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
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Filed by Party other than the Registrant [ ]
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[X] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement [ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to
Section 240.14a-12
CANEUM, INC.
(Name of Registrant as Specified in Its Charter)
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[X] No fee required.
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the filing fee is calculated and state how it was determined):
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(1) Amount Previously Paid:
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CANEUM, INC.
170 Newport Center Drive
Suite 210
Newport Beach, CA 92660
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Caneum, Inc. (the "Company") will hold its Annual Meeting of
Shareholders on May 31, 2007, at 10:00 AM, Pacific Time, at its offices
located at 170 Newport Center Drive, Suite 210, Newport Beach, California.
At the Annual Meeting, we will ask you to:
* Elect five directors;
* Ratify the appointment of LevitZacks, Certified Public Accountants,
as our independent registered public accountant for the fiscal year
ending December 31, 2007;
* Consider a proposal to add Article VIII to the Company's Articles
of Incorporation to limit the monetary liability of directors and
officers under both Nevada and California law; and
* Transact any other business that may properly be presented at the
annual meeting.
If you own shares of the Company's Common Stock as of April 3, 2007, you
can vote those shares by completing and mailing the enclosed proxy card or by
attending the Annual Meeting and voting in person. The Board of Directors has
fixed April 3, 2007, as the record date for determining shareholders who will
be entitled to receive notice of and vote at the Annual Meeting or any
postponements or adjournments of the meeting. A list of these stockholders
will be available at the Company's offices at least ten days before the
Annual Meeting.
Your vote is important. Whether or not you plan to attend the Annual
Meeting, please cast your vote by completing, dating and signing the enclosed
proxy card and return it in the envelope provided. If you attend the
meeting, you may withdraw your proxy and vote in person, if you so choose.
By order of the Board of Directors,
Alan S. Knitowski, Chairman
April ____, 2007
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TABLE OF CONTENTS
Page
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING . . . . . . . . 1
VOTING REQUIREMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ELECTION OF DIRECTORS (ITEM 1) . . . . . . . . . . . . . . . . . . . . . 4
INFORMATION REGARDING BOARD OF DIRECTORS AND COMMITTEES . . . . . . . . . 7
Director Independence . . . . . . . . . . . . . . . . . . . . . . . . 7
Board Attendance . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Committees of the Board of Directors . . . . . . . . . . . . . . . . . 8
Report of the Audit Committee . . . . . . . . .. . . . . . . . . . . . 9
FEES PAID TO INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM . . . . . . . 9
Fees Paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Audit Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
CORPORATE GOVERNANCE MATTERS . . . . . . . . . . . . . . . . . . . . . . 10
Shareholder Communications with the Board of Directors . . . . . . . . 10
Overview of Director Nominating Process . . . . . . . . . . . . . . . 11
Code of Ethics . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
OWNERSHIP OF COMPANY SECURITIES . . . . . . . . . . . . . . . . . . . . . 11
Beneficial Owners of More than Five Percent, Directors, and Management 11
Equity Compensation Plan Information . . . . . . . . . . . . . . . . . 12
Section 16(a) Beneficial Ownership Reporting Compliance . . . . . . . 13
EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . 13
Executive Compensation Summary . . . . . . . . . . . . . . . . . . . . 13
Equity Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Director Compensation . . . . . . . . . . . . . . . . . . . . . . . . 17
CERTAIN TRANSACTIONS AND RELATIONSHIPS . . . . . . . . . . . . . . . . . 18
RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM (ITEM 2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
LIMITATION OF LIABILITY PROPOSAL (ITEM 3) . . . . . . . . . . . . . . . . 20
ADDITIONAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . 21
Information About Shareholder Proposals . . . . . . . . . . . . . . . 21
Additional Filings . . . . . . . . . . . . . . . . . . . . . . . . . . 21
OTHER BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
iii
CANEUM, INC.
PROXY STATEMENT
FOR THE
2007 ANNUAL MEETING OF SHAREHOLDERS
_____________________________________________________________________________
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING
_____________________________________________________________________________
Q: Why did I receive this Proxy Statement?
A: Because you are a shareholder of Caneum, Inc. as of April 3, 2007, the
record date, and are entitled to vote at the 2007 Annual Meeting of
Shareholders, the Board of Directors is soliciting your proxy to vote at
the meeting. As of the record date, there were 7,820,000 shares of
Common Stock outstanding. Each share of Common Stock is entitled to one
vote.
This Proxy Statement summarizes the information you need to know to vote
at the Annual Meeting. This Proxy Statement and proxy card were first
mailed to shareholders on or about April ____, 2007.
Q: What am I being asked to vote on?
A: You are being asked to vote on the following items:
* Election of Suki Mudan, Alan S. Knitowski, Luan Dang, Dr. Avtar
Singh Ranshi, and Robert F. Mitro as directors of the Company, each
for a term of one year;
* Ratification of the appointment of LevitZacks as the Company's
independent registered public accounting firm for the fiscal year
ending December 31, 2007;
* A proposal to add Article VIII to the Company's Articles of
Incorporation to limit the monetary liability of directors and
officers under both Nevada and California law; and
* Any other matter properly introduced at the meeting.
Q: What are the voting recommendations of the Board of Directors?
A: The Board recommends the following votes:
* FOR each of the director nominees (Item 1);
* FOR ratification of the appointment of LevitZacks; and
* FOR the proposal to add Article VIII to the Company's Articles of
Incorporation to limit the monetary liability of directors and
officers under both Nevada and California law (Item 3).
Q: Will any other matters be voted on?
A: We are not aware of any other matters that will be brought before the
shareholders for a vote at the Annual Meeting. If any other matter is
properly brought before the meeting, your proxy will authorize each of
Suki Mudan and Alan S. Knitowski to vote on such matters in their
discretion.
Q: How do I vote?
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A: If you return your signed proxy card, your shares will be voted as you
indicate. If you do not indicate how your shares are to be voted on a
matter, the shares represented by your properly completed proxy/voting
instruction card will be voted "For" the nominees for director, "For"
ratification of the appointment of LevitZacks and "For" the proposal to
add Article VIII to the Company's Articles of Incorporation to limit the
monetary liability of directors and officers under both Nevada and
California law.
If your shares are held in a brokerage account in your broker's name
(also known as "street name"), you should follow the instructions for
voting provided by your broker or nominee. You may complete and mail a
voting instruction card to your broker or nominee. If you provide
specific voting instructions, your broker or nominee will vote your
shares as you have directed.
Ballots will be provided during the Annual Meeting to anyone who wants
to vote in person at the meeting. If you hold shares in street name,
you must request a confirmation of beneficial ownership from your broker
to vote in person at the meeting.
In the election of directors, shareholders may elect to cumulate their
votes as described below under "What does cumulative voting mean?"
Q: What does cumulative voting mean?
A: Cumulative voting applies only in the election of directors. It means
that you may cast a number of votes equal to the number of common shares
you own multiplied by the number of directors to be elected. For
example, since five directors are standing for election at the Annual
Meeting, if you hold 100 shares of common stock, you may cast 500 votes
(5 times 100) in the election of directors. You may distribute those
votes among as few or as many of the five nominees as you wish. In
other words, in the example provided, you may cast all 500 votes "FOR"
one nominee or allocate your 500 votes among two or more nominees, as
long as the total equals 500 votes.
If you received a proxy card and wish to vote cumulatively, you must:
* write the words "cumulate for" in the space provided under Item 1
of the proxy card; and
* write the name of each nominee and the number of votes to be cast
for each nominee in that space.
If you vote cumulatively, please check to be sure that the votes you
cast add up to the number of shares you own multiplied by 5. If the
number of votes does not add up correctly, your votes will not be
counted until a properly completed proxy card has been received.
The cumulative voting feature for the election of directors also is
available by voting in person at the annual meeting. If you are the
beneficial owner of shares held in street name and wish to vote
cumulatively, you will need to contact your broker, bank or other
nominee holder of your shares.
Q: Can I change my vote?
A: Yes. If you are a shareholder of record, you can change your vote or
revoke your proxy before the Annual Meeting by:
* Submitting a valid, later-dated proxy;
* Notifying the Company's Corporate Secretary in writing that you
have revoked your proxy; or
* Completing a written ballot at the Annual Meeting.
Q: Is my vote confidential?
A: Yes. All proxies, ballots and vote tabulations that identify how
individual shareholders voted will be kept confidential and not be
disclosed to the Company's directors, officers or employees, except in
limited circumstances, including:
* When disclosure is required by law;
* During any contested solicitation of proxies or
* When written comments by a shareholder appear on a proxy card or
other voting material.
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Q: What will happen if I do not instruct my broker how to vote?
A: If your shares are held in street name and you do not instruct your
broker how to vote, your broker may vote your shares at its discretion
on routine matters such as the election of directors (Item 1) or
ratification of the independent registered public accounting firm
(Item 2). On non-routine matters, brokers and other nominees cannot vote
without instructions from the beneficial owner, resulting in so-called
"broker non-votes." Broker non-votes will have no impact on the
proposal to add Article VIII to the Company's Articles of Incorporation
to limit the monetary liability of directors and officers under both
Nevada and California law (Item 3).
Q: How many shares must be present to hold the Annual Meeting?
