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
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THE BLUEBOOK INTERNATIONAL HOLDING COMPANY
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(Name Of Registrant As Specified In Its charter)
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THE BLUEBOOK INTERNATIONAL HOLDING COMPANY
21098 BAKE PARKWAY, SUITE 100
LAKE FOREST, CA 92630-2163
NOTICE OF 2005 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON AUGUST 26, 2005
To Our Stockholders:
You are cordially invited to attend the 2005 Annual Meeting of Stockholders of
The Bluebook International Holding Company. The Annual Meeting will be held on
Friday, August 26, 2005, at 10:00 a.m/ 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 2005 Annual Meeting. The Board has fixed the close of
business on July 12, 2005 as the record date (the "Record Date") for determining
those stockholders who will be entitled to notice of and to vote at the 2005
Annual Meeting. The stock transfer books will remain open between the Record
Date and the date of the 2005 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, 2004. 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
May 2, 2005
THE BLUEBOOK INTERNATIONAL HOLDING COMPANY
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INFORMATION STATEMENT FOR 2005
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 (the "Annual Meeting") to be held on
Friday, August 26, 2005 at 10:00 a.m. 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, 2004, including the financial statements, will be
mailed on or about July 12, 2005 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 YOU 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 12, 2005 (the "Record Date"). At the close of business on April 21,
2005, 8,760,221 shares of Common Stock were issued and outstanding. These shares
were held of record by approximately 187 stockholders. We have reserved 686,688
shares of Common Stock for issuance pursuant to warrants issued by the Company.
You are entitled to one vote on each proposal 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.
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 April 29, 2005:
NAME AGE POSITION DIRECTOR SINCE
Mark A. Josipovich 38 Chief Executive Officer, President, 2001
Treasurer, Principal Accounting
Officer and Chairman of the Board
Daniel T. Josipovich 39 Chief Operating Officer and Director 2001
Paul D. Sheriff 41 Director
2001
David M. Campatelli 38 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, Chairman of the Board, Chief Executive Officer, President
and Treasurer, has been the entrepreneurial driver of Bluebook's strategic
initiatives for the past 16 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. Mark A. Josipovich has been the President and Chief Executive
Officer of the Company since October 1, 2001. Prior to that, he was the
Executive Vice President of the Company.
Daniel T. Josipovich, Chief Operating Officer and Director, designed, directed
and managed development of Bluebook's most innovative products for the past 22
years. He is also directly involved in marketing. Daniel has held various
positions with Bluebook including management of marketing, staffing, day-to-day
operations and product development. Daniel T. Josipovich has been the Chief
Operating Officer of the Company since October 2001. Prior to that, he was the
Director of Technology of the Company.
Paul D. Sheriff, Director, has over 18 years experience in programming business
applications. In 1991, Mr. Sheriff founded PDSA, Inc., a consulting company
specializing in high quality custom software. Mr. Sheriff has been the President
and Chief Executive Officer of PDSA, Inc. since 1991. He specializes in the
development, design and deployment of business software solutions. Mr. Sheiff is
also a frequent speaker at Microsoft Developer Days, Microsoft Tech Ed,
Microsoft "MSDN Presents," Access/VBA Advisor Developer Conferences, and user
groups across the country. Mr. Sheriff is a contributing editor to Access/VBA
Advisor magazine and teaches ".NET" on Microsoft WebCasts and with Blast Through
Learning videos (www.blastthroughlearning.com). Mr. Sheriff completed his new
book "ASP.NET Developer's Jumpstart" with co-author Ken Getz.
David M. Campatelli, Director, has been a Spanish and English Instructor at Long
Beach Unified School District, Long Beach, California for the past five years.
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.
None of our directors, officers (or affiliates of our directors or officers),
owners of record or beneficial owners of more than 5% of any of our voting
securities is a party adverse to us in a material proceeding or has a material
interest adverse to us.
BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
BOARD MEETINGS
The Board of Directors held seven meetings during 2004. Paul D. Sheriff, a
director, attended less than 75% of the total number of meetings of the Board of
Directors and all committees on which he served during 2004.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has Audit, Nominating and 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, c/o 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 quarter of 2004.
