UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
(Amendment No. 1)
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement
|_| Confidential, For Use of the Commission Only (as permitted by 14a-6(e)(2))
|X| Definitive Proxy Statement
|_| Definitive Additional materials
|_| Soliciting Material Pursuant To Rule 14a-11(c) or Rule 14a-12
ELECTRONIC GAME CARD, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
----------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of filing fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
|_| Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, schedule or registration statement no.:
(3) Filing party:
(4) Date filed:
ELECTRONIC GAME CARD, INC.
151 FIRST AVENUE #65 NEW YORK, NEW YORK 10003
----------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON TUESDAY, SEPTEMBER 2, 2008
To Our Stockholders:
The Annual Meeting of Shareholders of Electronic Game Card, Inc. (the "Company")
will be held on Tuesday September 2, 2008 at 10:00 a.m., Eastern Daylight Time
("EDT"), at Grannus Financial Advisors, Inc., 1120 Avenue of the Americas, Suite
4000, New York, NY 10036 for the following purposes:
1. To elect directors to hold office until the 2009Annual Meeting
or until their successors are elected and qualified;
2. To ratify the selection of Mendoza Berger & Company, L.L.P. as
independent auditors for the year ending December 31, 2008;
and
3. To transact such other business as may properly come before
the meeting or any adjournment(s) thereof.
The foregoing items of business are more fully described in the Proxy Statement
accompanying this Notice.
Only Stockholders of record at the close of business on July 28, 2008 are
entitled to notice of and to vote at the Annual Meeting. A list of Stockholders
as of this date will be available during normal business hours for examination
by any Stockholder for any purpose germane to the Annual Meeting for a period of
ten days prior to meeting at the offices of the Company.
All Stockholders are urged to attend the Annual Meeting in person or by proxy.
However, to ensure your representation at the meeting, you are urged to mark,
sign, and date and return the enclosed proxy card as promptly as possible in the
postage-prepaid envelope enclosed for that purpose. Any Stockholder attending
the Annual Meeting may vote in person even if such Stockholder has previously
returned a proxy. The proxy is revocable and will not affect your right to vote
in person in the event you attend the Annual Meeting.
This notice and the accompanying proxy statement are being mailed to
Stockholders on or about August 5, 2008.
By Order of the Board of Directors
/s/ Linden J H Boyne
- -------------------------------------
Linden J H Boyne
Chief Financial Officer and Secretary
New York, New York
July 24, 2008
1
PROXY STATEMENT
TABLE OF CONTENTS
PAGE
----
GENERAL INFORMATION CONCERNING SOLICITATION AND VOTING 3
PROPOSALS ON WHICH YOU MAY VOTE
Proposal No. 1 - Election of Directors 5
Proposal No. 2 - Ratification of Appointment of Independent
Auditors 7
Report of the Audit Committee 8
CORPORATE GOVERNANCE 9
Corporate Governance Policies and Practices 9
Stockholder Communications with Directors 9
Board Meetings and Committees 10
Non-Employee Director Compensation 11
Certain Relationships and Related Transactions 12
EXECUTIVE COMPENSATION 12
Executive Officers 12
Summary Compensation Table 12
Equity Incentive Plan Information 13
COMPENSATION DISCUSSION AND ANALYSIS 14
Overview of Compensation Programs 14
Objectives of the Compensation Policy 14
Elements of Compensation 14
Compensation Committee Report 17
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 17
Section 16(a) Beneficial Ownership Reporting Compliance 18
INVESTOR INFORMATION 19
2
ELECTRONIC GAME CARD, INC.
151 FIRST AVENUE #65
NEW YORK, NEW YORK 10003
----------
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON SEPTEMBER 2, 2008
----------
GENERAL INFORMATION CONCERNING SOLICITATION AND VOTING
This Proxy Statement contains information related to the solicitation of proxies
by and on behalf of the Board of Directors (the "Board") of Electronic Game
Card, Inc. (the "Company") for use in connection with the Annual Meeting of
Stockholders to be held on Tuesday September 2, 2008, beginning at 10:00 a.m.,
EDT, at Grannus Financial Advisors, Inc., 1120 Avenue of the Americas, Suite
4000, New York, NY 10036., and at any and all adjournments or postponements
thereof. This Proxy Statement and the accompanying proxy materials are being
mailed to Stockholders on or about August 5, 2008.
INFORMATION CONCERNING SOLICITATION AND VOTING
RECORD DATE
Only holders of record of voting stock at the close of business on July 28, 2008
(the "Record Date") are entitled to notice of the Annual Meeting and to vote at
the Annual Meeting. On that date, the Company had 53,205,975 outstanding shares
of voting common stock, and 6,549,922 outstanding shares of voting Series A
Redeemable Convertible Preferred stock.
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Secretary of the
Company, at or before the taking of the vote at the Annual Meeting, a written
notice of revocation or a duly executed proxy bearing a later date or by
attending the Annual Meeting and voting in person.
VOTING AND SOLICITATION
If your shares are registered directly in your name with our transfer agent,
then you are considered the stockholder of record with respect to those shares
and these proxy materials are being sent directly to you. Each share of common
stock is entitled to one vote on all matters presented at the Annual Meeting.
Stockholders do not have the right to cumulate their votes in the election of
directors.
If your shares are held in "street name" (that is, they are held in the name of
a broker, bank or similar organization), you are considered the beneficial
holder of such shares and these proxy materials are being forwarded to you by
such organization. The organization holding your account is considered the
stockholder of record for purposes of voting at the Annual Meeting. As a
beneficial owner, you have the right to direct the stockholder of record on how
to vote the shares in your account. If you do not give instructions to your
3
record holder on how to vote, the record holder will be entitled to vote your
shares in its discretion. Please follow the voting instructions provided by the
organization holding your shares to ensure your vote is counted. If you are not
the stockholder of record, you may not vote your shares in person at the Annual
Meeting unless you request and obtain a valid proxy from the stockholder of
record Shares of common stock represented by properly executed proxies will,
unless such proxies have been previously revoked, be voted in accordance with
the instructions indicated thereon. In the absence of specific instructions to
the contrary, votes submitted by mail, telephone or Internet will be voted by
the individuals named on the proxy card (or the individual properly authorized):
(i) FOR the election of each of the Company's nominees for director, and (ii)
FOR the ratification of the selection of Mendoza Berger & Company, L.L.P. as
independent auditors of the Company for the year ending December 31, 2008. No
business other than that set forth in the accompanying Notice of Annual Meeting
of Stockholders is expected to come before the Annual Meeting. Should any other
matter requiring a vote of Stockholders properly arise, the persons named in the
enclosed form of proxy will vote such proxy in accordance with the
recommendation of the Board.
