UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c)
of the Securities Exchange Act of 1934
(Amendment No. )
Check the appropriate box:
|_| Preliminary Information Statement
|_| Confidential, for Use of the Commission Only
(as permitted by Rule 14c-5(d)(2))
|X| Definitive Information Statement
THE BLUEBOOK INTERNATIONAL HOLDING COMPANY
- --------------------------------------------------------------------------------
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
|_| 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:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
THE BLUEBOOK INTERNATIONAL HOLDING COMPANY
21098 BAKE PARKWAY, SUITE 100
LAKE FOREST, CA 92630-2163
NOTICE OF 2004 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON AUGUST 20, 2004
To Our Stockholders:
You are cordially invited to attend the 2004 Annual Meeting of
Stockholders of The Bluebook International Holding Company. The Annual Meeting
will be held on Friday, August 20, 2004, at 10:00 am local time, at the
Company's offices located at 21098 Bake Parkway, Suite 100, Lake Forest,
California 92630-2163.
The matters to be voted on at the Annual Meeting are:
o Election of Mark A. Josipovich, Daniel T. Josipovich, Paul D.
Sheriff and David M. Campatelli as directors; and
o Ratification of Weinberg & Company, P.A. as independent auditors.
These matters are described more fully in the information statement
accompanying this notice.
Our stockholders will also act upon such other business as may properly
come before the meeting or any adjournment or postponement thereof. The Board of
Directors is not aware of any other business to be presented to a vote of the
stockholders at the 2004 Annual Meeting.
The Board has fixed the close of business on July 6, 2004 as the record
date (the "Record Date") for determining those stockholders who will be entitled
to notice of and to vote at the 2004 Annual Meeting. The stock transfer books
will remain open between the Record Date and the date of the 2004 Annual
Meeting.
Included with the Information Statement is a copy of our Annual Report on
Form 10-KSB for the fiscal year ended December 31, 2003. We encourage you to
read the Form 10-KSB. It includes our audited financial statements and
information about our business and products.
By Order of the Board of Directors
/s/ Mark A. Josipovich
MARK A. JOSIPOVICH
Chairman of the Board and
Chief Executive Officer
July 23, 2004
THE BLUEBOOK INTERNATIONAL HOLDING COMPANY
-----------------
INFORMATION STATEMENT FOR 2004
ANNUAL MEETING OF STOCKHOLDERS
INFORMATION CONCERNING VOTING
This information statement is being mailed or otherwise furnished to
stockholders of The Bluebook International Holding Company (the "Company"), for
use at the Annual Meeting of Stockholders to be held on Friday, August 20, 2004
at 10:00 am local time, and at any postponement or adjournment thereof. The
Annual Meeting will be held at our offices located at 21098 Bake Parkway, Suite
100, Lake Forest, California. The purposes of the Annual Meeting are set forth
in the accompanying Notice of Annual Meeting of Stockholders.
This information statement and the enclosed Annual Report on Form 10-KSB
for the fiscal year ended December 31, 2003, including financial statements,
were first mailed on or about July 23, 2004 to all stockholders entitled to vote
at the Annual Meeting. Our principal executive offices are located at 21098 Bake
Parkway, Suite 100, Lake Forest, California 92630-2163, and our telephone number
is (949) 470-9534.
WE ARE NOT ASKING FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A
PROXY.
GENERAL INFORMATION ABOUT THE ANNUAL MEETING
WHO MAY VOTE You may vote if our records showed that you
owned shares of our Common Stock as of July 6,
2004 (the "Record Date"). At the close of
business on that date, we had a total of
34,050,115 shares of Common Stock issued and
outstanding, which were held of record by
approximately 167 stockholders. You are entitled
to one vote for each share that you own.
VOTING If a bank, broker or other nominee holds your
shares and you wish to attend the Annual Meeting
and vote in person, you must obtain a "legal
proxy" from the record holder of the shares
giving you the right to vote the shares.
HOW VOTES ARE COUNTED The Annual Meeting will be held if a quorum is
represented in person at the Annual Meeting. A
quorum means a majority of the total number of
outstanding shares of Common Stock entitled to
vote. If you attend the Annual Meeting in
person, your shares will be counted for the
purpose of determining whether there is a
quorum, even if you wish to abstain from voting
on some or all matters at the meeting.
ABSTENTIONS Shares that are voted "WITHHELD" or "ABSTAIN"
are treated as being present for purposes of
determining the presence of a quorum and as
entitled to vote on a particular subject matter
at the Annual Meeting.
PROPOSAL ONE:
ELECTION OF DIRECTORS
The Board of Directors currently consists of four directors. At each
Annual Meeting of stockholders, directors are elected for a term of one year and
hold office until their respective successors are duly elected and qualified.
1
NOMINEES The Nominating and Corporate Governance
Committee of the Board of Directors selected,
and the Board of Directors approved, Mark A.
Josipovich, Daniel T. Josipovich, Paul D.
Sheriff and David M. Campatelli as nominees for
election at the Annual Meeting to the Board of
Directors. If elected, they will each serve as a
director until their respective successors are
elected and qualified or their earlier
resignation or removal.
VOTE REQUIRED If a quorum is present, the nominees receiving
the highest number of votes will be elected to
the Board of Directors. Abstentions will have no
effect on the election of directors.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE "FOR"
THE ELECTION OF MARK A. JOSIPOVICH, DANIEL T. JOSIPOVICH, PAUL D. SHERIFF AND
DAVID M. CAMPATELLI TO THE BOARD OF DIRECTORS.
INFORMATION ABOUT THE DIRECTORS AND NOMINEES
The following table sets forth information regarding our directors and
executive officers as of July 6, 2004:
NAME AGE POSITION DIRECTOR SINCE
- ---- --- -------- --------------
Mark A. Josipovich 37 Chief Executive Officer, President, 2001
Treasurer and Principal Accounting
Officer, and Chairman of the Board
Daniel T. Josipovich 38 Chief Operating Officer and Director 2001
Paul D. Sheriff 40 Director 2001
David M. Campatelli 37 Director 2001
There are no family relationships between any director and executive
officer, except Mark A. Josipovich and his brother Daniel T. Josipovich.
According to our bylaws, the term of office for our directors is one year.
Directors hold office until their successors are elected and qualified.
Mark A. Josipovich, Chief Executive Officer and President, has been the
entrepreneurial driver of Bluebook's strategic initiatives for the past 15
years. His responsibilities included guiding the progress of projects through
various milestones to ensure conformity; negotiating contractual agreements;
supporting the sales operation by assisting in the pre-sale process;
coordinating and preparing proposals; and performing ancillary administrative
functions. He has held various positions with Bluebook including management of
marketing, staffing, day-to-day operations and product development.
Daniel T. Josipovich, Chief Operating Officer, designed, directed and
managed development of Bluebook's most innovative products for the past 21
years. He is also directly involved in marketing. Like his brother Mark, Dan has
held various positions with Bluebook including management of marketing,
staffing, day-to-day operations and product development.
Paul D. Sheriff, Director, has over 17 years experience programming
business applications. In 1991, Mr. Sheriff founded PDSA, Inc., a consulting
company specializing in high quality custom software. PDSA, Inc. is a Microsoft
Certified Partner.
David M. Campatelli, Director, is currently a Spanish and English
Instructor at Long Beach Unified School District, Long Beach, California. Mr.
Campatelli also currently serves as a Teacher and Consultant with the California
Reading and Literature Project in San Diego, California, and lectures, teaches
and trains for primary language institutes throughout the State of California.
Mr. Campatelli has been a consultant to Toscana Incorporated, an international
import/export firm, since 1993.