A: Holders of at least one-third of the shares of outstanding Common Stock
as of the record date must be represented at the Annual Meeting in order
to conduct business. This is called a quorum. If you vote, your shares
will be part of the quorum. Abstentions, "Withheld" votes and broker
non-votes also will be counted in determining whether a quorum exists.
Q: What vote is required to approve the proposals?
A: In the election of directors, the five nominees receiving the highest
number of "For" votes will be elected.
The proposal to ratify the appointment of LevitZacks will require
approval by a majority of the shares present at the meeting and entitled
to vote.
The proposal to add Article VIII to the Company's Articles of
Incorporation to limit the monetary liability of directors and officers
under both Nevada and California law will require approval by a majority
of the shares entitled to vote.
Broker non-votes, if any, will have no impact on the other proposals.
Q: Who can attend the Annual Meeting?
A: All Company shareholders as of April 3, 2007, may attend the Annual
Meeting.
Q: Where can I find the voting results of the Annual Meeting?
A: We plan to announce preliminary voting results at the Annual Meeting and
to publish final results in our Quarterly Report on SEC Form 10-QSB for
the Quarterly Period Ended June 30, 2007.
_____________________________________________________________________________
VOTING REQUIREMENTS
_____________________________________________________________________________
Only our shareholders of record at the close of business on April 3,
2007, will be entitled to vote at the meeting. Our outstanding voting stock
as of such record date consisted of 7,820,000 shares of our common stock.
Each outstanding share of our common stock is entitled to one vote, except
for the election of directors which permits cumulative voting. Each share
voted for the election of directors is entitled to five votes, one each for
the election of five directors, and the five votes may be cast for a single
person or may be distributed among two or more persons.
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_____________________________________________________________________________
ELECTION OF DIRECTORS (ITEM 1)
_____________________________________________________________________________
The Board of Directors has nominated the following individuals for
election as directors: Suki Mudan, Alan S. Knitowski, Luan Dang, Dr. Avtar
Singh Ranshi, and Robert F. Mitro. Each of the nominees currently is serving
as a director of the Company. All nominees have consented to serve for the
new term.
The following table sets forth as of April 3, 2007, the name, age, and
position of our executive officers and directors, as well as certain
significant employees:
Director
Name Age Position(s) Since
---- --- ----------- --------
Suki Mudan 58 President and Director 2002
Gary D. Allhusen 45 Executive Vice-President & --
Chief Operating Officer
Alan S. Knitowski 37 Chairman 2003
Luan Dang 35 Vice-Chairman 2005
Robert F. Mitro 65 Director 2003
Avtar Singh Ranshi 59 Director 2003
Michael A. Willner 52 Senior Vice-President --
Robert J. Morris 37 Senior Vice-President --
Heather J. Jeanblanc 37 Vice-President Finance & Accounting --
Jesper Lindorff 35 CEO of Caneum India Pvt Ltd --
Neeraj Sehgal 34 CTO of Caneum India Pvt Ltd --
Directors are elected for a term of one year and until their successors
are elected and qualified. Annual meetings of the stockholders, for the
selection of directors to succeed those whose terms expire, are to be held at
such time each year as designated by the Board of Directors. Officers of the
Company are elected by the Board of Directors, which is required to consider
that subject at its first meeting after every annual meeting of stockholders.
Each officer holds his office until his successor is elected and qualified or
until his earlier resignation or removal.
Set forth below is certain biographical information regarding our
current executive officers and directors:
SUKI MUDAN has been the President since August 1, 2002. Mr. Mudan was
the COO and Venture Partner of IP Capital Partners in La Jolla, California
from 2001 to 2002. IP Capital Partners was focused on identifying and
creating value in early to mid stage technology companies that are poised to
become future leaders in their specific market segments. IP Capital
leverages its access and special ties to the region's universities and
research centers with its deep business community and industry contacts to
identify and facilitate the growth of next generation technology companies.
From 1998 to 2001 Mr. Mudan was a senior consultant at Nextera Interactive, a
technology and management consulting company that was part of Knowledge
Universe. In 1985, he founded Comwave Inc., originally a Packet Data radio
company and subsequently a fax broadcasting company that was acquired by a
publicly traded company in 1994. In his capacity as CEO, he led the company
from a small UK based company to becoming a global company with offices in
various countries interconnected by a private data network. Previously, from
1981 to 1985, Mr. Mudan was a strategy consultant with Booz Allen and
Hamilton. Mr. Mudan graduated in Chemical Engineering from Imperial College,
London University and holds a Masters degree in Management Studies from
Balliol College, Oxford University.
GARY D. ALLHUSEN was appointed as our Executive Vice-President on
March 17, 2004, and as our COO on June 22, 2006. From February 2003 until
March 2004, Mr. Allhusen was a Director in the Communications Industry
Practice with EDS selling and delivering large transformational consulting
and outsourcing programs. Mr. Allhusen also set up EDS' strategic
transformational outsourcing practice focused on the business and information
technology transformational outsourcing market. From July 2000 through
January 2003, Mr. Allhusen was a Principal with A. T. Kearney, a high value
management consulting firm and subsidiary of EDS. While at A. T. Kearney,
Mr. Allhusen focused on providing information technology strategy and
alignment consulting services to
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large multi-national organizations. He was also responsible for embedding
business process transformation and information technology operational
excellence services into large EDS outsourcing deals. Major clients of
Mr. Allhusen included Sprint, Bechtel, i2 Technologies, Hewlett-Packard,
Boeing, Solar Turbines, Jet Propulsion Laboratory, Warner Brothers Studios,
and Warner/Elektra/Atlantic. From June 1994 until July 2000, he was employed
by Ernst & Young LLP. From June 1989 through May 1994, he was employed by
Hughes Space and Communications Company and from August 1984 through August
1987, he was employed by the New York State Energy Research and Development
Authority.
In 1984, Mr. Allhusen received a Bachelor of Science degree in
mechanical and aerospace engineering from Sibley School, Cornell University.
In 1989, he received his MBA from Johnson Graduate School of Management,
Cornell University. And in 1993 he received a Master of Engineering degree
in operations research and industrial engineering from the School of
Operations Research and Industrial Engineering, Cornell University. He has
published and spoken at major conferences on the topic of Information
Technology Strategy and Alignment. He is also active on the Management
Committee for the Special Olympics of Southern California Summer Games'
Tennis Venue where he is responsible for running the annual competition.
ALAN KNITOWSKI has been our Chairman since 2003. He has been the
President of Alternative Investments for Curo Capital, LLC, since January
2007, and has been Co-Manager of the Curo Capital Appreciation Fund I, LLC,
since January 2007. He has also been Chairman of Trycera Financial, Inc.
(OTC BB: TRYF), a company engaged in developing, deploying and marketing
semi-custom and customized branded prepaid and stored value card solutions,
since 2004. Mr. Knitowski was the Founder and has served as the Managing
Director of Ecewa Capital Group, LLC, since January 2004. He was the
Co-Founder and has served as the Managing Director of Trymetris Capital
Management, LLC, and the Trymetris Capital Fund I, LLC, since April 2004. He
has served as a Director of WindSpring, Inc., since January 2004, as an
advisor of Edgewater Networks, Inc., since June 2005, as a Director of
Vootage, Inc., since January 2007, and as an Angel Investor of numerous
technology, media, biotechnology and energy companies.
Previously, from 2000 to 2003 Mr. Knitowski was Co-Founder and Director
of Telverse Communications, Inc., a next-generation advanced services ASP
focused on wholesale communications services for carriers, service providers
and value-added resellers, which was acquired in July 2003 by Level 3
Communications (NASDAQ: LVLT). Most recently, Mr. Knitowski was Director of
Marketing for the Voice Technology Group at Cisco Systems from November 2000
to March 2003 and was responsible for business, market and community
development, including business planning and strategy for Cisco's global
packet communications initiatives. In November 2000, Mr. Knitowski joined
Cisco as part of the Vovida Networks acquisition, where he served as
Co-Founder, President and CEO and led the company from idea conception in
January 1999 through its eventual acquisition by Cisco (NASDAQ: CSCO) in
November 2000.
From December 2000 to October 2002, Mr. Knitowski was an Angel Investor
and Director of vCIS, a proactive software behavior analysis and anti-virus
security company, and helped negotiate and structure its acquisition by
Internet Security Systems (NASDAQ: ISSX). Additionally, he was a Founding
Director of both the Open Multimedia Protocol Alliance (OMPA) and the
International Softswitch Consortium (ISC) in early 1999, which were
subsequently merged and scaled to nearly 200 companies prior to renaming
itself to become the International Packet Communications Consortium (IPCC) in
2003. During his tenure at the consortium, Mr. Knitowski served as its Vice
Chairman, Co-Chair of its Government Liaison Working Group and one of its
external evangelists.
Previously, Mr. Knitowski worked in various operational, line management
and consulting roles with The Results Group (1998 - 1999), Nortel Networks
(1996 - 1998), Hewlett Packard (1991) and the United States Army (1991 -
1996), where he served as an Airborne, Air Assault and Ranger qualified
Captain in the Corps of Engineers both domestically and abroad.
Mr. Knitowski holds an MBA from the University of California at Berkeley
(1999), an MS in industrial engineering from the Georgia Institute of
Technology (1992) and a BS in industrial engineering from the University of
Miami (1991). He has delivered and moderated general and executive sessions
at various events and conferences within the communications industry, has
appeared on radio and television to discuss next-generation networking and
packet communications and has delivered educational sessions on
next-generation networking and packet communications to the United States
Federal Communications Commission.