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 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 Board of Directors has
determined that we do not have an audit committee financial expert as defined in
the Sarbanes-Oxley Act of 2002. The Company is not required to have an audit
committee financial expert.
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.
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 met four times in 2004.
PRE-APPROVAL POLICY
As part of its responsibility, the Audit Committee pre-approves audit and
non-audit services performed by our independent auditor in order to assure that
the provision of such services does not impair the auditor's independence. The
Audit Committee's Pre-Approval Policy establishes a procedure 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 Audit
Committee approved of all of the services provided by Weinberg & Company, P.A.
for fiscal year 2003 and 2004.
NOMINATING AND CORPORATE GOVERNANCE
The Nominating and Corporate 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.
The Nominating Committee met one time in 2004.
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 OF NOMINEES FOR DIRECTORS
The Nominating and Corporate Governance Committee utilizes a variety of methods
for identifying and valuating 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 firms,
stockholders or other persons. The 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 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.
STOCKHOLDER NOMINATIONS
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 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,
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;
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,
o a representation that such stockholder intends to appear in person
or by proxy at the meeting to nominate the persons named in its
notice, 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, 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 WITH THE BOARD
The following procedures have been established by the Board in order to provide
communications between our stockholders and the Board:
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, c/o The Bluebook International Holding Company, 21098 Bake Parkway,
Suite 100, Lake Forest, California 92630-2163.
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
the 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 our directors. Except as set forth in the preceding sentence,
the Secretary will not screen communications sent to directors.
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 did not meet in 2004.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal year 2004, no member of the Compensation Committee was either an
officer or consultant of the Company. During fiscal 2004, 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.
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
Our corporate governance documents, including our code of ethics, Audit
Committee charter, Nominating and Corporate Governance charter and Compensation
Committee charter are not on our Website. By the Annual Meeting, management
intends to have our corporate governance documents, including our code of
ethics, Audit Committee charter, Nominating and Corporate Governance charter and
Compensation Committee charter available on our website at www.bluebook.net. Our
Nominating and Corporate Governance charter and our Audit Committee charter are
attached hereto 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.
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 April 21, 2005 as to:
o each of the executive officers named in the Summary Compensation
Table in this Information Statement;
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.
Our authorized capital stock consists of 150,000,000 shares of common
stock, par value $0.0001 per share, and 5,000,000 shares of preferred stock, par
value $0.0001 per share. As of April 21, 2005, 8,760,221 shares of common stock
were issued and outstanding and no shares of preferred stock were issued and
outstanding. We have reserved 686,688 shares of common stock for issuance
pursuant to warrants issued by the Company.
NUMBER OF SHARES PERCENTAGE
NAME OF BENEFICIAL OWNER OF COMMON STOCK OWNERSHIP OF
BENEFICIALLY COMMON
OWNED (1) STOCK
Named Executive Officers and Directors
Mark A. Josipovich 638,255 7.29 %
Daniel T. Josipovich 761,234 8.69 %
Peter Johnson 0 0.00 %
Brian C. Jones 0 0.00 %
Paul D. Sheriff 0 0.00 %
David M. Campatelli 0 0.00 %
All Executive Officers and Directors as a Group (6
Persons) 1,399,489 15.98 %
Five Percent Stockholders of Common Stock
Daniel E. Josipovich 3,543,000 (2) 40.44 %
Dorothy E. Josipovich 3,543,000 (3) 40.44 %
The Freedom Family, LLC 2,733,333 (4) 31.20 %
Roaring Fork Capital SBIC, L.P. 840,000 (5) 9.59 %
Eugene C. Mc Colley 840,000 (6) 9.59 %
Roaring Fork Capital Management LLC 840,000 (7) 9.59 %
Ian P.Ellis 834,000 (8) 9.52 %
Micro Capital LLC 834,000 (9) 9.52 %
Micro Capital Fund L.P. 516,000 (10) 5.89 %
Chris Albrick 418,074 (11) 4.77 %
(1) Unless otherwise indicated, all persons named in the table above have sole
voting and investment power with respect to the shares of common stock
beneficially owned by them. For purposes of this table, a person is deemed
to have "beneficial ownership" of any shares as of April 21, 2005 which
the person has the right to acquire within 60 days of such date. For
purposes of computing the outstanding shares held by each person named
above on a given date, any shares which such person has the right to
acquire within 60 days after such date are deemed to be outstanding, but
are not deemed to be outstanding for the purpose of computing the
percentage ownership of any other person.