If you will not be able to attend the Annual Meeting to vote in person, you may
vote your shares by completing and returning the accompanying proxy card. To
vote by mail, please mark, sign and date the accompanying proxy card and return
it promptly in the enclosed postage paid envelope. If your shares are registered
in more than one name or in more than one account, you will receive more than
one card. Please complete and return all of the proxy or vote instruction cards
you receive to ensure that all of your shares are voted.
Solicitation of proxies is being made by the Company through the mail, in
person, and by telecommunications. The cost of this solicitation will be borne
by the Company. Proxies may be solicited by certain of the directors, officers
and employees of the Company, without additional compensation, personally or by
telephone, letter or facsimile. The Company may reimburse brokerage firms and
other persons representing beneficial owners of shares for their expenses in
forwarding solicitation materials to such beneficial owners.
A representative of the Company's transfer agent, will count the vote and act as
the inspector of election. Preliminary voting results will be announced at the
Annual Meeting. Final voting results will be published in the Company's
quarterly report on Form 10-QSB for the third quarter of 2008.
OTHER MATTERS
In the event that any matter not described herein is properly presented for a
Stockholder vote at the meeting, or any adjournment thereof, the persons named
in the form of proxy will vote in accordance with their best judgment. At the
time this proxy statement went to press, the Company knew of no other matters
that might be presented for Stockholder action at the meeting.
QUORUM; ABSTENTIONS; BROKER NON-VOTES
The required quorum for the transaction of business at the Annual Meeting is a
majority of the votes eligible to be cast by holders of shares of the Company's
Series A Redeemable Convertible Preferred Stock and holders of the Company's
common stock, together which vote as a single class, issued and outstanding on
the Record Date. Shares that are voted "FOR" or "AGAINST" a matter are treated
as being present at the meeting for purposes of establishing a quorum and are
also treated as shares entitled to vote at the Annual Meeting with respect to
such matter.
Broker non-votes with respect to Proposal 2 shall be treated the same as
abstentions, and therefore shall have the effect of a vote against such
proposals. Broker non-votes as to all other proposals will not be counted for
purposes of determining the presence or absence of a quorum, will not be counted
as votes for or against such proposals, and will not be included in calculating
the number of votes necessary for approval of such proposals.
4
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS
Any Stockholder who intends to present a proposal at the 2009 Annual Meeting of
Stockholders must ensure that the proposal is received by the Corporate
Secretary at Electronic Game Card, Inc., 151 First Avenue, #65 New York NY1003,
not later than June 25, 2009 in order to be considered for inclusion in our
proxy materials for that meeting. If the date of the annual meeting for 2009 is
moved by more than 30 days from the date of this year's Annual Meeting, then the
deadline for receiving stockholder proposals shall be a reasonable time before
the Company begins to print and mail the proxy statement for the 2009 annual
meeting.
As a stockholder, you may recommend any person as a nominee for director of
Electronic Game Card for consideration by the Governance Committee by submitting
the name and supporting information in writing to the Governance Committee of
the Board of Directors, c/o Secretary, Electronic Game Card Inc., 151 First
Avenue, #65 New York NY1003, The recommending stockholder must meet the
eligibility requirements for submitting a stockholder proposal for inclusion in
that proxy statement, a written recommendation must be received by the Company
by June 25, 2009 and the written recommendation must contain the following:
o The candidate's name, age, address, principal occupation or
employment, the number of shares of common stock such
candidate beneficially owns, a brief description of any direct
or indirect relationships with the Company, and the
information that would be required in a proxy statement
soliciting proxies for the election of the candidate as a
director;
o A signed consent of the nominee to cooperate with reasonable
background checks, requests for information and personal
interviews and to serve as a director, if elected; and
o A description of all relationships or arrangements between the
recommending stockholder and the candidate and any other
person or persons (including their names) pursuant to which
the recommendation is being made, as well as a list of all
other companies that the stockholder has recommended the
candidate to for election as a director in that year.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The following nominees currently serve on the Company's Board or have agreed to
serve as a director if elected. The Company believes that each of them will be
available to serve if elected. Based on the recommendation of the Governance
Committee, the Board of Directors has nominated the following directors for
election. The names and ages of the nominees and their principal occupations or
employment during the past several years are set forth below.
NOMINEES FOR ELECTION TO ONE-YEAR TERMS EXPIRING AT THE 2009 ANNUAL STOCKHOLDER
MEETING:
NAME AGE BACKGROUND
- ----------------------- ------ --------------------------------------------
Lee J. Cole 47 Mr. Cole has served as a director of our
Company since December 2002 and has been the
interim Chief Executive Officer since
February 2006. Since 1998, Mr. Cole has been
a principal with Tech Capital Group, a
technology consulting and investment firm
that has investments in private and public
information and healthcare technology
companies. Mr. Cole has also been a
consultant for Sterling FCS Limited since
March 2003. Mr. Cole served as a director of
Enhance Biotech, Inc. from 2003 until
January 2008. He served as a director of
Neuro Bioscience, Inc. from January 2002
until January 2008. Mr. Cole served as a
5
director of Auto Data Network, Inc. from
2001 until January 2008. He was a director
of Stem Cell Ventures, Inc. from April 2004
to October 2007. He has been a Director of
Advance Nanotech, Inc. since October 2004,
and has been interim Acting Chief Executive
Officer since April 28, 2008. He has been a
Director of Avantogen Oncology, Inc. since
May 2006. In September 2004 Mr. Cole became
Chairman of Gardant Pharmaceuticals, Inc.,
which ceased to be a public company when it
was acquired by another company in December
2006.