5
LUAN DANG has been President of Strategic Investments for Curo Capital
LLC since January 2007, and has been Co-Manager of the Curo Capital
Appreciation Fund I LLC, since January 2007. He has also been President of
Alternative Investments for Trymetris Capital Management LLC, and Co-Manager
of the Trymetris Capital Fund I LLC, since January 2007. He has served as
Vice Chairman of Trycera Financial, Inc. (OTC BB: TRYF), a company engaged in
developing, deploying and marketing semi-custom and customized branded
prepaid and stored value card solutions, since 2004, and currently serves on
the audit committee and chairs the compensation committee. He has also been
an Advisor of Bitfone, Inc. (acquired by Hewlett-Packard (NYSE: HPQ) in
December 2006), since 2006, of Vootage, Inc. since January 2007, and of
Edgewater Networks, Inc., since June 2005. Mr. Dang was a director of
engineering for Cisco Systems from November 2000 until February 2005,
overseeing the development of VoIP products and strategies and the next
generation SIP call control. From February 1999 until November 2000 he was
Co-Founded of and employed by Vovida Networks, a software development firm
for VoIP, as CTO and Senior Vice-President. From 1999 to 2002, Mr. Dang
served as a member of the Technical Advisory Council for the International
Softswitch Consortium, which has become the International Packet
Communications Consortium. In addition to filing two telephony patents for
voice-over-IP in 1999 and caller IP in 1998, he holds a patent on display
screen management apparatus in 1997. He is the co-author of a book entitled
Practical VoIP that is currently being used as a core textbook for teaching
VoIP system development at universities worldwide. Mr. Dang received his BS
degree in computer science from the University of California at San Diego in
1992. He received his MS degree in computer science from Stanford University
in 1996. Mr. Dang has been an honored speaker at national and international
conferences in the telecom industry, including acting as Chairman of the
Media Gateway Control 2000 Conference in La Defense, France.
ROBERT F. MITRO was the Vice Chairman of the board from June 11, 2003,
until 2005, and has been a Director of the company since 2003. He had been
retired since October 2002. In December 2005, Mr. Mitro was elected to he
board of directors of STEP Communications which is a noise elimination and
voice separation acoustics software technology company. Since January 2004,
he has also been the Chairman of the board for Windspring, Inc. [formerly
Zentronix Pty Limited (Australia)], which has introduced an innovative data
miniaturization software technology to supersede traditional compression
technology for wireless, digital mapping and high speed storage and search
applications. From February 2005 to March 2007, Mr. Mitro also assumed the
WindSpring CEO position. From January 2001 until October 2002, he was
President and CEO of vCIS, Inc., a proactive software behavior analysis and
anti-virus security company which was acquired by Internet Security Systems
in 2002. Prior to joining vCIS Technology, Mr. Mitro has held numerous
executive positions including President of eCycle, Inc. from January 1998 to
April 1999; President and COO of Engelhard/ICC from June 1994 to April 1995;
Senior Vice-President and General Manager of PictureTel Sales, Marketing and
Services Group from September 1988 to June 1994; Vice-President Sales and
Marketing for Harris Corporation from October 1985 to July 1988; plus Group
Director for IBM Storage Systems Group from October 1984 to September 1985,
and Manager for IBM Engineering/Scientific Marketing from March 1981 to
September 1984 during a 17 year career at IBM from November 1968 to September
1985. In addition to his general management experience, Mr. Mitro has had a
successful 30 year sales, marketing and business development career in
maximizing revenues and profits for a variety of companies in the high tech
industry, including extensive experience in business strategy and
development, organization development, market entry for emerging products and
markets, global market and channel development; strategic partner alliances,
and joint venture investment strategies for both large corporations and
start-up companies alike. Mr. Mitro has recently served on the board of
directors of Vovida Networks from February 1999 to November 2000 when it was
acquired by Cisco Systems. He has served as a director of Telverse
Communications from August 2000 to July 2003 when it was acquired by Level 3
Communications, and vCIS Technology from January 2001 to October 2002 when it
was acquired by Internet Security Systems. Mr. Mitro received a Bachelor of
Engineering from Stevens Institute of Technology, Hoboken, New Jersey, in
1965, and completed Executive Programs at the Graduate Schools of Business at
Harvard University in 1975 and the University of Michigan in 1979.
DR. AVTAR SINGH RANSHI has been a Director of the board since 2003, and
has also been a director of Spotform, PLC, an English limited liability
company engaged in the car and van rental business, since 1991. He received
his Bachelor of Science, Masters of Science, and Doctorate degrees from the
University of Manchester, UK, in 1970, 1972, and 1974, respectively.
Dr. Ranshi worked for four years, from 1975 to 1978, for National Nuclear
Corporation primarily focusing on the structural impact of an earthquake or
aircraft impact on nuclear power stations. He then worked for twelve years,
from 1978 to 1990, for SDRC, a US company, where he held several management
positions in Technical Support, Sales, Marketing and General Management with
profit and loss
6
responsibility. With SDRC he also spent four years in Germany as the Country
Manager for Central Europe with complete control of all business in Germany,
Austria, Switzerland and emerging eastern European countries. Dr. Ranshi has
authored several technical papers in international journals from his Masters
and Doctoral research, as well as from his work at National Nuclear
Corporation and SDRC. He has also presented technical papers at several
international conferences.
MICHAEL A. WILLNER has served as our Senior Vice-President since
March 28, 2006. He has served as President of Tier One Consulting, Inc., our
wholly owned subsidiary, since March 2003. From January 2002 until January
2003 he was employed as Senior Vice-President of Sertan, a software company.
From June 1999 until October 2001, Mr. Willner was employed as President of
Net-Strike Worldwide, an employee management firm. He received his Juris
Doctor degree from Antioch School of Law in 1979.
ROBERT J. MORRIS has served as our Senior Vice-President since March 28,
2006. He has served as Vice-President and Chief Financial Officer of Tier
One Consulting, Inc., our wholly owned subsidiary, since March 2003. From
October 2000 until October 2002 he was employed as Vice-President of
Operations for Net-Strike Worldwide, a professional IT services company.
Mr. Morris received his MBA degree in 1998 from Loyola Marymount.
HEATHER J. JEANBLANC served as Director of Operations/Controller for
Industria Solutions, Inc. in Mountain View, California, from January 2000
through June 2001. From June 2001 through June 2004 she served as
Vice-President and CFO for Silver Oak Partners, Inc. of Boston,
Massachusetts. From June 2004 through April 2005 she served as Chief
Financial Officer for ZZyzx Peripherals Inc. in San Diego, California.
Ms. Jeanblanc graduated with a Bachelor of Arts degree in Management from Saint
Martin's College, Olympia, Washington, in 1992. Ms. Jeanblanc has passed the
financial and law sections of the CPA examination, but she has not yet passed
the remaining portions of the examination.
JESPER LINDORFF has served as the chief executive officer and a Director
of the Board of Caneum India Pvt Ltd, formerly Continuum Services Pvt Ltd,
since April 2002. Mr. Lindorff received his Master of Science in Business
Administration, Accounting and Finance in 2006 from Stockholm School of
Economics.
NEERAJ SEHGAL has served as the chief technical officer of Caneum India
Pvt Ltd, formerly Continuum Services Pvt Ltd, since April 2002. From April
2002 until December 2006, he also served as Director of the Board.
Mr. Sehgal received his Master of Business Administration in 2007 from IMSAR,
India.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" EACH OF THE
DIRECTOR NOMINEES NAMED ABOVE.
_____________________________________________________________________________
INFORMATION REGARDING BOARD OF DIRECTORS AND COMMITTEES
_____________________________________________________________________________
Director Independence
Our securities are not listed on a national securities exchange or in an
inter-dealer quotation system which has requirements that directors be
independent. As a result, we have adopted the independence standards of the
American Stock Exchange to determine the independence of our directors and
those directors serving on our committees. These standards provide that a
person will be considered an independent director if he or she is not an
officer of the company and is, in the view of the Company's Board of
Directors, free of any relationship that would interfere with the exercise of
independent judgment. Our Board of Directors has determined that three of
our directors, Robert F. Mitro, Luan Dang, and Dr. Avtar Singh Ranshi, would
meet this standard and therefore, would be considered to be independent.
Board Attendance
The Board of Directors met eight times in 2006. During that period,
each incumbent director attended 75% or more of the aggregate number of
meetings of the Board and the committees on which he served. All directors
attended each meeting of the Board of Directors with the exception of one
meeting missed by one director.
7
Mr. Knitowski serves as chairman at all meetings of the Board of Directors.
During 2006, the Company's non-management directors did not meet in executive
session.
The Board has not adopted any policy with regard to Board members'
attendance at annual meetings of shareholders. This is the first annual
meeting of shareholders held by the Company.
Committees of the Board of Directors
In August 2003 our Board created an Audit Committee and a Compensation
Committee. Luan Dang and Dr. Avtar Singh Ranshi currently serve on each
committee as independent directors. Mr. Dang is chair of the compensation
committee and Dr. Ranshi is chair of the audit committee. Our Board of
Directors has determined that we do not have an audit committee financial
expert serving on our Audit Committee. Our board has determined that the
need for an audit committee financial expert during our initial phase of
operations does not warrant the expense to retain such an expert.