2
Clinton L. Hubbard served as one of our directors from 1991 to December
2003, when he resigned from our board of directors for health reasons. We thank
Mr. Hubbard for his service and dedication to our company.
We have not received Form 3 and to the best of our knowledge a Form 3 has
not been filed with the SEC for Clinton Hubbard, Paul Sheriff, and David
Campatelli, since each became an officer or director. We have requested that
each such person file a Form 3 in accordance with Section 16(a) of the Exchange
Act. Mark Josipovich, Daniel T. Josipovich, Daniel and Dorothy E. Josipovich
have not timely filed a Form 5.
CORPORATE GOVERNANCE
BOARD MEETINGS The Board of Directors held two meetings during
2003. All directors attended 100% of the total
number of meetings of the Board of Directors and
all committees on which they served during 2003.
COMMITTEES OF THE BOARD OF The Board of Directors has Audit, Nominating and
DIRECTORS Corporate Governance, and Compensation
Committees. Each of these committees operates
under a written charter. Copies of the Audit and
Nominating and Corporate Governance Committee
charters are attached as Appendix A and B,
respectively. In addition, we will provide a
copy of any of these documents without charge to
any stockholder upon written request made to
Corporate Secretary, The Bluebook International
Holding Company, 21098 Bake Parkway, Suite 100,
Lake Forest, California 92630-2163. All members
of the committees are appointed by the Board of
Directors. These committees were formed in the
first part of 2004, and there were no committee
meetings held in 2003.
AUDIT COMMITTEE The Audit Committee presently consists of
Messrs. Mark A. Josipovich, Daniel T.
Josipovich, Paul D. Sheriff and David M.
Campatelli. Mr. Daniel T. Josipovich serves as
chairman of the Audit Committee. The Board of
Directors has determined that Mr. Daniel T.
Josipovich is an audit committee financial
expert, as that term is defined in Item 401(h)
of Regulation S-K of the Exchange Act. The Board
of Directors has also determined that each of
Messrs. Sheriff and Campatelli is independent
within the meaning of Item 7(d)(3)(iv) of
Schedule 14A of the Exchange Act and the
requirements of the Nasdaq Stock Market as
currently in effect.
The Audit Committee oversees the accounting,
financial reporting and audit processes; makes
recommendations to the Board of Directors
regarding the selection of independent auditors;
reviews the results and scope of audit and other
services provided by the independent auditors;
reviews the accounting principles and auditing
practices and procedures to be used in preparing
our financial statements; and reviews our
internal controls. The Audit Committee charter
is attached as Appendix A.
3
The Audit Committee works closely with
management and our independent auditors. The
Audit Committee also meets with our independent
auditors in an executive session, without the
presence of our management, on a quarterly
basis, following completion of their quarterly
reviews and annual audit, to review the results
of their work. The Audit Committee also meets
with our independent auditors to approve the
annual scope of the audit services to be
performed.
The Audit Committee Report is included below on
page 15.
PRE-APPROVAL POLICY As part of its responsibility, the Audit
Committee is required to pre-approve audit and
non-audit services performed by our independent
auditor in order to assure that the provision of
such services does not impair the independent
auditor's independence. The Audit Committee's
Pre-Approval Policy establishes a policy
requiring the Audit Committee to review and
approve (1) all audit services, (2) permitted
non-audit services, (3) tax services and (4) all
other services to be performed by our
independent auditor or its affiliates. Unless a
type of service to be provided by our
independent auditor or its affiliates has
received general pre-approval, it requires
specific pre-approval by the Audit Committee.
The Audit Committee pre-approves both scope and
fee levels for all services to be provided by
our independent auditor or its affiliates within
specified categories of services. Any proposed
services exceeding pre-approval scope or cost
levels require specific pre-approval by the
Audit Committee. The term of any pre-approval is
twelve months from the date of pre-approval,
unless the Audit Committee specifically provides
for a different period.
The following summarizes the pre-approval
policies and procedures:
o Any of the services described above
to be provided to the company by
our independent auditor or its
affiliates must be submitted to the
Audit Committee for review and
approval. The proposed services are
submitted to the Audit Committee in
writing by both our independent
auditor and our Chief Executive
Officer, with a description of the
services to be performed, fees to
be charged, and affirmation that
the services are not prohibited
under Section 201 of the
Sarbanes-Oxley Act of 2002.
o The Audit Committee in its sole
discretion then approves or
disapproves the proposed services
and documents such approval in
writing. Pre-approval actions taken
during Audit Committee meetings are
recorded in the minutes of the
meetings.
o Any audit or non-audit service to
be provided to the company which is
proposed between meetings of the
Audit Committee is submitted to the
Audit Committee chairman in writing
for the chairman's review and
pre-approval and is included as an
agenda item at the next scheduled
Audit Committee meeting, or is
approved in the form of a written
consent of the Audit Committee, in
the discretion of the Audit
Committee chairman.
The Audit Committee may periodically revise the
list of pre-approved services, based on
subsequent determinations. The Audit Committee
does not delegate to management its
responsibilities to pre-approve services
performed by the independent auditor or its
affiliates.
4
Prior to the adoption of this policy, management
had the implicit pre-approval of the Audit
Committee to engage Weinberg & Company, P.A., or
any other professional service firm, to perform
tax and other services. The Audit Committee has
since assumed responsibility for pre-approving
all auditing services and permitted non-auditing
services, including the related fees and terms
thereof.
NOMINATING AND CORPORATE The Nominating and Corporate Governance
GOVERNANCE Committee presently consists of Messrs. Paul D.
Sheriff and David M. Campatelli. Mr. Sheriff
serves as chairman of the Nominating and
Corporate Governance Committee. Both members of
the Nominating and Corporate Governance
Committee meet the independence requirements of
the Nasdaq Stock Market as currently in effect.
The Nominating and Corporate Governance
Committee considers and periodically reports on
matters relating to the identification,
selection and qualification of the Board of
Directors and candidates nominated to the Board
of Directors and its committees; develops and
recommends governance principles applicable to
us; and oversees the evaluation of the Board of
Directors and management.
DIRECTOR QUALIFICATIONS The Nominating and Corporate Governance
Committee uses a variety of criteria to evaluate
the qualifications and skills necessary for
members of our Board of Directors. Under these
criteria, members of the Board of Directors
should have the highest professional and
personal ethics and values, consistent with our
values and standards. They should have broad
experience at the policy-making level in
business, government, education, technology or
public interest. They should be committed to
enhancing stockholder value and should have
sufficient time to carry out their duties and to
provide insight and practical wisdom based on
experience. Their service on other boards of
public companies should be limited to a number
that permits them, given their individual
circumstances, to perform responsibly all
director duties. Each director must represent
the interests of our stockholders.
IDENTIFICATION AND EVALUATION The Nominating and Corporate Governance
OF NOMINEES FOR DIRECTORS Committee utilizes a variety of methods for
identifying and evaluating nominees for
director. The Nominating and Corporate
Governance Committee regularly assesses the
appropriate size of the Board of Directors, and
whether any vacancies on the Board of Directors
are expected due to retirement or otherwise. In
the event that vacancies are anticipated, or
otherwise arise, the Nominating and Corporate
Governance Committee considers various potential
candidates for director. Candidates may come to
the attention of the Nominating and Corporate
Governance Committee through current members of
the Board of Directors, professional search
firms, stockholders or other persons. These
candidates are evaluated at regular or special
meetings of the Nominating and Corporate
Governance Committee, and may be considered at
any point during the year. The Nominating and
Corporate Governance Committee considers
properly submitted stockholder recommendations
for candidates for the Board of Directors. In
evaluating such recommendations, the Nominating
and Corporate Governance Committee uses the
qualifications standards discussed above and
seeks to achieve a balance of knowledge,
experience and capability on the Board of
Directors.