Linden J H Boyne 65 Mr. Boyne has served as a director since
December 2002 and is Chief Financial Officer
and Company Secretary. He served as Company
Secretary of Auto Data Network, Inc from
2001 to January 2008 and of Aftersoft Group,
Inc from December 2005 to March 2008. He was
previously Managing Director of NSS
Newsagents Retail and served as a consultant
to a number of businesses advising on
operations.
Lord Leonard Steinberg 71 Lord Steinberg founded Stanley Leisure in
Belfast in 1958 with one licensed betting
shop. Stanley Leisure plc became the largest
casino operator and fourth largest retail
bookmaker with 600 shops in the United
Kingdom. In 2005 Stanley sold its retail
bookmaking operations for 504m pounds
Sterling (approximately $1 billion) and
returned 327m pounds (approximately $650
million) to Stockholders. In 2006, Stanley
then sold its 45 casinos to Genting
International for approximately $1.3
billion. In addition to his highly
successful business career, Lord Steinberg
was made a Conservative Life Peer in 2004
and is an active member of the House of
Lords in the United Kingdom. He is a well
known philanthropist and is a member of the
Board of Directors of Medgenics, a U.S.
incorporated biopharmaceutical company, L
Sports Investments Ltd., Stanley Bet
Holdings Ltd., and Stanley Bet Overseas
Investments Ltd.
Eugene Christiansen 62 Mr. Eugene Christiansen has been active as
an executive and consultant to the
commercial gambling and entertainment
industries since 1976 through New York based
Christiansen Capital Advisors where Mr.
Christiansen has conducted numerous studies
of the economics and regulation of casino
gaming. Mr. Christiansen is the author of
acclaimed articles dealing with casinos,
horse racing, greyhound racing, jai alai,
off-track betting, lotteries and related
activities in trade, professional, and
academic publications. Mr. Christiansen has
also co-authored an influential academic
study of gambling, The Business of Risk:
Commercial Gambling in Mainstream America
and is a member of the advisory boards of
the National Council on Problem Gambling and
the Institute for the Study of Gambling and
Commercial Gaming at the University of
Nevada, Reno.
Anna Houssels 40 Ms. Anna Houssels is currently Vice
President of VIP Sales for City Center Las
Vegas, an $8 billion mixed use real estate
project developed as a joint venture between
MGM Mirage and Dubai World. In this capacity
she focuses on expanding the sales network
through VIP customers and referrals, and
licensing with MGM Mirage key executives
plus international and domestic casino
marketing teams. Her responsibilities
include leading event sales nationally and
internationally, and developing new sales
leads through "business to business"
channels. Prior to joining City Center Ms.
Houssels owned and operated Houssels
Properties, a Las Vegas real estate firm
specializing in selling exclusive residences
to local and a large international network.
6
REQUIRED VOTE
Directors are elected by a "plurality" of the shares voted. This means that the
nominee with the largest number of votes will be elected, up to the maximum
number of directors to be chosen. Stockholders can either vote "FOR" the nominee
or withhold authority to vote for the nominee. Neither shares that are withheld
("abstentions") nor broker non-votes have any effect on the outcome of the
election for directors.
BOARD RECOMMENDATION
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" EACH OF THE FOREGOING
DIRECTOR NOMINEES.
PROPOSAL NO. 2
RATIFICATION OF THE APPOINTMENT OF MENDOZA BERGER AND COMPANY, L.L.P.
AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Based on the recommendation of the Audit Committee, the Board of Directors has
appointed Mendoza Berger and Company, L.L.P., an independent registered public
accounting firm, to audit the financial statements of the Company for the year
ending December 31, 2008. The Audit Committee is submitting its selection to the
Stockholders for ratification. Mendoza Berger & Company, L.L.P. has served as
the Company's auditor for the years ended December 31, 2006 and 2007, and has no
financial interest of any kind in the Company except the professional
relationship between auditor and client. A representative of Mendoza Berger &
Company, L.L.P. is expected to attend the meeting, will be afforded an
opportunity to make a statement if he or she desires to do so, and will be
available to respond to appropriate questions by Stockholders.
The following table shows the fees billed or expected to be billed to the
Company for the audit and other services provided by our accountants for 2007
and 2006:
2007 2006
-------- --------
Audit Fees $ 71,736 $ 55,553
Tax and Other Fees $ -- $ --
-------- --------
Total $ 71,736 $ 55,553
======== ========
AUDIT FEES: This category includes the audit of our consolidated financial
statements and reviews of the financial statements included in our Quarterly
Reports on Form 10-QSB. This category also includes advice on accounting matters
that arose during, or as a result of, the audit or the review of interim
financial statements, SEC registration statements and comfort letters.
ALL OTHER FEES: None.
INDEPENDENCE ASSESSMENT BY AUDIT COMMITTEE
The Company's Audit Committee considered and determined that the provision of
the services provided by Mendoza Berger and Company, L.L.P. as set forth herein
is compatible with maintaining Mendoza Berger and Company, L.L.P.'s
independence.
7
Our Audit Committee is required to pre-approve the audit and non-audit services
performed by the independent auditor. Unless a type of service to be provided by
the independent auditor has received general pre-approval, subject to certain
dollar limitations, it will require specific pre-approval by the Audit
Committee. The Audit Committee may delegate pre-approval authority to one or
more of its members. The member or members to whom such authority is delegated
shall report any pre-approval decisions to the Audit Committee at its next
scheduled meeting. Unless otherwise determined by the Audit Committee or
otherwise required by applicable law, the Chairperson of the Audit Committee has
the right to exercise the pre-approval authority of the Audit Committee. The
Audit Committee has determined that the professional services rendered by our
accountants are compatible with maintaining the principal accountant's
independence. The Audit Committee gave prior approval to all audit and non-audit
services rendered in 2007.
REQUIRED VOTE
Proposal No. 2 requires the affirmative vote of a majority of the votes cast on
the proposal. Stockholders may vote "for" or "against" the proposal or they may
abstain from voting on the proposal. Abstentions will have the effect of voting
"against" the proposal, but broker non-votes will not have any effect on the
outcome of this proposal. Stockholders are asked to ratify the action of the
Board of Directors in making this appointment. In the event the Stockholders do
not approve this proposal, the Audit Committee will reconsider the appointment.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" PROPOSAL NO. 2, THE
RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.