The Audit Committee held three meeting in 2006. It does not have a
charter. However, the Board has assigned the committee the duties generally
to assist the Board in fulfilling its responsibility for oversight of the
quality and integrity of our accounting, auditing and financial reporting
practices; monitor the integrity of our financial reporting process, systems
of internal controls and disclosure controls regarding finance, accounting
and legal compliance; review areas of potential significant financial risk to
the Company; review consolidated financial statements and disclosures;
appoint an independent registered public accounting firm for ratification by
our shareholders; monitor the independence and performance of our independent
registered public accountants and internal auditing department; pre-approve
all audit and non-audit services provided by our independent registered
public accountants; review the scope and results of the annual audit
including reports and recommendations of our independent registered public
accountants; review the internal audit plan, results of internal audit work;
and periodically meet with our internal audit group, management, and
independent registered public accounting firm.
The Compensation Committee held one meeting in 2006; all other actions
were taken by unanimous written consents. This committee does not have a
charter. However, the Compensation Committee's responsibilities generally
assigned to it by the Board include the following: approve and oversee the
implementation of the executive and director compensation philosophy,
policies and programs; consider and recommend for approval by the Board all
executive compensation programs including benefits, stock option plans and
stock ownership plans; and promote an executive compensation program that
supports the overall objective of enhancing shareholder value. The
Compensation Committee has been given authority to retain and terminate
consultants, outside counsel and other advisors as the Committee may deem
appropriate in its sole discretion. The Committee has sole authority to
approve related fees and retention terms. The Committee annually evaluates
the CEO's performance in light of established goals and objectives. Based
upon the Committee's evaluation and recommendation, the committee sets the
CEO's annual compensation, including salary, bonus, incentive and equity
compensation and perquisites. The CEO annually reviews the performance of
each of our senior officers. The CEO also annually reviews the performance
of our other senior officers and provides oversight of management's
evaluations of our other officers. The Compensation Committee has not been
given power to delegate any authority described above to other persons. The
Compensation Committee has not engaged any compensation consultants in
determining or recommending the amount or form of executive and director
compensation.
In October 2003, we established an advisory board to assist management
in its business goals. The members of the Advisory board are Jason Daggett,
Roger Goulette, Romir Bosu, Paul D. McNulty, David Oppenheimer, Andrew
Quintero, and John T. Wells, Jr. Jason Daggett was appointed to the
advisory board effective July 28, 2004. On December 30, 2005, we appointed
an additional member and chairman to the advisory board, Roger Goulette. As
compensation to him for accepting this appointment, we granted to him 40,000
shares and options to purchase a total of 50,000 shares at $.85 per share.
The shares vest based on performance and is tied to generating $500,000 in
revenue. Each quarter we divide the revenue attributed to Mr. Goulette for
the quarter by $500,000 to calculate the percentage of the stock grant that
would vest for that quarter. Of the options, 40,000 options vest one-eighth
(1/8th) at the end of each 90 day period, provided that Mr. Goulette remains
on the advisory board, and 10,000 options vest one-fourth (1/4th) at the end
of each 90 day period, provided that Mr. Goulette remains as the chairman of
the advisory board. The options also vest immediately in the event of a
Corporate Transaction, as defined in the 2002 Stock Option/Stock Issuance
Plan. The stock and options were granted under
8
our 2002 Stock Option/Stock Issuance Plan. On November 7, 2006, Mssrs Bosu,
McNulty, Oppenheimer, Quintero and Wells were appointed to the advisory board.
As compensation for accepting their appointments, we granted each 40,000
shares and options to purchase 40,000 shares at $.68 per share. The shares
vest based on performance and are tied to generating $500,000 in revenue.
Each quarter we divide the revenue attributed to each grantee for the quarter
by $500,000 to calculate the percentage of the stock grant that would vest for
that quarter. Of the options, 40,000 options vest one-eighth (1/8th) at the
end of each 90 day period, contingent upon continued service on the advisory
board. The options also vest immediately in the event of a Corporate
Transaction, as defined in the 2002 Stock Option/Stock Issuance Plan. The
stock and options were granted under our 2002 Stock Option/Stock Issuance
Plan.
On March 11, 2004, the Board of Directors created a Disclosure Committee
composed of our President, Chairman and Chair of our Audit Committee. The
purpose of the Disclosure Committee is to assist our principal executive
officer and the principal financial officer in fulfilling their
responsibility for oversight of the accuracy and timeliness of disclosures
made by us in our periodic reports.
Report of the Audit Committee
The Audit Committee has reviewed and discussed the Company's audited
financial statements as of and for the fiscal year ended December 31, 2006,
with management and LevitZacks, the Company's independent registered public
accounting firm. Management is responsible for the Company's internal
control over financial reporting and the financial statements, while
LevitZacks is responsible for conducting its audit in accordance with
generally accepted auditing standards and expressing opinions on the
Company's financial statements in accordance with U.S. generally accepted
accounting principles (GAAP).
The Audit Committee reviewed with LevitZacks the overall scope and plans
for their audit of the Company's financial statements. The Audit Committee
also discussed with LevitZacks matters relating to the quality and
acceptability of the Company's accounting principles, as applied in its
financial reporting processes, as required by Statement of Auditing Standards
(SAS) No. 61, as amended by SAS No. 90. In addition, the Audit Committee
reviewed and discussed with LevitZacks the auditor's independence from
management and the Company, as well as the matters included in written
disclosures received from LevitZacks as required by Independence Standards
Board Standard No. 1, Independence Discussions with Audit Committees. As
part of its review, the Audit Committee reviewed fees paid to LevitZacks and
determined that LevitZacks did not perform any non-audit services for the
Company during 2006.
Based upon the reviews and discussions referred to above, the Audit
Committee recommended to the Board of Directors that the audited financial
statements be included in the Company's Annual Report on Form 10-KSB for the
fiscal year ended December 31, 2006, for filing with the Securities and
Exchange Commission.
MEMBERS OF THE AUDIT COMMITTEE:
DR. AVTAR SINGH RANSHI
LUAN DANG
_____________________________________________________________________________
FEES PAID TO INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
_____________________________________________________________________________
Fees Paid
LevitZacks served as the Company's independent registered public
accounting firm for the fiscal years ended December 31, 2006. Haskell & White
LLP served as the Company's independent registered public accounting firm for
the fiscal years ended December 31, 2005. The following fees were paid to
our independent registered public accounting firms for services rendered
during the Company's last two fiscal years:
9
Audit Fees
The aggregate fees billed for professional services rendered by our
principal accountant for the audit of our annual financial statements, review
of financial statements included in the quarterly reports and other fees that
are normally provided by the accountant in connection with statutory and
regulatory filings or engagements for the fiscal years ended December 31,
2006 and 2005 were $73,770 and $60,315, respectively.
Audit-Related Fees
There were no fees billed for assurance and related services by our
principal accountant that are reasonably related to the performance of the
audit or review of the financial statements, other than those previously
reported above, for the fiscal years ended December 31, 2006 and 2005.
Tax Fees
There were no fees billed for professional services rendered by our
principal accountant for tax compliance, tax advice and tax planning for the
fiscal years ended December 31, 2006 and 2005.
All Other Fees
There were no other fees billed for products or services provided by the
principal accountant, other than those previously reported above, for the
fiscal years ended December 31, 2006 and 2005.
Audit Committee
Our Audit Committee was created on August 14, 2003. Prior to that date
the function of overseeing our accounting and financial reporting processes,
and the audits of our financial statements, was performed by our board of
directors.
Our Audit Committee has considered whether the non-audit services
provided by our auditors to us are compatible with maintaining the
independence of our auditors and concluded that the independence of our
auditors is not compromised by the provision of such services. Our Audit
Committee pre-approves all auditing services and permitted non-audit
services, including the fees and terms of those services, to be performed for
us by our independent auditor prior to engagement.
_____________________________________________________________________________
CORPORATE GOVERNANCE MATTERS
_____________________________________________________________________________
Shareholder Communications with the Board of Directors
Our current policy is to permit security holders to recommend candidates
for election as directors and to provide for a process for stockholders to
send other communications to the Board of Directors. Stockholders may send
communications to the Board of Directors by contacting our President,
Mr. Mudan, in one of the following ways:
* In writing at 170 Newport Center Drive, Suite 210, Newport Beach,
CA 92660;
* By e-mail at suki@caneum.com
The President will submit each nomination or communication received to
the Board of Directors at the next regular meeting. At such meeting the
Board will consider such director candidates recommended by security holders.
We have not received any nominations from security holders and therefore have
not determined a process for evaluating nominees for director based upon
whether the nominee is recommended by a security holder.
10
Overview of Director Nominating Process
We do not have a standing Nominating Committee; recommendations for
candidates to stand for election as directors are made by the Board of
Directors. Each director participates in the consideration of director
nominees. We believe it is appropriate not to have a separate Nominating
Committee at this early stage of our operations.
We have not established any minimum qualifications which must be met by
a nominee and have not determined any specific qualities or skills that a
nominee must possess to serve on the Board of Directors. We have not and do
not intend to engage any third party to identify or evaluate or assist in
identifying or evaluating potential nominees.
Code of Ethics
On March 10, 2004, the Board of Directors adopted a Code of Ethics. The
purpose of the Code of is to set the expectations of the highest standards of
ethical conduct and fair dealings. The Code of Ethics applies to our
principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar functions.
