SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary proxy statement Confidential For Use of this Commission Only
(as permitted by Rule 14a-6(e)(2))
|X| Definitive proxy statement
|_| Definitive additional materials
|_| Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
AuGRID OF NEVADA, INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement if Other than 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:
(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:
AuGRID CORPORATION
September 15, 2004
Dear Stockholder:
You are cordially invited to attend the 2004 Annual Meeting of Stockholders of
AuGRID CORPORATION., a Nevada corporation (the "Company" or "AuGRID"), to be
held on Friday, October 22, 2004, Marriot Cleveland Key Center, 127 Public
Square, Cleveland, Ohio 44114. at 9:00 a.m. EST. We urge you to be represented
by proxy or present in person at the meeting.
You will be asked to consider and vote upon (i) the election of members of
AuGRID's Board of Directors, (ii) the ratification of the engagement of the
Company's independent auditors for the year ending December 31, 2004 and (iii)
any other proposal properly presented to stockholders at the meeting. The Board
of Directors unanimously recommends that stockholders vote to approve all
proposals. Details of the proposals, as well as information regarding the
Company, are set forth in the accompanying proxy statement.
Whether or not you plan to attend the annual meeting in person, it is important
that your shares are represented. Please promptly complete, sign, date and
return the enclosed proxy card in the accompanying envelope, which requires no
postage if mailed within the United States. You are, of course, welcome to
attend the annual meeting and vote in person even if you have returned a proxy
card.
On behalf of the Board of Directors and management of AuGRID, I thank you for
your support.
Sincerely yours,
M. J. Shaheed
President and Chief Executive Officer
AuGRID CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON FRIDAY, OCTOBER 22, 2004
STOCKHOLDERS OF AuGRID CORPORATION.
The 2004 Annual Meeting of Stockholders of AuGRID CORPORATION., a Nevada
corporation (the "Company" or "AuGRID"), will be held on Friday, October 22,
2004, at 9:00 a.m., Ohio local time, at Marriot Cleveland Key Center, 127 Public
Square, Cleveland, Ohio 44114. Doors to the meeting will be open at 8:45 a.m.
The meeting will be conducted:
1. To consider and to vote upon the following proposals, each of which
is described in more detail in the accompanying proxy statement:
(i) Proposal One: Election of four persons, M. J. Shaheed, Mary F.
Sloat-Horoszko, Stan Chapman and Essa Mashni to serve on the
Board of Directors until the next Annual Meeting of
Stockholders to be held in 2005 or until election and
qualification of their successors;
(ii) Proposal Two: Ratification of the appointment of Henry L.
Creel Co., Inc., a firm of independent accountants, as the
Company's auditors for the year ending December 31, 2004.
2. To consider and act upon such other matters as may properly come
before the meeting and any and all postponements or adjournments
thereof.
Only stockholders of record at the close of business on August 10, 2004 will be
entitled to notice of and to vote at the meeting or any adjournments or
postponements thereof.
September 15, 2004
Mary Sloat-Horoszko
Secretary
EACH STOCKHOLDER IS REQUESTED TO EXECUTE AND PROMPTLY RETURN THE ENCLOSED
PROXY CARD IN THE ENCLOSED PREPAID ENVELOPE.
AuGRID CORPORATION
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
To be held on Friday, October 22, 2004
Mailed on or About September 26, 2004
INTRODUCTION
This Proxy Statement (the "Proxy Statement") is being furnished to stockholders
of AuGRID CORPORATION., a Nevada corporation ("AuGRID" or the "Company"), in
connection with the solicitation of proxies by the Board of Directors of AuGRID
(the "Board" or the "Board of Directors") from holders of record of AuGRID's
outstanding shares of common stock, par value $.01 per share (the "AuGRID Common
Stock"), as of the close of business on August 10, 2004 (the "Annual Meeting
Record Date") for use at the 2004 Annual Meeting of Stockholders of AuGRID (the
"Annual Meeting") to be held on Friday, October 22, 2004, at 9:00 a.m. (EST) at
the Marriot Cleveland Key Center, 127 Public Square, Cleveland, Ohio 44114 and
at any adjournments or postponements thereof. This Proxy Statement and the
accompanying form of proxy are first being mailed to stockholders on or about
September 26, 2004. The principal executive offices of AuGRID are located at
10777 Westheimer Rd - Suite 1040, Houston, Texas, 77042 and its telephone number
is 713-532-2000.
SOLICITATION OF PROXIES
Proxies will be solicited by mail, telephone, or other means of communication.