REPORT OF THE AUDIT COMMITTEE
The Audit Committee reviews the Company's financial reporting process on behalf
of the Board. Management has the primary responsibility for the financial
statements and the reporting process, including the system of internal controls.
The Audit Committee has reviewed and discussed the audited financial statements
with management. In addition, the Audit Committee has discussed with the
independent auditors the matters required to be discussed by Statements on
Auditing Standards No. 90.
The Audit Committee has also received the written disclosures and the letter
from the independent accountants required by Independence Standards Board
Standard No. 1 "Independence Discussions with Audit Committees," and has
discussed with Mendoza Berger & Company, L.L.P., its independence, including
whether their provision of other non-audit services to the Company is compatible
with maintaining its independence.
The Audit Committee discussed with the Company's independent auditors the
overall scope and plans for the respective audits. The Audit Committee meets
with the independent auditors, with and without management present, to discuss
the results of their examinations, the evaluation of the Company's internal
controls and the overall quality of the Company's reporting.
Based upon the review and discussions referred to in the foregoing paragraph,
the Audit Committee recommended to the Board that the audited financial
statements be included in the Company's Annual Report on Form 10-KSB for the
year ended December 31, 2007 for filing with the Securities and Exchange
Commission. The Audit Committee and the Board also have recommended, subject to
Stockholder approval, the selection of the Company's independent auditors.
8
No portion of this Audit Committee Report shall be deemed to be incorporated by
reference into any filing under the Securities Act of 1933, as amended (the
"Securities Act"), or the Exchange Act, through any general statement
incorporating by reference in its entirety the Proxy Statement in which this
report appears, except to the extent that the Company specifically incorporates
this report or a portion of it by reference. In addition, this report shall not
be deemed to be "filed" under either the Securities Act or the Exchange Act.
/S/ LEE COLE
--------------------------
LEE COLE, CHAIRMAN
/S/ LINDEN BOYNE
--------------------------
LINDEN BOYNE
JULY 11, 2008
CORPORATE GOVERNANCE
The Company's Board of Directors and management are committed to responsible
corporate governance to ensure that the Company is managed for the long-term
benefit of its Stockholders. To that end, the Board of Directors and management
periodically review and update, as appropriate, the Company's corporate
governance policies and practices. In doing so, the Board and management review
published guidelines and recommendations of institutional stockholder
organizations and current best practices of similarly situated public companies.
The Board and management also regularly evaluate and, when appropriate, revise
the Company's corporate governance policies and practices in accordance with the
requirements of the Sarbanes-Oxley Act of 2002 and the rules and listing
standards issued by the Securities and Exchange Commission ("SEC").
All of our employees, officers and directors are subject to our Code of Business
Conduct and Ethics Policy, which is available on the Company's website at
www.electronicgamecard.com. The ethics policy meets the code of ethics
requirements of the SEC. If any material provisions of our Code of Business
Conduct and Ethics Policy are waived for our Chief Executive Officer or senior
financial officers, or if any substantive changes are made to our policy as they
relate to any director or executive officer, we will disclose that fact on our
website within five (5) business days. In addition, any other material amendment
of our Code of Business Conduct and Ethics Policy will be so disclosed. As part
of our Code of Business Conduct and Ethics Policy, we have made a
"whistleblower" hotline available to all employees for anonymous reporting of
financial or other concerns. The Audit Committee receives directly, without
management participation, all hotline activity reports, including complaints on
accounting, internal controls or auditing matters.
STOCKHOLDER COMMUNICATIONS WITH DIRECTORS
Stockholders who wish to communicate with the Board or with a particular
director may send a letter to the Secretary of the Company at Electronic Game
Card, Inc., 151 First Avenue #65 New York NY 10003. The mailing envelope should
contain a clear notation indicating that the enclosed letter is a "Board
Communication" or "Director Communication." All such letters should state
whether the intended recipients are all members of the Board or just certain
specified individual directors. The Secretary will circulate the communications
(with the exception of commercial solicitations) to the appropriate director or
directors. Communications marked "Confidential" will be forwarded unopened.
9
BOARD MEETINGS AND COMMITTEES
With proposed expansion of the Company's Board in the fall of 2008, the Board
has recruited one independent director "as defined in accordance with paragraph
(a)(1) of Item. 407 Corporate Governance " who will be appointed as a member of
the Audit Committee and the Governance Committee. The Board reviews at least
annually the Company's business initiatives, capital projects and budget
matters. Each current director attended at least 75% of the meetings of the
Board of Directors and Board committees on which such director served during
2007. The Board has three standing committees - an Audit Committee, a
Compensation Committee, and Governance Committee. Current committee members are
listed below. New committee members will be appointed at the Board meeting
immediately following the upcoming Annual Meeting of Stockholders. Each
committee has a charter which is available on the Company's website at
www.electronicgamecard.com. In the ordinary course all the Directors are
expected to attend the annual meeting of security holders of the company.
The directors of Electronic Game Card, Inc., their ages and committee
memberships as of July 1 2008:
COMMITTEE MEMBERSHIP
- --------------------------------------------------------------------------------
NAME AGE DIRECTOR AUDIT COMPEN- GOVERNANCE
SINCE SATION
- --------------------------------------------------------------------------------
Lee J. Cole 47 2003 Chair Chair X
Linden Boyne 65 2003 X X Chair
Gordon McNally* 66 2006 X X
*Not standing for re-election
AUDIT COMMITTEE: The functions of the Audit Committee are to recommend selection
of independent public accountants to the Board, to review the scope and results
of the year-end audit with management and the independent auditors, to review
the Company's accounting principles and its system of internal accounting
controls and to review the Company's annual and quarterly reports before filing
with the Securities and Exchange Commission. The Audit Committee also reviews
and approves all related-party transactions. The Board has determined that all
members of the Audit Committee are financially literate, as that term is defined
by NASDAQ and by applicable SEC rules. The Audit Committee met four times during
2007 and all members of the Audit Committee attended those meetings.
EXECUTIVE COMPENSATION COMMITTEE: The Executive Compensation Committee reviews
and approves salaries, bonuses and other benefits payable to the executive
officers and administers the 2005 Equity Compensation Scheme as amended. All of
the current directors are members of the Executive Compensation Committee. The
Executive Compensation Committee met once in 2007.
