Rica to hold office until the next Annual Meeting of Stockholders of
Rica following their election or until their successors are duly elected
and qualified.
Nominees: (1) Calixto Chaves; (2) Jorge M. Quesada; (3) Luis Guinot, Jr.;
(4) Pedro J. De Matteu; (5) Dr. Federico Vargas; (6) Alfred E. Smith IV;
(7) Luis Lauredo; (8) Jack Peeples; (9) Monica Chaves
INSTRUCTION: To withhold authority to vote for any individual nominee, write the
nominee's name in the space provided below.
- --------------------------------------------------------------------------------
PROPOSAL NO. 2
FOR AGAINST ABSTAIN
(2) Ratification of the appointment of Arthur [ ] [ ] [ ]
Andersen, LLP as independent auditors of the
Company for the fiscal year ended September
30, 2001
PLEASE MARK, SIGN AND RETURN THIS PROXY CARD AND PROMPTLY USING THE ENCLOSED
ENVELOPE.
Signature Dated: , 2001 Signature Dated: , 2001
------------ ------ ------------ ------
(if held jointly)
IMPORTANT: Please sign exactly as your name appears on the stock certificate. If
acting as attorney, executor, trustee, guardian or in other representative
capacity, sign the name and title. 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. If held jointly, both
parties must sign and date.
APPENDIX "A"
RICA FOODS, INC.
AUDIT COMMITTEE CHARTER
I. PURPOSE
The Audit Committee is a committee of the Board of Directors. The primary
function of the Audit committee is to assist the Board of Directors in
fulfilling its oversight responsibilities by reviewing the financial information
which will be provided to the stockholders and others, the systems of internal
controls which management and the board of directors have established, and the
audit process. The independent auditor is ultimately accountable to the Audit
Committee and the Board of Directors. The Audit Committee and the Board of
Directors have the ultimate authority and responsibility to select, evaluate
and, where appropriate, replace the independent auditor (or to nominate the
independent auditor to be proposed for stockholder approval in any proxy
statement.)
The Audit Committee will fulfill these responsibilities by carrying out
the activities enumerated in Sections III-VI of this Charter.
II. COMPOSITION OF THE AUDIT COMMITTEE
The Audit Committee shall be comprised of not less than three directors,
all of whom have no relationship to the Corporation that may interfere with the
exercise of their independence from management and the Corporation. Each member
of the Audit Committee shall meet the independence requirements set forth in
Section 121(A) (or qualify for an exemption under Section 121(B)(b)(ii)) of the
American Stock Exchange Listing Standards, Policies, and Requirements, as
applicable, and as may be modified or supplemented. Each member of the Audit
Committee shall be financially literate, as determined by the Corporation's
Board of Directors in its business judgment, or must become financially literate
within a reasonable period of time after his or her appointment to the Audit
Committee. At least one member of the Audit Committee shall have accounting or
related financial management expertise, as determined by the Board of Directors
in its business judgment.
The members of the Audit Committee shall be elected by the Board of
Directors. Unless a Chair is elected by the full Board of Directors, the members
of the Audit Committee may designate a Chair by majority vote of the full Audit
Committee membership. The duties and responsibilities of a member of the Audit
Committee are in addition to those duties of such member as a member of the
Board of Directors.
III. CONTINUOUS ACTIVITIES - GENERAL
The Audit Committee shall:
1. Provide an open avenue of communication between the independent
auditor and the Board of Directors.
2. Meet four times per year or more frequently as circumstances require.
The Audit Committee may ask members of management or others to attend
meetings and provide pertinent information as necessary.
3. Confirm and assure the independence of the independent auditor. With
respect to the independence of the independent auditor, the Audit
Committee must:
(a) Ensure that the independent auditor submits on a periodic basis
to the Audit Committee a formal written statement delineating
all relationships between the independent auditor and the
Corporation. This statement must comply with Independence
Standards Board Standard No. 1, as may be modified or
supplemented;
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(b) Actively engage in a dialogue with the independent auditor with
respect to any disclosed relationships or services that may
impact the objectivity and independence of the independent
auditor; and
(c) Recommend that the Board of Directors take appropriate action in
response to the independent auditor's report to satisfy itself
of the independent auditor's independence.
4. Instruct the independent auditor that the Board of Directors and the
Audit Committee are the independent auditor's clients.