Solicitation also may be made by directors, officers and other employees of
AuGRID not specifically employed for this purpose. AuGRID will reimburse
brokerage firms, custodians, nominees and fiduciaries in accordance with the
rules of the National Association of Securities Dealers, Inc., for reasonable
expenses incurred by them in forwarding materials to the beneficial owners of
shares. The entire cost of solicitation will be borne by AuGRID.
VOTING RIGHTS AND PROXY INFORMATION
Only holders of record of shares of AuGRID Common and Preferred Stock as of the
close of business on the Annual Meeting Record Date will be entitled to notice
of and to vote at the Annual Meeting and any adjournments or postponements
thereof. Such holders of shares of AuGRID Common Stock are entitled to one vote
per share on any matter that may properly come before the Annual Meeting. The
presence, either in person or by properly executed and delivered proxy, of the
holders of a majority of the then outstanding shares of AuGRID Common Stock is
necessary to constitute a quorum at the Annual Meeting and to permit action to
be taken by the stockholders at such meeting. Under Nevada law, shares of AuGRID
Common Stock represented by proxies that reflect abstentions or "broker
non-votes" (i.e., shares held by a broker or nominee which are represented at
the Annual Meeting, but with respect to which such broker or nominee is not
empowered to vote on a particular proposal) will be counted as shares that are
present and entitled to vote for purposes of determining the presence of a
quorum.
The affirmative vote of a plurality of shares of AuGRID Common Stock present in
person or represented by proxy at the Annual Meeting is required to elect the
directors nominated pursuant to Proposal One. "Plurality" means that the
individuals who receive the largest number of votes cast are elected as
directors up to the maximum number of directors to be chosen at the meeting.
Consequently, any shares not voted (whether by abstention, broker non-vote, or
otherwise) as to Proposal One will have no impact on the election of directors,
except to the extent that the failure to vote for an individual results in
another individual receiving a larger number of votes. Thus, the withholding of
a vote with respect to the election of any nominee for director will have the
practical effect of a vote against that nominee. The appointment of auditors, as
set forth in Proposal Two, and of any other matter properly brought before the
Annual Meeting requires the approval of a majority of the shares of AuGRID
Common and Preferred Stock present in person or represented by proxy at the
Annual Meeting. An abstention with respect to any share will have the practical
effect of a vote against Proposal Two or any other question or matter properly
brought before the Annual Meeting. A broker non-vote with respect to any share
will not affect the passage of Proposal Two or any other question or matter
properly brought before the Annual Meeting, since the share is not considered
present for voting purposes.
As of August 10, 2004, there were 1,055,193,654 shares of AuGRID Common Stock
8,317,500 shares of AuGRID Preferred Class A Stock and 1,500,000 Preferred Class
B Stock outstanding and entitled to vote at the Annual Meeting held of record by
713 persons. The directors and executive officers of AuGRID intend to vote in
accordance with the recommendations of the Board with respect to Proposals One
and Two and any other question or matter properly brought before the Annual
Meeting.
All shares of AuGRID Common Stock that are represented at the Annual Meeting by
properly executed and delivered proxies received prior to or at the Annual
Meeting and not revoked will be voted at the Annual Meeting in accordance with
the instructions indicated in such proxies. If no instructions are indicated for
any Proposal, such proxies will be voted in accordance with the recommendations
of the Board as set forth herein with respect to such Proposal.
In the event that a quorum is not present at the time the Annual Meeting is
convened or if for any other reason AuGRID believes that additional time should
be allowed for the solicitation of proxies, AuGRID may adjourn the Annual
Meeting with or without a vote of the stockholders. If AuGRID proposes to
adjourn the Annual Meeting by a vote of the stockholders, the persons named in
the enclosed form of proxy will vote all shares of AuGRID Common Stock for which
they have voting authority in favor of such adjournment.
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before it is voted. Proxies may be revoked by (i) filing
with AuGRID, at or before the Annual Meeting, a written notice of revocation
bearing a later date than the proxy, (ii) duly executing a subsequent proxy
relating to the same shares of AuGRID Common Stock and delivering it to AuGRID
at or before the Annual Meeting, or (iii) attending the Annual Meeting and
voting in person (although attendance at the Annual Meeting will not, in and of
itself, constitute a revocation of a proxy). Any written notice revoking a proxy
should be sent to AuGRID CORPORATION., Attention: Investor Relations, 10777
Westheimer Rd. - Suite 1040, Houston, Texas 77042.