GOVERNANCE COMMITTEE: The Governance Committee is responsible for proposing a
slate of directors for election by the Stockholders at each annual meeting and
for proposing candidates to fill any vacancies. The Governance Committee
currently consists of the whole Board. The Governance Committee met once in
2007.
The Governance Committee manages the process for evaluating current Board
members at the time they are considered for re-nomination. After considering the
appropriate skills and characteristics required on the Board, the current makeup
of the Board, the results of the evaluations, and the wishes of the Board
members to be re-nominated, the Governance Committee recommends to the Board
whether those individuals should be re-nominated.
10
The Governance Committee meets at least on an annual basis and will review with
the Board whether it believes the Board would benefit from adding any new
member(s), and if so, the appropriate skills and characteristics required for
the new member(s). If the Board determines that a new member would be
beneficial, the Governance Committee solicits and receives recommendations for
candidates and manages the process for evaluating candidates. All potential
candidates, regardless of their source, are reviewed under the same process. The
Governance Committee (or its chairman) screens the available information about
the potential candidates. Based on the results of the initial screening,
interviews with viable candidates are scheduled with Governance Committee
members, other members of the Board and senior members of management. Upon
completion of these interviews and other due diligence, the Governance Committee
may recommend to the Board the election or nomination of a candidate.
Candidates for independent Board members have typically been found through
recommendations from directors or others associated with the Company.
Stockholders may also recommend candidates by sending the candidate's name and
resume to the Governance Committee under the provisions set forth above for
communication with the Board. The deadline to submit recommendations for
nominees for election to the Board at the Company's 2009 Annual Meeting of
Stockholders is June 25, 2009. If the date of the annual meeting for 2009 is
moved by more than 30 days from the date of this year's Annual Meeting, then the
deadline for receiving recommendations for nominees shall be a reasonable time
before the Company begins to print and mail the proxy statement for the 2009
annual meeting.
The Governance Committee has no predefined minimum criteria for selecting Board
nominees, irrespective of the source of the recommendation of the nominee to the
Governance Committee, although it believes that all independent directors should
share qualities such as independence; experience at the corporate, rather than
divisional level, relevant non-competitive experience; and strong communication
and analytical skills. In any given search, the Governance Committee may also
define particular characteristics for candidates to balance the overall skills
and characteristics of the Board and the perceived needs of the Company.
However, during any search the Governance Committee reserves the right to modify
its stated search criteria for exceptional candidates. Lord Steinberg offered to
join the Board and serve as its Executive Chairman, and subsequently recommended
Mr. Christiansen and Ms. Houssels for consideration as Board nominees by the
Governance Committee.
NON-EMPLOYEE DIRECTOR COMPENSATION
Members of the Board of Directors who are not employees of the Company receive a
retainer of $12,500 per quarter. Pursuant to the Company's 2007 Equity
Compensation Plan, newly appointed Independent Directors will receive share
options as well. Employee directors do not receive compensation for serving as
directors or for attending Board of Directors, committee or stockholder
meetings. The Company maintains a written compensation policy for its
non-employee directors. The Company does not provide additional compensation for
service on any of its Board committees.
The following table provides information on compensation awarded or paid to the
non-employee directors of the Company for the fiscal year ended December 31,
2007.
FEES EARNED OR PAID OPTION AWARDS
NAME IN CASH ($)(1) ($) (3) TOTAL ($)
- --------------------------------------------------------------------------------
G. McNally 12,500(1) None 50,000
(1) The annual retainer is paid quarterly.
11
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company's Audit Committee reviews, approves, or ratifies any related party
transaction of a character or magnitude that would be required to be reported
pursuant to applicable rules and regulations and of which it has been made
aware. The Company's directors, executive officers and other identified persons
are required to bring such transactions to the attention of the Audit Committee
to seek advance approval by the Audit Committee. This policy is set forth in the
Company's Corporate Governance handbook. The Audit Committee was not required to
review any such transaction during the Company's last fiscal year.
Lord Steinberg has entered into an appointment agreement with the Company
providing that if he is elected as a Director he will also be appointed as
Chairman of the Board of Directors of the Company. Lord Steinberg's appointment
agreement provides that his compensation as Executive Director shall be $250,000
per annum. In exchange for agreeing to appointment and service as Chairman, upon
election Lord Steinberg shall be granted options to purchase 2,000,000 shares of
the Company's common stock.
Each of Anna Houssels and Eugene Christensen have entered into appointment
agreements with the Company providing that elected a Director of the Company
each will receive $50,000 per annum as non-Executive Directors.
EXECUTIVE COMPENSATION
EXECUTIVE OFFICERS
The executive officers of Electronic Game Card, Inc., and their ages, as of July
1, 2008 are as follows:
NAME AGE PRINCIPAL OCCUPATION
- --------------------------------------------------------------------------------
Lee Cole 47 Interim CEO and Chairman of the Board
Linden Boyne 65 Chief Financial Officer and Secretary
SUMMARY COMPENSATION TABLE
The following table sets forth a summary of annual and long-term compensation
awarded to, earned by, or paid for the fiscal year ended December 31, 2007 to
the Chief Executive Officer and Chief Financial Officer of Electronic Game Card,
Inc. and each of the next three most highly compensated executive officers (as
defined in Rule 3b-7 under the Exchange Act) of Electronic Game Card, Inc.
serving at the end of the year (the "NEOs"):
12
NON-EQUITY
INCENTIVE ALL OTHER
STOCK OPTION PLAN CONPEN- COMPEN-
PRINCIPAL SALARY($) BONUS($) AWARDS($) AWARDS($) SATION($) SATION($)
POSITION YEAR (1) (2) (3) (4) (5) (6) TOTAL($)
- --------------------------------------------------------------------------------------------------------------------
Lee Cole 2007 $ 0 N/A $ 0 $ 0 N/A $ 0 $ 0
Interim CEO
12
Linden Boyne 2007 $ 0 N/A $ 0 $ 0 N/A $ 0 $ 0
Chief Financial
Officer & Secretary
Gordon McNally (3) 2007 $ 50,000 N/A $ 0 $ 0 N/A $ 0 $ 50,000
(1) Per SEC rules, the salary column represents the amount of actual gross
wages paid in 2007 to the Executive Officer. Mr. Cole and Mr. Boyne
were separately remunerated by a service company, Sterling FCS Ltd, who
invoiced $200,000 for their joint services in 2007 and received
4,000,000 stock options in January 2007, 2,250,000 of which have been
exercised by Sterling FCS Ltd. Neither Mr. Cole nor Mr. Boyne are
officers, directors or beneficial owners of, or exercise managerial
control with respect to, Sterling FCS Ltd.