(2) Daniel E. Josipovich beneficially owns an aggregate of 3,543,000 shares of
common stock, consisting of 525,917 shares of common stock held in his
name, 283,750 shares of common stock held in the name of Dorothy E.
Josipovich and 2,733,333 shares of common stock owned by The Freedom
Family, LLC. These shares collectively constitute 40.44% of the total
number of shares of common stock currently issued and outstanding. Daniel
E. Josipovich may be deemed to share beneficial ownership of the 283,750
shares of common stock held in the name of Dorothy E. Josipovich and the
2,733,333 shares of common stock owned by The Freedom Family, LLC, but
hereby disclaims beneficial ownership of shares. The address of Daniel E.
Josipovich is 21391 Avenida Manantial, Lake Forest, CA 92630.
(3) Dorothy E. Josipovich beneficially owns an aggregate of 3,543,000 shares
of common stock, consisting of 283,750 shares of common stock held in her
name, 525,917 shares of common stock held in the name of Daniel E.
Josipovich and 2,733,333 shares of common stock owned by The Freedom
Family, LLC. These shares collectively constitute 40.44% of the total
number of shares of common stock currently issued and outstanding. Dorothy
E. Josipovich may be deemed to share beneficial ownership of the 525,917
shares of common stock held in the name of Daniel E. Josipovich and the
2,733,333 shares of common stock owned by The Freedom Family, LLC, but
hereby disclaims beneficial ownership of such shares. The address of
Dorothy Josipovich is 21391 Avenida Manantial, Lake Forest, CA 92630.
(4) The address of The Freedom Family, LLC is 21391 Avenida Manantial, Lake
Forest, CA 92630.
(5) Includes stock underlying a warrant to purchase up to 140,000 shares of
common stock at an exercise price of $1.31 per share. The address of
Roaring Fork Capital SBIC, L.P. is 5310 DTC Parkway, Suite I, Greenwood
Village, CO 80111.
(6) Eugene M. McColley is the natural control person of Roaring Fork Capital
Management, LLC, which is the general partner and investment advisor to
Roaring Fork Capital SBIC, L.P. Roaring Fork Capital Management, LLC and
Eugene M. McColley have investment power and voting control over the
840,000 shares of common stock held in the name of Roaring Form Capital
SBIC, L.P., but each disclaims beneficial ownership of these securities.
The 840,000 shares of common stock includes stock underlying warrants to
purchase up to 140,000 shares of common stock at an exercise price of
$1.31 per share. The address of Eugene C. McColley is 5310 DTC Parkway,
Suite I , Greenwood Village, CO 80111.
(7) Roaring Fork Capital Management, LLC is the general partner and investment
advisor to Roaring Fork Capital SBIC, L.P. Roaring Fork Capital
Management, LLC and Eugene M. McColley, the natural control person of
Roaring Fork Capital Management, LLC, have investment power and voting
control over the 840,000 shares of common stock held in the name of
Roaring Form Capital SBIC, L.P., but each disclaims beneficial ownership
of these securities. The 840,000 shares of common stock includes stock
underlying warrants to purchase up to 140,000 shares of common stock at an
exercise price of $1.31 per share. The address of Roaring Fork Capital
Management, LLC is 5310 DTC Parkway, Suite I, Greenwood Village, CO 80111.
(8) Ian P. Ellis is the natural control person of MicroCapital, LLC, which is
the general partner and investment advisor to MicroCapital Fund L.P. and
MicroCapital Fund Ltd. MicroCapital LLC and Ian P. Ellis have investment
power and voting control over the 516,000 shares of common stock held in
the name of MicroCapital Fund L.P. and the 318,000 shares of common stock
held in the name of MicroCapital Fund Ltd, but each disclaims beneficial
ownership of these securities. The 834,000 shares of common stock includes
stock underlying warrants to purchase up to 139,000 shares of common stock
at an exercise price of $1.31 per share. The address of Ian P. Ellis is
201 Post Street, Suite 1001, San Francisco, CA 94108. Ian P. Ellis is the
principal owner of MicroCapital LLC and has sole responsibility for the
selection, acquisition and disposition of the portfolio securities by
MicroCapital LLC on behalf of its funds. MicroCapital LLC is the general
partner and investment advisor to MicroCapital Fund L.P. and MicroCapital
Fund Ltd.