ANNUAL REPORT
The Company's annual report for the year ended December 31, 2003 has been mailed
with this proxy statement and the accompanying Notice of Annual Meeting to all
stockholders entitled to notice of and to vote at the meeting. The annual report
contains information that the Company is required to provide pursuant to Rule
14a-3 under the Securities Exchange Act of 1934. The annual report is not
incorporated into this proxy statement and is not considered proxy-soliciting
material.
PROPOSAL ONE: ELECTION OF DIRECTORS
GENERAL
Pursuant to the Company's Bylaws, the number of directors may be changed from
time to time by Board resolution; provided, however, that the number of
directors may not be fewer than three (3) nor more than twenty (20). The number
of directors currently is fixed at four (4), serving in a single class. Each
director of the Company serves for a one-year term or until his successor is
duly elected and qualified, and each director's term of office expires at this
year's Annual Meeting.
The Board has nominated and recommends the reelection of each of the following
persons to serve as a director for a one-year term expiring at the next Annual
Meeting of Stockholders to be held in 2005. Unless otherwise instructed, the
proxy holders will vote the proxies received by them FOR each nominee.
If elected, each nominee has consented to serve as a director of the Company for
a one-year term and until his respective successor is elected and qualified.
Although it is not contemplated that any nominee will be unable to serve as
director, in such event, the proxies will be voted for such other person or
persons as may be designated by the present Board of Directors.
NOMINEES
The nominees, each to serve as a director of the Company, and the age and
positions of each with the Company, as of September 3, 2004, are as follows:
NAME AGE POSITION
M. J. Shaheed 37 Director; Chairman; President and
Chief Executive Officer of the Company
Mary F. Sloat-Horoszko 37 Secretary
Stan Chapman 37 Director; Treasurer
Essa Mashni 38 Director
BUSINESS EXPERIENCE
M. J. SHAHEED has served as President, Chief Executive Officer and Chairman of
the Board of Directors of the Company since March 1998. A native of Cleveland,
Ohio, he attended Cleveland State University from 1986 to 1988, majoring in
Physics and Computer Science. From 1986 through 1987, Mr. Shaheed assisted in
the general instruction of math and science to children at the elementary level
- - specializing in teaching handicapped and children with severe behavioral
problems. From 1987 to 1990, he was a manager with the National Theatre
Corporation in Cleveland Heights, Ohio, with overall management responsibility
for customer relations, inventory, promotions, marketing and accounting. From
1990 through 1993, Mr. Shaheed was a systems engineer for Integrated Business
Solutions located in Lyndhurst, Ohio. He was responsible for the construction of
complete computer hardware systems, specifications, BIOS, cache and
reconfiguring computer operational systems. He also worked on program that
assisted the Dean of the Artificial Intelligence Department at Case Western
Reserve, and he assisted as a Holistic Programming expert, analyst and overall
troubleshooter relating to maximum and minimum system capacity. Since the
founding of the Company, Mr. Shaheed has headed the research and development of
flat panel technologies at the Company in accordance with the United States
Government Flat Panel Display Initiative; and he has provided clients with
systems engineering, CAD electronic circuit design work for high and low
temperature ceramic tape, thermal analysis for 100% superconductive material,
construction of complete complex computer systems and specifications, BIOS,
cache, systems analysis and overall trouble shooting. From 1994 to March 1998,
Mr. Shaheed's focus and dedication were directed solely to acquiring a viable
flat screen technology to be implemented in the United States in the areas of
auto, military and consumer electronics. During that period, he worked with
Ceravision, Ltd., in research and development and the formulation and
identification of flat panel technology market-specific applications in the
United States.
MARY F. HOROSZKO has served as Secretary and a director of the Company since
February, 1997. A graduate of Ohio State University, she holds a Bachelor of
Arts Journalism degree with specialization in Broadcast Communication and
Marketing. From 1992 to 1994, Ms. Sloat-Horoszko was a Producer and On-Air
Coordinator for Cleveland, Ohio based WWWE-Newsradio. During this time, her
responsibilities were Guest/Topic development and coordination; marketing and
program/station promotional development and corporate and community events. From
1994 to late 1996, she served as Director of Marketing, responsible for product
development, marketing, advertising and community and fund-raising events for
Illinois Insurance Brokerage Services, Chicago, Illinois. From late 1996 to
mid-1997, Ms. Sloat-Horoszko served as Director of Marketing and Sales for RAE
Enterprises of Chagrin Falls, Ohio, where she was responsible for corporate
sales, marketing, assessments, program development and facilitation. Clients
included General Motors, IBM, UAW/Ford and Rubbermaid. Since joining the Company
in mid 1997, Ms. Sloat-Horoszko has managed the day-to-day office operations of
the Company and has assisted in planning product lines and identifying target
markets.