_____________________________________________________________________________
OWNERSHIP OF COMPANY SECURITIES
_____________________________________________________________________________
Beneficial Owners of More than Five Percent, Directors, and Management
The following table sets forth certain information furnished by current
management concerning the ownership of the common stock of our company as of
April 3, 2007, of (i) each person who is known to us to be the beneficial
owner of more than 5 percent of the common stock; (ii) all directors and
executive officers; and (iii) our directors and executive officers as a
group:
Name and Address Amount and Nature of Percent of
of Beneficial Owner Beneficial Ownership(1) Class(2)
- ------------------- ----------------------- ----------
Sukhbir Singh Mudan 1,320,822(3) 15.0%
170 Newport Center Dr.
Suite 210
Newport Beach, CA 92660
Gary D. Allhusen 831,451(4) 9.6%
170 Newport Center Drive
Suite 210
Newport Beach, CA 92660
Alan S. Knitowski 1,993,423(5) 22.8%
2 San Joaquin Plaza
Suite 240
Newport Beach, CA 92660
Luan Dang 487,407(6) 6.0%
2 San Joaquin Plaza
Suite 240
Newport Beach, CA 92660
Robert F. Mitro 1,284,611(7) 15.3%
348 Bean Ave.
Los Gatos, CA 95030
11
Avtar Singh Ranshi 287,500(8) 3.6%
66 Marshals Drive
St. Albans, Hertfordshire
UK ALI 4RF
Michael A. Willner 312,500(9) 3.8%
170 Newport Center Dr.
Suite 210
Newport Beach, CA 92660
Robert J. Morris 312,500(9) 3.8%
170 Newport Center Dr.
Suite 210
Newport Beach, CA 92660
Heather J. Jeanblanc 29,412 *
170 Newport Center Dr.
Suite 210
Newport Beach, CA 92660
Executive Officers and 6,859,726 56.2%
Directors as a Group
(9 Persons)
Iain Stuart Allison 424,357 5.4%
5 Ravenscroft Rd.
Oxon RG9 2DH
United Kingdom
__________
* Less than 1%
(1) This table is based upon information supplied by officers, directors and
principal stockholders and Schedules 13D and 13G filed with the
Securities and Exchange Commission. Unless otherwise indicated in the
footnotes to this table, and subject to community property laws where
applicable, we believe that each of the stockholders named in this table
has sole voting and investment power with respect to the shares
indicated as beneficially owned. Beneficial ownership is determined in
accordance with the rules of the Securities and Exchange Commission and
generally includes voting or investment power with respect to
securities. Beneficial ownership also includes shares of stock subject
to options and warrants currently exercisable or exercisable within 60
days of the date of this table.
(2) Applicable percentages are based on 7,820,000 shares of our common stock
outstanding on April 3, 2007.
(3) Includes 996,213 shares issuable upon exercise of options.
(4) Includes 796,875 shares issuable upon exercise of options.
(5) Includes 766,667 shares issuable upon exercise of options, 166,667
issuable upon exercise of warrants held by a family trust, and 1,060,089
shares held by a family trust.
(6) Includes 252,083 shares issuable upon exercise of options and 33,333
shares issuable upon exercise of warrants.
(7) Includes 600,000 shares issuable upon exercise of options and 684,611
shares held by a living trust.
(8) Includes 137,500 shares issuable upon exercise of options and 25,000
shares issuable upon exercise of warrants.
(9) Consists of 312,500 shares issuable upon exercise of options.
Equity Compensation Plan Information
The following table sets forth as of the most recent fiscal year ended
December 31, 2006, certain information with respect to compensation plans
(including individual compensation arrangements) under which our common stock
is authorized for issuance:
12
Number of securities remaining
Number of securities to Weighted-average available for future issuance
be issued upon exercise exercise price of under equity compensation plans
of outstanding options, outstanding options, (excluding securities reflected
warrants and rights warrants and rights in column (a) and (b))
(a) (b) (c)
----------------------- -------------------- -------------------------------
Equity compensation plans
approved by security holders 7,569,761 $0.78 6,270,596(1)
Equity compensation plans not
approved by security holders 0 0 0
Total 7,569,671 $0.78 6,270,596
_________
(1) We have a single equity compensation plan designated as the 2002
Stock Option/Stock Issuance Plan which is authorized to issue up
to 15,000,000 shares. At December 31, 2006, we had granted
644,279 shares under the plan and options for 515,454 shares had
been exercised.
Section 16(a) Beneficial Ownership Reporting Compliance
The following table identifies each person who, at any time during the
fiscal year ended December 31, 2006, was a director, officer, or beneficial
owner of more than 10% of our common stock that failed to file on a timely
basis reports required by Section 16(a) of the Exchange Act during the most
recent fiscal year:
Number of Transactions
Number of Not Reported on a Reports
Name Late Reports Timely Basis Not Filed
- ---- ------------ ---------------------- ---------
Robert F. Mitro 1 1 0
Avtar Singh Ranshi 1 1 0
Suki Mudan 1 1 0
Alan S. Knitowski 2 2 0
Luan Dang 1 1 0
_____________________________________________________________________________
EXECUTIVE COMPENSATION
_____________________________________________________________________________
Executive Compensation Summary
The following table sets forth the compensation of the named executive
officers for each of the two fiscal years ended December 31, 2006 and 2005:
SUMMARY COMPENSATION TABLE
Option All Other
Name & Salary Bonus Awards Compensation Total
Principal Position Year ($) ($) ($) ($) ($)
- ------------------ ---- -------- ---------- ----------- ------------ --------
Suki Mudan, CEO 2006 $120,000 0 $9,167 $17,528 $146,695
2005 $120,000 $42,000 $177,328 $15,069 $354,397
Alan S. Knitowski, 2006 $120,000 0 $9,167 $17,528 $146,695
Chairman 2005 $120,000 $54,000 $177,328 $15,069 $366,397
Gary D. Allhusen, 2006 $120,000 0 $61,375 $17,528 $198,903
COO & Executive 2005 $120,000 $42,600 $146,374 $15,069 $230,386
Vice-President
Michael A. Willner, 2006 $108,000 0 $110,252 $12,134 $230,386
Senior Vice-President 2005 $120,000 0 0 0 $120,000
Robert J. Morris, 2006 $108,000 0 $110,252 $12,134 $230,386
Senior Vice-President 2005 $120,000 0 0 0 $120,000
During 2005, we granted stock bonuses under our 2002 Stock Option/Stock
Issuance Plan to Messrs Mudan, Knitowski, and Allhusen pursuant to our
employment agreements with these individuals. On November 16, 2005, we
issued 59,155 shares to Mr. Mudan, 76,056 shares to Mr. Knitowski, and 60,000
shares to Mr. Allhusen. The value of these stock bonuses was the 2005
compensation charge dollar amount recognized for financial statement
reporting purposes in accordance with FAS 123R. In addition to the base
salaries and stock bonuses paid to the named executive officers, we also
provided employee benefit packages to each party consisting of medical,
dental, and vision insurance coverage, a 401k plan with no matching amounts,
short and long term disability insurance coverage, and life insurance
coverage for $50,000.
On October 28, 2003, our Compensation Committee approved employment
agreements with Sukhbir Singh Mudan, our President, and Alan S. Knitowski,
our Chairman. The following description sets forth the material individual
terms of these agreements:
* Sukhbir Singh Mudan. The initial period of the employment
agreement for Mr. Mudan expires on March 31, 2008. If on or before
March 31, 2008, he notifies us in writing that he is willing to
negotiate in good faith to enter into a new employment agreement,
we will pay him a bonus of $60,000, payable in cash or common
stock. He is required to devote not less than 100% of his business
time to the business of Caneum. His base salary is $120,000 per
annum. He received options to purchase 1,000,000 shares at $.55
per share as additional compensation for entering into the
agreement. All of these options have vested and are available for
exercise. On October 26, 2004, the Compensation Committee granted
13,065 restricted shares to Mr. Mudan as a performance bonus for
2004. These shares vested on January 2, 2005. On November 16,
2005, the Compensation Committee granted 59,155 restricted shares
to Mr. Mudan as a performance bonus for 2005. These shares vested
on January 2, 2006.
* Alan S. Knitowski. The initial period of the employment agreement
for Mr. Knitowski expires on March 31, 2008. If on or before
March 31, 2008, he notifies us in writing that he is willing to
negotiate in good faith to enter into a new employment agreement, we
will pay him a bonus of $60,000, payable in cash or common stock.
Mr. Knitowski is required to devote his best efforts to performing
well all duties that Caneum may reasonably assign to him from time
to time during the term of the agreement, but he will not be
required to devote in excess of 25% of his business time and effort
to providing these services. His base salary is $120,000 per annum.
He received options to purchase 1,000,000 shares at $.55 per share
as additional compensation for entering into the agreement. All of
these options have vested and are available for exercise. On
October 26, 2004, the Compensation Committee granted 14,033
restricted shares to Mr. Knitowski as a performance bonus for 2004.
These shares vested on January 2, 2005. On November 16, 2005, the
Compensation Committee granted 76,056 restricted shares to
Mr. Knitowski as a performance bonus for 2005. These shares vested
on January 2, 2006.