5. Inquire of management and the independent auditor about significant
risks or exposures and assess the steps management has taken to
minimize such risk to the Company.
6. Consider and review with the independent auditor:
(a) The adequacy of the Company's internal controls including
computerized information system controls and security; and
(b) Related findings and recommendations of the independent auditor
together with management's responses.
7. Consider and review with management and the independent auditor:
(a) Significant findings during the year, including the status of
previous audit recommendations;
(b) Any difficulties encountered in the course of audit work
including any restrictions on the scope of activities or access
to required information;
8. Meet periodically with the independent auditor and management in
separate executive sessions to discuss any matters that the Audit
Committee or these groups believe should be discussed privately with
the Audit Committee.
9. Review/assess and approve significant conflict-of-interest and
related-party transactions, as well as current violations of company
policy, if any.
10. Assess the performance of the Audit Committee through the following:
(a) Solicit informal feedback from the Board of Directors,
President, CFO, and independent auditors on specific
opportunities to improve overall Audit Committee effectiveness;
(b) Assess the contribution and performance of individual committee
members (this should be done periodically by the committee
chair) for review with the Chairman of the Board of Directors
and the President;
(c) Consult with independent auditors and others on typical audit
committee practices in relation to current Audit Committee
practices, and institute appropriate change;
(d) Report periodically to the Board of Directors on significant
results of the foregoing activities; and
(e) Complete a self-assessment process at least every two years and
review the results with the Board of Directors, top management
and independent auditors.
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11. Set guidelines for Audit Committee education and orientation to
assure understanding of the business and the environment in which the
company operates through the following:
New Members
(a) Meet with Audit Committee Chair and jointly agree on specific
orientation and education needs;
(b) Receive tailored information about the Company's:
o business and industry;
o key business and financial risks and risk control processes;
o important legal and regulatory requirements; and
o code of ethical conduct;
(c) Meet with the President and the Chief Financial Officer and, as
necessary, independent auditors, to get the background on key
business and financial risks, accounting principles, and other
relevant matters.
All Members
(a) Routinely receive highly focused information about:
o important, relevant industry issues, developments and
trends;
o key financial and other performance indicators;
o significant and relevant proposed changes in financial
reporting and regulatory requirements; and
o other ongoing business risk matters as determined by the
Audit Committee;
(b) Participate, over time, in in-depth discussions of business
processes to manage risk:
o Risk management;
o Regulatory compliance;
o Company-specific "vital few" processes;
(c) Selectively (committee member) make periodic visits to new or
troubled locations, meet with local management and report to the
full Audit Committee; and
(d) Attend relevant outside seminars and share information at
subsequent Audit Committee meetings.
12. Report periodically to the Board of Directors on significant results
of the foregoing activities.
IV. CONTINUOUS ACTIVITIES - RE: REPORTING-SPECIFIC POLICIES
1. Advise financial management and the independent auditor that they are
expected to provide a timely analysis of significant current
financial reporting issues and practices including the following:
(a) Selection of new or changes to accounting policies;
(b) Estimates, judgments, and uncertainties;
A-3
(c) Unusual transactions;
(d) Accounting policies relating to significant financial statement
items, including the timing of transactions and the period in
which they were recorded.
2. Ensure that financial management and the independent auditor discuss
with the Audit Committee their qualitative judgments about the
appropriateness, not just the acceptability, of accounting principles
and financial disclosure practices used or proposed to be adopted by
management and, particularly, about the degree of aggressiveness or
conservatism of its accounting principles and underlying estimates.
3. Inquire as to the independent auditor's independent qualitative
judgments about the appropriateness, not just the acceptability, of
the accounting principles, the consistency of the Company's accounting
policies, and the clarity and completeness of the Company's financial
statements and related disclosure practices used or proposed to be
adopted by management in connection with the independent auditors
review of interim and audit of annual financial statements prior to
filing its Form 10-Q and 10-K, respectively. Involve, as appropriate,
members of management including the President, Chief Financial Officer
and general counsel in the quarterly discussions.
4. Determine, with regard to new transactions or events, the independent
auditor's reasoning for the appropriateness of the accounting
principles and disclosure practices adopted by management.
5. Set guidelines for monitoring compliance with SEC Staff Accounting
Bulletin ("SAB") No. 99 - Materiality, SAB No. 101 - Revenue
Recognition and other SABs as released or become applicable to the
company:
(a) Consider the SABs in the discussion of the quality, not just the
acceptability, of the Company's accounting principles with
management and the independent auditors;
(b) Review and approve all unrecorded adjustments to the Company's
financial statements which were identified by either management
or the independent auditors. Ensure that the requirements of SAB
No. 99 have been met. Consult with legal counsel as necessary;
and
(c) Discuss with management and the independent auditors:
o The implications of each SAB to the Company;
o The control processes in place at the Company to ensure
compliance with each SAB;
o The audit approach used by the independent auditors to test
the Company's control processes; and
o For each recorded and each unrecorded adjustment, the
business and financial reporting risks and/or control
process deficiencies that gave rise to the adjustment.
V. SCHEDULED ACTIVITIES
1. Recommend the selection of the independent auditor for approval by the
Board of Directors, approve the compensation of the independent
auditor and review and approve the discharge of the independent
auditor.
2. Consider, in consultation with the independent auditor, the audit
scope and plan of the independent auditor.
A-4
3. Review with management and the independent auditor the results of
annual audits and related comments in consultation with other
committees as deemed appropriate including:
(a) The Company's audited annual financial statements and related
footnotes;
(b) The independent auditor's audit of, and report on the financial
statements;
(c) Any significant changes required in the independent auditor's
audit plans;
(d) Any difficulties or disputes with management encountered during
the course of the audit; and
(e) Other matters related to the conduct of the audit which are to
be communicated to the Audit committee under Generally Accepted
Auditing Standards.
4. Review the Company's annual filings with the SEC and other published
documents containing the Company's financial statements and consider
whether to recommend to the Board of Directors that the audited
financial statements be included in the Company's Annual Report on
Form 10-K filing with the SEC.
5. Review the interim financial reports with management and the
independent auditor before those interim reports are released to the
public or filed with the SEC or other regulators.
6. Review policies and procedures with respect to officer's expense
accounts and perquisites annually, including their use of corporate
assets, and consider having possible material areas of concern
reviewed by the independent auditor.
7. Review annually with the independent auditor the results of the
monitoring of compliance with the Company's code of conduct.
8. Disclose in the Company's annual proxy statement whether all members
of the Audit Committee are independent. Also disclose that the Audit
Committee is governed by a written charter and include a copy of the
charter in the proxy at least once every three years.
9. Include a report in the Company's annual proxy statement stating
whether:
(a) The Audit Committee reviewed and discussed the audited financial
statements with management;
(b) The Audit Committee has discussed with the independent auditors
the matters required to be discussed by SAS 61, Communications
with Audit Committees and SAS 90, Audit Committee Communication,
an amendment to SAS 61 (as set forth in Article IV hereof), as
may be modified or supplemented;
(c) The Audit Committee has received and reviewed the written
disclosures and the letter from the independent auditor required
by Independence Standards Board Standard No. 1, as may be
modified or supplemented, and has discussed with the independent
auditor the independent auditor's independence; and
(d) Based on the review and discussions referred to in paragraphs
9(a) through 9(c), the Audit Committee recommended to the Board
of Directors that the audited financial statements be included
in the company's Annual Report on Form 10-K for the last fiscal
year for filing with the SEC.
10. Arrange for the independent auditor to be available to the full Board
of Directors at least annually to help provide a basis for the Board
of Directors to recommend the appointment of the independent auditor.
A-5
11. Set guidelines for review of stock exchange certifications and SEC
proxy statement disclosure requirements related to the Audit
Committee.
12. Review and update the Audit Committee Charter annually.
VI. "WHEN NECESSARY" ACTIVITIES
1. Review and approve requests for any management consulting engagement
to be performed by the independent auditor and be advised of any other
study undertaken at the request of management that is beyond the scope
of the audit engagement letter.
2. Review periodically with general counsel, legal and regulatory matters
that may have a material impact on the Company's financial statements,
compliance policies and programs.
3. Conduct or authorize investigations into any matters within the Audit
Committee's scope of responsibilities. The Audit Committee shall be
empowered to retain independent counsel and other professionals to
assist in the conduct of any investigation or in discharging its
responsibilities.
4. Perform any other activities consistent with this Charter, the
Company's Certificate of Incorporation or Bylaws, and governing law,
as the Audit Committee or the Board of Directors deems necessary or
appropriate.
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