ESSA MASHNI, a director since of the Company since February, 1999, is a graduate
of Wayne State College of Pharmacy with a degree in Pharmacy. He has served as
Chief Pharmacist of Arbor Drugs since 1996. Mr. Mashni is a member of the
American Pharmaceutical Association, the Michigan Pharmacy Association, the
American Ramallah Federation and St. Mary's Antiochian Orthodox Church and an
active participant in Ramallah Boys Club.
STAN CHAPMAN has held various positions with the Company over the past few years
and has served as Chief Financial Officer and Treasurer as a director of the
Company since March, 2003. Mr. Chapman holds a BS Business Administration and
Accounting. With over 13 years of Public Accounting experience, Mr. Chapman has
operated as comptroller for the Company as well as Chief Executive Officer of a
private consulting firm and controller for both public and private companies.
Stan also currently serves as Chief Financial Officer for a Cleveland
not-for-profit organization. Mr. Chapman's financial services experience
includes extensive auditing, projections, budget and corporate tax returns.
BOARD MEETINGS AND COMMITTEES
In 2003 the Board met 6 times and acted by written consent 10 times. No director
attended less than 75% of the number of meetings of the Board of Directors
during the period for which he or she was a member of the Board. The Board has
an Audit Committee, but it has no other standing committees, including without
limitation any standing nominating or compensation committee or any other
committee performing similar functions. The functions that would be performed by
the nominating and compensation committees are performed by the Board as a
whole. The Audit Committee, which is comprised of the non-management members of
the Board, did not meet during 2003.
DIRECTOR COMPENSATION
Members of the Board receive no compensation for their services as directors.
However, each director is reimbursed for travel expense and other out-of-pocket
costs incurred in attending meetings.
VOTE REQUIRED
Approval of the election of the nominees is subject to the affirmative vote of a
plurality of shares of Company Common Stock present in person or represented by
proxy at the Annual Meeting.
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY RECOMMENDS A VOTE FOR
EACH OF THE NOMINEES LISTED IN PROPOSAL ONE AS A DIRECTOR OF THE COMPANY.
PROPOSAL TWO
RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Company is asking the stockholders to ratify the selection of Henry L. Creel
Co., Inc. ("HLC") as the Company's independent public accountants for the fiscal
year ending December 31, 2004. The affirmative vote of a majority of the
outstanding voting shares of AuGRID Common Stock present or represented at the
Annual Meeting will be required to ratify the selection of HLC.
If the stockholders fail to ratify HLC's appointment, the Board will consider
the stockholders' action as a directive to select other auditors for the
subsequent fiscal year. Even if the selection is ratified, the Board in its
discretion may direct the appointment of a different independent accounting firm
at any time during the year, if the Board determines that such a change would be
in the best interest of the Company and its stockholders.
A representatives of HLC will be present at the Annual Meeting, will be given an
opportunity to make a statement and will be available to respond to appropriate
questions.
Unless otherwise instructed, the proxy holders will vote the proxies received by
them FOR the ratification of the appointment of HLC as AuGRID's independent
auditors. If the stockholders of AuGRID reject the nomination, the Board of
Directors will reconsider its selection.
VOTE REQUIRED
The ratification of the Board of Directors' appointment of Henry L. Creel Co.,
Inc., as AuGRID's independent auditors for 2004 requires an affirmative vote of
the holders of a majority of shares of AuGRID Common Stock present in person or
represented by proxy at the Annual Meeting.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE
FOR APPROVAL OF PROPOSAL THREE RATIFY ITS SELECTION OF
INDEPENDENT PUBLIC ACCOUNTANTS.
OTHER EVENTS
In a written action without a meeting, the Board of Directors (the "Board") of
AuGRID Corporation (the "Company") has unanimously approved on August 19, 2004 a
one-to-one hundred (1:100) split of the Company's outstanding common stock (a
reverse split). The Board deemed the reverse split to be advisable in order to
attract the additional equity funding that the Company needs to continue
operations.
A majority of the Company's stockholders, acting by written consent, has adopted
the reverse split approved by the Board. The record date for the split will be
September 27, 2004, and the effective date of the split will be October 7, 2004.
The transfer agent for the Company's common and preferred stock, Signature Stock
Transfer, Inc., will contact each stockholder after the effective date with
instructions regarding the exchange of old shares certificates for new shares
certificates reflecting the split.