5
STOCKHOLDER NOMINATIONS The Nominating and Corporate Governance
Committee seeks out appropriate candidates to
serve as directors of the company, and the
Nominating and Corporate Governance Committee
interviews and examines director candidates and
makes recommendations to the Board regarding
candidate selection. In considering candidates
to serve as director, the Nominating and
Corporate Governance Committee evaluates various
minimum individual qualifications, including
strength of character, maturity of judgment,
relevant technical skills or financial acumen,
diversity of viewpoint and industry knowledge,
as well as the extent to which the candidate
would fill a present need on the Board.
The Nominating and Corporate Governance
Committee will consider stockholder nominations
for director. Nominations for director submitted
to this committee by stockholders are evaluated
according to our overall needs and the nominee's
knowledge, experience and background. A
nominating stockholder must give appropriate
notice to the company of the nomination not less
than 90 days prior to the first anniversary of
the preceding year's annual meeting. In the
event that the date of the annual meeting is
advanced by more than 30 days or delayed by more
than 60 days from the anniversary date of the
preceding year's annual meeting, the notice by
the stockholder must be delivered not later than
the close of business on the later of the 60th
day prior to such annual meeting or the tenth
day following the day on which public
announcement of the date of such annual meeting
is first made.
The stockholders' notice shall set forth, as to:
o each person whom the stockholder
proposes to nominate for election
as a director:
o the name, age, business address and
residence address of such person,
o the principal occupation or
employment of the person,
o the class and number of shares of
the company which are beneficially
owned by such person, if any, and
o any other information relating to
such person which is required to be
disclosed in solicitations for
proxies for election of directors
pursuant to Regulation 14A under
the Exchange Act,
o and the rules thereunder; and
o the stockholder giving the notice:
o the name and record address of the
stockholder and the class and
number of shares of the company
which are beneficially owned by the
stockholder,
o a description of all arrangements
or understandings between such
stockholder and each proposed
nominee and any other person or
persons (including their names)
pursuant to which nomination(s) are
to be made by such stockholder,
6
o a representation that such
stockholder intends to appear in
person or by proxy at the meeting
to nominate the persons o named in
its notice,
o any other information relating to
such person which is required to be
disclosed in solicitations for
proxies for election of directors
pursuant to Regulation 14A under
the Exchange Act, and the rules
thereunder.
The notice must be accompanied by a written
consent of the proposed nominee to be named as a
director.
STOCKHOLDER COMMUNICATIONS The following procedures have been established
WITH THE BOARD by the Board in order to facilitate
communications between our stockholders and the
Board:
o Stockholders may send
correspondence, which should
indicate that the sender is a
stockholder, to the Board or to any
individual director, by mail to
Corporate Secretary, The Bluebook
International Holding Company,
21098 Bake Parkway, Suite 100, Lake
Forest, California 92630-2163.
o Our Secretary will be responsible
for the first review and logging of
this correspondence and will
forward the communication to the
director or directors to whom it is
addressed unless it is a type of
correspondence which the Board has
identified as correspondence which
may be retained in our files and
not sent to directors. The Board
has authorized the Secretary to
retain and not send to directors
communications that: (1) are
advertising or promotional in
nature (offering goods or
services); (2) solely relate to
complaints by clients with respect
to ordinary course of business
customer service and satisfaction
issues; or (3) clearly are
unrelated to our business,
industry, management or Board or
committee matters. These types of
communications will be logged and
filed but not circulated to
directors. Except as set forth in
the preceding sentence, the
Secretary will not screen
communications sent to directors.
o The log of stockholder
correspondence will be available to
members of the Board for
inspection. At least once each
year, the Secretary will provide to
the Board a summary of the
communications received from
stockholders, including the
communications not sent to
directors in accordance with the
procedures set forth above.
COMPENSATION COMMITTEE The Compensation Committee consists of Messrs.
Paul D. Sheriff and David M. Campatelli. Mr.
Campatelli serves as chairman of the
Compensation Committee. Mr. Sheriff and Mr.
Campatelli meet the independence requirements of
the Nasdaq Stock Market as currently in effect.
The Compensation Committee oversees and makes
recommendations to the Board of Directors
regarding our compensation and benefits
policies; and oversees, evaluates and approves
compensation plans, policies and programs for
our executive officers.
The Compensation Committee Report is included
below on page 13.
7
COMPENSATION COMMITTEE During fiscal year 2003, no member of the
INTERLOCKS AND INSIDER Compensation Committee was either an officer or
PARTICIPATION consultant of the Company. During fiscal year
2003, no member of the Board or executive
officer of the Company served as a member of the
Board of Directors or Compensation Committee of
any entity that has an executive officer serving
as a member of our Board of Directors or
Compensation Committee.
ANNUAL MEETING ATTENDANCE Each director is encouraged to attend annual
meetings of our stockholders and to be available
to answer any questions posed by stockholders to
such director. We did not hold an annual meeting
in 2003.
CODE OF ETHICS We have adopted a code of ethics that complies
with the standards mandated by the
Sarbanes-Oxley Act of 2002. This code applies to
our chief executive officer and our senior
financial officers, including our principal
accounting officer and treasurer.
If we amend or grant any waiver, including an
implicit waiver, from a provision of the code of
ethics that applies to our directors and
executive officers, including our chief
executive officer and our senior financial
officers, we will publicly disclose such
amendment or waiver as required by applicable
law and regulations or post such amendment or
waiver on our website at www.bluebook.net. The
information on our website is not, and shall not
be deemed to be, a part of this information
statement or incorporated by reference into this
or any other filing we make with the SEC.
CORPORATE GOVERNANCE DOCUMENTS By the date of the 2004 Annual Meeting,
management hopes to have our code of ethics,
Board committee charters and certain other
corporate governance documents and policies
available on our website at www.bluebook.net. In
addition, we will provide a copy of any of these
documents without charge to any stockholder upon
written request made to Corporate Secretary, The
Bluebook International Holding Company, 21098
Bake Parkway, Suite 100, Lake Forest, California
92630-2163.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The following tables set forth information regarding the beneficial
ownership of our Common Stock and Preferred Stock as of July 6, 2004 as to:
o each of the executive officers named in the Summary Compensation
Table;
o each director and nominee for director;
o each person who is known by us to own beneficially more than 5% of
our outstanding Common Stock or Preferred Stock; and
o all directors and executive officers as a group.
Unless otherwise indicated, the address of each listed stockholder is c/o
The Bluebook International Holding Company, 21098 Bake Parkway, Suite 100, Lake
Forest, California 92630-2163. As of July 6, 2004, there were 34,050,115 shares
of Common Stock outstanding. There were also 2,050 shares of Series B Preferred
Stock outstanding. Holders of Series B Preferred Stock have no voting rights.
8
COMMON STOCK
NUMBER OF SHARES OF
COMMON STOCK PERCENTAGE OWNERSHIP OF
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED(1) COMMON STOCK
------------------------ --------------------- -----------------------
NAMED EXECUTIVE OFFICERS AND DIRECTORS
Mark A. Josipovich 5,675,000 16.67%
Daniel T. Josipovich 5,675,000 16.67%
Paul D. Sheriff 0 0.00%
David M. Campatelli 0 0.00%
FIVE PERCENT STOCKHOLDERS OF COMMON STOCK
Daniel E. and Dorothy Josipovich, jointly (2) 18,757,407 45.24%
Cotelligent, Inc. (3) 5,316,704 15.61%
Johanna Ventures, Ltd. (4) 7,777,777 18.59%
ALL EXECUTIVE OFFICERS AND DIRECTORS AS A GROUP 11,350,000 33.33%
(4 PERSONS)
- ----------
(1) Unless otherwise indicated, all persons named in the table have sole
voting and investment power with respect to the shares of common stock
beneficially owned by them.