(2) The Company did not pay any cash bonuses.
(3) Gordon McNally is not standing for re-election.
EQUITY COMPENSATION PLAN INFORMATION
The Company presently has a single plan for the granting of equity incentives to
directors, employees and consultants -first approved in 2002 and reapproved by
the Board in 2007. The 2007 Equity Compensation Plan (the "Plan"). Provides for
up to 10% of the issued common stock to be made available for Stock grants and
options to purchase common stock may be issued under the Plan. The Plan is
intended to be a broad-based, long-term retention program that is intended to
attract and retain talented employees, directors and consultants. The purpose of
the Plan is to promote the success, and enhance the value, of the Company by
aligning the interests of participants with those of the Company's Stockholders.
The Company has issued 5,000,000 shares of its common stock pursuant to grants
under the Plan. Under the Plan, participants may be granted shares of the
Company's common stock or options to purchase common stock. The Board delegated
administration of the Plan to the Executive Compensation committee. The
Executive Compensation committee will be responsible for approving all grants
made under the Plan.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
Mr. Cole and Mr. Boyne provide their services through a management company
Sterling FCS Limited. Neither Mr. Cole nor Mr. Boyne are officers, directors or
beneficial owners of, or exercise managerial control with respect to, Sterling
FCS Ltd. The Company has employed Sterling since 2003. The current contract runs
until March 31, 2009 and is subject to termination on six months notice.
13
COMPENSATION DISCUSSION AND ANALYSIS
Electronic Game Card's compensation programs for the named executive officers
(the "NEOs") (as defined in the regulations under the federal securities laws)
listed in the Summary Compensation Table appearing in this Proxy Statement and
the Company's other executives are designed to aid in the attraction, retention
and motivation of these employees. The programs are administered by the
Executive Compensation Committee of the Board of Directors (the "Committee").
The Committee operates under a charter adopted by the Board of Directors that
provides the authority to interpret the Company's compensation, equity and other
benefit plans and establish the rules for their implementation and
administration. Through these compensation programs, the Company seeks to foster
a performance-oriented culture by linking a significant portion of each NEOs'
compensation to the achievement of performance targets that are important to the
success of the Company and its Stockholders. This discussion and analysis
describes Electronic Game Card, Inc.'s current compensation programs and
policies, which are subject to change.
OVERVIEW OF COMPENSATION PROGRAMS
The Company's executive compensation strategy is comprised of three elements:
base salary, equity-based compensation and benefits and perquisites.
Base salary and equity-based compensation are used to attract executives and
reward them for performance. Equity-based compensation is designed to (i) align
the interests of the NEOs and other executives with stockholders in the creation
of long-term value, (ii) retain employees through the use of vesting schedules,
and (iii) foster a culture of stock ownership. In January 2007, the Company
awarded 5,000,000 share options pursuant to the Plan.
OBJECTIVES OF THE COMPENSATION POLICY
The primary objectives of the Company's executive compensation programs are to
attract, retain and motivate executives critical to the Company's long-term
growth and success and the creation of Stockholder value by appropriately
rewarding such individuals for their achievements. To this end, the Company has
adopted the following guiding principles:
a. PERFORMANCE-BASED: Compensation levels should be determined
based on Company and individual results compared to
quantitative and qualitative performance goals and objectives
set at the beginning of the year. The Compensation Committee
reviews and approves quarterly performance metrics as part of
the quarterly performance award.
b. STOCKHOLDER-ALIGNED: Equity-based compensation should
represent a significant portion of compensation to more
closely align the interests of the NEOs and other executives
with those of the Stockholders.
c. FAIR AND COMPETITIVE: Compensation levels should be perceived
as fair, internally and externally, and competitive with
overall compensation levels at other companies in our
industry, including larger companies from which we may want to
recruit.
ELEMENTS OF COMPENSATION
The Company seeks to achieve these objectives through three key compensation
elements:
o Base Salary,
14
o Equity-based Compensation, and
o Benefits and Perquisites.
The Company considers each of these elements when setting total compensation
levels, but does not use a pre-determined formula in which each element
constitutes a specific percentage of overall compensation.
In making compensation decisions, we consider the compensation practices of and
the competitive market for executives at companies with which we compete for
talent. To this end, the Company utilizes a number of resources that, during
2007, included: Executive compensation information compiled from the proxy
statements of other companies and executive compensation information compiled
from a peer group of companies. The peer group currently consists of the
following companies:
References to "market data" herein refer to proxy data. The Company uses market
data in establishing total compensation objectives and ensuring that
compensation for the NEOs and other executives is within the broad range of
comparative pay of the peer group companies. The Company does not target a
specific position in the range of comparative data for each individual or for
each component of compensation. For 2007, total compensation of the Company's
NEOs and other executives is believed to be generally within the 40th to 50th
percentile of the market as described above, although individuals may be
compensated above or below this level based on competitive factors, the
Company's financial and operating performance and consideration of individual
performance and experience.
BASE SALARY
The Company pays base salaries in order to attract executives and reward them
for performance. Base salaries are determined in accordance with the
responsibilities of each NEO, market data for the position and the NEO's
individual performance and experience. The Company considers each of these
factors but does not assign a specific value to each factor. Base salaries for
NEOs and other executives are typically set during the first half of the year in
conjunction with the Company's annual performance review process.
EQUITY-BASED COMPENSATION
The Company grants equity-based awards, such as stock options and stock grants,
to the NEOs and certain other key employees to create a clear and strong
alignment between compensation and Stockholder return and to enable the NEOs and
other employees to develop and maintain a stock ownership position in the
Company that will vest over time and act as an incentive for the employee to
remain with the Company.