As a result of the reverse split, each one hundred (100) shares of the Company's
common stock prior to the split will be represented by one (1) new share of the
Company's common stock after the split. Market reaction cannot be predicted with
any degree of certainty, and thus it cannot be known what effect the split will
have on the price per share of the Company's common stock.
The authorized capital stock of the Company will be unaffected by the reverse
split and will continue to consist of 1,960,000,000 shares of common stock and
40,000,000 shares of preferred stock, classes A and B. This should ensure
availability to the Company of adequate shares for use in equity fundings and
business combinations. However, although the Company is actively engaged in
discussions relating to funding and mergers, there is in place no definitive
agreement with any third party with respect to an investment in the Company or a
merger.
Shares of the Company's common stock trade on the Over-the-Counter Bulletin
Board ("OTCBB") under the symbol "AGRD." On September 16, 2004, the National
Association of Securities Dealers, Inc. and the OTCBB were notified of the
impending reverse stock split and its effective date.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
CERTAIN BENEFICIAL OWNERS
The Company Common Stock is the only outstanding class of equity security of the
Company. Ownership as of August 10, 2004 of AuGRID Common Stock (to the
Company's knowledge), by beneficial holders of more than five percent of the
Company Common Stock, is as follows:
- ------------------------------------------------------------------------------
TITLE OF CLASS NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT
BENEFICIAL OWNER BENEFICIAL OWNER OF CLASS
- ------------------------------------------------------------------------------
M. J. Shaheed
10777 Westheimer Rd - Suite 1040
Houston, TX 77042
Common Stock 30,652,160 3%
Preferred A 6,000,000 33%
Preferred B 750,000 50%
- ------------------------------------------------------------------------------
MANAGEMENT
The following table sets forth, as of September 3, 2004, the ownership of AuGRID
Common Stock by each of the Company's directors and executive officers, and by
all directors and executive officers, as a group. Each director and executive
officers has full voting and investment power with respect to his shares, and no
shares listed in the table below are subject to any vesting requirement. There
are no shares of any other class of capital stock outstanding, and no options or
other rights to acquire such shares have been granted.
- --------------------------------------------------------------------------------
TITLE OF CLASS NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT
BENEFICIAL OWNER BENEFICIAL OWNER OF CLASS
- --------------------------------------------------------------------------------
M. J. Shaheed
10777 Westheimer Rd - Suite 1040
Houston, Texas 77042
Common Stock 30,652,160 3%
Preferred Stock Class A 6,000,000 33%
Preferred Stock Class B 750,000 50%
- --------------------------------------------------------------------------------
Mary F. Sloat-Horoszko
10777 Westheimer Rd - Suite 1040
Houston, Texas 77042
Common Stock 22,340,500 2%
Preferred Stock Class A 1,000,000 12%
Preferred Stock Class B 350,000 23%
- --------------------------------------------------------------------------------
Stan Chapman
10777 Westheimer Rd - Suite 1040
Houston, Texas 77042
Common Stock 15,510,000 1.4%
Preferred Stock Class A 1,000,000 12%
Preferred Stock Class B 350,000 23%
- --------------------------------------------------------------------------------
Essa Mashni
10777 Westheimer Rd - Suite 1040
Houston, Texas 77042
Common Stock 156,440 *
Preferred Stock Class B 50,000 4%
- --------------------------------------------------------------------------------
* - less than 1%
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires the Company's directors and certain of its officers and persons who own
more than ten percent (10%) of any registered class of the Company's equity
securities to file reports of ownership and changes in ownership on Forms 3, 4
and 5 with the Securities and Exchange Commission and to furnish copies of such
reports to the Company. Based solely on the Company's review of the copies of
such forms it has received, the Company believes all Section 16(a) filing
requirements were satisfied by the Company's directors and executive officers.
EXECUTIVE OFFICERS
The name, age and position of each executive officer of the Company are as
follows. Each executive officer also is a nominee for director, and the business
experience of each executive officer is set forth above under the caption
Proposal One: Election of Directors.
NAME POSITION
M.J. Shaheed Director; Chairman;
President and Chief Executive Officer
of the Company
Stan Chapman Director; Treasurer; Chief Operations Officer
Mary F. Horoszko Secretary; Vice President Communications
EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION.
The following table discloses compensation paid during the year ended 2003 to
(i) the Company's Chief Executive Officer, and (ii) individual(s) who were the
only executive officers, other than the Chief Executive Officer, serving as
executive officers at the end of 2003 whose total salary and bonus exceeded
$100,000 (the "Named Executive Officers").
ANNUAL COMPENSATION
OTHER
NAME AND PRINCIPAL FISCAL YEAR SALARY BONUS COMP.