(2) Includes 11,350,000 shares of common stock and 1,000 shares of Series B
Preferred Stock convertible into 7,407,407 shares of common stock as of
July 6, 2004. Does not include 1,050 shares of Series B Preferred Stock
owned by Johanna Ventures, Ltd. and convertible into 7,777,777 shares of
common stock as of July 6, 2004; a purchase agreement between Daniel E.
and Dorothy Josipovich and Johanna Ventures, Ltd. has been executed with
respect to such shares pursuant to which Johanna Ventures, Ltd. has agreed
to sell such shares to Daniel E. and Dorothy Josipovich, and the closing
of this transaction was pending as of July 6, 2004.
(3) Consists of 5,316,704 shares of common stock. Based upon information
derived from a Schedule 13D filed on January 17, 2003 by Cotelligent
pursuant of Section 13D of the Securities and Exchange Act of 1934 and the
rules promulgated thereunder (the "Exchange Act"), reporting their
beneficial ownership of our Series C Convertible Redeemable Preferred
Stock. According to the Schedule 13D, Cotelligent, Inc. has sole power to
vote and dispose of 5,316,704 shares of Series C Preferred Stock
convertible into 5,316,704 shares of common stock. Pursuant to a mutual
settlement agreement entered into by our company and Cotelligent, all of
the 5,316,704 shares of Series C Preferred Stock were converted into
5,316,704 shares of common stock on May 6, 2004. The address for
Cotelligent is 100 Theory, Suite 200, Irvine, California 92612.
(4) Includes 1,050 shares of Series B Preferred Stock convertible into
7,777,777 shares of common stock as of July 6, 2004. The address for
Johanna Ventures Ltd. is Le Quesne Chambers, 9 Burrard Street, St. Helier,
Jersey JE2 4WS. A purchase agreement between Daniel E. and Dorothy
Josipovich and Johanna Ventures, Ltd. has been executed with respect to
such shares pursuant to which Johanna Ventures, Ltd. has agreed to sell
such shares to Daniel E. and Dorothy Josipovich, and the closing of this
transaction was pending as of July 6, 2004.
9
SERIES B PREFERRED STOCK
PERCENTAGE
OWNERSHIP OF
NUMBER OF SHARES OF PREFERRED STOCK PREFERRED SERIES B
NAME OF BENEFICIAL OWNER BENEFICIARY OWNED STOCK
- ------------------------ ----------------------------------- ------------------
NAMED EXECUTIVE OFFICERS AND DIRECTORS
Mark A. Josipovich 0 0.00%
Daniel T. Josipovich 0 0.00%
Paul D. Sheriff 0 0.00%
David M. Campatelli 0 0.00%
FIVE PERCENT STOCKHOLDERS OF SERIES B
PREFERRED STOCK
Daniel E. and Dorothy Josipovich, jointly 1,000 48.78%
Johanna Ventures, Ltd. 1,050 51.22%
ALL EXECUTIVE OFFICERS AND DIRECTORS AS A 0 0.00%
GROUP (4 PERSONS)
PROPOSAL TWO:
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has selected Weinberg & Company, P.A. to audit our
financial statements for the fiscal year ending December 31, 2004. Although
ratification by stockholders is not required by law, the Board of Directors has
determined that it is desirable to request approval of this selection by the
stockholders. Notwithstanding its selection, the Board of Directors, in its
discretion, may appoint new independent auditors at any time during the year if
the Board of Directors believes that such a change would be in the best interest
of the Company and its stockholders. If the stockholders do not ratify the
appointment of Weinberg & Company, P.A. the Board of Directors may reconsider
its selection.
Weinberg & Company, P.A. was first appointed in fiscal year 2002, and has
audited our financial statements for fiscal years 2002 and 2003. The Board of
Directors expects that representatives of Weinberg & Company, P.A. will be
present at the Annual Meeting to respond to appropriate questions and to make a
statement if they so desire.
CHANGE IN ACCOUNTANTS
Effective November 4, 2002, our Board of Directors approved a change in
our independent public accountants for the year ended December 31, 2002, from
Good Swartz Brown & Berns LLP to Weinberg & Company, P.A.
We did not consult with Weinberg & Company, P.A. during the fiscal years
ended December 31, 2000 and 2001, and the interim period from December 31, 2001
through July 30, 2002, with respect to (1) the application of accounting
principles to a specified transaction, either completed or proposed, or the type
of audit opinion that might be rendered on our financial statements or (2) any
matter that was the subject of any prior disagreement between us and our
previous independent accountant.
The report of Good Swartz Brown & Berns LLP for the years ended December
31, 2000 and December 31, 2001 contained no adverse opinions, disclaimer of
opinion or qualification or modification as to uncertainty, audit scope or
accounting principles. During the fiscal years ended December 31, 2000 and 2001,
and the interim period from December 31, 2001 through November 4, 2002, there
were no disagreements between us and Good Swartz Brown & Berns LLP on any
accounting principles or practices, financial statement disclosure or auditing
scope or procedure, which, if not resolved to the satisfaction of Good Swartz
Brown & Berns LLP, would have caused it to make reference to the subject matter
of the disagreement in connection with its report. No event described in
paragraph (a)(1)(iv) of Item 304 of Regulation S-B has occurred within our
fiscal years ended December 31, 2000 and 2001, or the period from December 31,
2001 through November 4, 2002.
10
AUDIT AND OTHER FEES
The following table summarizes the fees charged by Weinberg & Company,
P.A. for certain services rendered to the company during 2002 and 2003. Weinberg
& Company, P.A. was retained in November 2002 to audit the Company's financial
statements and provide audit-related services for fiscal years 2002 and 2003.
AMOUNT BILLED AND PAID
--------------------------------------
TYPE OF FEE FISCAL YEAR 2002 FISCAL YEAR 2003
- ----------- ---------------- ----------------
Audit(1) $ 46,335 $ 93,154
Audit Related(2) 0 0
Tax(3) 7,500 0
All Other(4) 42,600 37,181
Total $ 96,435 $130,335
- ----------
(1) This category consists of fees for the audit of our annual financial
statements included in the Company's annual report on Form 10-KSB and
review of the financial statements included in the Company's quarterly
reports on Form 10-QSB. This category also includes advice on audit and
accounting matters that arose during, or as a result of, the audit or the
review of interim financial statements, statutory audits required by
non-U.S. jurisdictions and the preparation of an annual "management
letter" on internal control matters.
(2) Represents services that are normally provided by the independent auditors
in connection with statutory and regulatory filings or engagements for
those fiscal years, aggregate fees charged for assurance and related
services that are reasonably related to the performance of the audit and
are not reported as audit fees. These services include consultations
regarding Sarbanes-Oxley Act requirements, various SEC filings and the
implementation of new accounting requirements.
(3) Represents aggregate fees charged for professional services for tax
compliance and preparation, tax consulting and advice, and tax planning.
(4) Represents aggregate fees charged for products and services other than
those services previously reported.
VOTE REQUIRED If a quorum is present, the affirmative vote of
a majority of the shares present and entitled to
vote at the Annual Meeting will be required to
ratify the appointment of Weinberg & Company,
P.A. as our independent auditors. Abstentions
will have the effect of a vote "against" the
ratification of Weinberg & Company, P.A. as our
independent auditors.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE "FOR"
THE RATIFICATION OF WEINBERG & COMPANY, P.A. AS THE COMPANY'S INDEPENDENT
AUDITORS FOR THE FISCAL YEAR ENDING DECEMBER 31, 2004.