On March 17, 2004, our Compensation Committee approved an employment
agreement with our Executive Vice-President, Gary D. Allhusen. The initial
period of the employment agreement for Mr. Allhusen expires on March 29,
2008. Beginning on the initial expiration date, and on each anniversary
thereafter, unless it is terminated earlier as provided therein or Caneum
delivers written notice to Mr. Allhusen of its intention not to extend the
employment agreement at least ninety days before such anniversary date, the
term of the employment agreement will automatically be extended for one
additional year. He is required to devote 100% of his business time to the
business of Caneum. His base salary is $120,000 per annum. He received
options to purchase 750,000 shares at $.75 per share as additional
compensation for entering into the agreement. All of these options have
vested and are available for exercise. On June 22, 2006, we granted him
250,000 options exercisable at $0.67 per share. Of the total options
granted, 31,250 have vested and are available for exercise.
14
Effective with the closing of the transaction with Tier One on March 28,
2006, we entered into two-year full-time employment agreements with Michael A.
Willner and Robert J. Morris and appointed them Senior Vice-Presidents of our
company. In the event of a corporate transaction the term of the agreement
will be automatically extended for a period of four years from March 28,
2006, and any unvested options granted pursuant to the Agreement will
immediately vest. Each employment agreement provides for a base salary of
$120,000 and each person was granted options to purchase 1,000,000 shares of
our common stock pursuant to our existing Stock Option/Stock Issuance Plan at
$0.83 per share. The options will vest at the rate of 1/16th per calendar
quarter beginning with the quarter ending March 31, 2006, with the first
62,500 options vesting on March 31, 2006, subject to early vesting in the
event of a corporate transaction and in the event the person dies or is
disabled, or if we terminate him without cause.
Each of the employment agreements for the above named individuals
contains the following provisions which apply to each of the parties:
* Each employee, except Messrs Allhusen, Morris, and Willner, is
eligible to receive an annual performance bonus between nothing and
100% of the then applicable base salary upon achievement of annual
performance objectives payable either in cash or stock. For 2004
no specific performance bonuses were established, but bonuses were
granted by the Compensation Committee based on a review of the
employee's performance during 2004. Performance bonuses for 2004
were paid in common stock of Caneum only and no cash bonuses were
granted. Performance objectives for subsequent years will be
established by the Chairman, and in the case of performance
objectives for the Chairman, by the compensation committee, for
each calendar year beginning with the year ending December 31,
2005. These performance objectives have not yet been established.
* Each employee, together with his spouse and dependents, is entitled
to participate in any employee benefit plans maintained by the
Company of general applicability to other senior executives,
including, without limitation, group medical, dental, vision,
disability, life insurance, flexible-spending account, 401(k) and
other plans.
* The employee is entitled to four weeks paid vacation per year.
* Each agreement contains customary termination provisions. The
agreements will be terminated by Caneum due to the death or
disability of the employee, in which event Caneum shall pay the
base salary through the date of termination and all unexercised
options will immediately vest. The agreement may also be
terminated by Caneum for cause, in which event Caneum will pay the
base salary through the date of termination, but all unexercised
options shall lapse. Caneum may also terminate the agreements
without cause upon ninety days' notice, in which event Caneum will
pay the base salary through the date of termination, and all
unexercised options will immediately vest, except in the case of
Messrs Allhusen, Willner, and Morris, for whom only one-half of the
unexercised options will vest. The employee may terminate the
employment agreement at any time, in which event Caneum will pay
the base salary through the date of termination, but all
unexercised options shall lapse.
* Each agreement also contains certain confidentiality covenants, but
does not contain non-competition or anti-piracy provisions.
* Each agreement contains covenants that for a period of twelve
months following termination of employment, the employee will not
solicit another employee to leave Caneum.
Equity Awards
The following table sets forth certain information concerning
unexercised options for the named parties that were outstanding as of
December 31, 2006:
15
Outstanding Equity Awards at Fiscal Year-End
Option Awards
---------------------------------------------------
Number of Number of
Securities Securities
Underlying Underlying
Unexercised Unexercised
Options Options Exercise Option
(#) (#) Price Expiration
Name Exercisable Unexercisable ($) Date
- ---- ----------- ------------- -------- ----------
Suki Mudan 954,546 0 $0.55 8/14/13
20,833 104,167 $0.70 9/29/16
Alan S. Knitowski 725,000 0 $0.55 8/14/13
20,833 104,167 $0.70 9/29/16
Gary D. Allhusen 750,000 0 $0.75 3/17/14
31,250 218,750 $0.67 6/22/16
Michael A. Willner 187,500 812,500 $0.83 3/28/16
Robert J. Morris 187,500 812,500 $0.83 3/28/16
On December 18, 2002, our Board of Directors adopted the 2002 Stock
Option/Stock Issuance Plan. Our shareholders approved the plan in June of
2003. The purpose of the plan is to provide eligible persons an opportunity
to acquire a proprietary interest in our company and as an incentive to
remain in the service of the company.
There are 15,000,000 shares of common stock initially authorized for
nonstatutory and incentive stock options and stock grants under the plan,
which are subject to adjustment in the event of stock splits, stock
dividends, and other situations.
The plan is administered by our Compensation Committee, which is
composed of Luan Dang and Avtar Singh Ranshi, two of our directors.
Participants in the plan are to be selected by the plan administrator
which is currently our Compensation Committee. The persons eligible to
participate in the plan are as follows: (a) employees of our company and any
of its subsidiaries; (b) non-employee members of the board or non-employee
members of the Board of Directors of any of its subsidiaries; and
(c) consultants and other independent advisors who provide services to our
company or any of its subsidiaries. Options may be granted, or shares
issued, only to consultants or advisors who are natural persons and who
provide bona fide services to our company or one of its subsidiaries,
provided that the services are not in connection with the offer or sale of
securities in a capital-raising transaction, and do not directly or
indirectly promote or maintain a market for our securities.
The plan will continue in effect until all of the stock available for
grant or issuance has been acquired through exercise of options or grants of
shares, or until December 1, 2012, whichever is earlier. The plan may also
be terminated in the event of certain corporate transactions such as a merger
or consolidation or the sale, transfer or other disposition of all or
substantially all of our assets.
Stock option awards under the plan consist of nonstatutory stock options
(NSOs) and incentive stock options (ISOs). ISOs may be granted only to
employees of our company or one of its subsidiaries.
The purchase price under each option is established by the plan
administrator, but in no event will it be less than 100% of the fair market
value of our common stock for ISOs and 85% for NSOs. The price applicable to
any option holder who holds more than 10 percent of our outstanding common
stock will be 110% percent of fair market value. The aggregate exercise
price, plus applicable taxes, are due and payable in cash or check on the
date of the exercise of an option. However, the plan administrator may
permit payment of the total amount due by a full-recourse, interest-bearing
promissory note; payroll deductions in installments; shares of common stock
valued at fair
16
market value on the date of exercise of the option; or through a special sale
and remittance procedure through a designated brokerage firm.
The plan administrator will fix the terms of each option, but no option
can be granted for a term in excess of 10 years. The term of such an option
will not be longer than five years in the case of any option holder who
holds, on the date of the grant of an ISO, more than 10% of our outstanding
common stock. Upon termination of services, the option holder will have a
limited time in which to exercise vested options. The plan administrator
will not impose a vesting schedule upon any options granted which provides
for exercise of an option for less than 20 percent of the shares subject to
the option and with an initial installment for vesting which is fixed for a
longer period than one year from the date of grant of the option.
During the lifetime of the person to whom an option has been granted,
only that person has the right to exercise the option and that person cannot
assign, encumber or transfer any right to the option. Upon the death of the
person to whom an option has been granted, the option may be exercised only
by those persons who inherit from the holder of the option by will or under
the applicable laws of descent and distribution.
The plan administrator has the authority, with the consent of the option
holder affected, to cancel outstanding options and to grant in substitution
therefore new options covering the same or a different number of shares of
common stock at an exercise price per share based upon the fair market value
per share of such stock on the date of the grant of a new option.
At the discretion of the plan administrator, the consideration provided
for the issuance of shares of common stock under the stock issuance plan will
be satisfied in one or more of the following ways, or combinations thereof:
(a) in cash or check payable to us; (b) issuing of a full-recourse promissory
note; (c) payroll deductions in installments; (d) past services rendered to
us or one of our subsidiaries; or (e) the agreement of a participant to
accept employment and the undertaking and performance of services with or to
us or one of our subsidiaries.
Stock issued under the stock issuance plan may vest immediately or upon
terms established by the plan administrator, provided that at least 20
percent of the total shares subject to a vesting schedule will fully vest in
each calendar year on the anniversary date of the issuance of the shares.
Irrespective of whether a participant's shares are vested or are held in
escrow, a participant to whom shares under the stock issuance plan have been
issued will have the right to vote those shares and to receive any regular
cash dividends paid on those shares.
If employment with or service to us terminates for whatever cause at a
time when the participant holds unvested shares issued under the stock
issuance plan, those shares will be immediately surrendered to us and
cancelled. In the event the participant paid for the shares surrendered in
cash or cash equivalent, the amount of that consideration will be repaid. In
the event that the participant furnished a promissory note in payment of
shares surrendered, the remaining balance of that note attributable to the
surrendered shares will be cancelled. In the sole discretion of the plan
administrator, the surrender and cancellation of any unvested shares issued
under the stock issuance plan may be waived at any time by the plan
administrator subject to such terms and conditions or on no terms and
conditions as the plan administrator may determine.