POSITION
M.J. Shaheed 2003 $62250 -0- (1)
Chairman,
President and CEO
(1) No officer of the company including the company's CEO was paid a salary
exceeding $100,000.00, including stock granted.
No options or other rights to acquire the Company's securities were granted to
any officer of the Company or exercised during the last fiscal year, and no such
options or rights were outstanding at the end of the last fiscal year. The
Company's long-term incentive plan was filed with the SEC July 2, 2004 and
currently there are employment contracts with 3 officers of the Company.
AUDIT COMMITTEE REPORT
This report is provided with respect to the Company's audited financial
statements for the fiscal year ended December 31, 2003, included in the
Company's Annual Report on Form 10-KSB for that year, which was filed with the
Securities and Exchange Commission (the "Commission") on April 3, 2004. The
information in this report shall not be deemed to be "soliciting material" or to
be "filed" with the Commission, nor shall such information be incorporated by
reference into any future filing under the Securities Act of 1933, as amended,
or the 1934 Securities Exchange Act, as amended, except to the extent that the
Company specifically incorporates it by reference in such filing.
The Audit Committee, comprised of the one non-management member(s) of the Board,
reviews the Company's financial reporting. In accordance with the written
charter adopted by the Board of Directors, a copy of which is attached as
Appendix A, the Audit Committee provides oversight of the quality and integrity
of the accounting, auditing and financial reporting practices of the Company.
The Audit Committee reviews the charter annually to reassess its adequacy.
During the fiscal year, the Audit Committee discussed the interim financial
information contained in each quarterly earnings announcement with the chief
executive officer, the principal accounting officer and the independent auditors
prior to public release. The audit committee recommends to the Board the
selection of auditors for presentation to the stockholders for ratification at
each annual meeting.
Management is responsible for the Company's internal controls and for the
preparation of its financial statements. The Company's independent accountants
are responsible for performing an independent audit of the Company's financial
statements in accordance with generally accepted auditing standards and to issue
a report thereon. The Audit Committee has general oversight responsibility with
respect to the Company's financial reporting, and it reviews the results and
scope of the audit services provided by the Company's independent accountants.
The independent auditors do not provide any non-audit services to the Company.
The Audit Committee has discussed with the Company's independent auditors the
matters required to be discussed by SAS 61 (Codification of Statements on
Auditing Standards, AU Section 380) as amended, which includes, among other
items, matters related to the conduct of the audit of the Company's financial
statements. The Audit Committee has received the written disclosures and the
letter from the independent auditors required by Independence Standards Board
Standard No. 1 ("Independence Discussions with Audit Committees") as amended,
and has discussed with its auditors their independence from the Company.
AUDIT FEES
The aggregate fees billed for professional services rendered for the audit of
the Company's annual financial statements and review of its quarterly financial
statements was $21,600 for the fiscal year ended December 31, 2003.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
During the fiscal year ended December 31, 2003, the Company paid no fees to HLC
for any non-audit services relating (i) directly or indirectly, to the operation
or supervision of the operation of the Company's information system or to the
management of the Company's local area network or (ii) to the design or
implementation of a hardware or software system used to aggregate source data
underlying the financial statements or generate information significant to the
financial statements.
ALL OTHER FEES
During the fiscal year ended December 31, 2003, the Company paid no fees to its
independent auditors, other than the audit fees disclosed above.
Relying on the reviews and discussions referred to above, the Audit Committee
recommended to the Board that the Company's financial statements for the three
years ended December 31, 2003 should be included in the Company's Annual Report
on Form 10-KSB for the year ended December 31, 2003 filed with the Commission on
April 3, 2004 in accordance with the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
Submitted by the Audit Committee
Essa Mashni
STOCKHOLDER PROPOSALS FOR 2005 ANNUAL MEETING
Any stockholder who meets the requirements of the proxy rules under the Exchange
Act may submit to the Board of Directors proposals to be considered for
submission to the Annual Meeting of Stockholders to be held in 2005. Any such
proposal should be submitted in writing by notice delivered or mailed by
first-class United States mail, postage prepaid, to the Secretary, AuGRID
Corporation, 10777 Westheimer Rd - Suite 1040, Houston, Texas 77042 and must be
received no later than January 4, 2005. Any such notice shall set forth: (a) the
name and address of the stockholder and the text of the proposal to be
introduced; (b) the number of shares of stock held of record, owned beneficially
and represented by proxy by such stockholder as of the date of such notice; and
(c) a representation that the stockholder intends to appear in person or by
proxy at the meeting to introduce the proposal specified in the notice. The
chairman of the meeting may refuse to acknowledge the introduction of any
stockholder proposal not made in compliance with the foregoing procedures. Proxy
holders will use their discretion in voting proxies with respect to any
stockholder proposal properly presented from the floor and not included in the
Proxy Statement for the 2005 Annual Meeting, unless specific voting instructions
are received with respect to any such proposal by February 20, 2005.