EXECUTIVE COMPENSATION AND OTHER MATTERS
The following table sets forth compensation information for our Chief
Executive Officer and other executive officers as of the end of fiscal year
2003.
11
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
NAME AND PRINCIPAL FISCAL YEAR SALARY BONUS OTHER ANNUAL COMPENSATION
- ------------------ ----------- ------ ----- -------------------------
POSITIONS
Mark A. Josipovich 2003 $180,000(1) $ 39,500 $ 19,186(2)
President and Chief 2002 $180,000 -- $ 19,721(3)
Executive Officer 2001 $ 62,100(4) -- --
Daniel T. Josipovich 2003 $180,000(5) $ 35,800 $ 25,577(6)
Chief Operating Officer 2002 $180,000 -- $ 25,233(7)
2001 $ 60,000(4) -- --
- ----------
(1) Includes $128,834.76 that was deferred at the election of the executive
officer, none of which amount has yet been paid to the executive officer.
(2) Includes reimbursement of $9,266.86 for automobile expenses and $9,918.36
for health insurance.
(3) Includes reimbursement of $7,746 for automobile expenses and $9,880.32 for
health insurance.
(4) Reflects partial year of employment.
(5) Includes $150,000.00 that was deferred at the election of the executive
officer, none of which amount has yet been paid to the executive officer.
(6) Includes reimbursement of $15,658.36 for automobile expenses and $9,918.36
for health insurance.
(7) Includes reimbursement of $15,393.08 for automobile expenses and $8,593.32
for health insurance.
EMPLOYMENT AGREEMENTS AND SEVERANCE ARRANGEMENTS
In September 2001, Bluebook International entered into employment
agreements with Mark A. Josipovich and Daniel T. Josipovich for a term of two
years with an automatic extension of successive one-year periods. Effective
October 1, 2001 we assumed these agreements and expanded the services to each
person's executive position with us. Under these agreements, Mark A. Josipovich
is employed as the Chief Executive Officer, President, and Secretary, and Daniel
T. Josipovich is employed as the Chief Operating Officer, each with an annual
salary of $180,000, plus health insurance benefits, term life insurance benefits
and the right to participate in any future employee stock option, retirement,
profit sharing or other benefit plans offered in the future to similarly
situated employees. The employment agreements also contain indemnification and
confidentiality provisions. The agreements also provide that we should reimburse
the employee for all reasonable and necessary expenses incurred on our behalf.
In the event of termination without cause by Mark A. Josipovich or Daniel T.
Josipovich or termination with cause by us, the Mark A. Josipovich and Daniel T.
Josipovich are entitled to all accrued and unpaid compensation as of the date of
termination. In the event of termination with cause by Mark A. Josipovich or
Daniel T. Josipovich or termination without cause by us, Mark A. Josipovich or
Daniel T. Josipovich are entitled to all accrued and unpaid compensation as of
the date of termination and total amount of annual salary from the date of
termination until the end of the term of the employment agreements.
12
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Effective as of January 1, 2002, our operating subsidiary, The Bluebook
International, Inc. ("Bluebook International"), entered into a consulting
agreement with Daniel E. Josipovich, father of our executive officers Mark A.
Josipovich and Daniel T. Josipovich. Aggregate fees paid or payable to Daniel E.
Josipovich for consulting services rendered and related expenses during the
years ended December 31, 2003 and December 31, 2002 were $150,000 and $189,708,
respectively.
In connection with Bluebook International's merger with Gama Computer
Corporation ("Gama") effective as of October 1, 2001, Daniel E. Josipovich and
Dorothy E. Josipovich, parents of Mark and Daniel T. Josipovich, assigned to
Gama a $1,000,000 promissory note due from Bluebook International. Daniel E. and
Dorothy Josipovich received this promissory note from Bluebook International as
partial consideration for the sale of all of their business assets, primarily
the Bluebook and B.E.S.T. software, to Bluebook International in September 2001.
Paul D. Sheriff, one of our directors, serves as President of PDSA, Inc.,
one of our consultants. Aggregate fees billed to us by PDSA for consulting
services rendered during the years ended December 31, 2003 and December 31, 2002
were $0 and $158,770, respectively.
In August 2002 we entered into a Stock Purchase Agreement with
Cotelligent, Inc. in which we agreed to sell Cotelligent approximately 5.3
million shares of our Series C Convertible Preferred Stock for $5.1 million in
two tranches. The first tranche closed in August 2002 in which Cotelligent
purchased approximately 3.055 million shares of Series C Convertible Preferred
Stock with a combination of cash in the amount of $1.5 million and
extinguishment of $2.1 million of outstanding accounts payable. The second
tranche closed in December 2002 for the purchase of the remaining shares of
Series C stock in cash in the amount of $1.5 million. In connection with this
financing, we also entered into the Consulting Agreement with Cotelligent under
which Cotelligent was to complete development of B.E.S.T.Net and
B.E.S.T.Central, which was recently terminated. Prior to termination of the
Consulting Agreement, we paid Cotelligent $2,413,375 for its services. Pursuant
to a mutual settlement agreement entered into by our company and Cotelligent,
all of the approximately 5.3 million shares of Series C Convertible Preferred
Stock were converted into the same number of shares of our common stock on May
6, 2004.
COMPENSATION COMMITTEE REPORT
The following Report of the Compensation Committee do not constitute
soliciting material and should not be deemed filed or incorporated by reference
into any of our other filings under the Securities Act of 1933, as amended (the
"Securities Act"), or the Exchange Act, except to the extent that we
specifically incorporate this report by reference therein.
The Compensation Committee has furnished this report on executive
compensation for the 2003 fiscal year.
The Compensation Committee has the authority to review and determine the
salaries and bonuses of senior executive officers of the company, including the
Chief Executive Officer, and to establish the general compensation policies for
such individuals.
The Compensation Committee believes that the compensation programs for our
executive officers should reflect the company's performance and the value
created for our stockholders. In addition, the compensation programs should
support the short-term and long-term strategic goals and values of the company,
reward individual contribution to our success and align the interests of our
officers with the interests of our stockholders. We are engaged in a very
competitive industry, and our success depends upon our ability to attract and
retain qualified executives through the competitive compensation packages we
offers to such individuals.
The principal factors that were taken into account in establishing each
executive officer's compensation package for the 2003 fiscal year are described
below. However, the Compensation Committee may in its discretion apply entirely
different factors, such as different measures of financial performance, for
future fiscal years.
13
Chief Executive Officer Compensation. Mark J. Josipovich, who served as
our Chief Executive Officer, President, Treasurer and Principal Accounting
Officer during 2003, earned a salary of $180,000 for 2003 under the terms of the
employment agreement he executed in September 2001. Mr. Josipovich elected to
defer $128,834.76 of his salary to be paid at a later time. The Board of
Directors awarded a bonus of $39,500 to Mr. Josipovich for 2003.
Other Senior Executive Officer Compensation. Daniel T. Josipovich, who
served as our Chief Operating Officer during 2003, earned a salary of $180,000
for 2003 under the terms of the employment agreement he executed in September
2001. Mr. Josipovich elected to defer $150,000 of his salary to be paid at a
later time. The Board of Directors awarded a bonus of $35,800 to Mr. Josipovich
for 2003.