(9) MicroCapital LLC is the general partner and investment advisor to
MicroCapital Fund L.P. and MicroCapital Fund Ltd. MicroCapital LLC and Ian
P. Ellis, the natural control person of MicroCapital LLC, have investment
power and voting control over the 516,000 shares of common stock held in
the name of MicroCapital Fund L.P. and the 318,000 shares of common stock
held in the name of MicroCapital Fund Ltd, but each disclaims beneficial
ownership of these securities. The 834,000 shares of common stock includes
stock underlying warrants to purchase up to 139,000 shares of common stock
at an exercise price of $1.31 per share. The address of MircroCapital LLC
is 201 Post Street, Suite 1001, San Francisco, CA 94108.
(10) Includes stock underlying a warrant to purchase up to 86,000 shares of
common stock at an exercise price of $1.31 per share. The address of
MicroCapital Fund LP is 410 Jessie Street, Suite 1002, San Francisco, CA
94103.
(11) The address of Chris Albrick is 25 Bridgeport, Dana Point, CA 92629.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act, requires our officers and directors,
and persons who own more than 10% of a registered class of our equity
securities, to file reports of ownership and changes in ownership (Forms 3, 4
and 5) with the SEC. Officers, directors and greater than 10% stockholders are
required to furnish us with copies of all such forms which they file.
We have not received a Form 3 and to the best of our knowledge a Form 3
has not been filed with the SEC for Paul Sheriff, David Campatelli, Brian C.
Jones or Peter Johnson 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. The Freedom Family, LLC did not timely file a Form 4 with
respect to the Company's issuance of a total of 2,733,333 shares of common stock
on conversion of the Company's outstanding 2,050 shares of Series B Convertible
Preferred Stock held by Daniel E. and Dorothy E. Josipovich in the name of The
Freedom Family, LLC. Mark Josipovich, Daniel T. Josipovich and Daniel E.
Josipovich did not timely file a Form 4 with respect to the Company's October
2004 issuances of:
o 354,505 shares of common stock in settlement of $265,879 of debt
owed to Mark A. Josipovich;
o 477,484 shares of common stock in settlement of $358,113 of debt
owed to Daniel T. Josipovich; and
o 242,167 shares of common stock in settlement of $181,625 of debt
owed to Daniel E. Josipovich.
Except for the above, to our knowledge, based solely on our review of such
reports or written representations from certain reporting persons, we believe
that all of the filing requirements applicable to our officers, directors,
greater than 10% beneficial owners and other persons subject to Section 16 of
the Exchange Act were complied with during the year ended December 31, 2004.
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, 2005. 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 2003 and 2004. 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.
AUDIT AND OTHER FEES
The following table sets forth the aggregate fees for professional audit
services rendered by Weinberg & Company, P.A. for audit of our annual financial
statements for the years ended December 31, 2004 and 2003, and fees billed for
other services provided by Weinberg & Company, P.A. for the years ended December
31, 2004 and 2003. Weinberg & Company, P.A. was retained in November 2002 and
audited the Company's financial statements and provided audit-related services
for fiscal years 2004 and 2003.
Year Ended
December 31,
------------------------------
2004 2003
-------------- ---------------
Audit Fees $ 38,573 93,154
Audit-Related Fees 38,444 --
Tax Fees -- --
All Other Fees 1,506 37,181
-------------- ---------------
Total Fees Paid $ 78,523 $ 130,335
============== ===============
Audit Fees
The aggregate fees for the annual audit of our financial statements and review
of our quarterly financial statements.
Audit-Related Fees
The aggregate fees for the auditor's consent for use of our audited financial
statements in our S-8 Registration Statement and SB-2 Registration Statement and
review of documents related to our private placement.