An accounting pronouncement adopted by the Financial Accounting Standards Board
and effective for the Company beginning on January 1, 2006 ("FAS 123(R)"),
requires us to measure the value of equity awards based on the fair value of the
award on the grant date. That cost is recognized in our statements of operations
over the period during which an employee is required to provide service in
exchange for the award, which is usually the vesting period. FAS 123(R) applies
to all equity-based compensation awarded on or after January 1, 2006, and to
existing stock options that vest after January 1, 2006.
In 2006, the Committee approved grants of stock options to executive officers.
Stock options are granted at an exercise price equal to fair market value on the
date of grant, have a term of ten years from the date of grant and, subject to
the recipient's continued employment, become exercisable over a three year
period. Because stock options have value to the holder only if the Company's
stock price appreciates, the Committee believes that executives holding such
options are properly focused on enhancing Stockholder value over time.
15
The Company intends to use a combination of stock option grants and stock awards
as elements of a cost effective long term incentive compensation strategy. In
addition, stock awards are an effective means for encouraging and creating stock
ownership among the Company's executives and key employees.
The number of stock options or shares of stock granted to each individual is
based on several factors including, but not limited to, the Company's guidelines
for awards based on competitive market data, the individual's level of
responsibility, past performance and ability to affect future Company
performance, recent noteworthy achievements and the cost for such awards.
Typically, the Committee has granted equity awards at its scheduled meetings
that, in the case of the quarterly grant of stock awards, is generally held
during the one month period following the end of each quarter. The Committee
approves a schedule setting forth each award on an individual-by-individual
basis. The date of the Committee approval is fixed as the grant date on which
the fair market value of the award is based. The Committee has not granted, nor
does it intend to grant, equity compensation to executives in anticipation of
the release of material nonpublic information that is likely to result in
changes to the price of the Company's stock. Furthermore, the Committee has not
timed, nor does it intend to time, the release of material nonpublic information
based on equity award grant dates.
BENEFITS AND PERQUISITES
The Company provides a limited number of benefits and perquisites to its
executive officers that it believes are required to remain competitive with the
goal of promoting enhanced employee productivity and loyalty to the Company. The
Committee periodically reviews the levels of benefits and perquisites provided
to executive officers. The NEOs participate in the Company's Health Insurance
plan, which pays 95% of the cost for health coverage for each employee and the
employee's family.
The Company does not maintain other perquisite programs, such as post-retirement
health and welfare benefits, defined or supplemental pension benefits or
deferred compensation arrangements.
FINANCIAL AND TAX CONSIDERATIONS
In 2007, in connection with the implementation of FAS 123(R), the Company
revised its long-term incentive strategy, which previously was based principally
on stock grants. The Company created a long-term incentive strategy based on
restricted stock and stock options for executives at certain levels, including
the Company's CEO and the other NEOs. The financial impact of equity-based
compensation, under FAS 123(R), including restricted stock and stock options, is
fixed at the time of award. Under the Company's revised strategy, the CEO and
the other NEOs receive restricted stock (that reinforces a stock ownership
culture and provides continued retention incentive, even in a down market) and
stock options (that have value only if there is stock price appreciation).
In designing our compensation programs, the Company takes into account the
financial impact and tax effects that each element will or may have on the
Company and the executives. Section 162(m) of the Code limits the Company's tax
deduction to $1,000,000 per year for compensation paid to each of the Named
Executive Officers, unless certain requirements are met. The Committee's present
intention is to structure executive compensation so that it will be
predominantly deductible, while maintaining flexibility to take actions it deems
to be in the best interest of the Company and its Stockholders, even if these
actions may result in the Company paying certain items of compensation that may
not be fully deductible.
16
CONCLUSION
Attracting and retaining talented and motivated management and employees is
essential to creating long-term Stockholder value. Offering a competitive,
performance-based compensation program with a large equity component helps to
achieve this objective by aligning the interests of the executive officers and
other key employees with those of Stockholders. We believe that the Company's
2007 compensation program met these objectives.
EXECUTIVE COMPENSATION COMMITTEE REPORT
The information contained in this report shall not be deemed to be "soliciting
material" or "filed" with the SEC or subject to the liabilities of Section 18 of
the Exchange Act, except to the extent that the Company specifically
incorporates it by reference into a document file under the Securities Act or
Exchange Act.
The Committee has reviewed and discussed with management the Compensation
Discussion and Analysis for 2007. Based on the review and the discussions, the
Committee recommended to the Board of Directors (and the Board approved), that
the Compensation Discussion and Analysis be included in the Company's Proxy
Statement for its 2008 Annual Meeting of Stockholders.
This report is submitted by the Committee.
/S/ LEE COLE
--------------------------
LEE COLE, CHAIRMAN
/S/ LINDEN BOYNE
--------------------------
LINDEN BOYNE
JULY 11, 2008
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the beneficial ownership of the Company's common
stock as of July 1, 2008 by:
i. each person known by the Company to be the beneficial owner of
more than five percent (5%) of the Company's common stock,
ii. each director,
iii. each of the Company's nominees in this Proxy Statement for
election as a director of the Company,
iv. each Named Executive Officers (NEOs), and
v. all directors and executive officers as a group.
Except as otherwise indicated in the footnotes to the table, the Company
believes that each of the persons or entities named in the table exercises sole
voting and investment power over the shares of common stock that each of them
beneficially owns, subject to community property laws where applicable.
17
SHARES OF COMMON STOCK
BENEFICIALLY OWNED PERCENTAGE
-------------------------------------------- OF TOTAL SHARES
NAME AND ADDRESS OF OWNER (1) SHARES OPTIONS (2) TOTAL OUTSTANDING
- -------------------------------------- -------------------------------------------- -----------------
Anna Houssels 0 500,000 500,000 *
Eugene Christiansen 0 500,000 500,000 *
Leonard Steinberg (3) 4,022,200 2,000,000 6,022,200 10.04
Lee Cole 0 0 0 *
Linden Boyne 0 0 0 *
Pequet Capital Management 9,385,874 0 9,385,874 16.2
500 Nayla Farm Road
Westport, CT 06880
Ingells & Snyder 3,113,500 0 3,133,500 5.4
61 Broadway
New York, NY 10006
Delta Onshore LP 7,369,333 0 7,369,333 12.7
Delta Institutional LP
Delta Offshore Ltd.