Director Compensation
The following table sets forth certain information concerning the
compensation of our directors, excluding Mr. Mudan whose total compensation
is set forth in the Summary Compensation Table above, for the last fiscal
year ended December 31, 2006:
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Director Compensation
----------------------------------------------------------------
Stock Option
Awards(1)(2) Awards(1)(2) Total
Name ($) ($) ($)
---- ------------ ------------ ---------
Luan Dang $61,536 $61,536
Robert F. Mitro $48,725 $48,725
Avtar Singh Ranshi $24,786 $24,786
__________
(1) The value of stock and option awards was the 2006 compensation
charge dollar amount recognized for financial statement reporting
purposes in accordance with FAS 123R.
(2) As of December 31, 2006, the aggregate number of option awards
outstanding for each director in the table was as follows:
Mr. Dang 318,750; Mr. Mirto, 600,000; and Dr. Ranshi, 195,000.
Directors are permitted to receive fixed fees and other compensation for
their services as directors, as determined by our Board of Directors. The
Board has adopted a policy to compensate non-employee directors. Each such
director receives options for each year of service. At the commencement of
each year of service as a non-employee director, the person receives options
to purchase 25,000 shares. The options are exercisable at market value on
the date of grant based upon the average closing bid price for the ten
trading days immediately preceding appointment or the anniversary date. The
Board also grants annual options to purchase 10,000 shares for these
directors to serve on a committee of the board, and 5,000 shares to chair the
committee. These options vest as to 25% of the options per quarter, starting
on the date of grant. They expire ten years from the date of grant.
_____________________________________________________________________________
CERTAIN TRANSACTIONS AND RELATIONSHIPS
_____________________________________________________________________________
Eric Chess Bronk was a founder of our company. He was a director from
the organization of the company on March 23, 2000, until December 19, 2002.
Mr. Bronk served as president from March 23, 2000, until August 1, 2002, and
he served as treasurer from March 23, 2000, until December 19, 2002. In
connection with our organization in 2000, Mr. Bronk received 190,000 shares
for services rendered to us, which services were valued at $1,900.
Mr. Bronk is also the sole managing member of Cygni Capital LLC. Cygni
Capital subleases office space to us on a month-to-month basis for $4,129 per
month. On June 14, 2002, Cygni Capital loaned to us $1,862, and on
December 31, 2002, loaned $3,725, for operating expenses. These loans were
repaid, with interest at 10% per annum, on June 1, 2003.
On October 28, 2003, we granted to Mr. Bronk five-year options to
purchase 150,000 shares of our common stock at $0.75 per share. The options
were granted under our Stock Option/Stock Issuance Plan and 37,500 were
granted in excess of the number of shares authorized under the plan at the
time of the grant. The options vest at the rate of (i) one-twelfth (1/12th)
each operating quarter in which the gross revenue for such quarter exceeds
the gross revenue of the prior quarter, and/or one-twelfth (1/12th) for each
$250,000 in gross revenue generated cumulatively in the aggregate since
inception of the company; (ii) immediately in the event of a Corporate
Transaction, as defined in the 2002 Stock Option/Stock Issuance Plan; and,
(iii) any unvested options outstanding at December 31, 2006, shall
automatically vest at that time. Because our Stock Option/Stock Issuance
Plan was not amended within one year of the grant, the 37,500 options granted
in excess of the number of shares authorized under the plan lapsed. On
February 23, 2005, we entered into a settlement agreement with Mr. Bronk and
issued warrants to purchase 50,000 shares at $0.75 per share. These warrants
were issued to Mr. Bronk in part to replace the options which lapsed and to
reward him for additional services performed subsequent to the original grant
of options. The warrants are exercisable immediately and expire on
ctober 28, 2008. The exercise price for the warrants may be paid in cash or
with shares of our stock, the warrants, or the cancellation of any debt.
18
On May 28, 2004, we granted to Mr. Bronk five-year options to purchase
100,000 shares of our common stock at $0.75 per share. The options were
granted under our Stock Option/Stock Issuance Plan. The options vest at the
rate of (i) one-twelfth (1/12th) each operating quarter in which the gross
revenue for such quarter exceeds the gross revenue of the prior quarter,
and/or one-twelfth (1/12th) for each $250,000 in gross revenue generated
cumulatively in the aggregate since inception of the company; and
(ii) immediately in the event of a Corporate Transaction, as defined in the
2002 Stock Option/Stock Issuance Plan. These options were granted for
consulting services.
In March 2006 we acquired all of the outstanding stock of Tier One
Consulting, Inc. from Messrs Willner and Morris, who subsequently became
executive officers of our company. As subsequently amended on November 2,
2006, the purchase price for the shares of Tier One was $3,070,000. Of the
total purchase price, $1,375,000 was paid at closing, and we agreed to pay
two equal installments of $687,500 due on the first and second anniversary of
the closing, and $13,333 is payable each month for 24 monthly payments. The
installment payments are subject to adjustment for certain set-offs for any
post-closing undisclosed liabilities of Tier One, enforcement of
indemnification provisions by Tier One in the agreement, a decline in the
EBIT calculation in the Tier One audited financial statements for 2005, or
any increase or decrease in the estimated cost of the audit of the Tier One
financial statements for 2005. In March 2007, we amended the Tier One
acquisition agreement to reduce the amount payable on the first anniversary
and to restructure the payment. The first anniversary payment was offset by
$1,975 and reduced to $685,525. On March 28, 2007, we paid a total of
$341,775 to Messrs Willner and Morris, with the balance of the adjusted first
anniversary payment payable in installments of $10,000 each per month
beginning April 1, 2007. The unpaid balance will bear interest at 8% per
annum and we have agreed to use our best efforts to increase the amount of
the monthly payments and to prepay the balance prior to December 31, 2007.
On January 2, 2007, we entered into an agreement to pay $1,250 of the
rent on office space of Curo Capital, LLC, a company controlled by Alan
Knitowski, our Chairman, and Luan Dang, one of our directors. The agreement
expires on December 31, 2008, and acts as the office of the Chairman for our
company.
During 2006 we paid a consulting fee to Robert F. Mitro, one of our
directors, of $5,000 per month, payable in shares of our common stock. The
consulting agreement with Mr. Mitro expired on October 23, 2006.
_____________________________________________________________________________
RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
(ITEM 2)
_____________________________________________________________________________
The Audit Committee has appointed LevitZacks as the Company's
independent registered public accounting firm for the fiscal year ending
December 31, 2007, subject to ratification by the Company's shareholders.
While the Audit Committee is responsible for the appointment, compensation,
retention, termination and oversight of the independent registered public
accounting firm, the Audit Committee and the Board are requesting, as a
matter of policy, that the shareholders ratify the appointment of LevitZacks
as the Company's independent registered public accounting firm. The Audit
Committee is not required to take any action as a result of the outcome of
the vote on this proposal. However, if the Company's shareholders do not
ratify the appointment, the Audit Committee may investigate the reasons for
shareholder rejection and may consider whether to retain LevitZacks or to
appoint another independent registered public accounting firm. Furthermore,
even if the appointment is ratified, the Audit Committee in its discretion
may appoint a different independent registered public accounting firm at any
time during the year if it determines that such a change would be in the best
interests of the Company and the Company's shareholders.
Representatives of LevitZacks, which also served as our independent
registered public accounting firm for 2006, are expected to be present at the
Annual Meeting. They will have an opportunity to make a statement, if they
so desire, and will be available to respond to appropriate questions by
shareholders. For additional information regarding the Company's
relationship with LevitZacks, please refer to "Fees Paid to Independent
Registered Public Accounting Firm" on page 9 of this Proxy Statement.
19
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" ITEM 2, WHICH
RATIFIES THE APPOINTMENT OF LEVITZACKS AS THE COMPANY'S INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31,
2007.
_____________________________________________________________________________
LIMITATION OF LIABILITY PROPOSAL (ITEM 3)
_____________________________________________________________________________
The Board of Directors is proposing that Article VIII be added to
Company's Articles of Incorporation to read as follows:
No director or officer shall be personally liable to the
corporation or its stockholders for monetary damages for
any breach of fiduciary duty by such person as a director
or officer. Notwithstanding the foregoing sentence, a
director or officer shall be liable to the extent
provided by applicable law, (i) for acts or omissions
which involve intentional misconduct, fraud or a knowing
violation of law, or (ii) for the payment of
distributions in violation of NRS 78.300.
Notwithstanding anything contained in the Articles of
Incorporation to the contrary, the personal liability of
the directors or officers of the corporation is hereby
eliminated to the fullest extent permitted by the
applicable provisions of the Nevada Revised Statutes, as
the same may be amended and supplemented. In addition,
the liability of the directors of the corporation for
monetary damages shall be eliminated to the fullest
extent permissible under California law.
The Company believes that it will be better able to attract and retain
qualified directors and officers by limiting the potential for monetary
claims against such persons. The increasing frequency of litigated claims
against directors and officers has greatly expanded the risks to directors
and officers of exercising their respective duties. The time and money
required to respond to and litigate such claims can be substantial. The
Company believes the proposed amendment eliminates monetary liability by
applying the provision under Nevada law and under California law, which may
be applicable to the Company. It may have the effect of reducing the
likelihood of derivative litigation against directors and officers and may
discourage or deter shareholders from instituting litigation against both
directors and officers for breach of their duty of care, even though such an
action might benefit the Company and its shareholders. However, the Board of
Directors believes this concern is outweighed by the benefit to the Company
of retaining highly qualified directors. The Board of Directors believes
that the proposed amendment to the Articles of Incorporation may have a
favorable impact over the long term on the availability, cost, amount, and
scope of coverage of directors' liability insurance, although there can be no
assurance of such an effect.