Tax Fees
None.
All Other Fees
The aggregate fees for fiscal year 2003 for due diligence for due diligence for
a potential merger with Cotelligent, review of Bluebook's financial projections
for use in financing transactions, and for fiscal year 2004, assistance with
various financing arrangements.
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, 2005.
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
2004, 2003 and 2002.
Summary Compensation Table Annual Compensation
Fiscal Other Annual
Name and Principal Positions Year Salary Bonus Compensation
- ------------------------------------ ---------- ---------- --------- -------------
Mark A. Josipovich 2004 $ 180,000 (1) -- --
President and Chief 2003 $ 180,000 (2) $ 39,500 $ 19,186 (4)
Executive Officer 2002 $ 180,000 (3) -- $ 19,721 (5)
Daniel T. Josipovich 2004 $ 180,000 (6) -- --
Chief Operating Officer 2003 $ 180,000 (7) $ 35,800 $ 25,577 (9)
2002 $ 180,000 (8) -- $ 25,233 (10)
Peter Johnson 2004 $ 110,000 (11) -- --
Chief Technology Officer
Brian C. Jones 2004 $ 139,200 (12) -- --
Executive Vice President 2003 $ 139,200 -- --
Insurance Solutions 2002 $ 139,200 -- --
- ------------
(1) Excludes $265,879 of debt in the form of accrued but unpaid compensation,
which amount was paid off in October of 2004 upon receipt of 345,505
shares of the Company's common stock.
(2) Includes $160,000 that was deferred at the election of the executive
officer, which amount was discharged in October 2004 in exchange for
shares of the Company's common stock.
(3) Includes $31,165 that was deferred at the election of the executive
officer, which amount was discharged in October 2004 in exchange for
shares of the Company's common stock.
(4) Includes reimbursement of $9,267 for automobile expenses and $9,880 for
health insurance.
(5) Includes reimbursement of $7,746 for automobile expenses and $9,880.32 for
health insurance.
(6) Excludes $358,113 of debt in the form of accrued but unpaid compensation,
which amount was paid off in October of 2004 upon receipt of 477,484
shares of the Company's common stock.
(7) Includes $150,000.00 that was deferred at the election of the executive
officer, which amount was discharged in October 2004 in exchange for
shares of the Company's common stock.
(8) Includes $39,000 that was deferred at the election of the executive
officer, which amount was discharged in October 2004 in exchange for
shares of the Company's common stock.
(9) Includes reimbursement of $15,658.36 for automobile expenses and $9,918
for health insurance.
(10) Includes reimbursement of $15,393.08 for automobile expenses and $8,593
for health insurance.
(11) Peter Johnson' s annual salary for fiscal year 2004 was $110,000. Mr.
Johnson was hired in September of 2004 and received a pro-rata share of
his annual salary in the amount of $27,500 for the fiscal year 2004.
(12) Excludes $94,587 of debt in the form of accrued by unpaid compensation
which amount was paid off in October of 2004 upon receipt of 126,116
shares of common stock.
Employment agreements
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, Bluebook Holding assumed these agreements and
expanded the services to include each person's executive position. Under these
agreements, Mark A. Josipovich is employed as the Chief Executive Officer,
President, and Treasurer, 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, 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 the total amount of
annual salary from the date of termination until the end of the term of the
employment agreements.
Director Compensation
Our directors who are not employees of the Company are not paid annual
cash fees, and do not receive any fees for attending the Board meetings or
Committee meetings.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
As part of an Amended and Restated Asset Purchase and Sale Agreement,
dated September 15, 2001, the Company is obligated to pay a royalty to Daniel E.
and Dorothy E. Josipovich in the amount of 6% of net revenue, defined as the
aggregate of all gross revenues, sales, and receipts of whatever nature or kind
received by the Company, less any returns, rebates, discounts, allowances,
rejections and credits, and less the actual out-of-pocket costs and expenses
incurred, except depreciation, reserves, taxes, interest and extraordinary
expenses. As of December 31, 2004 and 2003, under the above definition, the
Company has negative net revenues, therefore no royalty expenses were accrued.