Compliance with Code Section 162(m). Section 162(m) of the Code disallows
a tax deduction to publicly held companies for compensation paid to certain of
their executive officers, to the extent that compensation exceeds $1 million per
covered officer in any fiscal year. The limitation applies only to compensation
which is not considered to be performance based. Non-performance based
compensation paid to our executive officers for the 2003 fiscal year did not
exceed the $1 million limit per officer, and the Compensation Committee does not
anticipate that the non-performance based compensation to be paid to our
executive officers for the 2004 fiscal year will exceed that limit. Because it
is unlikely that the cash compensation payable to any of our executive officers
in the foreseeable future will approach the $1 million limit, the Compensation
Committee has decided at this time not to take any action to limit or
restructure the elements of cash compensation payable to our executive officers.
The Compensation Committee will reconsider this decision should the individual
cash non-performance based compensation of any executive officer ever approach
the $1 million level.
The Board did not modify any action or recommendation made by the
Compensation Committee with respect to executive compensation for the 2003
fiscal year. It is the opinion of the Compensation Committee that the executive
compensation policies and plans provide the necessary total remuneration program
to properly align our performance and the interests of our stockholders through
the use of competitive and equitable executive compensation in a balanced and
reasonable manner, for both the short and long term.
Respectfully submitted by:
PAUL D. SHERIFF
DAVID M. CAMPATELLI
AUDIT COMMITTEE REPORT
The following report of the Audit Committee does not constitute soliciting
material and should not be deemed filed or incorporated by reference into any of
our other filings under the Securities Act or the Exchange Act, except to the
extent that we specifically incorporate this report by reference therein, and
shall not be deemed to be soliciting material or otherwise deemed filed under
either such Act.
The Audit Committee is currently composed of four directors, two of whom
are independent. The duties and responsibilities of a member of the Audit
Committee are in addition to his duties as a member of the Board.
The Audit Committee operates under a written charter. A copy of the Audit
Committee Charter is attached as Appendix A to this information statement. The
Board and the Audit Committee believe that the Audit Committee Charter complies
with the current standards set forth in SEC regulations. There may be further
action by the SEC during the current year on several matters that affect all
audit committees. The Board and the Audit Committee continue to follow closely
further developments by the SEC in the area of the functions of audit committees
and will make additional changes to the Audit Committee Charter and the policies
of the Audit Committee as required or advisable as a result of these new rules
and regulations.
14
The Audit Committee's primary duties and responsibilities are:
o engage our independent auditor;
o monitor the independent auditor's independence, qualifications and
performance;
o pre-approve all audit and non-audit services;
o monitor the integrity of our financial reporting process and
internal controls system;
o provide an open avenue of communication among the independent
auditor, financial and senior management of the company and the
Board; and
o monitor our compliance with legal and regulatory requirements.
Management is responsible for our internal controls and the financial
reporting process. Our independent auditor is responsible for performing an
independent audit of our consolidated financial statements in accordance with
generally accepted auditing standards and issuing a report thereon. The Audit
Committee's responsibility is to monitor and oversee these processes.
We are planning to form an internal management group, reporting to the
Chief Executive Officer and the Audit Committee, that is charged with guiding
our company in meeting the various requirements of Section 404 of the
Sarbanes-Oxley Act of 2002.
The Audit Committee has begun to implement procedures to ensure that
during the course of each fiscal year it devotes the attention that it deems
necessary or appropriate to each of the matters assigned to it under its
charter. The Audit Committee did not meet during 2003, but met in early 2004
with respect to the financial statements and financial condition of our company
for fiscal years 2002 and 2003.
In overseeing the preparation of our financial statements, the Audit
Committee met with both management and our outside auditors to review and
discuss all financial statements prior to their issuance and to discuss
significant accounting issues. Management advised the Audit Committee that all
financial statements were prepared in accordance with accounting principles
generally accepted in the United States of America, and the Audit Committee
discussed the statements with both management and the outside auditors. The
Audit Committee's review included discussion with the outside auditors of
matters required to be discussed pursuant to Statements on Auditing Standards
No. 61 and 90 (Communication with Audit Committees).
With respect to our outside auditors, the Audit Committee, among other
things, discussed with Weinberg & Company, P.A. matters relating to its
independence, including the written disclosures made to the Audit Committee as
required by the Independence Standards Board Standard No. 1 (Independence
Discussions with Audit Committees). The Audit Committee also reviewed and
approved the audit and non-audit fees of that firm.
On the basis of these reviews and discussions, the Audit Committee
recommended to the Board that the Board approve the inclusion of our audited
financial statements in the Form 10-KSB for filing with the SEC.
Respectfully submitted by:
MARK A. JOSIPOVICH
DANIEL T. JOSIPOVICH
PAUL D. SHERIFF
DAVID M. CAMPATELLI
15
ANNUAL REPORT ON FORM 10-K
We filed our Annual Report on Form 10-KSB with the SEC on May 19, 2004. A
copy of the Form 10-KSB has been mailed to all stockholders along with this
information statement. Stockholders may obtain additional copies of the Form
10-KSB and the exhibits thereto, without charge, by writing to the Corporate
Secretary at our principal executive offices at 21098 Bake Parkway, Suite 100,
Lake Forest, CA 92630-2163.
OTHER MATTERS
Management does not know of any matters to be presented at the 2004 Annual
Meeting other than those set forth herein and in the Notice accompanying this
information statement.
It is important that your shares be represented at the 2004 Annual
Meeting, regardless of the number of shares that you hold. YOU ARE, THEREFORE,
URGED TO EXECUTE PROMPTLY AND RETURN THE ACCOMPANYING PROXY IN THE ENVELOPE THAT
HAS BEEN ENCLOSED FOR YOUR CONVENIENCE. Stockholders who are present at the 2004
Annual Meeting may revoke their proxies and vote in person or, if they prefer,
may abstain from voting in person and allow their proxies to be voted.
By Order of the Board of Directors,
/s/ MARK A. JOSIPOVICH
MARK A. JOSIPOVICH
Chairman of the Board and
Chief Executive Officer
July 23, 2004
Lake Forest, California
16
THE BLUEBOOK INTERNATIONAL HOLDING COMPANY
STOCKHOLDERS MEETING
AUGUST 20, 2004 AT 10:00 AM LOCAL TIME
21098 BAKE PARKWAY, SUITE 100
LAKE FOREST, CA 92630-2163
(949) 470-9534
DIRECTIONS FROM LOS ANGELES INTERNATIONAL AIRPORT (LAX):
1. Merge onto I-405 South (45.0 miles).
2. Take the Bake Parkway exit (0.6 miles).
3. Turn left onto Bake Parkway (2.3 miles).
4. End at 21098 Bake Parkway.
DIRECTIONS FROM LOS ANGELES/DOWNTOWN:
1. Merge onto I-5 South (39.0 miles).
2. Take the exit toward Alton Parkway (0.1 miles).
3. Merge onto Enterprise (<0.1 miles).
4. Turn right onto Alton Parkway (2.2 miles).
5. Turn right onto Toledo Way (0.4 miles).
6. Turn left onto Bake Parkway (0.4 miles).
7. End at 21098 Bake Parkway.
DIRECTORS FROM THE JOHN WAYNE AIRPORT:
1. Merge onto I-405 South (7.4 miles).
2. Take the Bake Parkway exit (0.6 miles).
3. Turn left onto Bake Parkway (2.3 miles).
4. End at 21098 Bake Parkway.
APPENDIX A
CHARTER FOR THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
OF THE BLUEBOOK INTERNATIONAL HOLDING COMPANY
PURPOSE:
The purpose of the Audit Committee of the Board of Directors of The
Bluebook International Holding Company (the "Company") shall be to:
o Oversee the accounting and financial reporting processes of the
Company and audits of the financial statements of the Company;
o Assist the Board in oversight and monitoring of (1) the integrity of
the Company's financial statements; (2) the Company's compliance
with legal and regulatory requirements; (3) the independent
auditor's qualifications, independence and performance; and (4) the
Company's internal accounting and financial controls;
o Prepare the report that the rules of the Securities and Exchange
Commission (the "SEC") require be included in the Company's annual
proxy statement;
o Provide the Company's Board with the results of its monitoring and
recommendations derived therefrom; and
o Provide to the Board such additional information and materials as it
may deem necessary to make the Board aware of significant financial
matters that require the attention of the Board.