STOCKHOLDER NOMINATIONS FOR DIRECTOR
The Board of Directors will consider nominations to AuGRID's Board of Directors
to the extent permitted under the Company's Bylaws. Any stockholder may
recommend any person as a nominee for director of AuGRID by writing to the
Secretary, AuGRID Corporation, 10777 Westheimer Rd - Suite 1040, Houston, Texas,
77042 Recommendations must be received by January 4, 2005 to be considered at
the Annual Meeting of Stockholders to be held in 2005.
FORM 10-KSB ANNUAL REPORT
ON APRIL 3, 2004, THE COMPANY FILED WITH THE COMMISSION ITS ANNUAL REPORT ON
FORM 10-KSB FOR THE FISCAL YEAR ENDED DECEMBER 31, 2003. UPON WRITTEN REQUEST OF
ANY STOCKHOLDER, THE COMPANY WILL PROVIDE WITHOUT CHARGE TO THAT STOCKHOLDER A
COPY OF ITS ANNUAL REPORT ON FORM 10-KSB, AS FILED WITH REQUIRED FINANCIAL
STATEMENTS, BUT WITHOUT EXHIBITS (ALTHOUGH EXHIBITS MAY BE REQUESTED). A
STOCKHOLDER'S REQUEST SHOULD BE ADDRESSED TO MS. MARY HOROSZKO, SECRETARY,
AUGRID CORPORATION., 10777 WESTHEIMER RD - SUITE 1040, HOUSTON, TX 77042. IF
EXHIBITS ARE REQUESTED, A CHARGE EQUAL TO THE REPRODUCTION AND MAILING COST WILL
BE MADE TO THE STOCKHOLDER. THE ANNUAL REPORT ON FORM 10-KSB WITH EXHIBITS ALSO
IS AVAILABLE AT THE COMMISSION'S WEBSITE, www.sec.gov, OR AT THE COMMISSION'S
PUBLIC REFERENCE ROOM AT JUDICIARY PLAZA BUILDING, 450 FIFTH STREET, N.W.,
WASHINGTON, D.C. 20549. YOU MAY CALL 1-800-SEC-0330 FOR MORE INFORMATION ON THE
COMMISSION'S PUBLIC REFERENCE ROOM.
BY ORDER OF THE BOARD OF DIRECTORS
Mary Horoszko
Secretary
September 10, 2004
APPENDIX A
AUDIT COMMITTEE CHARTER
I. PURPOSE
The primary function of the Audit Committee ("the Committee") is to assist
the Board of Directors ("the Board") of AuGRID CORPORATION. ("the Company")
in fulfilling its oversight responsibilities with respect to (i) the annual
financial information to be provided to stockholders and the Securities and
Exchange Commission ("SEC"); (ii) the system of internal controls that
management has established; and (iii) the external audit process. In
addition, the Committee provides an avenue for communication between the
independent accountants, management and the Board. The Committee should
have a clear understanding with the independent accountants that they must
maintain an open relationship with the Committee, and that the ultimate
accountability of the independent accountants is to the Board and the
Committee.
II. ORGANIZATION
The Committee shall be composed of three or more directors as determined by
the Board. The members must be independent of the management of the
corporation and free of any relationship that, in the opinion of the Board,
would interfere with their exercise of independent judgement as a committee
member. One of the members of the Committee may be elected Committee Chair
by the Board.
III. MEETINGS
The Committee will meet as often as the Committee deems necessary.
IV. RESPONSIBILITIES AND DUTIES
The Committee believes its policies and procedures should remain flexible
in order to react to changing conditions. The Committee will fulfill its
duties and responsibilities as follows:
A. General
- Review and update this Charter periodically, at least annually, as
conditions dictate.
- Report Committee actions to the Board with such recommendations as the
Committee may deem appropriate.
- Provide open avenues of communication between and among the
independent accountants, the management of the Company and the Board.
- Conduct or authorize investigations into any matters within the
Committee's scope of responsibilities. The Committee shall be
empowered to retain independent counsel, accountants or others to
assist it in the conduct of any investigation.
- The Committee will do whatever else the law, the Company's charter,
bylaws or the Board requires.