Effective as of January 1, 2002, Bluebook International entered into a
consulting agreement with Daniel E. Josipovich, father of our executive officers
Mark A. Josipovich and Daniel T. Josipovich. Mr. Josipovich provides consulting
services relating to labor and material costs, among other factors that affect
the pricing information provided by THE BLUEBOOK and our InsureBASE product. In
addition, Mr. Josipovich provides consulting services relating to the automation
of our database. Aggregate fees paid or payable to Daniel E. Josipovich, for
consulting services rendered and related expenses during the years ended
December 31, 2004 and 2003 were $150,000 and $150,000, respectively.
Paul D. Sheriff, a director, serves as President of PDSA, Inc., which
served as one of the Company's consultants from December 1997 until October
2002. PDSA provided consulting services relating to programming (coding),
product design assistance and product development. Aggregate fees billed to us
by PDSA for consulting services rendered during the year ended December 31, 2002
was $158,770, and was included in Programming costs.
In August 2002 we entered into a Stock Purchase Agreement with
Cotelligent, Inc. in which we agreed to sell to 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. By
virtue of its ownership of approximately 5.3 million shares of our Series C
Convertible Preferred Stock, which were convertible into an equal number of
shares of our common stock, Cotelligent became, at the time, a beneficial owner
of more than five percent of our voting securities. 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
by August 2002. In March 2003, Cotelligent refused to continue further
development work unless we agreed to pay over $400,000 in invoices, which
exceeded the total project cost provided in the Consulting Agreement. We
terminated the Consulting Agreement soon thereafter and paid Cotelligent
$2,413,375 for its services. We disputed that any further amounts were due under
the Consulting Agreement.
We entered into a mutual settlement agreement with Cotelligent pursuant to
which all of the approximately 5.3 million shares of Series C Convertible
Preferred Stock held by Cotelligent was converted into the same number of shares
of our common stock on May 6, 2004. These shares represent 265,835 shares of the
Company's common stock.
In October 2004, the Company issued a total of 2,733,333 shares of common
stock on conversion of the Company's outstanding 2,050 shares of Series B
Convertible Preferred Stock held by Daniel E. and Dorothy E. Josipovich in the
name of The Freedom Family, LLC. Also in October of 2004, the Company issued:
o 354,505 shares of common stock in settlement of $265,879 of debt
owed to Mark A. Josipovich, our President, Chief Executive
Officer and a director;
o 477,484 shares of common stock in settlement of $358,113 of debt
owed to Daniel T. Josipovich, our Chief Operating Officer and a
director;
o 242,167 shares of common stock in settlement of $181,625 of debt
owed to Daniel E. Josipovich, one of our largest security holders
and an immediate family member of our executive officers Mark A.
Josipovich and Daniel T. Josipovich;
o 157,560 shares of common stock in settlement of $118,170 of debt
owed to Michela Josipovich, an immediate family member of our
executive officers Mark A. Josipovich and Daniel T. Josipovich;
o 126,116 shares of common stock in settlement of $94,587 of debt owed
to Brian Jones, our Vice President - Insurance Solutions; and
o 30,000 shares of common stock in settlement of $22,500 of debt owed
to Robert Dewar, an immediate family member of our executive officer
Mark A. Josipovich.
On November 17, 2004, the Company declared a 1 for 20 reverse stock split.
All share and per share amounts have been retro-actively restated as if the
reverse split occurred as of the beginning of the period.
Following the reverse stock split, in November 2004, the Company issued:
o 418,074 shares of common stock to Chris Albrick, a creditor of the
Company, in settlement of debts totaling $438,978 pursuant to a
Convertible Promissory Note issued by the Company in August 2004;
o 10,000 shares of common stock to Julia Sugityo in settlement of
debts totaling $10,000 pursuant to a Share Purchase Agreement dated
November 8, 2004;
o 306,667 shares of common stock to Century Capital Management Ltd., a
consultant to the Company, for consulting services rendered; and
o 3,000 shares of common stock to Morris Diamond et al. in connection
with the settlement of litigation.
The Company may issue a warrant to purchase 90,000 shares of common stock
at a price of $1.40 per share to Chris Albrick, a consultant of the Company, as
a bonus payment.