Delta Pleides
900 3rd Avenue, 5th Floor
New York, NY 10022
- -------------------------------------- -------------------------------------------- -----------------
All Officers & Directors as a group 4,022,200 3,000,000 7,022,200 12.1
- -------------------------------------- -------------------------------------------- -----------------
* Less than one percent.
(1) Unless otherwise set forth in the table or in a footnote below, the
address of each Stockholder is c/o Electronic Game Card, Inc., 151
First Avenue #65 New York NY 10003.
(2) Assumes that Lord Steinberg, Ms. Houssels and Mr. Christiansen are
elected to the Board.
(3) Lord Steinberg acquired this stock in the market.
A person is deemed to be the beneficial owner of securities owned or that can be
acquired by such person within 60 days of the measurement date upon the exercise
of stock options. Each person's percentage ownership is determined by assuming
that stock options beneficially owned by such person (but not those owned by any
other person) have been exercised.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under Section 16(a) of the Securities Exchange Act of 1934, the Company's
directors and officers and its significant Stockholders (defined by statute as
Stockholders beneficially owning more than ten percent (10%) of the common
stock) are required to file with the Securities and Exchange Commission reports
of ownership, and changes in ownership, of common stock. These persons are
required by SEC regulations to furnish the Company with copies of all Section
16(a) forms they file. SEC regulations require us to identify in this proxy
statement anyone who filed a required report late or failed to file a required
report. Based solely on a review of the reports received by it, the Company
believes that during 2007 all reports were filed in a timely manner.
18
FORM 10-KSB
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM A COPY OF THIS
PROXY STATEMENT IS DELIVERED, UPON THE WRITTEN REQUEST OF ANY SUCH PERSON, A
COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION (NOT INCLUDING EXHIBITS TO THE FORM 10-KSB). WRITTEN
REQUESTS FOR SUCH COPIES SHOULD BE DIRECTED TO ELECTRONIC GAME CARD, INC.,
INVESTOR RELATIONS, 151 FIRST AVENUE #65 NEW YORK NY 10003.
INVESTOR INFORMATION
All reports filed by the Company with the SEC are available free of charge via
EDGAR through the SEC website at www.sec.gov. In addition, the public may read
and copy materials filed by the Company with the SEC at the SEC's public
reference room located at 450 Fifth St., N.W., Washington, D.C. 20549. You can
obtain information about the operation of the SEC's Public Reference Room by
calling the SEC at 1-800-SEC-0330. The Company also provides copies of its Forms
8-K, 10-QSB, 10-KSB, Proxy, Annual Report and press releases at no charge to
investors upon request and makes electronic copies of such reports and press
releases available through its website at www.electronicgamecard.com as soon as
reasonably practicable after filing such material with the SEC. Requests should
be sent to the Company, attention: Linden Boyne, Chief Financial Officer and
Secretary.
The Company knows of no other matters to be submitted at the Annual Meeting. If
any other matters properly come before the meeting, it is the intention of the
persons named in the enclosed proxy card to vote the shares they represent as
the Board may recommend.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Linden Boyne
- -----------------------
Linden Boyne, Secretary
New York, New York
July 24, 2008
19
PROXY FOR THE 2008 ANNUAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, a stockholder of ELECTRONIC GAME CARD, Inc., a
Delaware corporation (the "Company"), hereby nominates, constitutes and appoints
Lee J. Cole, as proxy of the undersigned, each with full power of substitution,
to attend, vote and act for the undersigned at the Annual Meeting of
Stockholders of the Company, to be held on September 2, 2008, and any
postponements or adjournments thereof, and in connection therewith, to vote and
represent all of the shares of the Company which the undersigned would be
entitled to vote with the same effect as if the undersigned were present, as
follows:
A VOTE FOR ALL PROPOSALS IS RECOMMENDED BY THE BOARD OF DIRECTORS:
Proposal 1. To elect the following five nominees as directors:
Lee J. Cole Linden J H Boyne Lord Leonard Eugene Anna Houssels
Steinberg Christiansen
|_| FOR ALL NOMINEES LISTED ABOVE (except as marked to the contrary below)
|_| WITHHELD for all nominees listed above
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space below:)
-----------------------------------------------------------------------
The undersigned hereby confer(s) upon the proxies and each of them
discretionary authority with respect to the election of directors in
the event that any of the above nominees is unable or unwilling to
serve.
Proposal 2. To ratify the appointment of Mendoza Berger & Company, L.L.P. as
independent auditors for the year ending December 31, 2008:
|_| FOR |_| AGAINST |_| ABSTAIN
The undersigned hereby revokes any other proxy to vote at the Annual Meeting,
and hereby ratifies and confirms all that said attorneys and proxies, and each
of them, may lawfully do by virtue hereof. With respect to matters not known at
the time of the solicitation hereof, said proxies are authorized to vote in
accordance with their best judgment.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE INSTRUCTIONS SET FORTH ABOVE OR,
TO THE EXTENT NO CONTRARY DIRECTION IS INDICATED, WILL BE TREATED AS A GRANT OF
AUTHORITY TO VOTE FOR ALL PROPOSALS. IF ANY OTHER BUSINESS IS PRESENTED AT THE
ANNUAL MEETING, THIS PROXY CONFERS AUTHORITY TO AND SHALL BE VOTED IN ACCORDANCE
WITH THE RECOMMENDATIONS OF THE PROXIES.
The undersigned acknowledges receipt of a copy of the Notice of Annual Meeting
dated July 24, 2008 and the accompanying Proxy Statement relating to the Annual
Meeting.
Dated:___________________________, 2008
Signature:_____________________________
Signature:_____________________________
Signature(s) of Stockholder(s)
(See Instructions Below)
The Signature(s) hereon should correspond exactly
with the name(s) of the Stockholder(s) appearing on
the Share Certificate. If stock is held jointly, all
joint owners should sign. When signing as attorney,
executor, administrator, trustee or guardian, please
give full title as such. If signer is a corporation,
please sign the full corporation name, and give title
of signing officer.
|_| Please indicate by checking this box if you anticipate
attending the Annual Meeting.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE