SCHEDULE 14A INFORMATION
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:
[ X ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
SCORE ONE, INC.
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(Name of Registrant as Specified in Its Charter)
N/A
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(Name(s) of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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4. Date Filed:
SCORE ONE, INC.
Unit 2, 34th Floor, Cable TV Tower
9 Hoi Shing Road
Tsuen Wan, Hong Kong
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on August 26, 2002
To our Shareholders:
You are cordially invited to attend the Annual Meeting of the
Shareholders (the "Annual Meeting") of Score One, Inc. (the "Company"), which
will be held at the offices of the Company, Unit 2, 34/th/ Floor, Cable TV
Tower, 9 Hoi Shing Road, Tsuen Wan, Hong Kong on August 26, 2002, at 4:00 PM
(Hong Kong time) for the following purposes:
1. To elect five directors (Proposal 1);
2. To consider and act upon an amendment to the Company's Articles
of Incorporation to increase the number of authorized shares of
the Company's common stock, par value $0.001 per share (the
"Common Stock"), from 515,625 to 50,000,000 (Proposal 2);
3. To consider and act upon a proposal to adopt the Company's 2002
Stock Incentive Plan (the "2002 Plan") (Proposal 3);
4. To consider and act upon a proposal to ratify the appointment
by the Board of Directors of the Company (the "Board") of
Clancy and Co., P.L.L.C. as independent certified public
accountants for the Company for the 2002 fiscal year (Proposal
4); and
5. To transact such other business as may properly come before the
Annual Meeting and all adjournments thereof.
Holders of record of the Common Stock at the close of business on July
23, 2002 are entitled to notice of, and to vote at, the Annual Meeting.
Whether or not you plan to attend the 2002 Annual Meeting, please
complete, sign, date and return the accompanying proxy card in the enclosed
envelope in order to make certain that your shares will be represented and
voted.
Thank you for your support and continued interest in Score One, Inc.
YOU MAY REVOKE THE PROXY AT ANY TIME
BEFORE THE AUTHORITY GRANTED THEREIN IS EXERCISED.
By order of the Board of Directors,
Wing Hung Ho
Secretary
Dated: August __, 2002
SCORE ONE, INC.
PROXY STATEMENT
This proxy statement and the enclosed form of proxy are furnished in
connection with the solicitation by the Board of Directors of Score One, Inc. of
proxies to be voted at our Annual Meeting to be held on August 26, 2002 at the
principal offices of the Company, Unit 2, 34th Floor, Cable TV Tower, 9 Hoi
Shing Road, Tsuen Wan, Hong Kong, at 4:00 PM (Hong Kong time). Proxy statements
are first being sent to shareholders on or about August __, 2002. All properly
executed proxies in the accompanying form received by us prior to the Annual
Meeting will be voted at the Annual Meeting. Any proxy may be revoked at any
time before it is exercised by giving notice in writing to our Secretary, by
granting a proxy bearing a later date or by voting in person.
Unless the context otherwise requires, the terms the "Company", "we",
"our" and "us" refer to Score One, Inc. and its subsidiaries and predecessors.
References to dollar amounts followed by "$" refer to United States Dollars.
References to dollar amounts followed by "HK$" refer to Hong Kong Dollars.
PROCEDURAL MATTERS
Holders of record of our Common Stock as of the close of business on
July 23, 2002 (the "Record Date") are entitled to receive notice of, to attend,
and to vote at the Annual Meeting. There were 249,198 shares of Common Stock
issued and outstanding on the Record Date. Each share of Common Stock has one
vote on all matters. The closing sale price of the Common Stock as reported on
the OTC Bulletin Board on the Record Date was $16.00 per share.
A shareholder may revoke any proxy given pursuant to this solicitation
by attending the Annual Meeting and voting in person, or by delivering to the
Company's Corporate Secretary at the Company's principal executive offices
referred to above, prior to the Annual Meeting, a written notice of revocation
or a duly executed proxy bearing a date later than that of the previously
submitted proxy.
Attendance at the Annual Meeting is limited to shareholders. Admission
to the meeting will be on a first-come, first-served basis. Registration will
begin at 3:30 PM (Hong Kong time) and each shareholder may be asked to present
valid picture identification such as a driver's license or passport. Cameras,
recording devices and other electronic devices will not be permitted at the
meeting.
REQUIRED VOTE
In the election of directors, Proposal 1, the five candidates receiving
the highest number of affirmative votes will be elected as directors. Proposal 2
requires for approval the affirmative vote of a majority of the outstanding
shares of Common Stock outstanding as of the Record Date. Proposals 3 and 4 each
require for approval the affirmative vote of a majority of the shares
represented and voting if a quorum is present.
QUORUM; ABSTENTIONS; BROKER NON-VOTES
The required quorum for the transaction of business at the Annual
Meeting is a majority of the shares of Common Stock issued and outstanding on
the Record Date. Shares that are voted "FOR", "AGAINST" or "ABSTAIN" in a matter
are treated as being present at the meeting for purposes of establishing the
quorum, but only shares voted "FOR" or "AGAINST" are treated as shares
"represented and voting" at the Annual Meeting with respect to such matter.
Accordingly, abstentions and broker non-votes will be counted for purposes of
determining the presence or absence of the quorum for the transaction of
business, but will not be counted for purposes of determining the number
"represented and voting" with respect to a proposal, and will have no effect on
the outcome of the election of the directors.
PROXY VOTING
Shareholders may vote without attending the meeting by submitting a
proxy. If specific voting instructions are provided, the shares will be voted as
indicated. If a proxy card is returned without voting instructions, the shares
represented by the proxy will be voted for the election of the nominees for
director and for Proposals 2 through 4, and as the persons named as proxies deem
advisable on such other matters that may come before the annual meeting.
The Board does not intend to present at the Annual Meeting any matters
other than those set forth in this Proxy Statement, nor does the Board know of
any other matters that may come before the Annual Meeting. However, if any other
matters properly come before the Annual Meeting, it is the intention of the
persons named in the enclosed proxy to vote the proxy in accordance with their
judgment.
Only holders of record of the Common Stock at the close of business on
July 23, 2002 will be entitled to vote at the Annual Meeting or any adjournments
thereof.
It is desirable that as large a proportion as possible of the
shareholders' interests be represented at the Annual Meeting. Therefore, even if
you intend to be present at the Annual Meeting, you are requested to sign and
return the enclosed proxy to ensure that your stock will be represented. If you
are present at the Annual Meeting and desire to do so, you may withdraw your
proxy and vote in person by giving written notice to our Secretary. Please
return your executed proxy promptly.
Except as otherwise indicated, references in this proxy statement to
dollars or "$" are United States dollars.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the number of shares of Common Stock
beneficially owned as of April 10, 2002 by (i) those persons or groups known to
us to beneficially own more than 5% of our outstanding Common Stock; (ii) each
director; (iii) each Named Executive Officer; and (iv) all directors and
executive officers as a group. The information is determined in accordance with
Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended
("Exchange Act"), based upon information furnished by persons listed or
contained in
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filings made by them with the SEC or by information provided by such persons
directly to us. Except as indicated below, the shareholders listed possess sole
voting and investment power with respect to their shares, except to the extent
authority is shared by a spouse under applicable law.
Number of Shares
Name and Address of Common Approximate Percentage
of Beneficial Owner Stock of Class 1
------------------- ----- ----------
I.World Limited 203,810 82%
Blk 2, Flat 6, 3rd Floor
Tak Fung Industrial Centre
166-176 Texaco Road
Tseun Road, Hong Kong
Kin Hung Lai/2/ 0 *
Unit 2, 34/th/ Floor
Cable TV Tower
9 Hoi Shing Road
Tsuen Wan, Hong Kong
Wing Man Ho/2/ 0 0
Unit 2, 34/th/ Floor
Cable TV Tower
9 Hoi Shing Road
Tsuen Wan, Hong Kong
Hong Liang Qian/2/ 0 0
Unit 2, 34/th/ Floor
Cable TV Tower
9 Hoi Shing Road
Tsuen Wan, Hong Kong
Wing Cheong Ho/3/ 118,210 47%
Blk 2, Flat B, 6/th/ Floor
Royal Ascot
Shatin, Hong Kong
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* Owns less than 1% of the Company's outstanding Common Stock
/1/ Based on 249,198 shares of Common Stock actually outstanding as of April
10, 2002.
/2/ Address of Company used as the beneficial owner's address.
/3/ Based on Mr. Wing Cheong Ho's 58% ownership of I.World Limited.
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Number of Shares
Name and Address of Common Approximate Percentage
of Beneficial Owner Stock of Class/1/
------------------- ----- -----------
Wing Hung Ho/4/ 24,457 10%
Blk 2, Flat B, 22nd Floor
Royal Ascot
Shatin, Hong Kong
Yue Fung International Group Holding Limited/5/ 61,143 25%
32nd Floor Wharf Cable Tower
9 Hoi Shing Road
Tseun Wan, Hong Kong
All executive officers and directors 142,667 57%
as a group (5 persons)
DIRECTORS, DIRECTOR NOMINEES AND EXECUTIVE OFFICERS
The following table and text sets forth the names and ages of all
directors and executive officers of Score One and our key management personnel.
All of our directors serve until the next annual meeting of shareholders and
until their successors are elected and qualified, or until their earlier death,
retirement, resignation or removal. Executive officers serve at the discretion
of the Board, and are appointed to serve until the first Board meeting following
the annual meeting of shareholders. Also provided is a brief description of the
business experience of each director and executive officer and the key
management personnel during the past five years and an indication of
directorships held by each director in other companies subject to the reporting
requirements under the Federal securities laws.
Name Age Position with the Company Appointed since
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Mr. Wing Cheong Ho 39 Chairman of the Board and President; 2000
Chairman of the Board of our Fu
Cheong subsidiary
Mr. Wing Hung Ho 46 Director and Secretary; Executive 2000
Director of Fu Cheong
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/4/ Based on Mr. Wing Hung Ho's 12% ownership of I.World Limited.
/5/ Based on the 30% ownership by Yue Fung International Group Holding Limited,
a Bermuda company ("Yue Fung International"), through its wholly-owned
subsidiary Holyworld Limited, a British Virgin Islands company
("Holyworld"), of I.World Limited.
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Name Age Position with the Company Appointed since
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Mr. Kin Hung Lai 40 Director 2001
Wing Man Ho 44 Director 2002
Hong Liang Qian 43 Director 2002
Mr. Wing Cheong Ho, our founder, has served as our Chairman of the
Board since 2000. He has over 11 years of experience in the printed circuit
board ("PCB") industry in Hong Kong as well as in China. Before founding
Advanced Technology, a wholly-owned subsidiary of ours, in 1991, he worked as a
sales manager for a PCB manufacturer listed on the Hong Kong Exchange. He is
responsible for the our overall business strategy and marketing. He is the
brother of Mr. Wing Hung Ho and Mr. Wing Man Ho.
Mr. Wing Hung Ho has served as one of our directors since 1996. He has
over 15 years of experience in production management and is currently taking a
major role in managing Advanced Technology's manufacturing plant in China. Prior
to joining the Company in July 1998, he was a director and shareholder of a
garment manufacturer. He is responsible for our product development and
production. He is the brother of Mr. Wing Cheong Ho and Mr. Wing Man Ho.
Mr. Kin Hung Lai has served as one of our directors since 2001. Since
1993 he has owned his own accounting firm, Francis K. Lai CPA office. Prior to
this, Mr. Lai worked for several US companies, including Echo Design Group in
1990, Golodetz Trading Corp. in 1989, and David Lieb and Company in 1988. Mr.
Lai has over 15 years of experience in the fields of finance and accounting.
Mr. Wing Man Ho served as a director of Smartfit Industrial Ltd., a
medical and textile products trading company, from 1999 until 2001. Prior to
that, he served as Manager of Wonderful Network Ltd., also a medical and textile
products trading company, from 1993 to 1999. He is the brother of Mr. Wing
Cheong Ho and Mr. Wing Hung Ho.
Mr. Hong Liang Qian has served as Manager of Jiangyin Jingtai Liminated
Board Co. Ltd., now a subsidiary of Advanced Technology International Holdings
Ltd. since 1996.
EXECUTIVE OFFICERS AND KEY EMPLOYEES
The following sets forth certain biographical information regarding
each of our executive officers, who is not a director, and other key employees,
including his or her principal occupation and business experience for the last 5
years. Information pertaining to Wing Cheong Ho, Wing Hung Ho, Kin Hung Lai,
Wing Man Ho and Hong Liang Qian may be found in the Section titled "Directors".
Mr. Wing Kui Chan is the financial controller of Fu Cheong and its
subsidiaries. Mr. Chan is responsible for overseeing the accounting activities
of Fu Cheong and its subsidiaries. Prior to joining Fu Cheong in April 2001, he
was the financial manager in the finance
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department of a Hong Kong company for over 5 years. He holds a masters degree in
accounting from the University of Wollongong, Australia.
Mr. Chuk Nam Kewin Chan is the engineering manager of Fu Cheong and its
subsidiaries. Mr. Chan is responsible for engineering and research and
development operations. He has over 15 years of experience in PCBs engineering
co-ordination and joined us in July 1998.
SECTION 16(A) BENEFICIAL OWNERSHIP COMPLIANCE
Section 16(a) of the Exchange Act requires our executive officers and
directors and persons who own more than 10% of our shares to file with the SEC
initial statements of beneficial ownership, reports of changes in ownership and
annual reports concerning their ownership of our outstanding common stock and
other equity on Forms 3, 4 and 5, respectively. Such executive officers,
directors and greater than 10% shareholders are required by the SEC regulations
to furnish us with copies of all Section 16(a) reports they file. To the best of
our knowledge (based solely upon a review of the Form 3, 4 and 5 filed), no
officer, director or 10% beneficial shareholder failed to file on a timely basis
any reports required by Section 16(a) of the Exchange Act during the year ended
December 31, 2001.
DIRECTOR COMPENSATION
Directors who are also officers of the Company are not paid any
compensation for attendance at directors' meetings or for attending or
participating in any committee meetings but will be eligible to participate in
the 2002 Plan.
EXECUTIVE COMPENSATION.
The following table summarizes information concerning compensation for
all services rendered in all capacities to the Company and its subsidiaries for
the last three fiscal years for Mr. Wing Cheong Ho, our President and Chairman,
and the four most highly compensated executive officers other than Mr. Wing Man
Ho who were serving as executive officers at the end of fiscal year 2001 each of
whose compensation exceeded $100,000 of salary and bonus during the year ended
December 31, 2001 (collectively, the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
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Annual Compensation Long-Term Compensation
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Other Annual Restricted Securities
Name and Salary Bonus Compensation Stock Underlying All Other
Principal Position Year ($) ($) ($) Awards ($) Options (#) Compensation
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Wing Cheong Ho, 2001 $126,667 -- $234,967 -- -- --
President and
Chairman of the 2000 $125,806 -- $212,129 -- -- --
Board
1999 $125,806 -- $239,742 -- -- --
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Neither Score One nor any subsidiary maintains or has maintained in the
past, any employee benefit plans. Accordingly, no options were granted or
exercised during the year ended December 31, 2001.
During the year ended December 31, 2001, certain corporate actions were
conducted by unanimous written consent of the Board. Directors receive no
compensation for serving on the Board, but are reimbursed for any out-of-pocket
expenses, if any, incurred in attending board meetings. The Board has
established an audit committee which consists of Kin Hung Lai and Hong Liang
Qian.
EMPLOYMENT AGREEMENTS
Fu Cheong International Holdings Ltd., a subsidiary of Advanced
Technology, has entered into a service agreement with the following Named
Executive Officer: Mr. Wing Cheong Ho. The agreement has an initial term of
three years, commencing on August 1, 2001, and continuing thereafter unless
terminated by either party upon three months prior written notice. The minimum
annual base salary is HK$1,950,000 for Mr. Wing Cheong Ho. After July 31, 2002,
at the discretion of the Board, this base salary is subject to annual increase
of no more than fifteen percent of the annual salary immediately prior to such
increase. Mr. Wing Cheong Ho has waived any difference between the annual salary
stated in his service agreement and his actual compensation paid.
MEETINGS OF THE BOARD
During the fiscal year ended December 31, 2001, the Board held two
meetings and each of the Directors attended all of the meetings.
AUDIT COMMITTEE
The Audit Committee consists of two directors: Kin Hung Lai and Hong
Liang Qian. Mr. Kin Hung Lai is an independent director under the rules of the
American Stock Exchange (the "AmEx"). Mr. Hong Liang Qian is not independent
under the rules of the AmEx. The Audit Committee (i) recommends to the Board the
conditions, compensation and term of appointment of independent certified public
accountants for the audit of our financial statements, (ii) reviews our
examination reports prepared by regulatory authorities, and (iii) provides the
Board with such assistance as is necessary with respect to our corporate and
reporting practices. The Audit Committee may also from time to time confer with
the auditors to exchange views relating to the scope and results of the audit.
The Audit Committee operates through a written charter, a copy of which is
attached to the Company's Proxy Statement as Exhibit A. During the fiscal year
ended December 31, 2001, the Audit Committee did not hold any meetings and did
not take action by written consent. See "Audit Committee Report."
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
During the years ended December 31, 2000 and 2001, Yue Fung Development
Limited ("YFD"), which beneficially owns 25% of our shares purchased
HK$5,712,000 and HK$3,359,000, respectively, of our PCBs which represented 3.6%
and 1.5%, respectively, of total sales for these periods. The unit price of the
sales between us and the YFD are determined
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on an arm's length basis, on normal commercial terms or terms no more favorable
than those available to independent third parties and, in cases where there is
no available comparison, we believe they are on fair and reasonable terms.
As of December 31, 2001 and December 31, 2000, monies due from certain
directors and shareholders in the amounts of $94,073 and $102,281, respectively,
were unsecured, interest-free and had no fixed terms of repayment.
On February 18, 2000, Mr. Wing Cheong Ho and Ms. Yuet Hing Chan, the
spouse of Mr. Wing Hung Ho, sold to Holyworld, an aggregate of 30% of the equity
interests in Advanced Technology and HK$3,000,000 of loans owing by Advanced
Technology to Mr. Ho and Ms. Chan for an aggregate consideration of
HK$57,330,000. The purchase price was based upon a price earnings multiple of 7
times of the unaudited profits of Advanced Technology of about HK$27.3 million
for the year ended December 31, 1999 (but no independent valuation was made in
respect thereof). The consideration was satisfied partly by the issuance of
80,000,000 shares in the capital of YFD at an issue price of HK$0.60 each,
partly by payment of cash of HK$3,000,000 and the remaining balance by the
transfer of certain machinery and moulds from the YFD worth approximately
HK$6,330,000. The equity interests in Advanced Technology held by the YFD were
subsequently transferred to us and in return for the equity interest in I.World
on August 25, 2000. For the three years ended December 31, 2001, the aggregate
sales made by Fu Cheong and its subsidiaries to the Yue Fung Group accounted for
approximately 4.3%, 3.6% and 1.5%, respectively, of our sales for these periods.
During each of the three years ended December 31, 2001, we incurred
bank interest expenses for a bank loan of approximately HK$4.0 million drawn on
behalf of Mr. Wing Cheong Ho at no consideration under certain of our banking
facilities. The corresponding bank interest expenses incurred by us during the
three years ended December 31, 2001 have not been included as part of the
directors' compensation. Had interest in the above bank loan drawn on Mr. Wing
Cheong Ho's behalf been charged during the three years ended December 31, 2001,
we would have received interest, net of tax, of approximately HK$398,000,
HK$410,000 and HK$94,000, respectively, for each of the three years ended
December 31, 2001. Mr. Wing Cheong Ho repaid the above bank loan and the
interest incurred in full in July 2001.
In March 2001, our Fortune (BVI) subsidiary entered into a lease
agreement with Grand Link whereby Grand Link has agreed to lease Unit 2, 34th
Floor, Cable TV Tower, No. 9 Hoi Shing Road, Tsuen Wan, New Territories, Hong
Kong (the "Grand Link property") to Fortune (BVI), at the rent of HK$25,000 per
month for the period from August 1, 2000 to May 31, 2001 and HK$20,000 per month
for the period from June 1, 2001 to July 31, 2002, exclusive of rates,
government rent, property tax and management fees. The Grand Link property is
used by us as our principal executive officers and as a warehouse. Grand Link is
a company owned by Mr. Wing Hung Ho and Mr. Wing Cheong Ho respectively. An
independent professional valuer has confirmed that the rental payable for the
said premises is fair and reasonable and is at the prevailing market rental
payable for similar premises.
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AUDIT COMMITTEE REPORT
The Audit Committee of the Board of the Company is composed of one
non-employee director and one employee director. The Audit Committee operates
under a written charter adopted by the Board, and is responsible for overseeing
the Company's financial reporting process on behalf of the Board. The members of
the Audit Committee are Kin Hung Lai and Hong Liang Qian. Each year, the Audit
Committee recommends to the Board, subject to shareholder ratification, the
selection of the Company's independent auditors.
Management is responsible for the Company's financial statements and
the financial reporting process, including internal controls. The independent
auditors are responsible for performing an independent audit of the Company's
consolidated financial statements in accordance with generally accepted auditing
standards in the United States and for issuing a report thereon. The Audit
Committee's responsibility is to monitor and oversee these processes.
In this context, the Audit Committee has held discussions with
management and Clancy, the Company's independent auditors. Management
represented to the Committee that the Company's consolidated financial
statements were prepared in accordance with generally accepted accounting
principles in the United States, and the Committee has reviewed and discussed
the consolidated financial statements with management and the independent
auditors. The Audit Committee discussed with Clancy the matters required to be
discussed by Statement on Auditing Standards ("SAS") No. 61, "Communication with
Audit Committees" and SAS No. 90, "Audit Committee Communications." These
matters included a discussion of Clancy's judgments about the quality (not just
the acceptability) of the Company's accounting principles as applied to
financial reporting.
Clancy also provided the Audit Committee with the written disclosures
and letter required by Independence Standards Board Standard No. 1 (Independence
Discussions with Audit Committees), and the Audit Committee discussed with
Clancy that firm's independence. The Audit Committee further considered whether
the provision by Clancy of the non-audit services described elsewhere in this
Proxy Statement is compatible with maintaining the auditors' independence.
Based upon the Audit Committee's discussion with management and the
independent auditors and the Audit Committee's review of the representation of
management and the disclosures by the independent auditors to the Audit
Committee, the Audit Committee recommended to the Board that the Company's
audited consolidated financial statements be included in the Company's Annual
Report on Form 10-K for the year ended December 31, 2001, for filing with the
Securities and Exchange Commission. The Audit Committee and the Board have also
recommended the selection of Clancy as the Company's independent auditors for
2002, subject to shareholder ratification.
AUDIT COMMITTEE
Kin Hung Lai
Hong Liang Qian
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OVERVIEW OF PROPOSALS
This Proxy Statement contains four proposals requiring shareholder
action. Proposal No. 1 requests the election of two directors to the Company's
Board. Proposal No. 2 requests the approval of an amendment to the Company's
Article of Incorporation to increase the number of shares of the Company's
Common Stock. Proposal No. 3 requests ratification of the 2002 Plan. Proposal
No. 4 requests ratification of the appointment of the Company's independent
auditors.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The election of Directors will be by a plurality vote which means that
the five nominees for directors receiving the highest number of affirmative
votes of the shares entitled to be voted for them shall be elected as directors.
Pursuant to our By-laws, the number of directors constituting the full Board is
determined from time to time by the Board or by the shareholders at any meeting.
The number of Directors is currently fixed by the Board at five. At the Annual
Meeting, action will be taken to elect a Board consisting of the five incumbent
directors, Wing Cheong Ho, Wing Hung Ho, Kin Hung Lai, Wing Man Ho and Hong
Liang Qian. All directors will serve until the next Annual Meeting of
Shareholders and until their respective successors shall be duly elected and
shall qualify.
Each of the incumbent directors has consented to be named a nominee in
this Proxy Statement and to serve as a director if elected. It is the intention
of the persons named in the accompanying form of proxy, unless shareholders
otherwise specify by their proxies, to vote for the election of the nominees
named below. The Board has no reason to believe that any of the persons named
will be unable or unwilling to serve as a director. Should any of the nominees
be unable or unwilling to serve, it is intended that the proxies will be voted
for the election of a substitute nominee or nominees selected by the Board or
the Board may be reduced in accordance with our By-laws. There are no
arrangements or understandings between any director or executive officer and any
other person pursuant to which he is or was selected as a director or officer.
THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE IN FAVOR OF THE ELECTION TO
THE BOARD OF ALL NOMINEES NAMED ABOVE.
PROPOSAL NO. 2
AMENDMENT TO ARTICLES OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED
SHARES OF COMMON STOCK FROM 515,625 TO 50,000,000
On July __, 2002, the Board unanimously voted to recommend to the
shareholders that the Articles of Incorporation be amended to increase the
number of authorized shares of Common Stock from 515,625 to 50,000,000 shares.
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The authorized Common Stock of the Company currently consists of
515,625 shares of Common Stock of which 249,198 shares were outstanding at March
31, 2002, and approximately 3,000,000 shares were reserved for issuance under
outstanding warrants, options and convertible securities.
The Board has expressed its intention to approve a stock dividend (the
"Stock Dividend"), pursuant to which, on a date to be established by the
Company, the Company will grant each shareholder of the Company a minimum of
five (5) and a maximum of twenty (20) shares of Common Stock, in the sole
discretion of the Board, for each share of Common Stock owned by such
shareholder. In addition, certain convertible securities of the Company will be
convertible into between five (5) and twenty (20) shares of Common Stock for
each share of Common Stock for which it is currently convertible. The purpose of
the Stock Dividend, among other things, is to increase the public float of the
Common Stock in anticipation of the Company's intended listing with the American
Stock Exchange or another national exchange. Therefore, the Company must
increase its number of authorized shares of Common Stock to effect the Stock
Dividend.
Furthermore, the Board believes that the complexity of modern business
financing and acquisition transactions requires greater flexibility in the
Company's capital structure than now exists. The authorization of additional
shares of Common Stock is desirable in order to have a substantial number of
authorized shares available for issuance from time to time without further
shareholder approval in connection with possible future distributions to
shareholders (including additional stock splits), financings, joint ventures,
strategic alliances, acquisitions, public or private offerings, employee benefit
plans and other corporate opportunities that may present themselves in the
future. Having additional authorized shares available for issuance in the future
would give the Company greater flexibility and allow shares of Common Stock to
be issued without the expense and delay of shareholder action at a special
meeting of shareholders unless such action is required by applicable law or the
rules of any stock exchange on which the Common Stock may be listed. Such a
delay might deprive the Company of the flexibility the Board views as important
in facilitating the effective use of the Company's shares. Except as described
above, the Company has no plans, understandings, agreements or arrangements
concerning the issuance of additional shares of Common Stock not previously
authorized for issuance by the Board.
Another effect of the proposed amendment would be that the Board would
have the authority, subject to the limitations set forth above, to issue
additional shares of Common Stock that would dilute the voting power of
outstanding shares, and thereby possibly impede a proposed tender offer or other
attempt by a third party to gain control of the Company without Board approval.
A portion of such additional shares could, for example, be privately placed with
purchasers who might side with the Board in opposing a hostile takeover bid and
thus preserve the control of the then existing management. The mere existence of
the additional authorized shares of Common Stock could have the effect of
discouraging unsolicited takeover attempts. The issuance of new shares of Common
Stock also could be used to dilute the stock ownership of a person or entity
seeking to obtain control. Accordingly, a future transaction which some, or even
a majority, of the holders of Common Stock might deem to be in their best
interest, or which such holders might have the opportunity to receive a premium
for their shares over the then market price, might be impeded. As of the date
hereof, the Company is not aware of any
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proposed tender offer or other attempt to take control of the Company. Holders
of the Common Stock have no preemptive rights with respect to any shares which
may be issued in the future. Under Nevada law, shareholders are not entitled to
dissenter's rights with respect to the proposed amendment to the Articles of
Incorporation.
The Board cannot predict what effect, if any, the increase in the
number of authorized shares of Common Stock will have on the market price of the
Common Stock. An increase in the number of authorized shares of Common Stock may
have a depressive effect on the market price of the Common Stock. The issuance
of additional shares of Common Stock without further approval of the
shareholders would also require the Board to make any determination to issue
shares of Common Stock based on its judgment as to the best interests of the
Company and the shareholders.
The additional Common Stock to be authorized by adoption of the
proposed amendment would have rights identical to the currently outstanding
Common Stock of the Company. Adoption of the proposed amendment and issuance of
the Common Stock would not affect the rights of the holders of currently
outstanding Common Stock of the Company, except for effects incidental to
increasing the number of shares of the Common Stock outstanding such as dilution
of the earnings per share and percentage share of voting rights of current
holders of Common Stock. If the proposed amendment is adopted, it will become
effective upon filing of a Certificate of Amendment to the Company's Articles of
Incorporation (the "Amendment") with the State of Nevada. A copy of the
Amendment is attached hereto as Exhibit B.
If the Amendment is approved by the shareholders, the first sentence of
Section 4.01 of Article IV of the Articles of Incorporation, following the
sub-heading "Number and Class", will be amended to read as follows:
The total number of shares of authorized capital stock of the
Corporation shall consist of two classes: Common Stock in the
amount of fifty million (50,000,000) shares, $0.001 par value per
share, and Preferred Stock in the amount of five million
(5,000,000) shares, $0.001 par value per share.
The affirmative vote of the holders of a majority of the outstanding
shares of Common Stock entitled to vote at the meeting is required to authorize
the proposed increase in the authorized number of shares of Common Stock.
THE BOARD RECOMMENDS A VOTE "FOR" THE PROPOSED INCREASE IN AUTHORIZED
SHARES OF COMMON STOCK.
PROPOSAL NO. 3
PROPOSAL TO ADOPT THE COMPANY'S 2002 STOCK INCENTIVE PLAN
Our Board proposes that you approve the adoption of the 2002 Plan. The
following is a fair and complete summary of the 2002 Plan as proposed. This
summary is qualified in its
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entirety by reference to the full text of the 2002 Plan, which appears as
Exhibit C to this document.
GENERAL
Purpose: The purpose of the 2002 Plan as proposed is to promote our
long-term growth and profitability by providing key people with incentives to
improve shareholder value and contribute to our growth and financial success and
by enabling us to attract, retain and reward the best available people.
Shares Available under the Plan: The maximum number of shares of common
stock that we may issue with respect to awards under the 2002 Plan is 5,000,000
shares. We will reserve such number of shares for awards under the 2002 Plan.
The maximum number of shares of common stock subject to awards of any
combination that may be granted under the proposed 2002 Plan during any fiscal
year to any one individual is limited to 500,000. These limits will be adjusted
to reflect any stock dividends, split-ups and reverse stock split, unless the
Board determines otherwise. If any award, or portion of an award, under the 2002
Plan expires or terminates unexercised, becomes unexercisable or is forfeited or
otherwise terminated, surrendered or canceled as to any shares, or if any shares
of common stock are surrendered to us in connection with any award (whether or
not such surrendered shares were acquired pursuant to any award), or if any
shares are withheld by the Company, the shares subject to such award and the
surrendered or withheld shares will thereafter be available for further awards
under the 2002 Plan. Those shares that are surrendered to or withheld by the
Company, or that are forfeited after issuance, however, will not be available
for incentive stock options. As of July 23, 2002, the fair market value of a
share of common stock, determined by the last reported sale price per share of
common stock on such date as quoted on the OTC Bulletin Board, was $16.00.
Administration: The proposed 2002 Plan will be administered by our
Board or by a committee or committees as the Board may appoint from time to
time. The administrator has full power and authority to take all actions
necessary to carry out the purpose and intent of the 2002 Plan, including, but
not limited to, the authority to: (i) determine who is eligible for awards, and
the time or times at which such awards will be granted; (ii) determine the types
of awards to be granted; (iii) determine the number of shares covered by or used
for reference purposes for each award; (iv) impose such terms, limitations,
restrictions and conditions upon any such award as the administrator deems
appropriate; (v) modify, amend, extend or renew outstanding awards, or accept
the surrender of outstanding awards and substitute new awards (provided however,
that, except as noted below, any modification that would materially adversely
affect any outstanding award may not be made without the consent of the holder);
(vi) accelerate or otherwise change the time in which an award may be exercised
or becomes payable and to waive or accelerate the lapse, in whole or in part, of
any restriction or condition with respect to such award, including, but not
limited to, any restriction or condition with respect to the vesting or
exercisability of an award following termination of any grantee's employment or
consulting relationship; and (vii) establish objectives and conditions, if any,
for earning awards and determining whether awards will be paid after the end of
a performance period.
In the event of changes in our common stock by reason of any stock
dividend, split-up, recapitalization, merger, consolidation, business
combination or exchange of shares and the like,
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the administrator may make adjustments to the number and kind of shares reserved
for issuance or with respect to which awards may be granted under the 2002 Plan,
in the aggregate or per individual per year, and to the number, kind and price
of shares covered by outstanding award.
Without the consent of holders of awards, the administrator in its
discretion is authorized to make adjustments in the terms and conditions of, and
the criteria included in, awards in recognition of unusual or nonrecurring
events affecting us, or our financial statements or those of any of our
affiliates, or of changes in applicable laws, regulations, or accounting
principles, whenever the administrator determines that such adjustments are
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the 2002 Plan.
Participation: Participation in the 2002 Plan will be open to all of
our employees, officers, directors and other individuals providing bona fide
services to us or any of our affiliates, as the administrator may select from
time to time. As of June 30, 2002, all directors and approximately 640 employees
would be eligible to participate in the 2002 Plan.
TYPE OF AWARDS
The 2002 Plan as proposed would allow for the grant of stock options,
stock appreciation rights, stock awards, phantom stock awards and performance
awards. The administrator may grant these awards separately or in tandem with
other awards. The administrator will also determine the prices, expiration dates
and other material conditions governing the exercise of the awards. We, or any
of our affiliates, may make or guarantee loans to assist grantees in exercising
awards and satisfying any withholding tax obligations arising from awards.
Stock Options: The proposed 2002 Plan allows the administrator to grant
either awards of incentive stock options, as that term is defined in section 422
of the Internal Revenue Code, or nonqualified stock options; provided, however,
that only our employees or employees of our subsidiaries may receive incentive
stock option awards. Options intended to qualify as incentive stock must have an
exercise price at least equal to fair market value on the date of grant, but
nonqualified stock options may be granted with an exercise price less than fair
market value. The terms of a stock option agreement, as determined by the
administrator with respect to each option, may permit the option holder to pay
the exercise price in cash, by tendering shares of common stock, by a
combination of cash and shares, or by any other means the administrator
approves.
Stock Appreciation Rights: The proposed 2002 Plan allows the
administrator to grant awards of stock appreciation rights which entitle the
holder to receive a payment in cash, in shares of common stock, or in a
combination of both, having an aggregate value equal to the spread on the date
of exercise between the fair market value of the underlying shares on that date
and the base price of the shares specified in the grant agreement.
Stock and Phantom Stock Awards: The proposed 2002 Plan allows the
administrator to grant restricted or unrestricted stock awards, or awards
denominated in stock-equivalent units to eligible participants with or without
payment of consideration by the grantee. Stock awards and phantom stock awards
may be paid in cash, in shares of common stock, or in a combination of both.
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Performance Awards: The proposed 2002 Plan allows the administrator to
grant performance awards which become payable in cash, in shares of common
stock, or in a combination of both, on account of attainment of one or more
performance goals established by the administrator. The administrator may
establish performance goals based on our operating income, or that of our
affiliates, or one or more other business criteria the administrator may select
that applies to an individual or group of individuals, a business unit, or us or
our affiliate as a whole, over such performance period as the administrator may
designate.
Other Stock-Based Awards: The proposed 2002 Plan allows the
administrator to grant stock-based awards which may be denominated in cash,
common stock, or other securities, stock equivalent units, stock appreciation
units, securities or debentures convertible into common stock, or any
combination of the foregoing. These awards may be paid in common stock or other
securities, in cash, or in a combination of common stock, other securities and
cash.
AWARDS UNDER THE PLAN
Because participation and the types of awards available for grant under
the 2002 Plan as proposed are subject to the discretion of the administrator,
the benefits or amounts that any participant or groups of participants may
receive if the 2002 Plan is approved are not currently determinable.
AMENDMENT AND TERMINATION
Our Board may terminate, amend or modify all or any provision of the
2002 Plan at any time.
FEDERAL INCOME TAX CONSEQUENCES
The following is a general summary of the current federal income tax
treatment of stock options, which would be authorized for grants under the 2002
Plan as proposed, based upon the current provisions of the Internal Revenue Code
and regulations promulgated thereunder.
Incentive Stock Options: Incentive stock options under the 2002 Plan
are intended to meet the requirements of section 422 of the Internal Revenue
Code. No tax consequences result from the grant of the option. If an option
holder acquires stock upon exercise, the option holder will not recognize income
for ordinary income tax purposes (although the difference between the option
exercise price and the fair market value of the stock subject to the option may
result in alternative minimum tax liability to the option holder) and they will
not be allowed a deduction as a result of such exercise, provided that the
following conditions are met: (a) at all times during the period beginning with
the date of the granting of the option and ending on the day three months before
the date of such exercise, the option holder is our employee or an employee of
one of our subsidiaries; and (b) the option holder makes no disposition of the
stock within two years from the date of the option grant nor within one year
after the transfer of the stock to the option holder. The three-month period
extends to one year in the event of disability and is waived in the event of
death of the employee. If an option is modified to give the option holder
additional benefits, the modification may be deemed to be the granting of a new
option for purposes of determining the two-year holding period. If the option
holder sells the stock after complying with the conditions as discussed above,
any gain realized over the price paid for the stock
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ordinarily will be treated as capital gain, and any loss will be treated as
capital loss, in the year of the sale.
If the option holder fails to comply with the employment requirement
discussed above, the tax consequences will be substantially the same as for a
nonqualified option, discussed below. If the option holder fails to comply with
the holding period requirements discussed above, the option holder will
recognize ordinary income in an amount equal to the lesser of (i) the excess of
the fair market value of the stock on the date of the exercise of the option
over the exercise price or (ii) the excess of the amount realized upon such
disposition over the adjusted tax basis of the stock. Any additional gain
ordinarily will be recognized by the option holder as capital gain, either
long-term or short-term, depending on the holding period of the shares. If the
option holder is treated as having received ordinary income because of his or
her failure to comply with either condition above, we will be allowed an
equivalent deduction in the same year.
Nonqualified Stock Options: No tax consequences result from the grant
of the option. An option holder who exercises a nonqualified stock option with
cash generally will realize compensation taxable as ordinary income in an amount
equal to the difference between the exercise price and the fair market value of
the shares on the date of exercise, and we will be entitled to a deduction from
income in the same amount in the fiscal year in which the exercise occurred. The
option holder's basis in these shares will be the fair market value on the date
income is realized, and when the holder disposes of the shares he or she will
recognize capital gain or loss, either long-term or short-term, depending on the
holding period of the shares.
Disallowance of Deductions: The Internal Revenue Code disallows
deductions for publicly held corporations with respect to compensation in excess
of $1,000,000 paid to the corporation's chief executive officer and its four
other most highly compensated officers. However, compensation payable solely on
account of attainment of one or more performance goals is not subject to this
deduction limitation if the performance goals are objective, preestablished and
determined by a compensation committee comprised solely of two or more outside
directors, the material terms under which the compensation is to be paid are
disclosed to the shareholders and approved by a majority vote, and the
compensation committee certifies that the performance goals and other material
terms were in fact satisfied before the compensation is paid. Under this
exception, the deduction limitation does not apply with respect to compensation
otherwise deductible on account of stock options and stock appreciation rights
granted at fair market value under a plan, such as the proposed 2002 Plan, that
limits the number of shares that may be issued to any individual and which is
approved by the corporation's shareholders.
Once a quorum is present, the affirmative vote of a majority of the
common stock of the Company present in person or represented by proxy voting at
the Annual Meeting is required for adoption of the 2002 Plan.
OUR BOARD UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR"
ADOPTION OF THE 2002 STOCK INCENTIVE PLAN.
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PROPOSAL 4
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS
Effective August 2, 2001, we accepted the resignation of Blackman,
Kalick, Bartelstein LLP ("BKL") as our independent accountants. Effective August
9, 2001, we engaged Clancy and Co., P.L.L.C. ("Clancy") as our new independent
accountants. The resignation of BKL and the retention of Clancy were accepted
and approved, respectively, by our Board, subject to ratification by the
shareholders. Prior to the engagement of Clancy, neither we nor anyone on our
behalf consulted with such firm regarding the application of accounting
principles to a specified transaction, either completed or uncompleted, or type
of audit opinion that might be rendered on our financial statements.
BKL audited our financial statements for the period from June 1, 2000
to December 31, 2000. BKL's report for this period did not contain an adverse
opinion or a disclaimer of opinion, nor was the report qualified or modified as
to uncertainty, audit scope or accounting principles.
During the period from June 1, 2000 to December 31, 2000 and the period
from January 1, 2001 to August 2, 2001, there were no disagreements with BKL on
any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreements, if not resolved
to the satisfaction of BKL, would have caused such firm to make reference to the
subject matter of the disagreements in connection with its report on our
financial statements. In addition, there were no such events as described under
Item 304(a)(1)(iv)(B) of Regulation S-B for the period from June 1, 2000 to
December 31, 2000 and the subsequent interim period through August 2, 2001.
As previously disclosed on Form 8-K filed with the SEC on November 24,
2000, BDO International ("BDO") audited our consolidated balance sheets as of
May 31, 2000 and December 31, 1999, and the related consolidated statements of
operations, stockholders' equity and cash flows for the five-month period ended
May 31, 2000 and the year ended December 31, 1999. BDO's reports for this period
did not contain an adverse opinion on a disclaimer of opinion, nor was the
report qualified or modified as to uncertainty, audit scope or accounting
principles. During the period from June 1, 2000 to October 17, 2000 and the
period from January 1, 2000 to May 31, 2000, there were no disagreements with
BDO on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreements, if not resolved
to the satisfaction of BDO, would have caused such firm to make reference to the
subject matter of the disagreements in connection with its report on the
Company's financial statements. In addition, there were no such events as
described under Item 304(a)(1)(iv)(B) of Regulation S-B during the period from
January 1, 2000 to May 31, 2000 and the subsequent interim periods through
October 17, 2000.
BKL provided us with a letter addressed to the SEC stating that it
agreed with the statements made by us in response to Item 304(a) regarding its
involvement with us as independent accountants and BKL's letter was filed as an
exhibit to our Current Report on Form 8-K/A dated September 5, 2001 and is
incorporated herein by reference.
Audit Fees: The aggregate fees for professional services rendered by
Clancy in connection with its audit of our consolidated financial statements and
reviews of the consolidated
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financial statements included in our Quarterly Reports on Form 10-Q for the 2001
fiscal year was approximately $33,500.
Financial Information Systems Design and Implementation: The Company
incurred no expense in respect of professional services rendered by Clancy
relating to designing, implementing managing and/or operating the Company's
information systems or local area network for the 2001 fiscal year.
All Other Fees: There were no fees for professional services rendered
by Clancy relating to any other non-audit services, including tax-related
services for the 2001 fiscal year.
A representative of Clancy is not expected to be present at the
meeting.
Once a quorum is present, the affirmative vote of a majority of the
common stock of the Company present in person or represented by proxy voting at
the Annual Meeting is required for ratification of the appointment of Clancy.
THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE IN FAVOR OF THE
RATIFICATION OF THE APPOINTMENT OF CLANCY AND CO., P.L.L.C.
OTHER MATTERS
Our 2001 Annual Report is being mailed to shareholders
contemporaneously with this Proxy Statement. We know of no other matters to be
brought before the Annual Meeting. If other matters should properly come before
the Annual Meeting, proxies will be voted on such matters in accordance with the
best judgment of the persons appointed by the proxies.
COST OF SOLICITATION
We will bear all costs in connection with the solicitation of proxies
for the Annual Meeting. We intend to request brokerage houses, custodians,
nominees and others who hold stock in their names to solicit proxies from the
persons who own stock, and such brokerage houses, custodians, nominees and
others will, at their request, be reimbursed for their out-of-pocket expenses
and reasonable clerical expenses. In addition to the use of the mails,
solicitation may be made by our employees personally or by mail or telephone to
the extent necessary in order to assure sufficient representation. No outside
proxy solicitation firm is expected to be employed by us in respect of the
Annual Meeting as of the date of this Proxy Statement.
SHAREHOLDER PROPOSALS FOR THE 2003 ANNUAL MEETING
Shareholder proposals for the 2003 Annual Meeting must be received by
us at our principal executive offices set forth above not later than January 1,
2003 in order to be included in our proxy materials.
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By Order of the Board of Directors,
Wing Hung Ho
Secretary
Dated: August __, 2002
PLEASE COMPLETE, DATE, SIGN AND RETURN YOUR PROXY PROMPTLY
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EXHIBIT A
SCORE ONE, INC.
AUDIT COMMITTEE CHARTER
The Audit Committee (the "Committee") of the Board of Directors (the "Board") of
Score One, Inc. (the "Corporation") will have the oversight responsibility,
authority and duties described in this Charter.
Purpose
The primary purpose of the Committee is to assist the Board in fulfilling its
oversight responsibilities with respect to (i) the annual financial information
to be provided to shareholders and the Securities and Exchange Commission (the
"SEC"); (ii) the system of internal accounting and financial controls that
management has established; and (iii) the internal and external audit process.
In addition, the Committee provides an avenue for communication between the
independent accountants, financial management and the Board. The Committee's
responsibility is one of oversight, recognizing that the Corporation's
management is responsible for preparing the Corporation's financial statements
and that the independent accountants are responsible for auditing those
financial statements. The independent accountants are ultimately accountable to
the Committee and the Board for such accountants' audit of the financial
statements of the Corporation.
Composition
The Committee shall be appointed annually by the Board and shall be comprised of
at least three directors, if the Corporation does not meet the "small business
issuer" requirements under Regulation S-B, or two directors, if the Corporation
meets the "small business issuer" requirements under Regulation S-B, each of
whom shall meet the "independence" and "financial literacy" requirements of the
American Stock Exchange, as amended (the "AmEx"). The Committee must be
comprised solely of independent directors. In addition, at least one member of
the Committee will possess accounting or financial management expertise as
defined by the AmEx. The Board shall designate one member as Chair of the
Committee.
Meetings
The Committee shall hold meetings as deemed necessary or desirable by the Chair
of the Committee. In addition to such meetings of the Committee as may be
required to perform the functions described under "Duties and Powers" below, the
Committee shall meet at least annually with the chief financial officer and the
independent accountants to discuss any matters that the Committee or any of
these persons or firms believe should be discussed. The Committee may, at its
discretion, meet in executive session with or without the presence of the
independent accountants or corporate officers.
A-1
Duties and Powers
The following shall be the principal recurring functions of the Committee in
carrying out its oversight responsibilities. The functions are set forth as a
guide with the understanding that the Committee may modify or supplement them as
appropriate.
Independent Accountants
1. Review the performance of the independent accountants and make
recommendations to the Board regarding the appointment or
termination of the independent accountants. The outside
auditor for the Corporation remains ultimately accountable to
the Board and the Committee. The Board has the ultimate
authority to select, evaluate and, where appropriate, replace
the outside auditor, or to nominate the outside auditor to be
proposed for shareholder approval in any proxy statement.
2. Ensure that the independent accountants prepare and deliver at
least annually a formal written statement delineating all
relationships between the independent accountants and the
Corporation addressing at least the matters set forth in
Independence Standards Board, Standard No. 1, Independence
Discussions with Committees, as amended.
3. Discuss with the independent accountants any disclosed
relationships or services that may impact the objectivity and
independence of the independent accountants and recommend that
the Board take appropriate action in response to the
independent accountants' report to satisfy itself of the
independent accountants' independence.
4. Obtain from the independent auditors assurance that the audit
was conducted in accordance with auditing standards generally
accepted in the United States and rules and regulations set
forth in Section 10A of the Securities Exchange Act of 1934,
as amended.
5. Review the fees charged by the independent accountants.
Financial Statement and Reports
6. Receive and review from management and the independent
accountants a timely analysis of significant financial
reporting issues and practices.
7. Discuss with the independent accountants the matters required
to be discussed by Statement on Auditing Standards No. 61,
Communications with Committees, as amended.
8. Meet with management and/or the independent accountants to:
(i) review the annual audit plans of the
independent accountants;
A-2
(ii) discuss the annual consolidated financial
statements;
(iii) discuss any significant matters arising from
any audit or report or communication
referred to in items 6 or 7 above relating
to the consolidated financial statements;
(iv) discuss significant proposed or contemplated
changes to the Corporation's accounting
principles, policies, controls, procedures,
practices and auditing plans; and
(v) inquire about significant risks and
exposures, if any, and the steps taken to
monitor and minimize such risks.
Reporting and Recommendations
12. Determine, based on the reviews and discussions noted above,
whether to recommend to the Board that the audited financial
statements be included in the Corporation's Annual Report on
Form 10-K/SB for filing with the SEC.
13. Review the quarterly financial statements with financial
management and the independent auditors prior to the filing of
the Corporation's Quarterly Report on Form 10-Q/SB (or prior
to the press release of results, if possible) to determine
that the independent auditors do not take exception to the
disclosure and content of the financial statements, and
discuss any other matters required to be communicated to the
Committee for purposes of this review.
14. Prepare any report, including any recommendation of the
Committee, required by the rules of the SEC to be included in
the Corporation's annual proxy statement.
15. Maintain minutes or other records of meetings and activities
of the Committee.
16. Report its activities to the Board on a regular basis and make
such recommendations with respect to the above and other
matters and take such other actions as the Committee or the
Board may deem necessary or appropriate.
17. Report the name of every Committee member below the Committee
report.
18. Certify that the Committee has adopted and complies with (i)
all of the rules and regulations of the applicable stock
exchange on which the Corporation is listed or intends to be
listed and (ii) a formal written Committee charter and that
the Committee annually reviews and reassesses the charter's
adequacy.
19. Include a copy of this charter in the annual report to
stockholders or the proxy statement (effective for year ended
December 31, 2001 at least triennially or the year after any
significant amendment to the charter.
20. Report the results of the annual audit to the Board. If
requested by the Board, invite the independent accountants to
attend the full Board meeting to assist in reporting the
results of the annual audit or to answer other directors'
questions. Alternatively, the other directors, particularly
the other independent directors,
A-3
may be invited to attend the Committee meeting during which
the results of the annual audit are reviewed.
21. Prepare any report the SEC requires the Corporation publish in
its annual proxy statement, including but not limited to a
report of the Committee placed in the Corporation's proxy
statement for its annual meeting of stockholders, disclosing
whether (1) the Committee has reviewed and discussed with
management and the independent accountants, as well as
discussed within the Committee (without management or the
independent accountants present) the financial statements and
the quality of accounting principles and significant
judgements affecting the financial statements; (2) the
Committee discussed with the accountants the independence of
the accountants; and (3) based upon the Committee's review and
discussions with management and the independent accountants,
the Committee had recommended to the Board that the
Corporation include the audited financials in its annual Form
10-K/SB report.
Resources and Authority
The Committee shall have the resources and authority appropriate to discharge
its responsibilities, including the authority to engage independent accountants
for special audits, review and other procedures and to retain special counsel
and other experts or consultants. Although the Committee has the powers and
responsibilities this charter establishes, the Committee has no duty to:
(i) plan or conduct audits. The Corporation's independent
accountants are responsible for planning and
conducting audits.
(ii) determine that the Corporation's financial statements
are accurate, complete, or produced according to
generally accepted accounting principles. The
Corporation's management has this responsibility.
(iii) ensure that the Corporation complies with all laws,
regulations, and the Corporation's code of ethical
conduct. These responsibilities also rest with the
Corporation's management.
Annual Review
The Committee shall review, on at least an annual basis, this Charter and the
scope of the responsibilities of this Committee. Any proposed changes, where
indicated, shall be referred to the Board for appropriate action.
A-4
EXHIBIT B
CERTIFICATE OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
SCORE ONE, INC.
(Filed Pursuant to Sections 78.385 and 78.390 of
the General Corporation Law of the State of Nevada)
Pursuant to the provisions of Sections 78.385 and 78.390 of the General
Corporation Law of the State of Nevada, Score One, Inc., a corporation organized
and existing under the General Corporation Law of the State of Nevada (the
"Corporation"), does hereby certify that:
1. The name of the Corporation is "Score One, Inc."
2. The first sentence of Section 4.01 of Article IV, following the
sub-heading "Number and Class" of the Corporation's Articles of Incorporation,
is hereby deleted in its entirety and replaced with the following sentence:
The total number of shares of authorized capital
stock of the Corporation shall consist of two classes:
Common Stock in the amount of fifty million (50,000,000)
shares, $0.001 par value per share, and Preferred Stock
in the amount of five million (5,000,000) shares, $0.001
par value per share.
3. This amendment of the Articles of Incorporation of the
Corporation was authorized by unanimous written consent of the Board of
Directors.
4. This amendment of the Articles of Incorporation of the
Corporation was adopted by majority vote of shareholders of the Corporation on
August ___, 2002 in the manner prescribed by Nevada law. The number of shares of
the Corporation outstanding and entitled to vote at the time of the adoption of
said amendment was 249,198. The number of shares voted for such amendment was
________, ________ shares voted against such amendment and _____ shares were
withheld from voting.
IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Amendment of the Articles of Incorporation on behalf of the Corporation as of
August ___, 2002.
SCORE ONE, INC.
By: ________________________
Wing Cheong Ho
President and Chief Executive Officer
B-1
EXHIBIT C
SCORE ONE, INC.
2002 STOCK INCENTIVE PLAN
1. ESTABLISHMENT, PURPOSE AND TYPES OF AWARDS
SCORE ONE INC., a Nevada corporation (the "Company"), hereby
establishes the 2002 STOCK INCENTIVE PLAN (the "Plan"). The purpose of the Plan
is to promote the long-term growth and profitability of the Company by (i)
providing key people with incentives to improve shareholder value and to
contribute to the growth and financial success of the Company, and (ii) enabling
the Company to attract, retain and reward the best-available persons.
The Plan permits the granting of stock options (including incentive
stock options qualifying under Code Section 422 and nonqualified stock options),
stock appreciation rights, restricted or unrestricted stock awards, phantom
stock, performance awards, other stock-based awards, or any combination of the
foregoing.
2. DEFINITIONS
Under this Plan, except where the context otherwise indicates, the
following definitions apply:
(a) "Affiliate" shall mean any entity, whether now or hereafter
existing, which controls, is controlled by, or is under common control with, the
Company (including, but not limited to, joint ventures, limited liability
companies, and partnerships). For this purpose, "control" shall mean ownership
of 50% or more of the total combined voting power or value of all classes of
stock or interests of the entity.
(b) "Award" shall mean any stock option, stock appreciation right,
stock award, phantom stock award, performance award, or other stock-based award.
(c) "Board" shall mean the Board of Directors of the Company.
(d) "Change in Control" means:
(i) an acquisition (other than from the Company) in a
transaction, or a series of related transactions, by any person, entity
or "group," within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934 (the "Exchange Act"), (excluding for
this purpose, (A) the Company or its subsidiaries, (B) any employee
benefit plan of the Company or its subsidiaries which acquires
beneficial ownership of voting securities of the Company, (C) an
underwriter temporarily holding securities pursuant to an offering of
such securities, or (D) any corporation owned, directly or indirectly,
by the shareholders of the Company in substantially the same
proportions as their ownership of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors) of beneficial ownership, within the meaning of Rule 13d-3
promulgated under the Exchange Act, of 50% or more of either the then
outstanding shares of common stock or the combined voting power of the
Company's
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then outstanding voting securities entitled to vote generally in the
election of directors (the "Company Voting Stock");
(ii) the effective time of any merger, share exchange,
consolidation or other reorganization or business combination of the
Company if immediately after such transaction persons who hold a
majority of the outstanding voting securities entitled to vote
generally in the election of directors of the surviving entity (or the
entity owning 100% of such surviving entity) are not persons who held
the Common Stock immediately prior to such transaction;
(iii) the closing of a sale or conveyance of all or substantially
all of the assets of the Company;
(iv) individuals who were the Board's nominees for election as
directors immediately prior to a meeting of the shareholders of the
Company involving an actual or threatened election contest relating to
the election of the directors of the Company, as such terms are used in
Rule 14a-11 of Regulation 14A promulgated under the Exchange Act, cease
to constitute a majority of the Board following the election; or
(v) the dissolution or liquidation of the Company;
provided, however, that the term "Change in Control" does not include a public
offering of capital stock of the Company that is effected pursuant to a
registration statement filed with, and declared effective by, the Securities and
Exchange Commission under the Securities Act of 1933.
(e) "Code" shall mean the Internal Revenue Code of 1986, as amended,
and any regulations promulgated thereunder.
(f) "Common Stock" shall mean shares of common stock of the Company,
par value $0.001 per share.
(g) "Fair Market Value" shall mean, with respect to a share of the
Company's Common Stock for any purpose on a particular date, the value
determined by the Administrator in good faith. However, if the Common Stock is
registered under Section 12(b) or 12(g) of the Securities Exchange Act of 1934,
as amended, and listed for trading on a national exchange or market, "Fair
Market Value" shall mean, as applicable, (i) either the closing price or the
average of the high and low sale price on the relevant date, as determined in
the Administrator's discretion, quoted on the New York Stock Exchange, the
American Stock Exchange, or the Nasdaq National Market; (ii) the last sale price
on the relevant date quoted on the Nasdaq SmallCap Market; (iii) the average of
the high bid and low asked prices on the relevant date quoted on the Nasdaq OTC
Bulletin Board Service or by the National Quotation Bureau, Inc. or a comparable
service as determined in the Administrator's discretion; or (iv) if the Common
Stock is not quoted by any of the above, the average of the closing bid and
asked prices on the relevant date furnished by a professional market maker for
the Common Stock, or by such other source, selected by the Administrator. If no
public trading of the Common Stock occurs on the relevant date, then Fair Market
Value shall be determined as of the next preceding date on which trading of the
Common Stock does occur. For all purposes under this Plan, the term "relevant
date" as used in this Section 2.1(g) shall mean either the date as of which Fair
Market Value is to
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be determined or the next preceding date on which public trading of the Common
Stock occurs, as determined in the Administrator's discretion.
(h) "Stock Option Agreement" shall mean a written document
memorializing the terms and conditions of an Award granted pursuant to the Plan
and shall incorporate the terms of the Plan.
3. ADMINISTRATION
(a) Administration of the Plan. The Plan shall be administered by the
Board or by such committee or committees as may be appointed by the Board from
time to time (the Board, committee or committees hereinafter referred to as the
"Administrator").
(b) Powers of the Administrator. The Administrator shall have all the
powers vested in it by the terms of the Plan, such powers to include authority,
in its sole and absolute discretion, to grant Awards under the Plan, prescribe
Stock Option Agreements evidencing such Awards and establish programs for
granting Awards.
The Administrator shall have full power and authority to take all other
actions necessary to carry out the purpose and intent of the Plan, including,
but not limited to, the authority to: (i) determine the eligible persons to
whom, and the time or times at which Awards shall be granted; (ii) determine the
types of Awards to be granted; (iii) determine the number of shares to be
covered by or used for reference purposes for each Award; (iv) impose such
terms, limitations, restrictions and conditions upon any such Award as the
Administrator shall deem appropriate; (v) modify, amend, extend or renew
outstanding Awards, or accept the surrender of outstanding Awards and substitute
new Awards (provided however, that, except as provided in Section 7(d) of the
Plan, any modification that would materially adversely affect any outstanding
Award shall not be made without the consent of the holder); (vi) accelerate or
otherwise change the time in which an Award may be exercised or becomes payable
and to waive or accelerate the lapse, in whole or in part, of any restriction or
condition with respect to such Award, including, but not limited to, any
restriction or condition with respect to the vesting or exercisability of an
Award following termination of any grantee's employment or other relationship
with the Company; and (vii) establish objectives and conditions, if any, for
earning Awards and determining whether Awards will be paid after the end of a
performance period.
The Administrator shall have full power and authority, in its sole and
absolute discretion, to administer and interpret the Plan and to adopt and
interpret such rules, regulations, agreements, guidelines and instruments for
the administration of the Plan and for the conduct of its business as the
Administrator deems necessary or advisable.
(c) Non-Uniform Determinations. The Administrator's determinations
under the Plan (including without limitation, determinations of the persons to
receive Awards, the form, amount and timing of such Awards, the terms and
provisions of such Awards and the Stock Option Agreements evidencing such
Awards) need not be uniform and may be made by the Administrator selectively
among persons who receive, or are eligible to receive, Awards under the Plan,
whether or not such persons are similarly situated.
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(d) Limited Liability. To the maximum extent permitted by law, no
member of the Administrator shall be liable for any action taken or decision
made in good faith relating to the Plan or any Award thereunder.
(e) Indemnification. To the maximum extent permitted by law and by the
Company's charter and by-laws, the members of the Administrator shall be
indemnified by the Company in respect of all their activities under the Plan.
(f) Effect of Administrator's Decision. All actions taken and decisions
and determinations made by the Administrator on all matters relating to the Plan
pursuant to the powers vested in it hereunder shall be in the Administrator's
sole and absolute discretion and shall be conclusive and binding on all parties
concerned, including the Company, its shareholders, any participants in the Plan
and any other employee, consultant, or director of the Company, and their
respective successors in interest.
4. SHARES AVAILABLE FOR THE PLAN
Subject to adjustments as provided in Section 7(d) of the Plan, the
shares of Common Stock that may be issued with respect to Awards granted under
the Plan shall not exceed an aggregate of 5,000,000 shares of Common Stock. The
Company shall reserve such number of shares for Awards under the Plan, subject
to adjustments as provided in Section 7(d) of the Plan. If any Award, or portion
of an Award, under the Plan expires or terminates unexercised, becomes
unexercisable or is forfeited or otherwise terminated, surrendered or canceled
as to any shares, or if any shares of Common Stock are surrendered to the
Company in connection with any Award (whether or not such surrendered shares
were acquired pursuant to any Award), or if any shares are withheld by the
Company, the shares subject to such Award and the surrendered and withheld
shares shall thereafter be available for further Awards under the Plan;
provided, however, that any such shares that are surrendered to or withheld by
the Company in connection with any Award or that are otherwise forfeited after
issuance shall not be available for purchase pursuant to incentive stock options
intended to qualify under Code section 422.
5. PARTICIPATION
Participation in the Plan shall be open to all employees, officers, and
directors of, and other individuals providing bona fide services to or for, the
Company, or of any Affiliate of the Company, as may be selected by the
Administrator from time to time. The Administrator may also grant Awards to
individuals in connection with hiring, retention or otherwise, prior to the date
the individual first performs services for the Company or an Affiliate provided
that such Awards shall not become vested prior to the date the individual first
performs such services.
6. AWARDS
The Administrator, in its sole discretion, establishes the terms of all
Awards granted under the Plan. Awards may be granted individually or in tandem
with other types of Awards. All Awards are subject to the terms and conditions
provided in the Stock Option Agreement. The Administrator may permit or require
a recipient of an Award to defer such individual's receipt of the payment of
cash or the delivery of Common Stock that would otherwise be due to such
individual by virtue of the exercise of, payment of, or lapse or waiver of
restrictions
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respecting, any Award. If any such payment deferral is required or permitted,
the Administrator shall, in its sole discretion, establish rules and procedures
for such payment deferrals.
(a) Stock Options. The Administrator may from time to time grant to
eligible participants Awards of incentive stock options as that term is defined
in Code section 422 or nonqualified stock options; provided, however, that
Awards of incentive stock options shall be limited to employees of the Company
or of any current or hereafter existing "parent corporation" or "subsidiary
corporation," as defined in Code sections 424(e) and (f), respectively, of the
Company. Options intended to qualify as incentive stock options under Code
section 422 must have an exercise price at least equal to Fair Market Value as
of the date of grant, but nonqualified stock options may be granted with an
exercise price less than Fair Market Value. No stock option shall be an
incentive stock option unless so designated by the Administrator at the time of
grant or in the Stock Option Agreement evidencing such stock option.
(b) Stock Appreciation Rights. The Administrator may from time to time
grant to eligible participants Awards of Stock Appreciation Rights ("SAR"). An
SAR entitles the grantee to receive, subject to the provisions of the Plan and
the Stock Option Agreement, a payment having an aggregate value equal to the
product of (i) the excess of (A) the Fair Market Value on the exercise date of
one share of Common Stock over (B) the base price per share specified in the
Stock Option Agreement, times (ii) the number of shares specified by the SAR, or
portion thereof, which is exercised. Payment by the Company of the amount
receivable upon any exercise of an SAR may be made by the delivery of Common
Stock or cash, or any combination of Common Stock and cash, as determined in the
sole discretion of the Administrator. If upon settlement of the exercise of an
SAR a grantee is to receive a portion of such payment in shares of Common Stock,
the number of shares shall be determined by dividing such portion by the Fair
Market Value of a share of Common Stock on the exercise date. No fractional
shares shall be used for such payment and the Administrator shall determine
whether cash shall be given in lieu of such fractional shares or whether such
fractional shares shall be eliminated.
(c) Stock Awards. The Administrator may from time to time grant
restricted or unrestricted stock Awards to eligible participants in such
amounts, on such terms and conditions, and for such consideration, including no
consideration or such minimum consideration as may be required by law, as it
shall determine. A stock Award may be paid in Common Stock, in cash, or in a
combination of Common Stock and cash, as determined in the sole discretion of
the Administrator.
(d) Phantom Stock. The Administrator may from time to time grant Awards
to eligible participants denominated in stock-equivalent units ("phantom stock")
in such amounts and on such terms and conditions as it shall determine. Phantom
stock units granted to a participant shall be credited to a bookkeeping reserve
account solely for accounting purposes and shall not require a segregation of
any of the Company's assets. An Award of phantom stock may be settled in Common
Stock, in cash, or in a combination of Common Stock and cash, as determined in
the sole discretion of the Administrator. Except as otherwise provided in the
applicable Stock Option Agreement, the grantee shall not have the rights of a
shareholder with respect to any shares of Common Stock represented by a phantom
stock unit solely as a result of the grant of a phantom stock unit to the
grantee.
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(e) Performance Awards. The Administrator may, in its discretion, grant
performance awards which become payable on account of attainment of one or more
performance goals established by the Administrator. Performance awards may be
paid by the delivery of Common Stock or cash, or any combination of Common Stock
and cash, as determined in the sole discretion of the Administrator. Performance
goals established by the Administrator may be based on the Company's or an
Affiliate's operating income or one or more other business criteria selected by
the Administrator that apply to an individual or group of individuals, a
business unit, or the Company or an Affiliate as a whole, over such performance
period as the Administrator may designate.
(f) Other Stock-Based Awards. The Administrator may from time to time
grant other stock-based awards to eligible participants in such amounts, on such
terms and conditions, and for such consideration, including no consideration or
such minimum consideration as may be required by law, as it shall determine.
Other stock-based awards may be denominated in cash, in Common Stock or other
securities, in stock-equivalent units, in stock appreciation units, in
securities or debentures convertible into Common Stock, or in any combination of
the foregoing and may be paid in Common Stock or other securities, in cash, or
in a combination of Common Stock or other securities and cash, all as determined
in the sole discretion of the Administrator.
7. MISCELLANEOUS
(a) Withholding of Taxes. Grantees and holders of Awards shall pay to
the Company or its Affiliate, or make provision satisfactory to the
Administrator for payment of, any taxes required to be withheld in respect of
Awards under the Plan no later than the date of the event creating the tax
liability. The Company or its Affiliate may, to the extent permitted by law,
deduct any such tax obligations from any payment of any kind otherwise due to
the grantee or holder of an Award. In the event that payment to the Company or
its Affiliate of such tax obligations is made in shares of Common Stock, such
shares shall be valued at Fair Market Value on the applicable date for such
purposes.
(b) Loans. The Company or its Affiliate may make or guarantee loans
to grantees to assist grantees in exercising Awards and satisfying any
withholding tax obligations.
(c) Transferability. Except as otherwise determined by the
Administrator, and in any event in the case of an incentive stock option or a
stock appreciation right granted with respect to an incentive stock option, no
Award granted under the Plan shall be transferable by a grantee otherwise than
by will or the laws of descent and distribution. Unless otherwise determined by
the Administrator in accord with the provisions of the immediately preceding
sentence, an Award may be exercised during the lifetime of the grantee, only by
the grantee or, during the period the grantee is under a legal disability, by
the grantee's guardian or legal representative.
(d) Adjustments for Corporate Transactions and Other Events.
(i) Stock Dividend, Stock Split and Reverse Stock Split. In
the event of a stock dividend of, or stock split or reverse stock split
affecting, the Common Stock, (A) the maximum number of shares of such Common
Stock as to which Awards may be granted under this Plan, as provided in Section
4 of the Plan, and (B) the number of shares covered by and the exercise price
and other terms of outstanding Awards, shall, without further action of the
Board,
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be adjusted to reflect such event unless the Board determines, at the
time it approves such stock dividend, stock split or reverse stock split, that
no such adjustment shall be made. The Administrator may make adjustments, in its
discretion, to address the treatment of fractional shares and fractional cents
that arise with respect to outstanding Awards as a result of the stock dividend,
stock split or reverse stock split.
(ii) Non-Change in Control Transactions. Except with respect
to the transactions set forth in Section 7(d)(i), in the event of any change
affecting the Common Stock, the Company or its capitalization, by reason of a
spin-off, split-up, dividend, recapitalization, merger, consolidation or share
exchange, other than any such change that is part of a transaction resulting in
a Change in Control, the Administrator, in its discretion and without the
consent of the holders of the Awards, shall make (A) appropriate adjustments to
the maximum number and kind of shares reserved for issuance or with respect to
which Awards may be granted under the Plan, as provided in Section 4 of the
Plan; and (B) any adjustments in outstanding Awards, including but not limited
to reducing the number, kind and price of securities subject to Awards.
(iii) Change in Control Transactions. In the event of any
transaction resulting in a Change in Control, outstanding stock options and
SAR's under this Plan will terminate upon the effective time of such Change in
Control unless provision is made in connection with the transaction for the
continuation or assumption of such Awards by, or for the substitution of the
equivalent awards of, the surviving or successor entity or a parent thereof. In
the event of such termination, the holders of stock options and SAR's under the
Plan will be permitted, for a period of at least twenty (20) days prior to the
effective time of the Change in Control, to exercise all portions of such Awards
that are then exercisable or which become exercisable upon or prior to the
effective time of the Change in Control; provided, however, that any such
exercise of any portion of such an Award which becomes exercisable as a result
of such Change in Control shall be deemed to occur immediately prior to the
effective time of such Change in Control.
(iv) Pooling of Interests Transactions. In connection with any
business combination authorized by the Board, the Administrator, in its sole
discretion and without the consent of the holders of the Awards, may make any
modifications to any Awards, including but not limited to cancellation,
forfeiture, surrender or other termination of the Awards, in whole or in part,
regardless of the vested status of the Award, but solely to the extent necessary
to facilitate the compliance of such transaction with requirements for treatment
as a pooling of interests transaction for accounting purposes under generally
accepted accounting principles.
(v) Unusual or Nonrecurring Events. The Administrator is
authorized to make, in its discretion and without the consent of holders of
Awards, adjustments in the terms and conditions of, and the criteria included
in, Awards in recognition of unusual or nonrecurring events affecting the
Company, or the financial statements of the Company or any Affiliate, or of
changes in applicable laws, regulations, or accounting principles, whenever the
Administrator determines that such adjustments are appropriate in order to
prevent dilution or enlargement of the benefits or potential benefits intended
to be made available under the Plan.
(e) Substitution of Awards in Mergers and Acquisitions. Awards may be
granted under the Plan from time to time in substitution for Awards held by
employees, officers,
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consultants or directors of entities who become or are about to become
employees, officers, consultants or directors of the Company or an Affiliate as
the result of a merger or consolidation of the employing entity with the Company
or an Affiliate, or the acquisition by the Company or an Affiliate of the assets
or stock of the employing entity. The terms and conditions of any substitute
Awards so granted may vary from the terms and conditions set forth herein to the
extent that the Administrator deems appropriate at the time of grant to conform
the substitute Awards to the provisions of the awards for which they are
substituted.
(f) Termination, Amendment and Modification of the Plan. The
Board may terminate, amend or modify the Plan or any portion thereof at any
time.
(g) Non-Guarantee of Employment or Service. Nothing in the Plan or in
any Stock Option Agreement thereunder shall confer any right on an individual to
continue in the service of the Company or shall interfere in any way with the
right of the Company to terminate such service at any time with or without cause
or notice and whether or not such termination results in (i) the failure of any
Award to vest; (ii) the forfeiture of any unvested or vested portion of any
Award; and/or (iii) any other adverse effect on the individual's interests under
the Plan.
(h) Compliance with Securities Laws; Listing and Registration. If at
any time the Administrator determines that the delivery of Common Stock under
the Plan is or may be unlawful under the laws of any applicable jurisdiction, or
federal or state securities laws, the right to exercise an Award or receive
shares of Common Stock pursuant to an Award shall be suspended until the
Administrator determines that such delivery is lawful. The Company shall have no
obligation to effect any registration or qualification of the Common Stock under
federal or state laws.
The Company may require that a grantee, as a condition to exercise of
an Award, and as a condition to the delivery of any share certificate, make such
written representations (including representations to the effect that such
person will not dispose of the Common Stock so acquired in violation of federal
or state securities laws) and furnish such information as may, in the opinion of
counsel for the Company, be appropriate to permit the Company to issue the
Common Stock in compliance with applicable federal and state securities laws.
The stock certificates for any shares of Common Stock issued pursuant to this
Plan may bear a legend restricting transferability of the shares of Common Stock
unless such shares are registered or an exemption from registration is available
under the Securities Act of 1933, as amended, and applicable state securities
laws.
(i) No Trust or Fund Created. Neither the Plan nor any Award shall
create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company and a grantee or any other person. To
the extent that any grantee or other person acquires a right to receive payments
from the Company pursuant to an Award, such right shall be no greater than the
right of any unsecured general creditor of the Company.
(j) Governing Law. The validity, construction and effect of the Plan,
of Grant Agreements entered into pursuant to the Plan, and of any rules,
regulations, determinations or decisions made by the Administrator relating to
the Plan or such Stock Option Agreements, and the rights of any and all persons
having or claiming to have any interest therein or thereunder,
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shall be determined exclusively in accordance with applicable federal laws and
the laws of the State of Nevada, without regard to its conflict of laws
principles.
(k) Effective Date; Termination Date. The Plan is effective as of the
date on which the Plan is adopted by the Board, subject to approval of the
shareholders within twelve (12) months before or after such date. No Award shall
be granted under the Plan after the close of business on the day immediately
preceding the tenth anniversary of the effective date of the Plan, or if
earlier, the tenth anniversary of the date this Plan is approved by the
shareholders. Subject to other applicable provisions of the Plan, all Awards
made under the Plan prior to such termination of the Plan shall remain in effect
until such Awards have been satisfied or terminated in accordance with the Plan
and the terms of such Awards.
Date Approved by the Board: July __, 2002
Date Approved by the Shareholders: August 26, 2002
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SCORE ONE, INC.
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 26, 2002
The undersigned shareholder of SCORE ONE, INC. (the "Company") hereby
appoints Wing Cheong Ho and Wing Hung Ho, or either of them, with full power of
substitution and revocation, proxies of the undersigned to vote all shares of
Common Stock of the Company which the undersigned would be entitled to vote if
personally present at the Annual Meeting of Shareholders of the Company (the
"Annual Meeting") to be held on August 26, 2002 at 4:00 PM (Hong Kong time) at
the offices of the Company, Unit 2, 34th Floor, Cable TV Tower, 9 Hoi Shing
Road, Tsuen Wan, Hong Kong, and at any adjournment thereof, with respect to:
1. To elect five directors (Proposal 1);
2. To consider and act upon an amendment to the Company's
Articles of Incorporation to increase the number of shares of
the Company's common stock, par value $0.001 per share (the
"Common Stock"), from 515,625 to 50,000,000 (Proposal 2);
3. To consider and act upon a proposal to adopt the Company's
2002 Stock Incentive Plan (Proposal 3); and
4. To consider and act upon a proposal to ratify the appointment
by the Board (the "Board") of Clancy and Co., P.L.L.C.
("Clancy") as independent certified public accountants for the
Company for the 2002 fiscal year (Proposal 4).
The proxy will be voted in accordance with the instructions given on
the other side, and in the discretion of the proxies upon such other matters as
may properly come before the Annual Meeting.
IF NO INSTRUCTIONS ARE GIVEN, THIS PROXY WILL BE VOTED (1) SO AS TO
ELECT THE LARGEST POSSIBLE NUMBER OF THE BOARD'S NOMINEES, (2) FOR THE INCREASE
OF COMMON STOCK, (3) FOR THE ADOPTION OF THE 2002 PLAN (4) FOR THE RATIFICATION
OF THE APPOINTMENT OF CLANCY AS INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD.
(CONTINUED AND TO BE SIGNED ON THE OTHER SIDE)
Please mark your vote as indicated in this example. [X]
THE BOARD RECOMMENDS SHAREHOLDERS VOTE FOR PROPOSAL 1.
PROPOSAL 1 - Election of Directors: Wing Cheong Ho, Wing Hung Ho, Kin
Hung Lai, Wing Man Ho and Hong Liang Qian.
The Board WITHHOLD
Recommends Shareholders Authority to vote for all nominees
Vote FOR PROPOSAL 1. listed above.
FOR the nominees listed above (except as written to the contrary below)
and, unless otherwise indicated, in their sole and absolute discretion, for one
or more of such nominees in such manner so as to elect the largest number of
such nominees.
(To withhold authority to vote for To vote for listed nominees, write
any nominee, write that nominee's "For" in the space provided below.
name in the space provided below)
___________________________________ _________________________________
THE BOARD RECOMMENDS SHAREHOLDERS VOTE FOR PROPOSAL 2.
PROPOSAL 2 - To approve the increase of the number of shares of the Company's
Common Stock.
FOR AGAINST ABSTAIN
THE BOARD RECOMMENDS SHAREHOLDERS VOTE FOR PROPOSAL 3.
PROPOSAL 3 - To consider and act upon a proposal to adopt the Company's 2002
Stock Incentive Plan.
FOR AGAINST ABSTAIN
THE BOARD RECOMMENDS SHAREHOLDERS VOTE FOR PROPOSAL 5.
PROPOSAL 4 - To consider and act upon a proposal to ratify the Board's
appointment of Clancy as independent certified public accountants for the
Company for the 2002 fiscal year.
FOR AGAINST ABSTAIN
Signature___________________ Signature___________________
Date___________
Please mark, date and sign exactly as your name(s) appear(s) above and
return in the enclosed envelope. If acting as attorney, executor, administrator,
trustee, guardian, etc., please give full title. If the signer is a corporation,
please sign the full corporate name by fully authorized officer. If shares are
held jointly, each shareholder named should sign.