SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. ____)
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ORALABS HOLDING CORP.
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ORALABS HOLDING CORP.
18685 East Plaza Drive
Parker, Colorado 80134
______________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
______________________
May 25, 2004
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
ORALABS HOLDING CORP. (the "Company") will be held at the Company's offices at
18685 East Plaza Drive, Parker, Colorado 80134, on Tuesday, May 25, 2004, at
2:00 p.m., for the following purposes:
1. To elect four Directors;
2. To ratify the action of the Board of Directors pursuant to the
recommendation of the Audit Committee in selecting Ehrhardt Keefe Steiner &
Hottman P.C. as the Company's independent auditors for the fiscal year ending
December 31, 2004; and
3. To transact such other business as may properly come before the
meeting or any adjournment(s) thereof.
The Board of Directors has fixed the close of business on April 5, 2004
as the record date for determining all stockholders entitled to receive notice
of the Annual Meeting and to vote at such meeting or any adjournment(s) thereof.
The Board of Directors appreciates and welcomes stockholder
participation in the Company's affairs. Whether or not you plan to attend the
Annual Meeting, please vote by completing, signing and dating the enclosed proxy
and returning it promptly to the Company in the enclosed self-addressed,
postage-prepaid envelope. If you attend the meeting, you may revoke your proxy
and vote your shares in person.
By Order of the Board of Directors,
/s/ Michael I. Friess
----------------------------------------
Secretary
April 20, 2004
ORALABS HOLDING CORP.
18685 East Plaza Drive
Parker, Colorado 80134
______________________
PROXY STATEMENT
______________________
ANNUAL MEETING OF STOCKHOLDERS
May 25, 2004
General Information
This Proxy Statement is furnished to the stockholders of OraLabs
Holding Corp., a Colorado corporation (the "Company"), in connection with the
solicitation of proxies by the Board of Directors of the Company (the "Board of
Directors") for use at the Annual Meeting of Stockholders of the Company to be
held on May 25, 2004, and any adjournment(s) thereof (the "Annual Meeting"). A
copy of the notice of meeting, the Company's Annual Report on Form 10-KSB for
the fiscal year ended December 31, 2003 (which also comprises the Company's
Annual Report) and form of proxy statement are first being sent to stockholders
on or about April 20, 2004.
Only stockholders of record at the close of business on April 5, 2004,
the record date for the Annual Meeting, will be entitled to notice of and to
vote at the Annual Meeting. On the record date, there were issued and
outstanding 4,580,615 shares of the Company's Common Stock, par value $.001 per
share (the "Common Stock"). Each share of Common Stock entitles the holder to
one vote with respect to each of the matters to be voted upon at the Annual
Meeting. The Common Stock is the only class of outstanding securities of the
Company entitled to vote at the Annual Meeting.
Presence in person or by proxy of the holders of 2,290,308 shares of
Common Stock will constitute a quorum at the Annual Meeting. Assuming a quorum
is present, the affirmative vote of the holders of at least a majority of votes
present and entitled to be cast at the Annual Meeting is required for (i) the
election of Directors, (ii) the ratification of the selection of Ehrhardt Keefe
Steiner & Hottman P.C. as independent auditors for the current fiscal year, and
(iii) except as otherwise required by Colorado law or the Company's Articles of
Incorporation or Bylaws, any other matters that properly come before the
meeting. If a stockholder, present in person or by proxy, abstains on any
matter, the stockholder's shares will not be voted on such matter. Abstentions
may be specified on all proposals submitted to a stockholder vote other than the
election of directors. Abstentions will be counted as present or represented and
entitled to vote for purposes of determining the existence of a quorum regarding
the proposal on which the abstention is noted, but will not be considered as
votes cast in determining whether a matter has been approved by the
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stockholders. A proxy submitted by a stockholder also may indicate that all or a
portion of the shares represented by such proxy are not being voted by such
stockholder with respect to a particular matter. This could occur, for example,
when a broker is not permitted to vote shares held in street name on certain
matters in the absence of instructions from the beneficial owner of the shares.
If a proxy in the accompanying form is properly executed and returned,
the shares represented thereby will be voted as instructed in the proxy. If no
instructions are given, the persons named in the proxy intend to vote in favor
of (i) the nominees for election as Directors as set forth below and (ii) the
ratification of the selection of Ehrhardt Keefe Steiner & Hottman P.C. as
independent auditors for the current fiscal year.
Brokers holding shares in street name, who do not receive instructions,
are entitled to vote on the election of Directors and ratification of the
appointment of the independent auditors, since such matters are considered to be
routine. Since a broker is not required to vote shares held in "street name" in
the absence of instructions from the beneficial stockholder, a stockholder's
failure to instruct his broker may result in the stockholder's shares not being
voted.
Each proxy granted may be revoked by the person granting it at any time
(i) by giving written notice to such effect to the Secretary of the Company,
(ii) by execution and delivery of a proxy bearing a later date, or (iii) by
attendance and voting in person at the Annual Meeting, except as to any matter
upon which, prior to such revocation, a vote shall have been taken pursuant to
the authority conferred by such proxy. The mere presence at the Annual Meeting
of a person appointing a proxy does not revoke the appointment.
ELECTION OF DIRECTORS
Nominees
The Bylaws of the Company provides that the number of Directors of the
Company shall be fixed by resolution of the Board of Directors. Such number
currently has been fixed at four persons. At the Annual Meeting, four persons
will be elected to the Board of Directors to serve until the next annual meeting
and until their successors have been elected and qualify. The persons named as
proxies in the accompanying proxy intend to vote FOR these nominees of the Board
of Directors or, if any of the nominees should be unable to serve, for such
substitute nominee(s) as the Board of Directors then may propose.
The following table sets forth information about the nominees, each of
whom is currently serving as a Director of the Company:
4
Year First
Elected to
Board of
Name Age Positions with the Company Directors
---- --- -------------------------- ---------
Gary H. Schlatter(2).....47 Chairman of the Board, Chief 1997
Executive Officer, Director
Allen R. Goldstone.......51 Director 1997
Michael I. Friess........54 Director (1), Secretary 1997
Robert C. Gust...........47 Director (1) 2000
__________________
1 Audit Committee member
2 See "Certain Relationships and Related Transactions" below.
Mr. Schlatter and Mr. Goldstone were elected to their positions in May
1997 upon consummation of the transaction by which the Company's subsidiary,
OraLabs, Inc., was acquired by SSI Capital Corp. (the Company's predecessor).
Mr. Friess was appointed as a Director on September 8, 1997 and Mr. Gust was
elected as a director on May 26, 2000. All directors serve as such until their
successors are elected and qualified. No family relationship exists among the
Directors or between any of such persons and the Executive Officers of the
Company. Mr. Goldstone resigned from the Board on August 24, 1999 and was
reappointed to the Board on December 30, 1999.
Gary H. Schlatter is the founder (in 1990) of the Company's subsidiary,
OraLabs, Inc., and has served as the President, Chief Executive Officer,
Treasurer and Secretary of the subsidiary since that time. He also serves in the
positions listed in the above table with respect to the Company. Mr. Schlatter
holds his offices (other than the position of director) pursuant to an
employment agreement (see, "Executive Compensation").
Michael Friess is a self-employed attorney licensed to practice law in
the State of Colorado. He was a partner from January 1983 to December 1993 in
the New York City law firm of Schulte, Roth & Zabel, where his practice
emphasized taxation.
Allen R. Goldstone is the managing member of Creative Business, LLC, a
company that is engaged in business consultation, and he has held that position
since 1998 (and prior thereto he was and still serves as president of Creative
Business Strategies, Inc., another business consulting firm). Mr. Goldstone has
also served as a management consultant since 1988. For calendar year 1997, Mr.
Goldstone was an employee of the Company's subsidiary, in which capacity he was
in charge of investor relations.
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Robert C. Gust is the co-founder (January 2002) and Partner of Apogee
Group, a business brokerage and consulting firm. From April 1997 to December
2001, Mr. Gust was co-founder and Senior Vice-President of Business Development
for Protocol Communications, Inc., a Massachusetts company engaged in the
business of owning and operating integrated marketing services companies. From
June 1993 until the formation of Protocol Communications, Inc., Mr. Gust was
Vice-President of Sales (North America) for Indigo America.
The Board of Directors recommends that stockholders vote FOR the
election of each of the nominees named herein.
Additional information with respect to the Board of Directors.
The Company has a standing Audit Committee consisting of Michael I.
Friess and Robert C. Gust. The Audit Committee reviews the consolidated
financial statements and independent auditors' report, including recommendations
from the independent auditors regarding internal controls and other matters. The
Audit Committee held one meeting during fiscal year 2003 to discuss the
financial statements to be part of the Company's Form 10-KSB for fiscal year
2003, and held two meetings with the Company's independent auditors with respect
to the Company's Annual Report on Form 10-KSB for fiscal year 2003. The meetings
were held by telephone conference call.
The Board of Directors adopted a revised written charter for the Audit
Committee in March 2004, which is attached to this Proxy Statement as Appendix
A. A report of the Audit Committee is found under the heading "Audit Committee
Report" below.
During the fiscal year ended December 31, 2003, the Board of Directors
did not meet in person but met four times by telephone conference, and each
Director participated in the meeting. The Board also took action on numerous
occasions without a formal meeting.
Audit Committee Report
The Board of Directors and the Audit Committee believe that the Audit
Committee's current member composition (two independent directors) satisfies the
rule of the National Association of Securities Dealers, Inc. ("NASD") that audit
committee members be "independent directors" as that term is defined by those
rules. The Board of Directors has determined that one of the Audit Committee
members, Michael I. Friess, is both independent and is an "audit committee
financial expert" as that term is used in Item 401 of Regulation S-B. Mr. Friess
qualifies as an audit committee financial expert by means of his employment as a
tax attorney in New York City as described above.
In accordance with its written charter adopted by the Board of
Directors, the Audit Committee assists the Board of Directors with fulfilling
its oversight responsibility regarding the quality and integrity of the
accounting, auditing and financial reporting practices of the Company. In
discharging its oversight responsibilities regarding the audit process, the
Audit Committee reviewed and discussed the audited financial statements with the
auditors and with management, discussed with the independent auditors the
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material required to be discussed by Statement on Auditing Standards No. 61
(communications with audit committees), reviewed the written disclosures and the
letter from the independent auditors required by the Independence Standards
Board's Standard No. 1, and discussed with the independent auditors their
independence.
Based upon the review 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, 2003, as filed with the Securities and Exchange
Commission.
Audit Committee
Michael I. Friess
Robert C. Gust
April 13, 2004
Section 16(a) Beneficial Ownership Reporting Compliance.
Section 16(a) of the Securities and Exchange Commission requires our
directors, executive officers and holders of more than 10% of our common stock
to file with the Securities and Exchange Commission reports regarding their
ownership and changes in ownership of our securities. The Company believes that
during fiscal year 2003, its directors, executive officers and 10% owners
complied with all Section 16(a) filing requirements with the following
exceptions: directors Friess, Goldstone and Gust each filed a late report with
respect to options awarded to each of them in June 2003 under the Company's 1997
Non-employee Directors Option Plan, and director Friess filed late reports
concerning shares of stock sold by him in 1999 and 2000.
Executive Officers and Significant Employees.
The following table sets forth information about the executive officers
and significant employees of the Company:
Name Age Positions with the Company
---- --- --------------------------
Gary H. Schlatter (1)................47 Chief Executive Officer, President,
Treasurer
Emile (Red) Jordan...................45 Comptroller, Chief Financial
Officer/ Chief Operating Officer
__________________
1 See description of Mr. Schlatter below the table of Nominees to the
Board of Directors, above.
Mr. Jordan has served as the Comptroller of the Company since May 1997.
He has served as Comptroller of the subsidiary, OraLabs, Inc. on a full time
basis since April 1, 1994. Mr. Jordan is the Chief Operating /Chief Financial
Officer of the Company. Mr. Jordan was elected to his position by the Board of
Directors of the Company and holds his office at the discretion of the Board of
Directors or until his earlier death or resignation.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Gary H. Schlatter, through an affiliated entity, is the owner of the
property leased by OraLabs (the Company's subsidiary) that serves as the
Company's headquarters, manufacturing facility and warehouse facility. The lease
expires on September 30, 2006. Rent paid to Mr. Schlatter and to his affiliated
entity that leased to OraLabs the two facilities occupied by it in 2003 was
$280,438. The Company believes that its rental rate is comparable to that which
would be paid to unaffiliated parties, and the Company believes that if the
leases were not to be renewed, the Company could obtain alternative space.
SECURITY OWNERSHIP OF MANAGEMENT AND
CERTAIN BENEFICIAL OWNERS
The following table sets forth, as of April 5, 2004, information
regarding the beneficial ownership of Common Stock (i) by each Director (each of
whom is a nominee for election at the Annual Meeting), (ii) by each Executive
Officer listed in the Summary Compensation table below, (iii) by all Directors
and current Executive Officers as a group (four (4) persons), and (iv) by each
person or group known by the Company to own beneficially in excess of five
percent (5%) of the Common Stock (all share numbers have been adjusted to
reflect the one-for-two reverse stock split effective in December 2003):
Name and Address Amount and Nature of Percent
of Beneficial Owner (6) Beneficial Ownership of Class
----------------------- -------------------- --------
Gary H. Schlatter 3,729,350 shares (1) 81.4%(1)
18685 East Plaza Drive
Parker, Colorado 80134
Allen R. Goldstone 36,250 shares (2) *
5353 Manhattan Circle
Suite 101
Boulder, Colorado 80303
8
Michael I. Friess 8,750 shares (3) *
5353 Manhattan Circle
Suite 101
Boulder, Colorado 80303
Robert C. Gust 24,750 shares (4) *
7N551 Cloverfield Circle
St. Charles, IL 60175
Emile J. Jordan 25,500 shares5 *
18685 East Plaza Drive
Parker, Colorado 80134
All directors and executive 3,824,600 shares (1, 2, 3, 4, 5) 82.5%
officers as a group (five persons)
* Less than one percent
__________________
1 Includes 100,000 shares held by The Schlatter Family Partnership, of
which Gary H. Schlatter and his spouse are the general partners. Mr.
Schlatter's spouse may be deemed the beneficial owner of some or all
of the shares. Does not include 30,500 shares that Mr. Schlatter's
spouse, an employee of the Company, has the right to acquire on April
5, 2004, or within sixty (60) days thereafter, pursuant to outstanding
options.
2 Includes 6,250 shares that he has the right to acquire on April 5,
2004, or within sixty (60) days thereafter, pursuant to outstanding
options.
3 Includes 8,750 shares that he has the right to acquire on April 5,
2004 or within sixty (60) days thereafter, pursuant to outstanding
options.
4 Includes 13,750 shares that he has the right to acquire on April 5,
2004 or within sixty (60) days thereafter, pursuant to outstanding
options.
5 Includes 25,500 shares that he has the right to acquire on April 5,
2004 pursuant to outstanding options.
6 Unless otherwise noted, the stockholders identified in this table have
sole voting and investment power. The sole person known to the Company
to be the beneficial owner of more than five percent (5%) of the class
of outstanding stock is Gary H. Schlatter, whose address is c/o
OraLabs Holding Corp., 18685 East Plaza Drive, Parker, Colorado 80134.
9
Change in Control.
The Company does not know of any arrangements, including a pledge by
any person of securities of the Company, the operation of which at a subsequent
date may result in a change in control of the Company.
EXECUTIVE COMPENSATION
The following table sets forth information regarding compensation for
services rendered, in all capacities, awarded or paid to or earned by the Chief
Executive Officer of the Company during the last three fiscal years and to Emile
J. Jordan for fiscal year 2001, the only other executive officer of the Company
who received a total annual salary and bonus in excess of $100,000 during any of
the last three fiscal years.
Summary Compensation Table
Annual Compensation Long Term Compensation
Name and Shares Under-
Principal Position Year Salary ($) Bonuses ($) Other ($) Other lying Options
Gary H. Schlatter, CEO 2003 370,346 (1) 0 22,339 (4) 0 30,5001
2002 335,468 (1) 0 27,009 (2) 0 30,5001
2001 314,856 (1) 355,000 25,147 (2) 0 30,5001
Emile J. Jordan (3) 2001 77,038 44,636 0 0 20,500
1 Includes 30,500 shares underlying 30,500 options granted in the fiscal
year ended December 31, 1997 to Mr. Schlatter's spouse, an employee of
the Company, under the Company's 1997 Stock Plan and a $10,000 annual
salary to the spouse. Beneficial ownership of such securities and
spouse's salary is disclaimed by Mr. Schlatter.
2 Includes expenses for automobiles and related insurance and other
automobile expenses, as well as payments made to a company owned by
Mr. Schlatter for computer equipment and furniture.
3 Mr. Jordan's total annual salary and bonus was not in excess of
$100,000 during the 2003 or 2002 fiscal years.
4 Includes expenses for automobiles and related insurance and other
automobile expenses.
Standard Compensation Arrangements for Directors
The directors other than Mr. Schlatter are compensated monthly for
services provided as directors. Currently, all three non-employee directors
receive $2,000 monthly as directors fees. The Company may modify those
arrangements at any time. Except as stated in "Other Compensation Arrangements"
below, there were no other arrangements pursuant to which any director of the
Company was compensated during the past fiscal year for any service provided as
a director. However, the Company has a Non-Employee Director Stock Option Plan
under which directors who are not employees are granted (at the time of initial
election or appointment to the Board) 10,000 options to purchase common stock
and are thereafter granted 2,500 options annually so long as they continue to
serve as non-employee directors. All of the options are exercisable at the
market price of the common stock at the time of grant and vest proportionately
over a four year period.
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Agreements with Executive Officers
The only employment contract between the Company and any executive
officer of the Company who received total salary and bonus during fiscal year
2003 in excess of $100,000 is an Amended and Restated Employment Agreement with
Gary H. Schlatter. Except for that Agreement as described below, the Company has
not entered into any compensatory arrangement pursuant to which any executive
officer of the Company will receive payment from the Company as a result of the
executive officer's resignation, retirement or termination of employment or as a
result of a change in control of the Company. There is no employment contract
between the Company and Emile J. Jordan.
Effective May 1, 2003, the Company's subsidiary, OraLabs, Inc., entered
into an Amended and Restated Employment Agreement ("Employment Agreement") with
Gary Schlatter. The Employment Agreement extended the term of Mr. Schlatter's
employment through April 30, 2006, unless terminated earlier pursuant to the
provisions of the Employment Agreement. Under the Employment Agreement, Mr.
Schlatter agrees to devote such time and attention to the business of OraLabs,
Inc. as may be required to fulfill his duties, which is expected to require a
substantial amount of his working time.
Under the Employment Agreement, Mr. Schlatter is paid a base salary of
$392,645 per year for the first twelve (12) months, $431,909 per year for the
next twelve (12) months, and $475,100 for the final twelve (12) months. Bonus
compensation is payable to Mr. Schlatter as may be determined by the Board of
Directors in its discretion. Mr. Schlatter also is paid or reimbursed for lease
and insurance expenses for automobile and cellular telephone expenses. Under the
Employment Agreement, Mr. Schlatter has agreed that during its term and for a
period of one (1) year thereafter, he will not participate in any business
competitive to that of the business of OraLabs, Inc., except with respect to
limited passive investments, and that he will never disclose or utilize any
trade secrets or proprietary information of OraLabs, Inc. except within the
scope of his employment.
Under specified circumstances involving a change in control, Mr.
Schlatter may terminate the Employment Agreement and receive a lump sum payment
equal to all of the compensation to which he otherwise would have been entitled
had the Employment Agreement remained in effect for its entire term.
SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has selected Ehrhardt Keefe Steiner & Hottman
P.C. as the independent auditors to audit the books and accounts of the Company
for the current fiscal year. Ehrhardt Keefe Steiner & Hottman P.C. has served as
such independent auditors since December 29, 1998. A representative of Ehrhardt
Keefe Steiner & Hottman P.C. is expected to attend the Annual Meeting and will
be available to respond to appropriate questions.
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The following table presents fees for professional audit services
rendered by Ehrhardt Keefe Steiner & Hottman P.C. ("EKS&H") for the audit of our
annual financial statements for the years ended December 31, 2003 and December
31, 2002, and the reviews of the financial statements included in each of our
quarterly reports on Form 10-QSB during the fiscal years ended December 31, 2003
and 2002:
2003 2002
Audit Fees $62,000 $55,472
Audit-Related Fees $0 0
Tax Fees $0 0
All Other Fees $0 $572
Audit Fees are fees incurred in connection with the audit of the Company's
consolidated annual financial statements and the review of financial statements
in the Company's quarterly reports on Form 10-QSB. All Other Fees are incurred
for services other than those described above, and represented fees for software
training in year 2002. The Audit Committee will pre-approve the performance by
EKS&H of any services other than those relating to the audit or review of the
Company's financial statements, but no other services are anticipated at this
time.
The Board of Directors recommends that the stockholders vote FOR
approval of the selection of Ehrhardt Keefe Steiner & Hottman P.C. as the
Company's independent auditors.
STOCKHOLDERS PROPOSALS FOR NEXT ANNUAL MEETING
Stockholders of the Company wishing to include proposals in the proxy
material relating to the Annual Meeting of Stockholders of the Company in 2005
must submit the same in writing so as to be received at the principal executive
office of the Company (to the attention of the Secretary) on or before December
21, 2004 for such proposal to be considered for inclusion in the proxy statement
for such meeting. Such proposals must also meet the other requirements of the
rules of the Securities and Exchange Commission relating to stockholder
proposals.
Stockholders who wish to submit any items of business to be addressed
at an annual meeting of stockholders (rather than include the item in the proxy
material) must make the submission in a timely manner as provided in the
Company's Amended and Restated Bylaws. The Bylaws provide that only timely
submissions of business items will be considered as proper business at the
meeting. To be timely, a stockholder's written submission must be delivered to
or mailed and received at, the principal business offices of the Company at
least sixty (60) days in advance of the date that the Company's proxy statement
was released to stockholders in connection with the previous year's annual
meeting of stockholders. As this proxy statement for the 2004 annual meeting is
being released on approximately April 21, 2004, the deadline for submissions of
business items for the 2005 annual meeting will be February 20, 2005. The Bylaws
also specify what must be included in the written notice of submission in order
for the submission to be considered timely and to be considered proper business
to be conducted at the annual meeting.
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OTHER MATTERS
The Board of Directors does not know of any other business to be
presented for consideration at the Annual Meeting. If other matters properly
come before the Annual Meeting, the persons named in the accompanying proxy
intend to vote thereon in accordance with their best judgment.
The Company's Annual Report on Form 10-KSB for the fiscal year ended
December 31, 2003 accompanies this Proxy Statement and constitutes the Company's
Annual Report to stockholders. Copies of any exhibits thereto will be furnished
to any stockholder of the Company upon the payment of a reasonable duplicating
charge. Written requests for any exhibit should be directed to OraLabs Holding
Corp., 18685 East Plaza Drive, Parker, Colorado 80134, Attention: Investor
Relations.
SOLICITATION AND EXPENSES
The Company will bear the cost of the Annual Meeting and the cost of
soliciting proxies, including the cost of mailing the proxy materials. In
addition to solicitation by mail, Directors, officers and regular employees of
the Company (who will not be specifically compensated for such services) may
solicit proxies by telephone or otherwise. Arrangements will be made with
brokerage houses and other custodians, nominees and fiduciaries to forward
proxies and proxy material to their principals and the Company will reimburse
them for their expenses.
By Order of the Board of Directors,
/s/ Gary H. Schlatter
--------------------------------------------
Gary H. Schlatter,
Chairman of the Board
April 20, 2004
13
APPENDIX A
----------
AUDIT COMMITTEE CHARTER
ORALABS HOLDING CORP.
(Amended and Restated as of March 22, 2004)
PURPOSE
There shall be an Audit Committee of the Board of Directors of OraLabs
Holding Corp., a Colorado corporation (the "Company").
The Committee shall have responsibility to oversee the Company's
management and outside auditors in regard to corporate accounting and financial
reporting. The audit committee shall provide assistance to the corporate
directors in fulfilling their responsibility to the shareholders, potential
shareholders, and investment community relating to corporate accounting,
reporting practices of the Company, and the quality and integrity of the
financial reports of the Company. In so doing, it is the responsibility of the
audit committee to maintain free and open means of communication between the
directors, the independent auditors, and the financial management of the
Company. The Committee has the authority to conduct any investigation it deems
appropriate, with full access to all books and records, facilities, personnel
and outside advisors of the Company. The Committee is empowered to retain
outside counsel, auditors or other experts in its discretion, provided that it
shall keep the full Board of Directors advised as to the nature and extent of
such activities.
ORGANIZATION
The Committee shall consist of at least two directors appointed by the
Board of Directors. A majority of the directors appointed to the Committee shall
not be disqualified from being an "independent director" within the meaning of
Rule 4200A of the NASD Manual, and shall have no relationship with the Company
which, in the opinion of the Board, would interfere with the exercise of
independent judgment. The Committee may ask members of Company management or
others to provide pertinent information to the Committee as considered necessary
for the Committee to fulfill its duties.
RESPONSIBILITIES
The Committee recognizes that the preparation of the Company's
financial statements and other financial information is the responsibility of
the Company's management and that the auditing, or conducting limited reviews,
of those financial statements and other financial information is the
responsibility of the Company's outside auditors. The Committee's responsibility
is to oversee the financial reporting process. The Committee is not expected to
audit the Company, to define or control the Company's accounting practices, to
define the standards to be used in the preparation of the Company's financial
statements, to assure that the Company's financial statements are in accordance
with generally accepted accounting principles, or to assure compliance with the
Code of Ethics adopted by the Company. The Committee will perform such other
functions as are authorized for the Committee by the Board of Directors.
14
The Company's management, and its outside auditors, in the exercise of
their responsibilities, acquire greater knowledge and more detailed information
about the Company and its financial affairs than the members of the Committee.
Consequently, the Committee is not responsible for providing any expert or other
special assurance as to the Company's financial statements and other financial
information or any professional certification as to the outside auditors' work.
In carrying out its oversight responsibilities, the Committee shall:
a) review and reassess the adequacy of the Audit Committee
Charter annually;
b) require that the outside auditors provide the Committee with a
formal written statement delineating all relationships between the outside
auditors and the Company, consistent with Independence Standards Board Standard
No. 1, and discuss with the outside auditors their independence;
c) actively engage in a dialogue with the outside auditors
regarding any disclosed relationships or services that may impact the
objectivity and independence of the outside auditors;
d) take, or recommend that the full Board take, appropriate
action to oversee the independence of the outside auditors;
e) review and consider the matters identified in Statement on
Auditing Standards No. 61 with the outside auditors and management;
f) review and discuss the Company's audited financial statements
that are to be included in the Company's Form 10-KSB with the outside auditors
and management and determine whether to recommend to the Board of Directors that
the financial statements be included in the Company's Form 10-KSB for filing
with the Securities and Exchange Commission;
g) review any matters identified by the outside auditors pursuant
to Statement on Auditing Standards No. 71 regarding the Company's interim
financial statements. Any such review shall occur prior to the filing of such
interim financial statements on the Company's Form 10-QSB; and
h) establish, review and update periodically the Company's Code
of Ethics required under applicable law and regulations to be adopted by May 4,
2004.
The outside auditors are ultimately accountable to the Board and the
Committee, as representatives of the shareholders. The Board and the Committee
have ultimate authority and responsibility to select, evaluate and, where
appropriate, replace the outside auditors, and, if applicable, to nominate the
outside auditors to be proposed for approval by the shareholders in any proxy
statement.
15
ORALABS HOLDING CORP.
PROXY SOLICITED ON BEHALF OF COMPANY'S
BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS
May 25, 2004
The undersigned hereby appoints as proxies Gary H. Schlatter, Michael
I. Friess and Allen R. Goldstone and each of them (with power of substitution)
to vote for the undersigned all shares of common stock of the undersigned at the
annual meeting of stockholders and any adjournment thereof with all the power
the undersigned would have if personally present. The shares represented will be
voted as instructed. Unless indicated to the contrary, this proxy shall be
deemed to grant authority to vote "FOR" all proposals.
PLEASE INDICATE YOUR VOTE BY AN "X" IN THE APPROPRIATE BOX BELOW
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1. ELECTION OF DIRECTORS |_| |_| |_|
(Instructions: To withhold authority to FOR ALL FOR ALL WITHHOLD
vote for an individual nominee, strike a EXCEPT AUTHORITY
line through the nominee's name in the FOR ALL
list below and mark center box to right.)
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Nominees: Gary H. Schlatter, Allen R. Goldstone, Michael I. Friess and Robert C. Gust
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2. Proposal to ratify the selection of |_| |_| |_|
Ehrhardt Keefe Steiner & Hottman P.C. as FOR AGAINST ABSTAIN
the independent auditors for the fiscal
year ended December 31, 2004
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In their discretion, the proxy holders are authorized to vote upon such
other matters as may properly come before the Annual Meeting of Stockholders and
at any adjournment(s) thereof. The Board of Directors at present knows of no
other business to be presented by or on behalf of the Company or the Board of
Directors at the Annual Meeting of Stockholders.
_______________________________ _______________________________
Signature Signature if Held Jointly
_______________________________ _______________________________
Name (Please print) Name (Please print)
Date: _________________________ Date: _________________________