All of the common stock and warrant issuances discussed above were issued
in reliance upon the exemptions from registration provided by section 4(2) of
the Securities Act of 1933 as the securities were offered in private
transactions which did not involve any public offering.
On December 23, 2004, the Company filed a Form S-8 registration statement
registering the 306,667 shares of common stock, $0.0001 par value per share,
issued to Century Capital Management Ltd., which were offered upon the terms and
subject to the conditions set forth in the Engagement Letter, dated October 8,
2004, between the Company and Century Capital Management Ltd.
On November 19, 2004 the Company issued to accredited investors, pursuant
to a Securities Purchase Agreement, 2,131,033 shares of common stock of the
Company and warrants to purchase an aggregate of 426,206 shares of common stock
for an aggregate consideration of $2,237,585. The warrants issued to the
accredited investors have an exercise price of $1.31 per share and are
exercisable immediately. In addition, the Company issued a warrant to purchase
170,482 shares of common stock to the placement agent, Roth Capital Partners,
LLC, for the transactions contemplated by the Securities Purchase Agreement. The
warrant issued to the placement agent has a term of five years, has an exercise
price of $1.15 per share and is exercisable immediately.
Our November 19, 2004 issuance of 2,131,033 shares of common stock and
596,688 warrants to accredited investors was in reliance upon the exemptions
from registration provided by Section 4(2) of the Securities Act of 1933 and on
Rule 506 of Regulation D promulgated thereunder.
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 2004 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
offer to such individuals.
The principal factors that were taken into account in establishing each
executive officer's compensation package for the 2004 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.
Chief Executive Officer Compensation
Mark J. Josipovich, who served as our Chief Executive Officer,
President, Treasurer and Principal Accounting Officer during 2004, earned a
salary of $180,000 for 2004 under the terms of the employment agreement he
executed in September 2001. The Board of Directors did not award a bonus to Mr.
Josipovich for 2004. The following table sets forth compensation information for
Mark J. Josipovich as of the end of fiscal year 2004, 2003 and 2002.
Summary Compensation Table Annual Compensation
Fiscal Other Annual
Name and Principal Positions Year Salary Bonus Compensation
- ------------------------------------ ---------- ---------- --------- ---------------
Mark A. Josipovich 2004 $ 180,000 (1) -- --
President and Chief 2003 $ 180,000 (2) $ 39,500 $ 19,186 (4)
Executive Officer 2002 $ 180,000 (3) -- $ 19,721 (5)
(1) Excludes $265,879 of debt in the form of accrued but unpaid compensation,
which amount was paid off in October of 2004 upon receipt of 345,505
shares of the Company's common stock.
(2) Includes $160,000 that was deferred at the election of the executive
officer, which amount was discharged in October 2004 in exchange for
shares of the Company's common stock.
(3) Includes $31,165 that was deferred at the election of the executive
officer, which amount was discharged in October 2004 in exchange for
shares of the Company's common stock.
(4) Includes reimbursement of $9,267 for automobile expenses and $9,880 for
health insurance.
(5) Includes reimbursement of $7,746 for automobile expenses and $9,880.32 for
health insurance.
Chief Operating Officer Compensation.
Daniel T. Josipovich, who served as our Chief Operating Officer during
2004, earned a salary of $180,000 for 2004 under the terms of the employment
agreement he executed in September 2001. The Board of Directors did not award a
bonus to Mr. Daniel T. Josipovich for 2004. The following table sets forth
compensation information for our Chief Operating Officer as of the end of fiscal
year 2004, 2003 and 2002.
Summary Compensation Table Annual Compensation
Fiscal Other Annual
Name and Principal Positions Year Salary Bonus Compensation
- ------------------------------------ ---------- ---------- --------- -------------
Daniel T. Josipovich 2004 $ 180,000 (1) -- --
Chief Operating Officer 2003 $ 180,000 (2) $ 35,800 $ 25,577 (4)
2002 $ 180,000 (3) -- $ 25,233 (5)
(1) Excludes $358,113 of debt in the form of accrued but unpaid compensation,
which amount was paid off in October of 2004 upon receipt of 477,484
shares of the Company's common stock.