While the proposed amendment may be viewed as further limiting the
rights of shareholders in some respects, the Board of Directors believes,
however, that these provisions will help balance the legal obligations of,
and protections for, directors and officers, and will contribute to the
quality and stability of the Company's corporate governance. The Board of
Directors has concluded that the benefit to shareholders of improved
corporate governance outweighs any possible adverse effects on shareholders.
In addition to applicable provisions under Nevada law relating to the
Company as a Nevada corporation, certain provisions of California corporate
law may apply to the Company. Section 2115 of the California General
Corporation Law subjects certain foreign corporations doing business in
California to various substantive provisions of the California General
Corporation Law in the event that the average of its property, payroll and
sales is more than 50% in California and more than one-half of its
outstanding voting securities are held of record by persons residing in the
State of California. Currently, management believes the Company meets this
test and would be considered a pseudo California corporation, even though it
was incorporated under the laws of the State of Nevada. This designation as
a pseudo California corporation would continue until the end of the first
year following a year in which we did not meet one of these tests.
Among the substantive provisions applicable to a pseudo California
corporation are laws relating to the directors' standard of care and the
liability of directors for unlawful distributions, as such may be applicable
to the elimination of monetary liability of directors. The Company is
proposing to eliminate the monetary liability of both
20
directors and officers to the extent permissible under Nevada and California
law. California and Nevada have similar laws respecting provision in their
articles of incorporation eliminating the liability of a director to the
corporation or its shareholders for monetary damages for breach of the
director's fiduciary duty of care. There are nonetheless certain differences
between the laws of the two states respecting limitation of liability.
California law permits eliminating or limiting the personal liability of
a director for monetary damages in an action brought by or in the right of
the corporation (a "derivative suit") for breach of a director's duties to
the corporation and its shareholders; provided, however, that the corporation
may not eliminate or limit liability for (i) intentional misconduct or
knowing and culpable violation of law; (ii) acts or omissions that a director
believes to be contrary to the best interests of the corporation or its
shareholders, or that involve the absence of good faith on the part of the
director; (iii) receipt of an improper personal benefit; (iv) acts or
omissions that show reckless disregard for the director's duty to the
corporation or its shareholders, where the director in the ordinary course of
performing a director's duties should be aware of a risk of serious injury to
the corporation or its shareholders; (v) acts or omissions that constitute an
unexcused pattern of inattention that amounts to an abdication of the
director's duty to the corporation or its shareholders; (vi) interested
transactions between the corporation and a director in which a director has a
material financial interest; and (vii) liability for improper distributions,
loans, or guarantees. California law also provides that no such provision
will eliminate or limit the liability of a director for any act or omission
occurring prior to the date when the provision becomes effective, which in
this case will be the date of the Annual Meeting, if such provision is
approved. Further, California law provides that such a provision cannot
eliminate or limit the liability of an officer for any act or omission as an
officer, even if that officer is also a director or that his actions, if
negligent or improper, were ratified by the Board of Directors.
Under Nevada law, such a provision may not eliminate or limit director
or officer monetary liability for (i) acts or omissions involving intentional
misconduct, fraud, or a knowing violation of law or (ii) the payment of
certain prohibited distributions. Such limitation of liability provision also
may not limit a director's or officer's liability for violation of, or
otherwise relieve the corporation or its directors or officers from the
necessity of complying with, federal or state securities laws, or affect the
availability of non-monetary remedies such as injunctive relief or
rescission.
THE MEMBERS OF THE BOARD OF DIRECTORS MAY BE DEEMED TO HAVE A PERSONAL
INTEREST IN EFFECTING THE PROPOSED AMENDMENT, BECAUSE, AS DIRECTORS OR ALSO
AS OFFICERS OF THE COMPANY, THEY MAY PERSONALLY BENEFIT FROM THE LIMITATIONS
ON LIABILITY CONTAINED IN THE AMENDMENT. NEVERTHELESS, THE BOARD OF
DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" ITEM 3, WHICH AMENDS THE ARTICLES OF
INCORPORATION TO LIMIT THE MONETARY LIABILITY OF DIRECTORS AND OFFICERS UNDER
BOTH NEVADA AND CALIFORNIA LAW.
_____________________________________________________________________________
ADDITIONAL INFORMATION
_____________________________________________________________________________
Information About Shareholder Proposals
If you wish to submit a proposal for inclusion in next year's proxy
statement and proxy, we must receive the proposal on or before ___________,
2007, which is 120 calendar days prior to the anniversary of this year's
mailing date. Upon timely receipt of any such proposal, the Company will
determine whether or not to include such proposal in the proxy statement and
proxy, in accordance with applicable regulations governing the solicitation
of proxies. Any proposals should be submitted in writing to: Corporate
Secretary, Caneum, Inc., 170 Newport Center Drive, Suite 210, Newport Beach,
CA 92660.
Additional Filings
A link to the Company's Forms 10-KSB, 10-QSB, 8-K and all amendments to
those reports are available without charge through the Company's website on
the Internet as soon as reasonably practicable after they are electronically
filed with, or furnished to, the Securities and Exchange Commission. They
may be accessed at the Company's website (www.caneum.com) by clicking on
"Investor Relations," and then "Caneum Public Filings." Information on our
website is not considered part of this Proxy Statement.
21
_____________________________________________________________________________
OTHER BUSINESS
_____________________________________________________________________________
The Board of Directors is not aware of any matters requiring shareholder
action to be presented at the Annual Meeting other than those stated in the
Notice of Annual Meeting.
In lieu of a separate annual report, the Company is furnishing with this
Proxy Statement a copy of the Company's 2006 Annual Report on Form 10-KSB.
Also, the Company will provide to any shareholder, without charge and upon
written request, a copy (without exhibits unless otherwise requested) of the
Company's Annual Report on Form 10-KSB for the Fiscal Year Ended December 31,
2006, as filed with the Securities and Exchange Commission. Any such request
should be directed to Caneum, Inc., Investor Relations, 170 Newport Center
Drive, Suite 210, Newport Beach, CA 92660; telephone (949) 273-4004.
By Order of the Board of Directors,
Suki Mudan, President
22
CANEUM, INC.
ANNUAL MEETING OF STOCKHOLDERS
Thursday, May 31, 2007
170 Newport Center Drive
Suite 210
Newport Beach, CA 92660
The Board of Directors solicits this proxy for use at the Annual Meeting on
Thursday, May 31, 2007.
The stockholder(s) whose signature(s) appear(s) on this proxy card
hereby appoint(s) Suki Mudan and Alan S. Knitowski or either of them, each
with full power of substitution, as proxies, to vote all shares of common
stock in Caneum, Inc. which the stockholder(s) would be entitled to vote on
all matters which may properly come before the 2007 Annual Meeting of
Stockholders and any adjournments thereof. THE PROXIES SHALL VOTE SUBJECT TO
THE DIRECTION INDICATED ON THIS CARD. THE PROXIES ARE AUTHORIZED TO VOTE IN
THEIR DISCRETION UPON OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING
AND ANY ADJOURNMENTS OR POSTPONEMENTS THEREOF. THE PROXIES WILL VOTE AS THE
BOARD OF DIRECTORS RECOMMENDS WHERE A CHOICE IS NOT SPECIFIED.
Mark, sign, and date your proxy card and return it in the envelope
provided so that it is received by May 29, 2007. Proxy cards will be sent to
our transfer agent and forwarded to us before the meeting.
YOUR VOTE IS IMPORTANT. THANK YOU FOR VOTING.
The Board of Directors Recommends a Vote "FOR" all Nominees:
1. Election of directors - 01 Suki Mudan
02 Alan S. Knitowski
03 Luan Dang
04 Robert F. Mitro
05 Avtar Singh Ranshi
[ ] Vote FOR all nominees [ ] Vote WITHHELD
(except as noted below) from all nominees
To withhold authority to vote for any
nominee, write the number(s) of the ___________________
nominee(s) in the box provided to the right. | |
| |
To cumulate votes, write "cumulate for" in |___________________|
the box provided to the right, followed by
the name of the nominee(s) and the number
of votes to be cast for each nominee.
The Board of Directors Recommends a Vote "FOR" Items 2 and 3:
2. Ratification of the appointment of LevitZacks, Certified Public
Accountants, as our independent registered public accountant for the
fiscal year ending December 31, 2007
[ ] For [ ] Against [ ] Abstain
3. Proposal to add Article VIII to the Company's Articles of Incorporation
to limit the monetary liability of directors and officers under both
Nevada and California law
[ ] For [ ] Against [ ] Abstain
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED. IF NO
DIRECTION IS GIVEN, IT WILL BE VOTED "FOR" all nominees and "FOR" ITEMS 2
and 3.
Date ______________________________
_____________________________
| |
| |
| |
|_____________________________|
Signature(s) in Box
Please sign exactly as your name(s)
appears on Proxy. If held in joint
tenancy, all persons should sign.
Trustees, administrators, etc., should
include title and authority. Corporations
should provide full name of corporation
and title of authorized officer signing
the proxy.
23