In addition, the Audit Committee will undertake those specific duties and
responsibilities listed below and such other duties as the Board of Directors
may from time to time prescribe.
MEMBERSHIP:
The Audit Committee members will be appointed by, and will serve at the
discretion of, the Board of Directors. The Audit Committee will consist of at
least three members of the Board of Directors. Members of the Audit Committee
must meet the following criteria (as well as any additional criteria required by
the SEC):
o Each member will be able to read and understand fundamental
financial statements; and
o At least one member will be a financial expert, as defined in the
rules of the SEC.
AUTHORITY AND RESPONSIBILITIES:
In addition to any other responsibilities which may be assigned from time
to time by the Board of Directors, the responsibilities of the Audit Committee
shall include:
o Appointing, compensating and overseeing the work of the independent
auditors (including resolving disagreements between management and
the independent auditors regarding financial reporting) for the
purpose of preparing or issuing an audit report or related work;
o Pre-approving audit and non-audit services provided to the Company
by the independent auditors (or subsequently approving non-audit
services in those circumstances where a subsequent approval is
necessary and permissible); in this regard, the Audit Committee
shall have the sole authority to approve the hiring and firing of
the independent auditors, all audit engagement fees and terms and
all non-audit engagements, as may be permissible, with the
independent auditors;
A-1
o Reviewing and providing guidance with respect to the external audit
and the Company's relationship with its independent auditors by (1)
reviewing the independent auditors' proposed audit scope, approach
and independence; (2) obtaining on a periodic basis a statement from
the independent auditors regarding relationships and services with
the Company which may impact independence and presenting this
statement to the Board of Directors, and to the extent there are
relationships, monitoring and investigating them; (3) reviewing the
independent auditors' peer review conducted every three years; (4)
discussing with the Company's independent auditors the financial
statements and audit findings, including any significant
adjustments, management judgments and accounting estimates,
significant new accounting policies and disagreements with
management and any other matters described in SAS No. 61, as may be
modified or supplemented; and (5) reviewing reports submitted to the
audit committee by the independent auditors in accordance with the
applicable SEC requirements; and
o At least annually, obtaining and reviewing a report by the
independent auditor describing (1) the audit firm's internal quality
control procedures; (2) any material issues raised by the most
recent internal quality-control review, or peer review, of the audit
firm, or by any inquiry or investigation by governmental or
professional authorities, within the preceding five years,
respecting one or more independent audits carried out by the audit
firm; and (3) any steps taken to deal with any such issues.
FINANCIAL STATEMENTS, DISCLOSURE AND OTHER RISK MANAGEMENT AND
COMPLIANCE MATTERS
o Reviewing and discussing with management and the independent
auditors the annual audited financial statements and quarterly
unaudited financial statements, including the Company's disclosures
under "Management's Discussion and Analysis of Financial Condition
and Results of Operations," prior to filing the Company's Annual
Reports on Form 10-KSB and Quarterly Reports on Form 10-QSB,
respectively, with the SEC;
o Directing the Company's independent auditors to review before filing
with the SEC the Company's interim financial statements included in
Quarterly Reports on Form 10-QSB, using professional standards and
procedures for conducting such reviews;
o Conducting a post-audit review of the financial statements and audit
findings, including any significant suggestions for improvements
provided to management by the independent auditors;
o Reviewing before release the unaudited quarterly operating results
in the Company's quarterly earnings release;
o Overseeing compliance with the requirements of the SEC for
disclosure of auditor's services and audit committee members, member
qualifications and activities;
o Reviewing on a continuing basis the adequacy of the Company's system
of internal controls, including meeting periodically with the
Company's management and the independent auditors to review the
adequacy of such controls and to review before release the
disclosure regarding such system of internal controls required under
SEC rules to be contained in the Company's periodic filings and the
attestations or reports by the independent auditors relating to such
disclosure;
o Providing a report in the Company's proxy statement in accordance
with the rules and regulations of the SEC;
o Reviewing the Company's policies and practices with respect to risk
assessment and risk management, including discussing with management
the Company's major financial risk exposures and the steps that have
been taken to monitor and control such exposures;
A-2
o Establishing procedures for receiving, retaining and treating
complaints received by the Company regarding accounting, internal
accounting controls or auditing matters and procedures for the
confidential, anonymous submission by employees of concerns
regarding questionable accounting or auditing matters;
o If necessary, instituting special investigations with full access to
all books, records, facilities and personnel of the Company;
o As appropriate, obtaining advice and assistance from outside legal,
accounting or other advisors (without seeking Board of Directors
approval);
o Reviewing, approving and monitoring the Company's code of ethics for
its senior financial officers;
o Reviewing management's monitoring of compliance with the Company's
standards of business conduct and with the Foreign Corrupt Practices
Act;
o Reviewing, in conjunction with counsel, any legal matters that could
have a significant impact on the Company's financial statements;
o Reviewing the Company's financial and accounting reporting
compliance relating to its employee benefit plans; and
o Reviewing and approving in advance any proposed related party
transactions.
REPORTING TO THE BOARD
o At least quarterly, reporting to the Board. This report shall
include a review of any issues that arise with respect to the
quality or integrity of the Company's financial statements, the
Company's compliance with legal or regulatory requirements, the
performance and independence of the Company's independent auditors,
the performance of the internal audit function and any other matters
that the Audit Committee deems appropriate or is requested to be
included by the Board;
o At least annually, reviewing and assessing the adequacy of this
charter and recommend any proposed changes to the Board for
approval; and
o At least annually, evaluating its own performance and report to the
Board on such evaluation.
LIMITATIONS INHERENT IN THE AUDIT COMMITTEE'S ROLE:
It's not the duty of the Audit Committee to plan or conduct audits or to
determine that the Company's financial statements are complete and accurate and
are in accordance with generally accepted accounting principles. This is the
responsibility of management and the independent auditor.
It is also not the duty of the Audit Committee to resolve disagreements,
if any, between management and the outside auditors or to assure compliance with
laws and regulations and the Company's policies generally. Furthermore, it is
the responsibility of the CEO and senior management to avoid and minimize the
Company's exposure to risk, and while the Audit Committee is responsible for
reviewing with management the guidelines and policies to govern the process by
which risk assessment and management is undertaken, the Audit Committee is not
the sole body responsible.
A-3
MEETINGS:
The Audit Committee will meet at least four times each year. The Audit
Committee may establish its own schedule, which it will provide to the Board of
Directors in advance.
The Audit Committee will meet separately with the Chief Executive Officer
and separately with the Chief Operating Officer of the Company at such times as
are appropriate to review the financial affairs of the Company. The Audit
Committee will meet separately with the independent auditors of the Company, at
such times as it deems appropriate, but not less than quarterly, to fulfill the
responsibilities of the Audit Committee under this charter.
MINUTES:
The Audit Committee will maintain written minutes of its meetings, which
minutes will be filed with the minutes of the meetings of the Board of
Directors.
COMPENSATION:
Members of the Audit Committee shall receive such fees, if any, for their
service as Audit Committee members as may be determined by the Board of
Directors in its sole discretion. Such fees may include retainers, per meeting
fees and special fees for service as Chair of the Audit Committee. Fees may be
paid in such form of consideration as is determined by the Board of Directors,
which may include cash, deferred payment, stock or stock options.
Members of the Audit Committee may not receive any compensation from the
Company except the fees that they receive for service as a member of the Board
of Directors or any committee thereof.
DELEGATION OF AUTHORITY:
The Audit Committee may, from time to time, delegate its authority to
approve non-audit services on a preliminary basis to one or more designated
members of the Audit Committee, provided that such designees present any such
approval to the full Audit Committee for ratification at the next scheduled
meeting.
A-4
APPENDIX B
CHARTER FOR THE NOMINATING AND CORPORATE GOVERNANCE
COMMITTEE OF THE BOARD OF DIRECTORS OF
THE BLUEBOOK INTERNATIONAL HOLDING COMPANY
PURPOSE:
The purpose of the Nominating and Corporate Governance Committee of the
Board of Directors (the "Board") of The Bluebook International Holding Company
(the "Company") shall be to ensure that the Board is properly constituted to
meet its fiduciary obligations to stockholders and the Company, and that the
Company has and follows appropriate governance standards.
To carry out this purpose, the Nominating and Corporate Governance
Committee shall: (1) identify prospective director nominees and recommend to the
Board the director nominees for the next annual meeting or special meeting of
stockholders at which directors are to be elected, and recommend individuals to
the Board to fill any vacancies or newly created directorships that may occur
between such meetings; (2) develop and recommend to the Board the governance
principles applicable to the Company; (3) oversee the evaluation of the Board
and management from a corporate governance perspective; (4) identify and
recommend to the Board directors for membership on Board committees; (5) oversee
and set compensation for the Company's directors; and (6) review the Company's
reporting in documents filed with the Securities and Exchange Commission, to the
extent related to corporate governance and other matters set forth in this
charter.
MEMBERSHIP:
The members of the Nominating and Corporate Governance Committee will be
appointed by the Board, will serve at the discretion of the Board and may be
removed by the Board at any time. The Nominating and Corporate Governance
Committee shall consist of at least two members. The Board shall designate the
Chairperson of the Nominating and Corporate Governance Committee.
AUTHORITY AND RESPONSIBILITIES:
In addition to any other responsibilities which may be assigned from time
to time by the Board, the Nominating and Corporate Governance Committee is
authorized to undertake, and has responsibility for, the following matters.
BOARD AND BOARD COMMITTEE NOMINEES
The Nominating and Corporate Governance Committee shall conduct searches
for qualified individuals for membership on the Company's Board. As vacancies or
newly created positions occur, the Nominating and Corporate Governance Committee
shall recommend individuals for membership on the Company's Board of Directors
and directors for appointment to the committees of the Board. In making its
recommendations, the Nominating and Corporate Governance Committee must:
o establish criteria for Board and committee membership;
o review candidates' qualifications for membership on the Board or a
committee of the Board and any potential conflicts with the
Company's interests;
o assess the contributions of current directors in connection with
their nomination to the Board or committee;
o periodically review the composition of the Board and its committees
to determine whether it may be appropriate to add individuals with
different backgrounds or skills from those already on the Board or
any such committee; and
B-1
o consider rotation of committee members and committee chairpersons.
EVALUATING THE BOARD, ITS COMMITTEES AND MANAGEMENT
At least annually, the Nominating and Corporate Governance Committee shall
(1) review and assess the performance of the Board and its committees, and
senior management of the Company; and (2) report such assessments, including any
recommendations for proposed changes, to the Board.
DIRECTOR COMPENSATION
At least annually, the Nominating and Corporate Governance Committee shall
review and approve compensation (including stock option grants and other
equity-based compensation) for the Company's directors. In so reviewing and
approving director compensation, the Committee shall:
o identify corporate goals and objectives relevant to director
compensation (including efforts by the Company to retain such
directors and the cost to the Company of the particular directors'
compensation or of all executive compensation as a whole);
o evaluate the performance of the Board in light of such goals and
objectives and set director compensation based on such evaluation
and such other factors as the Nominating and Corporate Governance
Committee deems appropriate and in the best interests of the
Company; and
o determine any long-term incentive component of director compensation
based on such factors as the Nominating and Corporate Governance
Committee deems appropriate and in the best interests of the
Company.
CORPORATE GOVERNANCE MATTERS
o The Nominating and Corporate Governance Committee shall develop and
recommend to the Board the Corporate Governance Guidelines and Code
of Business Conduct and Ethics for the Company. At least annually,
the Nominating and Corporate Governance Committee shall review and
reassess the adequacy of such Corporate Governance Guidelines and
Code of Business Conduct and Ethics and recommend any proposed
changes to the Board.
o The Nominating and Corporate Governance Committee shall oversee
compliance with the Company's Corporate Governance Guidelines and
Code of Conduct and Ethics and report on such compliance to the
Board. The Nominating and Corporate Governance Committee shall also
review and approve any waivers of the Company's Corporate Governance
Guidelines or Company's directors, executive officers and senior
financial officers.
o The Nominating and Corporate Governance Committee shall identify
potential conflicts of interest involving directors and shall
determine whether such director or directors may vote on any such
issue.
o At least annually, the Nominating and Corporate Governance Committee
shall review the number, size and responsibilities of the Board and
its committees and recommend any actions in this regard to the
Board.
o At least annually, the Nominating and Corporate Governance Committee
shall, in consultation with the Company's Chief Executive Officer,
prepare a report on management succession planning for the Board.
Such report should include policies for Chief Executive Officer
selection and succession in the event of the incapacitation,
retirement or removal of the Chief Executive Officer, and
evaluations of, and development plans for, any potential successors
to the Chief Executive Officer.
B-2
DISCLOSURE
The Nominating and Corporate Governance Committee shall review the
Company's reporting in documents filed with the Securities and Exchange
Commission, to the extent specifically related to corporate governance and the
other matters set forth in this charter.
REPORTING TO THE BOARD
The Nominating and Corporate Governance Committee shall report to the
Board at least annually. This report shall include a review of any
recommendations or issues that arise with respect to Board or committee nominees
or membership, Board or management performance, corporate governance or any
other matters that the Nominating and Corporate Governance Committee deems
appropriate or is requested to be included by the Board.
At least annually, the Nominating and Corporate Governance Committee shall
(1) review and assess the adequacy of this charter and recommend any proposed
changes to the Board for approval; and (2) evaluate its own performance and
report to the Board on such evaluation.
PROCEDURES:
MEETINGS
The Committee shall meet as often as it determines is appropriate to carry
out its responsibilities under this charter, but not less frequently than
quarterly. The Chairperson of the Nominating and Corporate Governance Committee,
in consultation with the other Committee members, shall determine the frequency
and length of the Committee meetings and shall set meeting agendas consistent
with this charter.
ADVISORS AND CONSULTANTS
The Nominating and Corporate Governance Committee is authorized to retain
(without further Board approval) special legal, accounting or other advisors and
may request any officer or employee of the Company or the Company's outside
counsel or independent auditor to meet with any members of, or advisors to, the
Nominating and Corporate Governance Committee. The Nominating and Corporate
Governance Committee has the sole authority to retain and terminate any search
firm to assist in identifying director candidates, including sole authority to
approve all such search firm's fees and other retention terms.
DELEGATION OF AUTHORITY
The Nominating and Corporate Governance Committee may, to the fullest
extent permitted by applicable law or regulation, form and delegate its
authority to subcommittees of the Committee when it deems appropriate and in the
best interests of the Company.
B-3