(2) Includes $150,000.00 that was deferred at the election of the executive
officer, which amount was discharged in October 2004 in exchange for
shares of the Company's common stock.
(3) Includes $39,000 that was deferred at the election of the executive
officer, which amount was discharged in October 2004 in exchange for
shares of the Company's common stock.
(4) Includes reimbursement of $15,658.36 for automobile expenses and $9,918
for health insurance.
(5) Includes reimbursement of $15,393.08 for automobile expenses and $8,593
for health insurance.
CTO Compensation.
The following table sets forth compensation information for our Chief
Technology Officer as of the end of fiscal year 2004.
Summary Compensation Table Annual Compensation
Fiscal Other Annual
Name and Principal Positions Year Salary Bonus Compensation
- ------------------------------------ ---------- ---------- --------- -------------
Peter Johnson 2004 $ 110,000 (1) -- --
Chief Technology Officer
(1) Peter Johnson's annual salary for fiscal year 2004 was $110,000. Mr.
Johnson was hired in September of 2004 and received a pro-rata share of
his annual salary in the amount of $27,500 for the fiscal year 2004.
Vice President of Insurance Solutions Compensation.
The following table sets forth compensation information for our Vice
President of Insurance Solutions as of the end of fiscal year 2004, 2003 and
2002.
Summary Compensation Table Annual Compensation
Fiscal Other Annual
Name and Principal Positions Year Salary Bonus Compensation
- ------------------------------------ ---------- ---------- --------- ---------------
Brian C. Jones 2004 $ 139,200 (1) -- --
Vice President 2003 $ 139,200 -- --
Insurance Solutions 2002 $ 139,200 -- --
(1) In October 2004, the Company issued a total of 126,116 shares of common
stock in settlement of $94,587 of debt owed to Brian Jones.
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 2004 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 2005 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 2004
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.
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 met four times during 2004 and once in early 2005 with respect to the
financial statements and financial condition of our company for fiscal years
2003 and 2004.
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
Stockholders Sharing an Address; Copies of Annual Report
We are sending only one Annual Report and Information Statement to two or more
stockholders that share an address unless we receive contrary instructions from
any beneficial owner at that address. This "householding" practice reduces our
printing and postage costs. However, if a beneficial owner at such an address
wishes to receive separate annual reports or information statements this year or
in the future, he or she may contact our transfer agent, Global Securities. If
you are a stockholder of record receiving multiple copies, you can request
householding by contacting us in the same manner. If you own your shares through
a bank, broker or other nominee, you can request householding by contacting the
nominee.
A copy of our Annual Report on Form 10-KSB for the fiscal year ended December
31, 2004, as filed with the Securities and Exchange Commission, will be sent to
any stockholder without charge upon written request to the Corporate Secretary
at the Bluebook International Holding Company, 21098 Bake Parkway, Suite 100,
Lake Forest, California 92630-2163. A copy of our Annual Report on Form 10-K
also may be obtained through the internet at the Securities and Exchange
Commission's website www.sec.gov.
Stockholder Proposals
Shareholders interested in presenting a proposal to be considered for inclusion
in the information statement for presentation at the 2006 annual meeting of
shareholders may do so by following the procedures prescribed in Rule 14a-8
under the Securities Exchange Act of 1934. To be eligible for inclusion,
shareholder proposals must be received by us on or before January 2, 2006.
Shareholders interested in presenting a proposal for consideration at the 2006
annual meeting of shareholders must submit their proposal to us, and the
proposal must be received by us on or before January 2, 2006.
OTHER MATTERS
Management does not know of any matters to be presented at the 2005 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 2005 Annual Meeting,
regardless of the number of shares that you hold. By Order of the Board of
Directors,
/s/ MARK A. JOSIPOVICH
MARK A. JOSIPOVICH
Chairman of the Board and
Chief Executive Officer
May 2, 2005
Lake Forest, California
THE BLUEBOOK INTERNATIONAL HOLDING COMPANY
STOCKHOLDERS MEETING
AUGUST 20, 2005 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 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;
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;
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 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.
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.
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.
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
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.
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.