B. External/Independent Accountants
- Recommend to the Board the selection of the independent accountants,
considering independence and effectiveness. The Committee will review
annually with management the fee arrangement with the independent
accountants. On an annual basis, the Committee will review and discuss
with the accountants all significant relationships the accountants
have with the Company to determine the accountant's independence.
- Obtain from the external auditors a formal written statement
delineating all services provided to the Company and all relationships
between the auditor and the Company.
- The external auditor is ultimately accountable to the Board and the
Committee, as representatives of the stockholders, and the Committee
has the ultimate authority and responsibility to select, evaluate, and
where appropriate replace the outside auditor.
A-1
- Meet annually with the independent accountants and financial
management of the Company to review the proposed scope of the external
audit for each current year. The external audit scope shall include a
requirement that the independent accountants inform the Committee of
any significant changes in the independent accountants' original audit
plan.
C. Financial Reporting Processes/Internal Controls
QUARTERLY REPORTING PROCESS
- Ensure that the independent accountants and the management of the
Company are satisfied with the quality and appropriateness of the
financial statements and that they advise the Committee through its
Chair and the management of the Company of any significant matters
identified through their review of the Company's interim quarterly
financial statements. And that such notification is to be made prior
to the related press release or, if not practicable, prior to filing
the Form 10-Q for the applicable quarter.
- On an ongoing basis, ensure that the independent accountants and the
management of the Company are satisfied with the disclosure and
content of the financial statements included in Form 10-Q, including
the nature and extent of any significant changes in accounting
principles, prior to the filing of the Form 10-Q with the SEC.
ANNUAL REPORTING PROCESS
- At the completion of the annual audit, discuss the following with
management and the independent accountants:
- Review the results of the audit and the annual financial
statements and related information to determine that the
independent accountants and the management of the Company are
satisfied with the quality, not just the acceptability, of the
Company's accounting principles and underlying estimates, and the
appropriateness of the financial statements, prior to the release
of the annual earnings.
- Discuss the adequacy of the company's system of internal controls.
- Advise management and the independent accountant to discuss with
the Committee their qualitative judgments about the
appropriateness of accounting principles and financial disclosure
practices used or adopted by the Company.
- Ensure that the independent accountants and the management of the
Company are satisfied with the disclosure and content of the Form
10-K prior to its filing with the SEC.
D. Legal and Regulatory Compliance
Review with the Company's legal counsel any legal matters that may have a
significant impact on the Company's overall financials.
A-2 PROXY
AuGRID CORPORATION.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE COMPANY FOR THE OCTOBER 18, 2004 ANNUAL MEETING
The undersigned hereby constitutes and appoints M. J. Shaheed, Stan Chapman and
Mary Horoszko, and each of them, his or her true and lawful agents and proxies
with full power of substitution in each, to represent the undersigned at the
Annual Meeting of Shareholders of AuGRID CORPORATION. to be held on Monday,
October 18, 2004 at 9:00 a.m., Ohio local time, in the Grand Ballroom of the
Holiday Inn, 6001 Rockside Road, Independence, Ohio 44131-229 and at any
adjournments thereof, on all matters coming before said meeting.
1. Election of Directors (Each to serve on the Board of Directors until the
next Annual Meeting of Stockholders to be held in 2003 or until their
successors are duly elected and qualified.)
Nominees: (1) M. J. Shaheed (3) Stan Chapman
(2) Mary Horoszko (4) Essa Mashni
|_| FOR all nominees listed |_| WITHHOLD AUTHORITY
(INSTRUCTION: IF YOU WISH TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, STRIKE A LINE THROUGH THE NOMINEE'S NAME.)
2. Ratification of the appointment of Henry L. Creel Co., Inc., a firm of
independent accountants, as the Company's auditors for the year ending
December 31, 2004.
|_| FOR |_| AGAINST |_| ABSTAIN
4. Transacting such other business as may properly come before the meeting
or any adjournments thereof.
PLEASE FILL IN, SIGN, DATE AND PROMPTLY RETURN THIS PROXY
USING THE ENCLOSED ENVELOPE.
You are encouraged to specify your choices by marking the appropriate boxes. If
you sign and return this proxy card, but do not mark any boxes on the other
side, the Proxies will cast your vote in accordance with the Board of Directors'
recommendations. The Proxies cannot vote your shares unless you sign and return
this card.
Dated ____________ , 2004
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Signature
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Signature if held jointly
___________________________________________
NOTE: Please sign exactly as name appears
hereon. Joint owners should each sign.
When signing as attorney, executor,
administrator, truste or guardian, please
give full title as such.
___________________________________________